The crypto thread

[Samson]

As the country falls apart around us the government takes charge by.... issuing official NFTs:

While millions are choosing between eating or heating as the cost of living scandal bites, Rishi Sunak is instructing the Royal Mint to issue an official non-fungible token (NFT), as “an emblem of the forward looking approach” the UK government is taking on cryptocurrency.

The government buying into the NFT hype should raise red flags because it tells us they have drunk the crypto bro kool-aid being pushed by Silicon Valley billionaires.

Gimmicky digital tokens aren’t going to help people heat their homes or put food on the table. The government of course knows this. The Treasury may or may not believe that crypto is actually the ‘future’ – the story so far suggests it’s not. But like grifters the world over, they see it as an opportunity to make money.

The NFT news was part of a wider government announcement to make the UK a “global cryptoasset technology hub” – hoping that the City will skim profits off of cryptobubbles. Unsurprisingly, the government’s plan includes “enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market”. Tax breaks, in other words.

Even the government’s own press release fails to make a convincing case for the utility of cryptoassets. The best they could muster is the argument that so-called stablecoins (like Facebook’s stalled Libra/Diem project or the infamous Tether) “could provide a more efficient means of payment and widen consumer choice”.​

 

[Birdjaguar]

Miami Gains, Investors Lose in Crypto Effort

BY HEATHER GILLERS

Miami is the first U.S. city to earn revenue from a city-branded cryptocurrency project, getting about $5 million from the launch of “MiamiCoin.”

Buyers of the digital token have had a rockier experience: MiamiCoin’s value has fallen by half since it made its debut last summer. The mining of municipal-linked coins is an early experi- ment blending the chronically cash-strapped bureaucracy of local governments with the cash-flush world of crypto. Proponents such as Miami Mayor Francis Suarez—whose city is hosting a bitcoin conference this weekend billed as the nation’s largest—see a future in which municipal coins become nearly ubiquitous.

For cities, tapping the crypto market can mean a fresh source of cash. Miami said it has used the revenue from MiamiCoin to help fund rent subsidies for low-income residents. The city’s operating budget is $1.37 billion. For investors and proponents, such digital coins hold the appeal of helping support a city while riding the seemingly endless waves of crypto enthusiasm to significant potential gains. So far, though, issuance has been limited and gains for investors have been few and short-lived, highlighting questions about the viability of the city coin concept. “It’s a good idea for the cities. It could be a bad idea for many of the citizens and investors,” said Pablo Molina, Drexel University’s chief information security officer, who teaches courses in ethics and technology management at Georgetown University.

The digital coins are a project of a 10-month-old nonprofit organization, CityCoins, that aims to make city-branded digital tokens a reality in any city that is interested. The mining, or creation, of digital coins named after Miami and New York began last year. The CityCoins website encourages visitors to vote on which city they think should come next. The cities have no role in the projects beyond agreeing to accept donations set aside during the mining process.

MiamiCoin began trading at around half a cent on Aug. 26 and was a little more than a quarter of a cent as of April 5, according to CoinMarketCap. The coin’s value briefly rocketed to 5 cents twice. NYCCoin has also fallen from close to half a cent at the beginning of February to about a quarter of a cent, according to CoinMarketCap. “If you’re in it for a quick buck, you shouldn’t be holding CityCoins,” said Patrick Stanley, part of a group of crypto enthusiasts who helped launch CityCoins. They dreamed up the idea in a digital chat space in 2021, he said.

“There’s no investment that only goes up and to the right,” Mr. Stanley added. The mining is done by private citizens anywhere in the world through a digital infra- structure set up by CityCoins. Miners buy MiamiCoin or NYCCoin by paying with another type of digital asset, known as STX, according to an explanation on the CityCoins website. The city gets 30% of the STX, which is set aside in a digital wallet and then converted to dollars before being donated to city coffers.

Some municipal leaders have signaled interest. New York City Mayor Eric Adams tweeted a warm welcome to CityCoins shortly after he was elected in November. Mr. Suarez, who frequently talks up MiamiCoin in public, has embraced the idea of using the city’s name to attract crypto enthusiasts. “It’s about the brand,” he said, “and I think Miami punches above its weight in terms of branding.” He said the $5 million in MiamiCoin proceeds have “created benefit for our residents directly because there’s a rental crisis in America.” He said he plans to distribute additional revenue from the MiamiCoin mining process within the next few months.

What remains to be seen is how long the coins can attract investor interest if their values decline, and how many government officials might champion an investment that could quickly lose buyers money. Philadelphia recently opted against pursuing a Phillybranded city coin.

“Municipalities and heads of municipalities need to be aware of what they’re doing,” said Gil Luria, a strategist at D.A. Davidson who has been studying cryptocurrencies for years. “They’re promoting a product that could lead to their citizens losing money.”

 

[Birdjaguar]

Bitcoin Price Plummets 54% From Its High
BY JENNA TELESCA

The cryptocurrency market continued its slide from last week, mirroring the fall of the broader stock market. The world’s largest crypto-currency, bitcoin, fell to $31,075.70 on Monday, a 10% drop from Sunday at 5 p.m. EDT, according to prices from CoinDesk. Bitcoin’s price has fallen 54% from its record of $67,802 in November.

Ethereum, the second-largest cryptocurrency, fell to $2,286.10, 10% below the price Sunday evening. Bitcoin and cryptocurrencies more widely are known for their violent price swings. Individual investors controlled the market for years but institutional investors, such as hedge funds and money managers, have started to dominate it.

With more professional investors trading crypto, the market has increasingly moved in tandem with traditional markets. Many institutional investors that buy cryptocurrencies treat them as risk assets, similar to technology stocks. Investors tend to retreat to safer corners of the market during turbulent bouts. The tech-heavy Nasdaq Composite has fallen almost 26% year to date. Crypto prices have been stagnant for much of 2022 as investors started bracing for rising interest rates. The crypto market has been active over the past 24 hours, with almost $155 billion in market volume in that period, according to CoinMarketCap. The global crypto market fell to $1.4 trillion.

Cryptocurrency companies have been working to become household names. Flush with venture-capital investment, crypto platforms have been spending more cash on lobbying efforts and marketing directly to consumers.

 

[Kaitzilla]

Catching up a bit... I should really check in more often!
Just speaking from the US... Most reputable sites (Coinbase for example) require quite a bit of identity authentication. However, unless you're going to invest a sizeable sum, you can easily just "go with what's popular" & find some easy-to-sign-up-for site.I mean, if you wanted to randomly throw $20 into Dogecoin because you heard about it on the internet somewhere (I don't advise this, just saying, as an example), you don't really need to do a lot of research.

On the other hand, if you want to shift your entire savings account into Bitcoin (I definitely don't advise this), then yes, you should do some extensive research. So it depends on how much you're just playing with pocket change vs trying to use this as a long-term plan (fwiw, I'm in between those views AND already have other much more stable, reliable long-term plans in place, so when I speak of this stuff, keep that in mind - @warpus has clearly done more research than I have & I'm the one that's in! that should tell you something - I can afford to lose all this - hope I don't, but I can).
IMO, no one should ever do this - use a credit card to buy crypto. Under no circumstances. However, if pressed, I'd get a bit wishy-washy on banning it. I wouldn't rail against it being banned here (USian here), but since my opinion counts as "one guy as the internet with no repercussions", I'd probably ever so slightly fall on the side of not banning it if, like, a rondom internet poll asked me my opinion - that's the extent of my conviction.Just speaking to the two sites I've dealt with, I had to go through two-factor authentication to set up an account (& even for some larger buys - mostly just my Ethereum, which as I've mentioned, is just a long-term hold for me I rarely even check), & had to take a picture of my driver's license & enter my SSN.That said, I bet you could - I looked into which exchanges are reputable & secure & those were the two best, although I, personal opinion only, greatly prefer Coinbase as far as security & accessibility to your money. Crypto.com tends to offer coins earlier - I bought my SHIBA when it was at "5 decimals after the 0" on Crypto.com b/c it was available there months sooner. They also are the only one of the two to offer TERRA, my favorite coin (see way upthread), & which if I'd just put all my money into when I bought it, I'd be waaay up compared to all my "smart" decisions - in other words, if I'd just put everything into "the coin named after my favorite comic book character", I'd be way up compared to where I am now, which is kinda up. That may be the best insight into crypto as a whole that I've provided this whole discussion.
Shut up & take my money!!
Well, if you're willing to accept literally true answers: speculative investments.

This is the latest post I could find on Coinbase.

I'm not sure how true any of this is.
Is it a scare article or are users really at risk?

https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/

Hidden away in Coinbase Global’s disappointing first-quarter earnings report—in which the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase’s service that may come as a surprise to its millions of users.

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

That shouldn’t happen.

Hmm, it looks like they are not co-mingling funds, just stating the obvious that bankruptcy courts might not know how to treat crypto correctly.

The CEO on Twitter:
https://twitter.com/brian_armstrong/status/1524233480040710144

 

[warpus]

It's a crypto firesale, y'all

Except that we could drop even lower. Nobody knows what's going to happen next.

The next Bitcoin halving event (which limits supply and creates buying pressure, usually leading to price surges) isn't for 720 or so days. From what I understand historically speaking prices usually start going up again about a year before the halving event.. So.. if this cycle is like that.. We could be seeling dropping or sideways moving crypto prices for about a year at least.

But like I said, nobody knows what is going to happen. Stay safe

 

[RobAnybody]

I've mentioned before I'm in for the long haul & more importantly only with money I can afford to lose if it all goes *poof* tomorrow, so I don't mind holding, even with the huge drops & the uncertainty of Coinbase. IIRC, Bitcoin was down to <$4k just in 2019. It may continue to drop, just like the stock market is dropping.
(fwiw, I don't actually have any Bitcoin, but rather Etherium plus some lesser random stuff)

For anyone in a similar situation to me, which I admit is a luxury position, I'd say just keep holding it. Granted, with hindsight, I wish I'd sold everything about 7-8 months ago, but I could say the same for my Mutual Fund that just tracks the market (meaning I don't "manage" it at all). Losses are only real if you sell.

 

[Lexicus]

Bitcoin Price Plummets 54% From Its High
BY JENNA TELESCA

The cryptocurrency market continued its slide from last week, mirroring the fall of the broader stock market. The world’s largest crypto-currency, bitcoin, fell to $31,075.70 on Monday, a 10% drop from Sunday at 5 p.m. EDT, according to prices from CoinDesk. Bitcoin’s price has fallen 54% from its record of $67,802 in November.

Ethereum, the second-largest cryptocurrency, fell to $2,286.10, 10% below the price Sunday evening. Bitcoin and cryptocurrencies more widely are known for their violent price swings. Individual investors controlled the market for years but institutional investors, such as hedge funds and money managers, have started to dominate it.

With more professional investors trading crypto, the market has increasingly moved in tandem with traditional markets. Many institutional investors that buy cryptocurrencies treat them as risk assets, similar to technology stocks. Investors tend to retreat to safer corners of the market during turbulent bouts. The tech-heavy Nasdaq Composite has fallen almost 26% year to date. Crypto prices have been stagnant for much of 2022 as investors started bracing for rising interest rates. The crypto market has been active over the past 24 hours, with almost $155 billion in market volume in that period, according to CoinMarketCap. The global crypto market fell to $1.4 trillion.

Cryptocurrency companies have been working to become household names. Flush with venture-capital investment, crypto platforms have been spending more cash on lobbying efforts and marketing directly to consumers.

Cities making money through pump-and-dump schemes is certainly a vibe

 

[Samson]

It's a crypto firesale, y'all

The carnage continues:

Tether loses peg, drops below $0.95

Tether, the largest stablecoin, had a major wobble. Pegged to the U.S. dollar and widely used throughout the cryptocurrency ecosystem, even a fractional cent deviation from its peg can have enormous ramifications. Tether spent six hours below $0.99—at one point slipping down to $0.95—in the most significant deviation from its peg in recent history.
​

Terra blockchain is halted after token crash increases threat of governance attacks

After $LUNA dropped below $0.01, Terra announced that they halted the Terra blockchain. "Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack"

In a scoop published shortly after the catastrophes began with TerraUSD and Luna, CoinDesk reported that Terraform Labs CEO Do Kwan had also previously led a different failed stablecoin project. Using the pseudonym "Rick Sanchez", Kwon created "Basis Cash" (BAC), another algorithmic stablecoin. Basis Cash also aimed to peg to the US dollar, but never actually achieved this value. The coin has traded far below $1 for most of its existence, dropping and remaining below $0.01 in early 2021.
​

BitPrime exchange forced to pause trading due to lack of liquidity

The New Zealand cryptocurrency exchange BitPrime paused trading operations, issuing a notice to their customers: "A perfect storm has occurred, where liquidity has reduced, the market has crashed, and our overheads have increased. These have eroded trading capital and liquidity to a point where we felt we couldn’t guarantee fast trading execution and liquidity of customer funds."​

 

[Birdjaguar]

"There's a sucker is born every minute." PT Barnum or David Hannum

 

[warpus]

Proof that this is still such a volatile space. And why, if you choose to invest, you should diversify. I've heard of people who invested their life savings into LUNA and lost it all.. Spread out your investments, yo!

 

[Lexicus]

Proof that this is still such a volatile space. And why, if you choose to invest, you should diversify. I've heard of people who invested their life savings into LUNA and lost it all.. Spread out your investments, yo!

Even simpler: don't invest in pump-and-dump schemes.

 

[PhroX]

Even simpler: don't invest in pump-and-dump schemes.

Not even just pump and dump - Luna was promising 20% returns. That's twice what Madoff was doing. It was about as obvious a Ponzi scheme as can possibly be.

 

[Samson]

Not even just pump and dump - Luna was promising 20% returns. That's twice what Madoff was doing. It was about as obvious a Ponzi scheme as can possibly be.

Ah, but it wasn't a ponzi scheme because it never pretended not to be a ponzi scheme. Bernie Madoff pretended there was some magic investing under the hood, but this just straight up paid a higher rate for depositing money that the rate they were lending out, making up the difference from the companies coffers. There was no subterfuge involved.

 

[EvaDK]

El Salvador risks bankruptcy as its leader has invested heavily of the nations modest reserves in Bitcoin, as well as making the digital currency the nations legal tender.

https://english.elpais.com/economy-...-expected-to-default-as-bitcoin-plummets.html

 

[El_Machinae]

Proof that this is still such a volatile space. And why, if you choose to invest, you should diversify. I've heard of people who invested their life savings into LUNA and lost it all.. Spread out your investments, yo!

Simpler, simpler.

Don't call it investing, don't pretend it's investing, don't subconsciously put it in the same mental category as "investing".

 

[Birdjaguar]

Simpler, simpler.

Don't call it investing, don't pretend it's investing, don't subconsciously put it in the same mental category as "investing".

Gambling and you are not the house.

 

[warpus]

Simpler, simpler.

Don't call it investing, don't pretend it's investing, don't subconsciously put it in the same mental category as "investing".

Better yet, assume that any money you spend on crypto is gone. That's basically the same as "Only invest what you are willing to lose". If you buy 20,000 moondogs and you can't stop checking the price, how much you're up, how much you're down, if the recent downturn has got you feeling bad thoughts etc. then you've probably overinvested.

The advice I've heard from more traditional investment "gurus" is to only have 5-10% of your portfolio in crypto, max. And that portion should be diversified as well, along different types of technologies and different niches.

That way, if something like LUNA tanks, it won't drag your whole portfolio down with it and won't make you suicidal... But the whole crypto market as a whole dropping 50% in 2 weeks is always possible, so don't invest money you'll be emotionally attached to later. Assume it's goooone as soon as you spend it. Then imagine you are Spock whenever you interact with your portfolio. Zero emotions allowed.

 

[Birdjaguar]

iBonds from the treasury are paying 9.6% if bought in the next 6 months and held.

 

[El_Machinae]

Better yet, assume that any money you spend on crypto is gone. That's basically the same as "Only invest what you are willing to lose". If you buy 20,000 moondogs and you can't stop checking the price, how much you're up, how much you're down, if the recent downturn has got you feeling bad thoughts etc. then you've probably overinvested.

The advice I've heard from more traditional investment "gurus" is to only have 5-10% of your portfolio in crypto, max. And that portion should be diversified as well, along different types of technologies and different niches.

That way, if something like LUNA tanks, it won't drag your whole portfolio down with it and won't make you suicidal... But the whole crypto market as a whole dropping 50% in 2 weeks is always possible, so don't invest money you'll be emotionally attached to later. Assume it's goooone as soon as you spend it. Then imagine you are Spock whenever you interact with your portfolio. Zero emotions allowed.

You used the word 'invest' four times there. So, your 'better yet', was (imo) worse!

 

[Kyriakos]

I caught the title of an article where it was claimed (maybe falsely) that the sharp fall in bitcoin/other e-coin price may put to risk Musk's ability to buy Twitter. Anyone in the know?