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Pump and a Ponzi? Bithumb Criticized For Prematurely Listing a Cryptocurrency Created by its Developers

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Earlier this week, Bithumb, South Korea’s second-biggest cryptocurrency exchange – behind UPbit – that is known for its rigorous verification process for new cryptocurrencies, announced the airdrop of Popchain, a cryptocurrency which the global community has not heard about previously.

Two Weeks Into Development

Hankyung, one of the leading mainstream media outlets in South Korea, reported that many investors of Bithumb have requested the exchange to reconsider the listing of Popchain and initiating an airdrop to the platform’s users given that the cryptocurrency has only been in two weeks of development and 91 percent of its supply is owned by two individuals.

More importantly, an investigation into the source code of Popchain revealed that its entire source code was copied from the source code of bitcoin, Monero, and Dash, and the copyright of these cryptocurrencies are still in the source code of Popchain. Various cryptocurrency communities within South Korea heavily criticized Popchain and its development team’s plagiarism of the whitepaper and source code of other cryptocurrencies.

As of presently, Popchain is worth around $2 million. But, 91 percent of the supply is stored in two wallets. As such, investors raised concerns towards a possible ponzi scheme, as no other cryptocurrency in the global market has two individuals having more than 90 percent of the entire supply.

Why Did Bithumb Rush Listing?

Earlier this year, Bithumb created a company in Singapore to launch an initial coin offering (ICO) for the company’s own token called Bithumb Cash. South Korea banned domestic ICOs in 2017 and as a result, Bithumb moved its blockchain venture outside of South Korea.

The top three contributors of the Popchain source code are Kwuaint Li, Lialvin, and Su Mingrui, the three main developers of Bithumb Cash. In April, Bithumb stated that it may reconsider its ICO plans and for now, put the entire project to a halt.

As a cryptocurrency listed in Bithumb, ‘Popchain’ is causing controversy among investors.

Investors have started to claim that Bithumb paused its ICO plans to promote Popchain, a cryptocurrency created by its developers that control 91 percent of the cryptocurrency’s supply.

Initially, upon the introduction of Popchain, the Bithumb team said that it will use The E&M’s Popcorn TV and Celeb TV to evolve Popchain into a successful blockchain-based content service platform. Investors were attracted by the token, as Popcorn TV and Celeb TV are platforms that are already being used by millions of users.

Investors Outraged, Bithumb Cancels Listing

Investors in South Korea have been outraged by the Popchain listing and airdrop because unlike other tokens like Kyber Network, EOS, and Storm, which had to go through a rigorous verification process, Popchain, a cryptocurrency that is merely two weeks in development with source code copied from other cryptocurrencies, secured a listing on Bithumb.

When Bithumb announced its plans to list Popchain, less than 18 wallets or users had the Popchain token. To put it simply, Bithumb announced a listing of a cryptocurrency owned and held by 18 people.

Cryptocurrency investors told Hankyung that the listing of Popchain is a fraud-like operation and that Bithumb prematurely integrating Popchain.

In response, Bithumb stated that it will not list Popchain in the short-term and wait until Popchain is integrated by major cryptocurrency exchanges.

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Was November the Last Big Bitcoin Sell-Off? Trader Expects Slow Grind in 2019

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By CCN.com: According to a trader and crypto technical analyst, November 2018 may have been the last sell-off of Bitcoin and a long consolidation period is expected throughout 2019.

Since experiencing a steep 13 percent drop on January 10 from $4,036 to $3,502, the Bitcoin price has been relatively stable in a tight range in mid-$3,000.

Chart from TradingView

What Does Low Volatility Mean For Bitcoin?

While it seems as if the price of Bitcoin has been volatile throughout the past two weeks, the volatility of the dominant cryptocurrency occurred in a tight range between $3,500 to $4,000.

No major movements below or above key support and resistance levels were recorded, preventing any meaningful short-term price movement.

One trader said that if the trend of relatively low volatility in a tight low price range continues, the sideways action of Bitcoin will extend throughout the year, resulting in a long consolidation period.

“The longer this sideways action takes place the more I think the bottom is in. November was one of the worst monthly candles in history. It’s very possible that was the last of the major selling and now we’ll have a consolidation period that lasts most of 2019,” the trader said.

bitcoin price
The trader is predicting bitcoin to trade sideways through much of 2019. Pic: Shutterstock.

On Sunday, Bitcoin recorded a six percent drop against the U.S. dollar in a 24-hour period from $3,700 to $3,470. The asset has since recovered above the $3,500 mark and based on the performance of the asset in the last 48 hours, Bitcoin is expected to demonstrate stability throughout the week.

Hsaka, a cryptocurrency analyst, said:

Inside Bar; Low that was taken out (3480) holding as support; Continue leaning neutral here, can’t short HTF support, will wait for a break (even moreso when confluent with that CME gap).

A slow grind upwards in the first two quarters of 2019 could allow Bitcoin to establish a proper bottom and a mid-term trend reversal. If the price of asset recovers quickly in a short time period, as seen in the major sell-off of cryptocurrencies in November 2018, it can leave the asset class vulnerable to a large short-term correction.

With events that are considered as catalysts to fuel the momentum of Bitcoin in the first two quarters of this year including Bakkt and Bitcoin exchange-traded fund (ETF) far from being materialized due to the shutdown of the U.S. government, it has become more likely for the cryptocurrency market to demonstrate a low level of volatility in the upcoming months.

How About Alternative Crypto Assets?

Historically, alternative crypto assets, especially low market cap cryptocurrencies, have tended to perform strongly against Bitcoin when the asset is in a sideways market.

However, as seen in the performance of tokens and other major crypto assets in the past 48 hours, the stability in Bitcoin is unlikely to trigger short-term rallies for assets with lower volumes and valuations due to the current conditions of the market.

Some analysts believe November to have been the last sell-off for Bitcoin and expect a several-month-long consolidation period to occur.

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Dow Futures Prep for Opening Bell Plunge as Bitcoin Price Turns Volatile

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By CCN.com: The US stock market returns to action this morning following Monday’s holiday break, and the Dow is gearing up for a triple-digit loss at the opening bell. The bitcoin price, meanwhile, experienced a jolt of volatility ahead of the US trading session to break out of what had previously been a relatively calm day for the cryptocurrency market.

Dow Futures See Triple-Digit Pullback

As of 8:29 am ET, Dow Jones Industrial Average futures had declined by 144 points or 0.58 percent, implying an opening-bell loss of 135.35 points. The broad S&P 500 and tech-heavy Nasdaq also steeled themselves for losses at the open, with futures for the two indices down 0.60 percent and 0.68 percent, respectively.

dow jones futures nasdaq S&P 500
Dow Jones Industrial Average (blue), S&P 500 (red), and Nasdaq (orange) futures declined on Monday and Tuesday ahead of the week’s opening bell.

With the US stock market closed on Monday in observance of Martin Luther King Jr. Day, futures trading had nevertheless portended Tuesday declines. As CCN reported, China published its official GDP growth statistics for 2018, which showed that the world’s second-largest economy had expanded at its slowest pace in 28 years.

That data emboldened US President Donald Trump, who implored China to “stop playing around” and “finally do a Real Deal” that would end the ongoing US-China trade war.

“China posts slowest economic numbers since 1990 due to U.S. trade tensions and new policies,” the president tweeted on Tuesday. “Makes so much sense for China to finally do a Real Deal, and stop playing around!”

Hu Xijin, the editor of the China-based Global Times, responded to that tweet with a warning that Beijing won’t sign an “unequal deal,” even if the country experienced negative economic growth.

“China has hoped to reach a reasonable trade deal with the US. When China’s GDP grew at double digit rate, we wished China-US relations go well. But if the US forces China to sign an unequal deal, Beijing won ‘t yield even it is a negative growth, let alone 6.6%.”

Meanwhile, the March 1 end to the US-China tariff truce continues to inch closer, placing more pressure on the two economic superpowers to find common ground.

Bitcoin Price Turns Volatile on Tuesday

Though not on a holiday itself, the cryptocurrency market had been relatively calm on Monday following Sunday’s moderate pullback. This morning, though, bitcoin and its would-be peers have begun to regain a bit of their characteristic volatility.

bitcoin price
A relatively calm bitcoin price broke out of its slumber on Tuesday, at least for five minutes.

After range-trading between $3,550 and $3,500 for most of the day, the bitcoin price took a sudden drop shortly before 11:40 UTC, slipping as low as $3,401 before recovering above $3,520 in a whipsaw movement that took less than five minutes. As of the time of writing, the bitcoin price sat at $3,557 on Bitstamp, about $33 below its intraday high of $3,590.

Day-over-day movements were relatively muted throughout the wider cryptocurrency market. The ripple price (XRP) declined by 1.22 percent to a global average of $0.317, while ethereum, bitcoin cash, EOS, litecoin, and bitcoin sv all moved by less than 1 percent. Stellar, whose price often moves in tandem with ripple, declined 1.33 percent to $0.102, and tron outperformed the index with a 4.51 percent jump to $0.026 that was likely connected to the announcement that TRX holders would earn an airdrop when the new BitTorrent cryptocurrency arrives.

Altogether, the cryptocurrency market cap — which measures the aggregate valuations of all cryptocurrencies — stands at $119.7 billion, representing a 24-hour increase of around $100 million.

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Crypto Could Still Be ‘Global Currency of Future’: Nasdaq CEO

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By CCN.com: On route to Davos, Nasdaq CEO Adena Friedman says 2019 will be a year of disruption and innovation. Cryptocurrencies could still be a global currency if the “tremendous demonstration of genius and creativity” finds practical utility.

Pioneering, Followed by a Dose of Reality

Friedman, like others, believes the cryptocurrency space has gone through the first stage of the “classic invention lifecycle” this is:

“Marked by early pioneers, followed by hype, followed by proliferation of newcomers and then a dose of reality.”

For many, that dose of reality is a real hard hitter. Over $400 billion has been wiped off the market capitalization of cryptocurrencies. Bitcoin’s price has fallen from highs of $19,000 to lows of $3,200. Early investors may still be in profit, for those who joined the market on its way up, they are sure feeling the downside.

Cryptocurrencies Could be the Internet or Segway

The Nasdaq CEO says one of two things will happen next. Firstly, like the internet:

“The innovation finds practical utility followed by years of steady and sustainable commercial progress and integration into the economic fabric.”

Or secondly like the Segway:

“The invention fails to achieve broad adoption and its commercial applications as medium of exchange are limited.”

It’s tough seeing an industry with billions in investment, tens of thousands of credible startups, and stalwart progress towards adoption, compared to a not so successful “personal transportation device.” Even if the Segway was a precursor to technology like the hoverboard.

Nasdaq Works to Gain Investors Trust in Cryptocurrency

Friedman says:

“It is difficult to ignore the huge amount that investors, including some of the most sophisticated global investors, have poured into digital currencies in recent years.”

Adding that such a genius invention “deserves an opportunity to find a sustainable future in our economy.”

That, she says, will depend on governance and regulatory clarity both “antithetical” to a “decentralized, ungovernable” currency.

For Nasdaq, says Friedman, its about gaining investors trust in cryptocurrency by implementing its trade technology and integrity. The Winklevoss twin’s Gemini exchange uses Nasdaq’s software. Nasdaq has also contributed to Singapore’s efforts to settle tokenized assets and invested in the Wall Street ErisX crypto-exchange. It has also partnered with VanEck to roll out bitcoin futures trading in early 2019.

Venture capitalist Chris Burniske too believes cryptocurrency is going through a normal phase of market development. He says crypto is still at the “installation phase” also comparable to the internet, and even Amazon’s rise to success.

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