Bitcoin in the News : 2018-01 More++

Does bad news breed more bad news? Along with a particularly dismal month for the price of bitcoin (see last week's Bitcoin in the News : 2018-01 Price for an overview), there were many other negative stories about the cryptocurrency community. Take, for example, the stories about Monero. We saw these last year in Bitcoin in the News : 2017-09 More++ (October 2017), and they resurfaced in force in January, for example, in:-

• 2018-01-04: PyCryptoMiner enslaves your PC to mine Monero • 'Researchers have stumbled across a new botnet which has gone under the radar for a long time while quietly enslaving PCs in the quest for cryptocurrency.'

These were joined by another botnet/crypto hookup (Satori/Satoshi?) looking for miners:-

• 2018-01-17: New botnet infects cryptocurrency mining computers, replaces wallet address (arstechnica.com) • 'Satori -- the malware family that wrangles routers, security cameras, and other Internet-connected devices into potent botnets -- is crashing the cryptocurrency party with a new variant that surreptitiously infects computers dedicated to the mining of digital coins.'

Another recurring theme, which is not going to disappear, was energy use:-

• 2018-01-04: Bitcoin’s Cheap Energy Feast Won’t Last Much Longer (washingtonpost.com) • 'To understand why China is cracking down on power use by bitcoin miners, have a look at curtailment. The practice -- where producers of wind and solar power cease generation because the entire electricity system is oversupplied -- has been a major problem for the country in recent years.'
• 2018-01-10: Bitcoin Mining Wastes Energy? What If That's Good? (coindesk.com) • 'Then there’s the "compared to what?" question.'

I could have chosen negative stories by throwing a digital dart at Google news alerts. Here are ten more:-

• 2018-01-06: Breaking Bitcoin With a Quantum Computer (fortune.com) • 'A Toronto-based physicist and pension fund analyst is skeptical about Bitcoin but sees one useful purpose for the crypto-currency: It may detect when someone creates a working quantum computer.'
• 2018-01-09: Fund managers say bitcoin ETF proposals withdrawn due to SEC concern (cnbc.com) • 'Two U.S. companies shelved proposals to launch bitcoin exchange-traded funds, citing ongoing concerns by the Securities and Exchange Commission (SEC), filings showed on Monday. Staff at the regulatory agency "expressed concerns regarding the liquidity and valuation" of futures contracts based on the digital asset, according to one of the filings.'
• 2018-01-11: South Korea considers Bitcoin trading ban (bbc.com) • 'South Korea is considering a law to ban cryptocurrencies such as Bitcoin being traded on local exchanges. Justice Minister Park Sang-ki said virtual currencies were "great concerns" and that the ministry was preparing a bill to ban trading.'
• 2018-01-13: Bitcoin Investors Are Using Credit Cards in Disturbing Numbers (fortune.com) • 'A recent poll shows that nearly one-fifth of all Bitcoin buyers are using credit cards to fund their investments, likely paying hefty fees for the privilege. A large portion of those buyers then carry the balance instead of paying their cards off, implying that they’re highly leveraged – but confident that their investments will grow in value.'
• 2018-01-15: Researchers find that one person likely drove Bitcoin from $150 to $1,000 (techcrunch.com) • 'Researchers have written a fascinating paper on Bitcoin price manipulation. Entitled “Price Manipulation in the Bitcoin Ecosystem” and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors.'
• 2018-01-16: New Report: Bitcoin Drug Money Laundering Is Highly Centralized (cointelegraph.com) • 'The report’s authors indicate that much of illicit Bitcoin is laundered through mixers.' • Wikipedia: Cryptocurrency tumbler; 'Cryptocurrency tumbler or cryptocurrency mixing is a service offered to mix potentially identifiable or 'tainted' cryptocurrency funds with others, so as to obscure the trail back to the fund's original source'
• 2018-01-19: CFTC brings two more cases against bitcoin fraud schemes (marketwatch.com) • 'In both cases, fraudsters allegedly took investors money instead of trading and investing in virtual currencies.'
• 2018-01-26: Bitcoin criticized at [World Economic Forum] in Davos but cryptocurrency world fights back (cnbc.com) • 'While the potential of blockchain, the underlying technology behind cryptocurrencies, was praised, bitcoin got slammed.'
• 2018-01-29: Bitcoin robbers 'alerted to fortune by prolific trading' (dailymail.co.uk) • 'Bitcoin robbers who held trader's family at gunpoint "knew about victim's fortune because of his prolific trading on the internet".'
• 2018-01-30: Facebook bans all ads for Bitcoin, ICOs, and other cryptocurrency (theverge.com) • 'Facebook is banning all advertisements for cryptocurrency, including Bitcoin and initial coin offerings, as part of an “intentionally broad” policy against deceptive marketers.'

Enough already; when it rains, it pours. Let's hope February brings better news for everyone.

Bitcoin in the News : 2018-01 Price

In my previous post, Bitcoin in the News : 2017-12 More++, I showed a composite image made from the twelve monthly charts of 2017. I also noted,

Exactly six of the 12 months (two per row) showed a steady upward trend during the course of the month.

None of the 12 months looked anything like the chart for January, which shows a steady downward trend during the course of the month.

Bitcoin Price Index

Before moving to an analysis of the price, I'll mention a few changes to the look of the chart. First, it uses a different color. In changing from green to yellow, are we imagining a traffic light? Next stop: red? Second, the upper right corner used to say 'Price Index'; now it says 'The Future of Money'. Floating over this particular chart, the irony isn't even subtle. Cointelegraph's Bitcoin Price Analysis threw up some unusual stories for the month.

• 2018-01-03: Peter Thiel’s VC Fund Invests Millions Into Bitcoin, Market Reacts • 'The Fund reportedly invested $15-20 million into Bitcoin, which has grown into hundreds of millions in the past year. [...] The WSJ report was unclear on whether or not Founders had sold any of its holdings to date.'
• 2018-01-12: Is Bitcoin’s Value Due to Social Status it Brings? • 'It makes perfect sense to want to own something that is has increased in value 13-fold in the last year, but is part of Bitcoin’s value due to the social status it brings?'

On that first story, it's not clear when the fund bought bitcoin (although it was some time ago), what price it paid, or whether any was sold. 'Market Reacts' ... with a yawn? On that second story, they're kidding, right? Both of these stories are grasping at straws when the overall trend is depressing.

In a rising market, every participant is a genius. In a falling market, everyone is a potential scapegoat.

• 2018-01-18: GDAX Starts BCH Trading, Users Angry About Focus • 'The addition of BCH on GDAX follows the addition of the hard fork coin on the Coinbase site, which saw the price of BCH rocket to new all time highs. While Coinbase owns GDAX, they are not the same entity. [...] However, the cryptocurrency community was not particularly thrilled with the news, given the slowness of GDAX to implement the SegWit protocol.'
• 2018-01-24: Why are Potential Forks not Accounted into the Bitcoin Futures Price • 'New Bitcoin forks became a sensitive issue after CME launched Bitcoin future contracts. Their average price does not include new offsprings as CME has no fork policy yet.'
• 2018-01-25: What the FUD? Bitcoin Market Beset by January Woes • 'It has been a depressing fortnight for anybody reading various mainstream headlines touting the ‘end of Bitcoin’ and the arrival of the ‘crypto bubble’ crash. Unsurprisingly, the most recent cryptocurrency market slump has led to naysayers stepping onto their soapboxes, crying out messages of ‘I told you so’.'

That last story mentions South Korea, UBS at Davos, and potential regulations esp. in China. None of these is a game changer, but when the herd is nervous, any noise might cause a stampede. The January chart shows a mid-month decline from $14K to $10K over a couple of days, accompanied by high volumes. Let's call this 'rushing for the exit'. What will happen if a genuine panic arises?

The last story will certainly come up for next month's '2018-02 Price' post. I'll mention it here, because it's a recurring theme and because the FUD acronym is mentioned again.

• 2018-02-02: Finding a Price: Why is Bitcoin Worth What it is? • 'Bitcoin price, as any investor knows, can move in the blink of an eye. It can go from $20,000 to the half of it in a few weeks, and Bitcoin is on a constant rollercoaster of price discovery. This leaves many asking what determines the price of this digital currency, especially for an intangible asset that exists only on the Internet.'

As for FUD, see Fear, uncertainty and doubt (wikipedia.org).