Tag Archives: Bitcoin

Modern Cryptocurrency Portfolio Theory

Summary

Modern Portfolio Theory doesn’t work with cryptocurrencies.

In a cryptocurrency portfolio, it’s all about managing risk.

As the cryptocurrency space matures, more high-level allocation models will become relevant.

This idea was first discussed with members of my private investing community, Crypto Blue Chips. To get an exclusive ‘first look’ at my best ideas, start your free trial today >>

Why Modern Portfolio Theory doesn’t work with cryptos

Aside from the obvious (that cryptocurrencies are not companies, they’re just software and the network of people involved), MPT asks the portfolio manager to make some basic assumptions.

  1. We are able to estimate the likely return of an asset (to compare it to the likely risk and determine the efficient frontier)
  2. We look for assets that are not highly correlated to reduce risk

Both of these are a big problem for cryptocurrencies, because the probable return is somewhere between zero and 100x, and nearly every cryptocurrency in the top 20 is highly correlated with bitcoin (at least for now).

https://static.seekingalpha.com/uploads/2018/7/22/49499619-15323029000211542_origin.pngImage Source: Sifrdata

Cryptocurrency projects by sector

What about building a cryptocurrency portfolio based on sector?

I’d like to tell you that it’s possible to just look at the different categories of cryptocurrency projects out there, and just build a sector weighted portfolio like you might do with traditional equities. If that were possible, you might want to use a chart like this to narrow down your choices.

https://static.seekingalpha.com/uploads/2018/7/22/49499619-15323015832143135_origin.jpgImage Source: Twitter

Or, perhaps one like this.

https://static.seekingalpha.com/uploads/2018/7/22/49499619-15323126278860574_origin.jpgImage Source: Reddit

But unfortunately, we can’t have nice things. Recall that 80% of ICOs in the last year are dead already or were simply scams in the first place (the real figure is probably over 90% now).

So, what can we do? We could just skip cryptocurrency all together, or we could take a different approach.

Building a cryptocurrency portfolio is about disciplined, rational reduction

When investing in cryptocurrencies, I suggest that you start off assuming everything is a scam and working backwards from there. Out of the 1900 or so cryptocurrencies listed on CMC, we might be able to argue for a handful as being legit projects that:

  • solve a real problem
  • aren’t a scam
  • didn’t start last week
  • have had their security model stress tested in the wild
  • have people working on them still
  • have an active community

In order to build your own cryptocurrency portfolio, I’m going to give you a list of questions to ask. This list is not exhaustive, but it’s a good place to start.

Can I replace the word “blockchain” with database?

This one comes from Andreas Antonopoulos. If the problem the project is trying to solve would work just as well without a blockchain, then we have a problem. Blockchains are slow, expensive data structures that when used properly can operate in a hostile environment with nobody at the helm.

If performance and control are important, a blockchain is probably not the correct tool for the job.

Is the code open source?

One of the main reasons that bitcoin has been successful is that the code is open source. This allows the community to share ideas and work together to solve problems that they find interesting and even exciting. Projects that hide their code away should be viewed with suspicion as many bugs could be lingering behind the walled gardens. Remember, closed systems maximize control while open systems maximize innovation at the edge.

Can I rent enough hash power to 51% this network right now?

Many cryptocurrencies are secured by proof of work. However, not all coins are created equal. Mining secures a PoW coin, but it can also be its downfall. For example, Ethereum (ETH-USD) shares a mining algorithm with Ethereum Classic (ETC-USD). However, Ethereum has attracted 20x more hash power than Ethereum Classic, which means that if you go to Nicehash, you can rent enough hash power to just take over Ethereum Classic for about $16,330 per hour. The reason for this is that the Ethash algorithm can be run on just about any GPU, so by using a marketplace for renting hash power, anyone that wants to can literally take over a the cryptocurrency of their choice if they pay the price.

However, not all coins can be hijacked in this way. Some coins like Bitcoin (BTC-USD) are so huge that only 1% of the necessary hardware could be rented for such an attack. Any coin that shares the SHA-256 algorithm is orders of magnitude easier to attack than bitcoin because bitcoin is the most profitable to mine, so that’s the network that the miners point their hardware at.

Bitcoin Cash (BCH-USD), for example, can be attacked with 1/14th the hardware that you would need to attack bitcoin, making it much less secure from a 51% attack standpoint.

See chart below.

https://static.seekingalpha.com/uploads/2018/7/22/49499619-15323042289304018_origin.pngImage Source: Crypto51

Does the coin have a fancy new security model or data structure?

If it does, it might just be the next big thing. But, more likely the security model has major flaws that have yet to be discovered. Bitcoin’s blockchain and proof of work has been operating in the wild since 2009, and it has been attacked constantly.

https://static.seekingalpha.com/uploads/2018/7/22/49499619-1532304896481929_origin.pngImage Source: Twitter

Smaller cryptocurrencies have the disadvantage of not being in the spotlight, so their networks’ bandwidth and security are tested at only a fraction of the pressure placed on larger networks like Bitcoin and Ethereum.

This doesn’t mean that we should stop trying to innovate, we just need to understand that the risk/reward ratio for these new concepts should be seen as orders of magnitude higher than that of Bitcoin and Ethereum because of the fact that they just haven’t been around long enough, they haven’t grown large enough to really be put to the test.

Some examples of this are the tangle, block lattice, and delegated proof of stake. They might be great ideas, they might even be the future, but betting on them now is a different animal than investing in Bitcoin.

Can this cryptocurrency be properly secured (preferably in a hardware wallet) in cold storage?

As I wrote about in my blog, part of the joy of investing in cryptocurrencies is understanding how to take custody of the assets. While there are many ways to secure cryptocurrency, my preference is to use a hardware wallet and store the coins offline (cold storage).

There are some really cool projects I’d like to invest in, but I just don’t want to deal with the mess of having to run full nodes of each project on my local machine, or worrying about if my paper wallet is safe.

A hardware wallet like Trezor or Ledger Nano S can store many of the top cryptocurrencies is a highly secure manner. As a fiduciary, I owe it to my investors to use the best security possible, so I rarely invest in cryptocurrencies that cannot be stored in a hardware wallet.

Is anyone using this cryptocurrency, and are there any software engineers working on the project still?

These seem like basic questions that you wouldn’t have to worry about if you were investing in a traditional company. I mean, nobody asks “I wonder if any software engineers at Amazon are writing code this month?” before buying Amazon (AMZN). But, with cryptocurrency things are a bit different.

Some projects I would like to invest in fail at this step. Either the number of transactions does not seem to be growing, or the development team seems to have wandered off.

Two projects I would be investing in if they were actively maintained are Dogecoin (DOGE-USD) and Litecoin (LTC-USD). See the development activity below.

https://static.seekingalpha.com/uploads/2018/7/22/49499619-15323067888755922_origin.pnghttps://static.seekingalpha.com/uploads/2018/7/22/49499619-1532306813947775_origin.png

With no active development team, these projects simply can’t survive.

Does the team behind this project inspire confidence, and can they be identified?

In order to reduce the odds that the cryptocurrency project that you’re thinking about investing in is a scam, it’s worthwhile to take a look at the founders. If you can’t find a way to identify them, and their past work, then what kind of recourse do you have if they just take the funds and vanish?

Is there a whitepaper, and does it make sense?

You can learn a lot about a cryptocurrency project from the whitepaper. In fact, I think it’s a great place to start. Also, you might want to check that the entire thing wasn’t copied and pasted, because that’s a thing that happens all the time.

What is the token’s issuance model?

Bitcoin has a fixed issuance model that will result in 21 million tokens being created by the year 2140, but many other coins have no set maximum supply. Also, some of these ICOs have large portions of the tokens set aside for their foundation and early stage investors (and they probably bought it at a discounted rate before the rest of us even heard about the project).

Tokens that restrict the supply tend to be worth more as long as they can attract actual usage. It’s important to understand how new tokens are issued if you are trying to predict what they might be worth in the future if the project achieves the goals it set out for itself.

What the future of portfolio management might look like

I think that as the cryptocurrency market matures we will start being able to apply the more traditional valuation models. I think that when traditional assets start being tokenized, then it won’t be uncommon to have crypto assets in a traditional portfolio much in the same way that we have derivatives, ETFs, mutual funds and equities all in the same E-Trade (ETFC) account now.

Imagine having a basket of foreign currencies with some bitcoin thrown in, or a basket of utility companies that includes blockchain-based power tokens representing claims of future energy production.

I think that crypto assets will just become a tool, a technological means to an end in the future. Tokenizing existing assets and the discovery of new assets to tokenize may well define the digital revolution as we move into a world where the Internet of Things becomes a vivid reality.

Conclusion

It would be nice to apply modern portfolio theory to a cryptocurrency portfolio. However, the cryptocurrency market simply isn’t mature enough yet for this to be a reality. Today, the best we can do is look for signs of extraordinary risk and steer clear. This means taking a more skeptical approach and investing only in cryptocurrencies that might qualify as “Crypto Blue Chips.”

If you like this article, you will love Crypto Blue Chips, where this idea was discussed first. Besides posting articles early, there’s research in Crypto Blue Chips you can’t get anywhere else, like the BVIPE, the Bitcoin Value Indicator Professional Edition, posted with updates every week. Also, you can follow along as I build a portfolio of cryptocurrencies that we’ll be holding for the next 1-3 years. Get in on the ground floor with Crypto Blue Chips.

Source: by Hans Hauge | Seeking alpha

 

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Bitcoin Whale Blows Up, Leading To Forced Liquidation, “Bail-Ins”

We may have found the reason for Bitcoin’s persistent weakness over the past week.

After hitting a price above $8,000 thanks to recent Blackrock ETF speculation, the cryptocurrency has dropped 10% in the past week, dropping as low as $7,300 today, leaving traders stumped what was causing this latest selloff in the absence of market-moving news.

It turns out the reason may have been a good, old-fashioned margin call forced liquidation, because as Bloomberg reports a massive wrong-way bet left an unidentified bitcoin futures trader unable to cover losses, resulting in a margin call that has “bailed-in” counter parties forced to chip in and cover the shortfall, while threatening to crush confidence in yet another major cryptocurrency venues.

According to a statement posted by Hong Kong’s OKEx crypto exchange on Friday, a long position in Bitcoin futures that crossed on Monday, July 30, had a notional value of about $416 million. After Bitcoin prices dropped sharply in subsequent days, OKEx moved to liquidate the position on Tuesday, “but the exchange was unable to cover the trader’s shortfall as Bitcoin’s price slumped.”

The exchange, which identified the problem trader only by an anonymous ID number 2051247, said the position was initiated at 2 a.m. Hong Kong time on July 31.

https://www.zerohedge.com/sites/default/files/inline-images/bitcoin%20futs%20trade.jpg?itok=7FefGVJS

“Our risk management team immediately contacted the client, requesting the client several times to partially close the positions to reduce the overall market risks,” OKEx said. “However, the client refused to cooperate, which lead to our decision of freezing the client’s account to prevent further positions increasing. Shortly after this preemptive action, unfortunately, the BTC price tumbled, causing the liquidation of the account.”

The exchange was forced to inject 2,500 Bitcoins, roughly $18 million at current prices, into an insurance fund to help minimize the impact on clients. And since OKEx has a “socialized clawback” policy for such instances, it also forced other futures traders with unrealized gains this week to give up about 18 percent of their profits.

As Bloomberg notes, “while clawbacks are not unprecedented at OKEx, the size of this week’s debacle has attracted lots of attention in crypto circles.”

The episode underscores the risks of trading on lightly regulated virtual currency venues, which often allow high levels of leverage and lack the protections investors have come to expect from traditional stock and bond markets. Crypto platforms have been dogged by everything from outages to hacks to market manipulation over the past few years, a period when spectacular swings in Bitcoin and its ilk attracted hordes of new traders from all over the world.

“Everyone is talking about it,” said Jake Smith, a Tokyo-based adviser to Bitcoin.com, in reference to the OKEx trade.

And while everyone also wants to now how much capital was actually at risk, the biggest question is just how much margin there was in the trade. The problem here is that the exchange – ranked No. 2 by traded value – allows clients to leverage their positions by as much as 20 times.

For those who rhetorcially tend to ask “what can possibly go wrong” after every bitcoin slump, well now you know.

What happens next?

OKEx, which requires traders to pass a quiz on its rules before they can begin investing in futures, outlined planned changes to its margin system and liquidation procedures that it said would “vastly minimize the size of forced liquidation positions” and make clawbacks less frequent.

According to Bloomberg, clawbacks are unique to crypto markets and expose the exchanges who use them to reputational risks when clients are forced to absorb losses, said Tiantian Kullander, a former Morgan Stanley trader who co-founded crypto trading firm Amber AI Group.

“It’s a weird mechanism,” Kullander said.

Finally, judging by the bounce in bitcoin, the market appears relieved that it has identified the culprit of the selling, and with no more liquidation overhang left, is once again pushing prices across the crypto space higher.

source: ZeroHedge

PBoC Filings Reveal Big Picture for Planned Digital Currency

https://media.coindesk.com/uploads/2018/06/yuan-bundles-860x430.jpgChinese yuan image via Shutterstock

The Digital Currency Research Lab at the People’s Bank of China has filed more than 40 patent applications so far – all as part of an aim to create a digital currency combining the core features of cryptocurrency and the existing monetary system.

A national digital fiat currency, say what?

Data from China’s State Intellectual Property Office (SIPO) revealed two new patent applications on Friday, pushing the total number submitted by the lab to 41 over the 12 months since its launch.

Each of the 41 patent applications focuses on a certain aspect of a digital currency system, and, when combined, would create a technology that issues a digital currency, as well as provides a wallet that stores and transacts the asset in an “end-to-end” fashion.

For instance, the most recently revealed patent application explains how the envisioned digital wallet would allow users to check any transactions made through the service, while earlier documents offered details on how the wallet can facilitate transactions.

The ultimate goal, according to PBoC’s patents, is to “break the silo between blockchain-based cryptocurrency and the existing monetary system” so that the digital currency can sport cryptocurrency-like features, while being widely used in the existing financial structure.

Last week’s patents further explain that the envisioned wallet would not be limited, like a typical cryptocurrency wallet, to merely storing the private key to a certain asset. Nor would it be like another mobile payment service that only reflects a number on an application’s front-end interface without users actually holding the assets in a peer-to-peer manner.

Instead, the patents indicates the wallet would store a digital currency issued by the central bank or any authorized central entity that is encrypted like a cryptocurrency with private keys, offers multi-signature security and is held by users in a decentralized way.

The research lab said in  one of the documents that it believes it is building a mechanism that makes a crypto-featured digital currency more applicable in the financial world.

The hybrid approach is also in line with opinions shared by the PBoC’s vice governor Fan Yifei and Yao Qian, the head of the research lab, who have both argued for a balance between the two polars of centralization and decentralization.

Overall, the patent applications filed so far signal the continuous efforts made by China’s central bank to develop its own central bank digital currency, as well as to potentially widen the application’s role among other central institutions.

The lab notably commented in a patent application released in November 2017:

“The virtual currencies issued by private entities are fundamental flaws given their volatility, low public trust, and limited useable scope. … Therefore, it’s inevitable for the central bank to launch its own digital currency to upscale the existing circulation of the fiat currency.”

Read one of the most recent patent applications below:

PBoC Digital Currency Research Lab by CoinDesk on Scribd

Source: By Wolfie Zaho | CoinDesk

The Bitcoin Valuation Delusion

Summary

Some people seem to believe that Bitcoin might be worthless, we discuss their arguments.

If there was value in Bitcoin, how would we know?

Shared delusions, are they useful?

The case for Bitcoin having no value at all

(Hans Hauge) If you’ve read anything I’ve written so far, you know that I’m long Bitcoin (BTC-USD). However, that doesn’t mean I’ve turned a blind eye to the crowd that says it’s all an illusion, that Bitcoin is intrinsically worthless.

Let’s take a look at who is making these arguments, and what they’re saying.

Jamie Dimon – J.P. Morgan Chase CEO

In September of 2017, Jamie Dimon said:

It’s worse than tulips bulbs, it won’t end well.

And:

There will be no real non controlled currency in the world. There’s no government that’s going to put up with it for long.

So, if I understand correctly, Mr. Dimon’s argument is that every government in the world will soon block all cryptocurrencies. Therefore, Bitcoin is doomed.

Warren Buffet and Charlie Munger of Berkshire Hathaway

In May, 2018, Warren Buffet said that Bitcoin was:

probably rat poison squared.

And Charlie Munger said:

To me, it’s just dementia. It’s like somebody else is trading turds and you decide you can’t be left out.

If I understand correctly, Mr. Buffet believes that Bitcoin is super tasty but very poisonous, like a Big Mac times itself, and Charlie Munger is trying to say that the Bitcoin market is pure FOMO, or the Fear of Missing Out. Therefore, Bitcoin is doomed.

Putting these ideas to the test

I hope you are a data driven person like me. I believe there’s no better way to have a clear understanding when people’s tempers are raging than to just look at data and slowly and carefully think about what makes sense.

Let’s start with Jamie Dimon’s argument that all governments in the world will ban Bitcoin. How does this argument stack up? Let’s look at what’s going on in the three largest economies in the world.

All governments to ban Bitcoin?

When governments move too quickly to ban new technology, the country they represent ends up getting left behind. Coinbase for example, has 20 million users and has traded over 150 billion dollars of cryptocurrencies to date. This kind of economic activity is creating jobs and driving innovation.

Will governments regulate cryptocurrency exchanges? Of course, and they already are.

Will every government in the world ban cryptocurrency outright? I’m not convinced it’s going to happen, especially with what we’re seeing in the US and Japan so far.

Final thoughts on J.P. Morgan

Mr. Dimon’s comments would make more sense if they were, I don’t know, maybe trying to patent Bitcoin’s technology and make their own version. But, that would be kind of unethical, don’t you think? I guess it’s not really surprising since J.P. Morgan (JPM) has been fined more than 29 billion dollars for abusing the market since the year 2000. But, Bitcoin is the fraud?

Bitcoin value is based on nothing but FOMO?

I think people forget that Bitcoin is not some magical beast that lives in isolation. It’s a network with many stakeholders and it represents something different to each group. Bitcoin has created an ecosystem that includes Bitcoin Miners, Software Engineers, Exchanges, Cloud infrastructure like Blockchian as a Service, Merchants, Users, and of course, the speculators and the scammers.

Let’s look at some data.

FOMO or subject of scholarly research?

If Bitcoin was just FOMO, then surely academic interest in the subject would be small, and certainly not growing over time. What’s the big deal after all?

Year Number of Scholarly Articles Mentioning “Bitcoin”
2012 1,040
2013 2,030
2014 4,080
2015 4,640
2016 5,860
2017 9,990

Data Source: Google Scholar

FOMO or a life raft for those living in oppressive regimes?

If Bitcoin was just speculation, surely the countries with the highest search volume for the term “Bitcoin” would be wealthy countries where people are throwing money around, rather than in troubled places where a censorship resistant currency might be of use. As you can see, with the exception Finland in 2012, the interest is overwhelming coming from troubled geographic areas.

Year Number one Country by Search Volume for the term “Bitcoin”
2012 Finland
2013 Estonia
2014 Estonia
2015 Ghana
2016 Nigeria
2017 South Africa

Data Source: Google Trends

FOMO or a source of jobs and innovation?

If Bitcoin was just FOMO, surely it wouldn’t be creating jobs, and certainly it wouldn’t be one of the fastest growing fields in technology.

https://static.seekingalpha.com/uploads/2018/6/13/49499619-15289486497264006.pngImage Source: Burning Glass

FOMO or the new obsession of Venture Capitalists?

If Bitcoin was just FOMO, then why are VC firms investing more in blockchain startups each year? Maybe some of them are caught up in the craze, but just look at the chart below.

https://static.seekingalpha.com/uploads/2018/6/14/49499619-1528949078002327.png
Image Source: Statista

A shared delusion?

To say that Bitcoin has no value is to say that academics (students and professors), governments, venture capitalists, software engineers, hiring managers, and people living in the most troubled areas of the world are completely off their rockers because they dare to challenge our assumptions about what value is and the ways in which it might be transferred.

Is Bitcoin a shared delusion? Sure, but so are lines of latitude and longitude, global time standards, our existing money system, right and wrong, cultural norms, beauty, art and hope. The more important question is, does this shared delusion give us something back? Do we gain something by believing in it?

For me, the answer is clear. I think Bitcoin is one of the most powerful forces for the rights of the individual. I think Bitcoin can at once weaken the oppressors of the downtrodden and create opportunity for the bold.

Conclusion

It may challenge our assumptions that money might come from the crowd, rather than from on high. But, maybe this time it’s up to us to save ourselves? Ask yourself what it might mean to live in a world where currencies exist that reach the entire globe and yet don’t require the backing of a military. I don’t know for sure what it means, but I’ve decided to follow this path and find out for myself, rather than relying on the old guard to hand down truth to me.

Source: Hans Hauge | Seeking Alpha

***

Can Bitcoin Become A Flight-To-Quality Asset?

2018 might be the year we find out.

There’s an old saying on Wall Street that when times are good, you should focus on the return on your capital, but when times are bad, you should only care about the return of your capital. A flight to quality asset then is anything that tends to go up in times of turmoil because investors perceive it as a safe place to park their money.

Upon first glance, Bitcoin is a terrible candidate for such a role. It’s volatile, hard to understand, and difficult to access given how it exists outside of the traditional banking system.

So why would anyone consider it desirable during a crisis? Because it exists outside of the traditional banking system.

One of the first parabolic up-moves for the cryptocoin began with a banking crisis in Cypress. Back in 2013, while still reeling from the aftermath of the financial crisis, the tiny Mediterranean country found its banking system teetering, and reached out to the bigger European powers for help.

But instead of offering them a bailout, the EU came back with something more along the lines of a bail-in, as it demanded that Cypriot banks confiscate a portion of their customers deposits to shore up their balance sheets. To add insult to injury, they also imposed capital controls that prevented people from moving their money to a safer jurisdiction.

As you can see on the chart below, a decentralized form of money like Bitcoin, despite its drawbacks, can suddenly look very appealing when the centralized system starts to falter.

https://www.zerohedge.com/sites/default/files/inline-images/1_07h2st-34dnwwYOFR5XC3Q.png?itok=JhN9K9GQ

Crypto skeptics who tell us that digital money should not be worth anything often forget that fiat money like the Euro is also in of itself worthless. It’s only valuable when someone else is willing to trade a good or service for it. But you can’t get anything in exchange for money that the government is taking or locking up, which is why the Cypriot crisis brought a lot of attention to the then relatively unknown Bitcoin.

Government officials don’t like cryptocurrency because they transfer the sovereignty of money from their control to a decentralized consensus mechanism, a transfer that they view as a downgrade in the quality of money. If our existing system of money and banking was always stable, they would have a point.

But every time there is a crisis, it reminds the public that the folks in charge are not as smart as they think they are. When those same leaders respond to the crisis with draconian capital controls (or selective bailouts for their once and future employers on Wall Street) they remind the public that they aren’t as fair as they think they are, either. Bitcoin might be volatile and hard to understand, but it’s always fair, because math does not discriminate, nor does it change the rules when people start to panic.

So why bring this issue up now? Because there is financial trouble brewing in certain corners of the global financial system, and if things continue to deteriorate, this year might serve as an important test of the crypto economy.

Iran and Venezuela are in the midst of the kinds of hyper inflationary currency death spirals that bring societies to their knees. In Argentina, the peso has fallen to an all-time low against the dollar as inflation and interest rates spike. Turkey is having problems of its own, and China continues to do everything it can to prevent its citizens from liberating their own money.

Some of this weakness was to be expected, because the Federal Reserve is now removing the liquidity it has provided for the past decade. But there’s a bigger issue in play, as the perennial economic mismanagement of developing nations is now rubbing up against the increasing political instability (Brexit, Trump, Catalonia, Five Star) of developed ones.

In the old days, the two best candidates for flight to quality assets were gold and the Dollar. But the former is hard to get a hold of and even harder to store, and the latter is no panacea either. When the Argentinian government last devalued its currency back in 2001, it first forced all local banks to convert the dollar-denominated accounts of its citizens to the Peso. Even the citizens that were smart enough not to trust the local currency had their savings destroyed, learning the valuable lesson that dollars in the bank is not the same as dollars under the mattress.

One of the most important takeaways from past financial crisis is that when the stuff hits the fan, banks are nothing more than a policy tool for the government.

So can a cryptocurrency like Bitcoin be considered a flight to quality asset for certain countries? Given everything we’ve learned in the past 20 years, a better question to ask might be how could it not.

Source: Authored by Omid Malekan via Medium.com, | ZeroHedge

JPMorgan Busted Over Bitcoin Fraud… Seriously!

Oh, the irony…

https://s16-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Fmedia.salon.com%2F2013%2F02%2Fjamie_dimon.jpg&sp=0b75c357def09705e3b7052650b2dcb9Jamie Dimon has come a long way in seven months…

From “Bitcoin is a fraud” in September to “Busted for Bitcoin fraud” in April.

Reuters reports that JPMorgan Chase & Co has been hit with a lawsuit in Manhattan federal court accusing it of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.

Simply put, the bank switched from charging regular interest rates to charging, higher, cash advance rates on purchases of cryptocurrencies without notice to customers about the change.

The named plaintiff in the lawsuit, Idaho resident Brady Tucker, was hit with $143.30 in fees and $20.61 in surprise interest charges by Chase for five cryptocurrency transactions between Jan. 27 and Feb. 2, his lawsuit said.

With no advance warning, Chase “stuck the plaintiff with the bill, after the fact of his transactions, and insisted that he pay it,” the lawsuit said.

Hundreds or possibly thousands of other Chase customers were hit with the charges, Tucker said.

The lawsuit is asking for actual damages and statutory damages of $1 million.

Full Docket below…

Source: ZeroHedge

Bitcoin Battered To Fresh Lows After Twitter Joins Crypto Ad Ban

Facebook started it – banning crypto/ICO ads on Jan 30th, then came Google – copying Facebook’s ban on March 14h; and now, less than a week later, Twitter is virtue-signalling support for the crypto-crackdown, planning its own ban on ads.

https://www.zerohedge.com/sites/default/files/inline-images/725_Ly9jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy81OGZjOTQ0MzIxOGM1MTRjN2I1MjE2MmRlOGFiMTcxMy5qcGc%3D.jpg?itok=ZnQ3SG_-

Sky news reports that Twitter is preparing to prohibit a range of cryptocurrency advertisements amid looming regulatory intervention in the sector.

The microblogging platform is following similar moves by Facebook and Google which have restricted financial advertisements due to concerns about illicit activities.

Sky News understands that the new advertising policy will be implemented in two weeks and currently stands to prohibit advertisements for initial coin offerings (ICOs), token sales, and cryptocurrency wallets globally.

The reaction was swift, just as we have seen to the other crypto ad bans… smashing Bitcoin back below $7500 (into mystery-dip-buyer territory)…

https://www.zerohedge.com/sites/default/files/inline-images/2018-03-18_8-12-11.jpg?itok=FtGpXfUk

But Ethereum and Ripple have been the worst performers since the crypto ad bans began…

https://www.zerohedge.com/sites/default/files/inline-images/2018-03-18_8-22-14.jpg?itok=I7yeDVvG

Reportedly, Twitter has experienced an influx of fake accounts pretending to advertise cryptocurrency giveaways, often by users posing as famous crypto sphere personas like Litecoin’s Charlie Lee.

… is food next?

Source: ZeroHedge