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| February 21, 2018

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Here’s Why You Can’t Judge a Coin by Its Market Cap

February 15, 2018 |

Here’s Why You Can’t Judge a Coin by Its Market Cap

Ever heard of a coin called ucash? You should have. It’s in the world’s top 25 cryptocurrencies after all, based on market cap, placing it higher than stratis, omisego, and zcash. Making it to the hallowed heights of 21st, where ucash placed on February 12, calls for mainstream media coverage, a growing user base, and significant adoption you would think. As it turns out, ucash is an outlier – a nothing coin whose ascent is proof that you can’t judge a coin by its cap.

Also read: United Bitcoin May Be the Most Controversial Fork to Date

Fake It Till You Make It

It’s widely accepted that market capitalization – that is, the total value of all coins in circulation multiplied by their last traded price – is a crude reckoner. As an approximate guide to the relative size of respective cryptocurrencies, market cap usually suffices, but there are occasions when it’s glaringly wrong. Ucash is the perfect case in point. The obscure altcoin – or shitcoin, as such offerings are pejoratively described – rose out of nowhere this week to soar into the crypto top 100.

Here’s Why You Can’t Judge a Coin by Its Market Cap

As anyone with a cursory knowledge of market cap metrics will know, gaming the system is extremely easy. All it takes is for someone to create a shitcoin with a circulating supply of 150 billion, list it on an equally shit exchange, sell one coin for $ 1 and instantly it’s worth more than bitcoin. The same trick that propelled dentacoin into 21st spot in the cryptocurrency rankings last month has now done the same for ucash. The exchange it’s traded on, BTC-Alpha, is a dubious Russian site, registered in the UK, with 600 Telegram followers, less than 2,000 Twitter followers, and a logo that’s ripped off of Maestro. But because it’s listed on Coinmarketcap, it’s eligible for inclusion in what passes for crypto’s “official” ranking system.

Here’s Why You Can’t Judge a Coin by Its Market Cap

Getting High On Your Own Supply

There are 325 billion dentacoins in circulation and 8.6 billion ucash, which explains why they’ve managed to artificially climb so high. Whether or not ucash was the result of a pump and dump is immaterial; on low liquidity exchanges like BTC-Alpha, everyone’s a whale and every coin is ultra volatile.

Here’s Why You Can’t Judge a Coin by Its Market Cap

Coinmarketcap’s extensive range of altcoins often makes for entertaining reading, especially when filtered by percentage gain. This week’s big performer, going by that metric, is unity ingot which is up 3,600%, though like ucash it’s only available on one tiny exchange. Although ucash and unity ingot are extremes, they illustrate why you should never judge a coin by its market cap.

Do you think there’s a better metric than market cap for rating cryptocurrencies? Let us know in the comments section below.


Images courtesy of Shutterstock, and Coinmarketcap.


Need to calculate your bitcoin holdings? Check our tools section.

The post Here’s Why You Can’t Judge a Coin by Its Market Cap appeared first on Bitcoin News.

Bitcoin News

Market Shakes Inflation Worries, Ends Up

February 15, 2018 |

Stocks rose for the fourth day in a row Wednesday on Wall Street after shaking off an early stumble following another sign that inflation was picking up slightly, the AP reports. The market started slightly lower but turned higher within the first hour of trading and kept going. The Dow…
Newser

Will the wild stock market cause the Federal Reserve to slow interest rate hikes? And should it?

February 13, 2018 |

Financial markets delivered an unwelcome gift for Jerome H. Powell when he was sworn in last week as chairman of the Federal Reserve — a nosedive.

Triggered by fears of rising inflation and interest rates, the Dow Jones industrial average’s record 1,175-point plunge on Feb. 5 kicked off the worst…


L.A. Times – Business

Healthcare stocks lead U.S. market lower

February 13, 2018 |

Healthcare companies led stocks broadly lower in Tuesday’s early trading on Wall Street as the market gave back some of its big gain from the day before.

Drug distributor companies were especially hard hit in the early going after the Wall Street Journal reported that Amazon was seeking to expand…


L.A. Times – Business

Stock market sell-off puts the share-buyback bogeyman back in focus

February 12, 2018 |

Short-term savior or longer-term source of instability?

Investors are facing that question after the dust settles on last week’s historic market rout, which saw $ 1.25 trillion in value wiped from U.S. equities in a single day. While fingers are being pointed at systematic strategies and volatility-linked…


L.A. Times – Business

What you need to know about a stock market correction, and why it’s not necessarily a bad thing

February 9, 2018 |

The stock market is all about numbers, and the biggest one to remember in the wake of this month’s steep losses is 10.

When a stock index declines 10% from its recent high, that’s considered a market correction.

After plunging more than 1,000 points on Thursday for the second time this week, the…


L.A. Times – Business

NY Regulator Demands Vigilance Against Market Manipulation from Bitlicense Firms

February 9, 2018 |

NY Regulator Demands Vigilance Against Market Manipulation from Bitlicense Firms

Accusations, rumors and fears of manipulation in the cryptocurrency market have been around for a long while now. The most recent one involves Tether supposedly artificially propping up the price of bitcoin by printing USDT. Now one regulator demands that companies in its jurisdiction will take action against such possible risks.

Also Read: Weiss Ratings Defends its Decision to Give Bitcoin Only a C+ Grade

Vigilant Against Market Manipulation

NY Regulator Demands Vigilance Against Market Manipulation from Bitlicense FirmsThe New York State Department of Financial Services (DFS) has issued a guidance paper on Wednesday, reminding all cryptocurrency companies licensed by it that they are required to implement measures designed to effectively detect, prevent, and respond to fraud, attempted fraud, and similar wrongdoing. In addition, it reminded Bitlicense holders that they must be especially vigilant against efforts at market manipulation. The regulator has granted six Bitlicenses so far, including to Bitflyer USA, Coinbase Inc., XRP II and Circle Internet Financial, and charters to Gemini Trust Company and itBit Trust Company.

“DFS took the lead in 2015 in regulating the virtual currency market, and we continue to be vigilant concerning risks in these markets. Market manipulation presents serious risks, both to consumers and to the safety and soundness of financial services institutions,” said Superintendent Maria T. Vullo. “As the cryptocurrency markets continue to evolve, DFS is directing virtual currency companies to take the necessary steps to guard against fraud, and to be extra vigilant about manipulation. By these actions, the market can evolve with strong regulatory supervision.”

All Bitlicense Firms to Report Risks

NY Regulator Demands Vigilance Against Market Manipulation from Bitlicense FirmsIn its guidance paper, the DFS also directed cryptocurrency firms to adopt measures that include effective implementation of a written policy to identify and assess the full range of fraud-related risk areas, including market manipulation. The policy should provides procedures and controls to protect against identified risks, allocate responsibility for monitoring those, and provide for the investigation of fraud and other wrongdoing, whether suspected or actual.

Immediately upon discovering any wrongdoing, a licensed cryptocurrency firm must submit a report to DFS with all the details. They must also submit, as soon as practicable, further reports of any developments along with a statement of the actions taken, and a statement of changes put in place in order to avoid repetition of similar events.

What could have prompted the regulator to suddenly fear manipulation in the crypto market? Tell us what you think in the comments section below.


Images courtesy of Shutterstock.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post NY Regulator Demands Vigilance Against Market Manipulation from Bitlicense Firms appeared first on Bitcoin News.

Bitcoin News

International Market Maintains Demand for Chinese Cryptocurrency Mining Hardware

February 5, 2018 |

International Market Maintains Demand for Chinese Mining Hardware

The future for manufacturers of bitcoin mining hardware in China appears bright despite reports that the Chinese central government will seek to rein in the power consumption of mining companies operating within its borders. Hong Kong-based media outlet, South China Morning Post, has reported that there is considerable international demand for Chinese mining hardware internationally – with Russian buyers representing a significant share of the industry’s demand.

Also Read: Large European Power Company Will Not Sell Electricity to Crypto-Miners

Russian Buyers Provide Demand for Chinese Mining Equipment

International Market Maintains Demand for Chinese Mining HardwareSouth China Morning Post spent time with Alex, a 38-year-old Russian businessman visiting China to establish connections with bitcoin mining hardware retailers. The report states that Alex spent three days exploring central Shenzhen, where he compared the products offered by 30 different retailers. Alex claims to have had two or three trips to China over the last 15 years to purchase toys that he resells in Russia, however, this is the first trip that he has undertaken in order to purchase mining hardware.

Alex states that when he first entered the bitcoin mining industry he purchased 200 units in Moscow, for which he paid a 20% premium when compared to the Chinese market. He states that there is far more to consider than just the prices of the hardware he inspects, emphasizing that “It’s about how to choose a true retailer [that I trust].”

For Alex, Shenzhen, in particular, offers too many potential retailers to easily choose from.

Mining Hardware Vendors Plentiful in Shenzen

International Market Maintains Demand for Chinese Mining HardwareSouth China Morning Post recounted exploring the SEG Plaza in Huaqiangbei, Shenzen – a major manufacturing hub that has comprised a Special Economic Zone since the 1980’s.

The report states that the plaza houses “vendors of mining machines scattered between the fourth and sixth floors in spaces originally occupied by sellers of computer components,” noting that “One mining shop had a Russian translation at the bottom of its ad.”

Whilst South China Morning Post article states that “Russians dominate the list of foreign customers,” it is also reported that “Indians and other Europeans” comprise a significant share of the market demand for Chinese mining hardware.

Do you think that China will maintain its dominance over the mining hardware manufacturing market? Share your thoughts in the comments section below!


Images courtesy of Shutterstock


Want to create your own secure cold storage paper wallet? Check our tools section.

The post International Market Maintains Demand for Chinese Cryptocurrency Mining Hardware appeared first on Bitcoin News.

Bitcoin News

Dow tumbles 666 points as stock market drops amid fears of rising interest rates

February 2, 2018 |

Stock prices fell sharply from near record highs Friday, with the Dow Jones industrial average tumbling 666 points, or 2.5%, to close out the worst week on Wall Street in years.

The main trigger was growing concern about rising interest rates and inflation, and their impact on stocks going forward,…


L.A. Times – Business