bitcoin

Saturday, October 30, 2021

Bakkt stock goes parabolic, GBTC outpaces BITO ETF and Tom Brady offers 1 BTC for 600th touchdown ball: Hodler’s Digest, Oct. 24-30

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $62,540, Ether (ETH) at $4,420 and XRP at $1.08. The total market cap is at $2.66 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are SHIBA INU (SHIB) at 164.03%, Curve DAO Token (CRV) at 58.39% and Decentraland (MANA) at 54.46%.

The top three altcoin losers of the week are OKB (OKB) at -23.74%, XDC Network (XDC) at -12.94% and Stacks (STX) at -9.66%.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.

Most Memorable Quotations

Anybody that does the homework […] ends up investing into it. Look at Ray Dalio, a Bitcoin skeptic, now a Bitcoin investor.

Anthony Scaramucci, founder and managing partner of SkyBridge Capital

#Bitcoin is the most practical solution for a consumer, investor, or corporation seeking inflation protection over the long term.

Michael Saylor, CEO of MicroStrategy

To a degree, we think rising regulations could be a positive for Coinbases competitive positioning, particularly versus business models that predominantly rely on markets being unregulated.

Peter Christiansen, Citi analyst

As of yesterday, the total size of the digital asset market was $2.7 trillion. Among that $2.7 trillion, nearly 60% were commodities. […] Given the size, the scope and the scale of this emerging market, how its interfacing and affecting retail customers, and with the scale of the growth being so rapid, potential financial stability risks in the future, I think its critically important to have a primary cop on the beat.

Rostin Behnam, acting chairperson of the U.S. Commodity Futures Trading Commission

Creators, owners and operators or some other persons who maintain control or sufficient influence in the DeFi arrangements, even if those arrangements seem decentralized, may fall under the FATF definition of a VASP where they are providing or actively facilitating VASP services.

Financial Action Task Force

GameStop is looking for a unique individual who can help accelerate the future of gaming and commerce. In this future, games are the places to go, and play is driven by the things you bring. Future creators wont just build games but also the components, characters, and equipment. Blockchains will power the commerce underneath.

GameStop job post

“The conversation has shifted dramatically, where I think there’s a little bit of an understanding [from professional sports organizations] that there’s something here. I meet very little resistance these days that NFTs are a thing.”

Caty Tedman, head of partnerships at Dapper Labs

There may be some parallels here between the 2017 bull run and this 2021 cycle; however, adoption is far greater, open interest is higher, and the utility of crypto is unrecognizably farther along than in 2017.

Steven Gregory, CEO of Currency.com

Prediction of the Week

Bitcoin price dip matches October 2017 with BTC ‘explosion’ still forecast before 2022

Bitcoins price sustained a bit of turbulence this week, trading above $63,000 before falling down to around $58,000, based on data from Cointelegraphs BTC price index. Following the dip, Bitcoins price rallied back up past $62,000.

Zooming out on a longer time horizon than just this week reveals similarities in price action between 2021 and 2017 (one of the crypto markets notable bull runs) according to charting from Twitter user Smart Crypto. The Twitter personality posted a tweet showing two charts side by side one from 2017 and one from 2021.

Both charts showed Bitcoins price action from July until the end of the year. The charts look as if 2021 rhymes with 2017 in terms of Bitcoins price action. If BTCs chart continues playing out similarly to 2017, the asset could be in for a notable rise in value ahead. Smart Cryptos tweet was seemingly based on analysis from Twitter user TechDev.

FUD of the Week

CFTC reportedly investigating decentralized prediction platform Polymarket

Earlier this week it was reported that the Commodity Futures Trading Commission (CFTC) was investigating Polymarket, a New York-based decentralized prediction market platform.

The news was first reported by Bloomberg, citing anonymous sources who claimed that the CFTC was looking to gauge whether the firm was enabling customers to trade binary options and conduct swaps that should be registered with the financial regulatory agency.

Polymarket is firmly committed to complying with applicable laws and regulations and to providing information to regulators that will assist them with any inquiry, a spokesperson from Polymarket said.

SEC reportedly knocks back Valkyrie’s leveraged Bitcoin ETF

It was reported on Thursday that the U.S. Securities and Exchange Commission (SEC) had knocked back two Bitcoin ETF applications from Valkyrie and Direxion.

On Tuesday, Direxion filed for a product that would enable investors to buy contracts that short the price of BTC, while Valkyrie applied for a leveraged BTC futures ETF the following day.

As many onlookers have pointed out, the SEC appears to specifically favor Bitcoin ETFs that offer direct exposure to futures contracts, as opposed to funds that are directly backed by the asset, or ones that are leverage-based and shorting-focused in this instance.

US gov attorneys to target individuals and gatekeepers for crypto prosecutions

A group of high-ranking U.S. government attorneys from the SEC, Department of Justice (DOJ) and CFTC outlined their agencies directives for white-collar crypto enforcement on Wednesday.

The SECs enforcement director, Gurbir Grewal, said the regulator is putting its focus on gatekeepers, as he noted that “they’re the first line of defense more often than not against all manner of misconduct.” Grewal added that the SEC is also keeping an eye on unregistered crypto exchanges, unregistered and fraudulent initial coin offerings, and crypto-lending platforms.

Nicholas McQuaid, the principal deputy assistant attorney general of the DOJ’s Criminal Division, said that his agency is looking to crack down on fraudulent individuals specifically. While Vincent McGonagle, the acting director of the Division of Enforcement for the CFTC, said that regulators are focusing on the wild west of decentralized finance (DeFi).

Best Cointelegraph Features

We haven’t even begun to tap into the potential of NFTs

Nonfungible tokens will become a critical component of all brands marketing and digital strategy initiatives.

Why now? SEC took eight years to authorize a Bitcoin ETF in the US

The SEC has been holding steady for years, but the real-world dynamics of crypto adoption and maturation rendered an ETF approval all but inevitable.

Crypto City: Guide to New York

The city that never sleeps is one of the major hubs in the crypto world despite the best efforts of regulators.

from Cointelegraph.com News https://ift.tt/3GE4WnV

Celebrities are embracing NFTs in a big way

The next few years are likely to be very interesting, as the nonfungible token market opens digital collectibles for fans and investors.

The nonfungible token (NFT) market is growing. According to a new report by analytics platform DappRadar, NFT trade volume soared past $10 billion during the third quarter of 2021, a sevenfold increase from the previous quarter’s figure. Although a significant slice of that action comes from runaway hits like NBA Top Shot, CryptoPunks and gaming platform Axie Infinity, NFT use cases are rapidly proliferating as creators recognize their potential.

In the not-too-distant past, celebrities keen to profit from the burgeoning crypto scene had few options. Mostly, they were limited to shilling an initial coin offering (ICO) or investing their own money in a startup they deemed promising. Thanks to NFTs, however, they can now leverage their star appeal by releasing sought-after digital collectibles representing, well, just about anything: artwork, albums, trading cards, or merchandise. These tokenized collectibles can then, in turn, be traded on the open market among fans and investors.

The music industry is a perfect proving ground for NFTs

From musicians and athletes to actors and supermodels, prominent celebrities are busy minting and auctioning a dizzying array of blockchain-based assets and commodities that appeal to the digitally-savvy crowd. Through NFTs, public figures can connect with fans in a digital realm and open up a new revenue stream into the bargain.

Earlier this year, Canadian musician Grimes sold almost $6 million worth of NFTs encompassing artwork and audio-visual animations. While some tokens were one-of-a-kind, other cheaper items had thousands of copies. Although this fact appears to contradict the NFT concept — isn’t every NFT supposed to be provably unique? — the “duplicates” in question raised over $5 million.

Dropping NFTs tomorrow at 2pm EST. enter the void pic.twitter.com/l9fNFUCheX
— Grimes ᚷᚱᛁᛗᛖᛋ (@Grimezsz) February 28, 2021

It is perhaps unsurprising that musicians are increasingly leveraging NFTs to supplement their income: The shift to streaming over the last decade has massively impacted the earning power of artists. The global COVID-19 pandemic also dealt a huge blow to the industry, since many musicians had relied on live performance for income. Acts joining Grimes down the NFT rabbit hole include Snoop Dogg, Eminem, Jay-Z, Shakira, Lewis Capaldi, Steve Aoki, Shawn Mendes, Kings of Leon, Soulja Boy and Aphex Twin.

Of all of the above names, Kings of Leon made perhaps the biggest splash by tokenizing their new album, When You See Yourself, and raised $2 million in the process. Interestingly, the release included half a dozen Golden Ticket auctions, with the resultant tokens entitling the holder to front-row seats to one show from every Kings of Leon tour for life. Album tokens priced at $50, meanwhile, included a limited-edition vinyl.

We are proud to support Katy Perry’s highly anticipated NFT launch in December that celebrates her upcoming Play residency at the Resorts World Las Vegas hotel. Katy is one of the world’s best-selling artists with all six of her albums surpassing one billion streams on Spotify. Interestingly, the NFTs will include both digital collectibles and IRL experiences — so there’s something for everyone.

Creativity is at the heart of these ventures, and new NFT use cases are emerging all the time. Take blockchain-powered marketplace Royal, for instance, which allows users to purchase shares of songs they enjoy — and earn royalties as those same tracks achieve popularity. Artists, meanwhile, get to retain the majority of rights to their work while accessing direct funding from their biggest supporters. According to Royal, it’s a system “where artists and fans can benefit mutually without relying on middlemen taking most of the profits.” A nice idea, to be sure, and one wonders what the record label bosses make of it.

From TopShot to Topps

Music may very well prove to be the single biggest driver in pushing NFTs into the mainstream — but sports stars are also embracing NFTs en masse.

Of course, we cannot discuss the intersection of blockchain and sport without referencing NBA Top Shot, the basketball card trading game that has turned its creator Dapper Labs into a multi-billion dollar company. Top Shot gives NBA fanatics the opportunity to buy, sell and trade officially-licensed video highlights of iconic moments like Lebron’s two-handed reverse windmill slam against the Houston Rockets last February — $219,000 is the lowest ask, FYI. Lest you believe that trading is concentrated among a core of diehards, Top Shot has facilitated over 13 million transactions while onboarding over a million users.

Needless to say, this formula is being replicated across other sports including baseball (Topps MLB), soccer (Sorare, Socios) and motor racing (F1 Delta Time). ONE Championship, the largest mixed martial arts (MMA) promotion in Asia, also recently announced that they will be launching a marketplace on the Theta blockchain with NFTs offering exclusive access to real-world benefits such as backstage passes, ringside seats and other personalized fan experiences. Individual sportsmen and women are also mobilizing their fan bases through special NFT drops, with heavyweight champion Tyson Fury selling a one-of-a-kind token for just shy of a million dollars. The buyer also received a physical painting of the artwork, signed boxing gloves and a personal video from the self-professed Gypsy King.

It’s natural to wonder where we go from here. Will the NFT bubble burst, leaving fans and investors holding a hoard of digital collectibles? Or, will we see more creative use cases emerging, with NFTs granting fans all kinds of nifty perks?

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Mitch Liu is the co-founder and CEO of Theta Labs. In 2010, Liu co-founded Gameview Studios, one of the earliest free-to-play mobile game studios best known for its Tap Fish game franchise with nearly 100 million downloads. The company was acquired by DeNA, a leading Japanese mobile gaming company six months after launch. Prior to that, he co-founded Tapjoy in 2007, a pioneer of mobile video advertising, and grew that company to $100MM in revenues. He holds a BS in Computer Science and Engineering from MIT and an MBA from Stanford Graduate School of Business.

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The United States will become the global crypto and blockchain leader

The United States is rapidly embracing decentralized finance, the cryptocurrency sector and the innovative industry of blockchain technology.

We have some great news coming out of the United States on the cryptocurrency industry this month with potentially more good news coming later this fall. On Oct. 6, Gary Gensler, head of the U. S. Securities and Exchange Commission (SEC), confirmed during a House Committee on Financial Services hearing that the regulator will not ban cryptocurrency, potentially blazing the path for the world’s largest economy to become the global leader in the development of decentralized finance (DeFi) and blockchain technologies.

Gensler, who taught a class on cryptocurrency at MIT, also said that prohibiting cryptocurrency doesn’t fall under the SEC’s mandate and the only way to legally ban digital assets would be through Congress. “It’s a matter of how we get this field within the investor consumer protection that we have and also working with bank regulators and others — how do we ensure that the Treasury Department has it within Anti-Money Laundering, tax compliance,” Gensler said. He also added:

“Many of these tokens do meet the test of being an investment contract, or a note, or a security.”

U.S. regulators will not ban cryptocurrencies

The SEC’s announcement comes after U.S. Federal Reserve Chair Jerome Powell said on Sept. 30 that the regulator has no plans to ban Bitcoin (BTC) and other cryptocurrencies during testimony in Congress. When asked by Rep. Ted Budd, a longtime advocate for the cryptocurrency sector and a member of the Congressional Blockchain Caucus, whether he intended to “ban or limit the use of cryptocurrencies,” Powell responded with a resounding “No. [I have] no intention to ban them.”

Fed Chair Powell says he has no intention to ban #Bitcoin and cryptocurrencies pic.twitter.com/i2zfRPk1je
— LilMoonLambo (@LilMoonLambo) September 30, 2021

Most of the media reports I have been reading are headlined with “The U.S. will not ban cryptocurrencies.” This is true, but this also means something much more significant: The U.S. will allow cryptocurrency to grow and will embrace the community to be involved in the process of discussing better ways for regulating the industry.

When the largest economy in the world announces that it will allow cryptocurrency to exist with its current financial industry — of course, with proper regulation — all other nations should take notice and begin considering opening their doors and regulating the industry in a fair way that spurs innovation and helps to create new jobs.

The U.S. allows crypto as adoption increases

As we have been seeing, U.S. regulators are incorporating the cryptocurrency industry into its financial system — allowing the traditional banking system to work alongside the new and fast-growing decentralized financial system. This could enable the U.S. to become a frontrunner in fintech development, blockchain technologies and even into more unconventional parts of decentralized finance such as insurance, trade finance and fundraising.

From a regulatory standpoint, there is plenty of work that still needs to be done by the cryptocurrency community and the U.S. government to pinpoint where their interest aligns and how they can work tougher, therefore making a smart decision together on how to regulate the industry, including the regulation of stable coins, decentralized exchanges, cryptocurrency derivatives and yield farming, just to name a few.

It is also very possible that the SEC could approve as many as four Bitcoin futures this fall, based on Bloomberg Intelligence’s count. On Oct. 3, the analyst put the chances the SEC would approve a Bitcoin exchange-traded fund (ETF) at 75%, with ProShares and Valkyrie already leading the race, getting their approvals coming on Oct. 19 and Oct. 22, respectively.

The U.S. set to lead in blockchain technologies

It's also nice to note that even American lawmakers are buying Bitcoin. U.S. Senator Cynthia Lummis disclosed that she scooped up the world’s largest cryptocurrency on Aug. 16, worth between $50,001 to $100,000.

Since the U.S. government won’t ban cryptocurrencies and American politicians are investing in them, it would be a good idea for all of us to reevaluate our investment portfolios and take a long look at Bitcoin, Ether (ETH) and other new blockchain technologies.

The U.S. is clearly signaling that it will embrace and regulate Bitcoin, blockchain technology and other cryptocurrencies, which from a geopolitical perspective, couldn’t have been more smart — positioning itself to receive massive foreign investment and attract the best talent on the planet. I expect to see the U.S. become the leader in decentralized finance over the coming years as regulators continue to work with the cryptocurrency community to build a sustainable and secure industry.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Raymond Hsu is the co-founder and CEO at Cabital, a cryptocurrency wealth management platform. Prior to co-founding Cabital in 2020, Raymond worked for fintech and traditional banking institutions, including Citibank, Standard Chartered Bank, eBay and Airwallex.

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The major tax myths about cryptocurrency debunked

More crypto tax enforcement is coming, and many taxpayers are complying going forward, and amending prior returns if they have something to clean up.

Crypto and taxes may not be a match made in heaven, but taxes seem inevitable, and the United States Internal Revenue Service (IRS) has made it clear it is going after people who don’t report. With IRS summonses to Coinbase, Kraken, Circle and Poloniex, plus other enforcement efforts, the IRS is on the hunt. The IRS sent 10,000 letters in different versions asking for compliance, but all were nudges to encourage taxpayers to be compliant.

The IRS hunt for crypto has often been compared to the IRS hunt for foreign accounts more than a decade ago. Unfortunately, it is not clear if there will ever be a crypto amnesty program emulating the offshore voluntary disclosure programs the IRS formulated for offshore accounts.

The IRS made its first big announcement about crypto in Notice 2014-21, classifying it as property. That has big tax consequences, accentuated by wild price swings. Selling crypto can trigger gain or loss and be taxable. But even buying something with crypto can trigger taxes. Paying employees or contractors does too. Even paying taxes in crypto can trigger more taxes.

We are already seeing crypto audits by the IRS, and by some states (notably California’s Franchise Tax Board), and more are sure to follow. At least now, there are tracking and tax return preparation alternatives that can make the process easier than it was in the early days. Everyone is trying to minimize taxable crypto gains and to defer taxes where legally possible.

Still, it is easy to get confused about the tax treatment and take tax positions that may be hard to defend if you are caught. With that in mind, here are some things I’ve heard, that I’ll call crypto tax myths.

Myth 1

You can’t owe any tax on cryptocurrency transactions unless you receive an IRS Form 1099. If you did not receive a Form 1099, you can check the box on your tax return that says that you did not have any transactions with cryptocurrency.

Actually: Tax may still be owed, even if the payor or broker does not file a Form 1099. A Form 1099 does not create tax where no tax was previously due, and plenty of taxable income is not reported on Forms 1099. A Form 1099 might be wrong in which case, explain it on your tax return. But if you are audited and your best defense is that you chose not to report your transactions because you did not receive a Form 1099, that is weak.

Myth 2

If you hold your crypto through a private wallet instead of an exchange, you don’t need to report the crypto on your tax returns.

Actually: Private wallet or exchange, the tax rules are the same. The impulse to hide ownership by moving wealth to anonymous holding structures is not new. When Swiss banks began disclosing their U.S. accountholders to the IRS and U.S. Department of Justice, many U.S. taxpayers tried just about everything, but nearly everyone paid in the end, usually with big penalties. The cryptocurrency question on the IRS Form 1040 is not limited to cryptocurrency held through exchanges. If you say “no,” even though you hold crypto through a private wallet, you are potentially making false statements on a tax return signed under penalties of perjury. You might be betting that you will never get caught, but thousands of U.S. taxpayers who have Swiss bank accounts who can attest how poorly that bet can played out.

Myth 3

If you hold your crypto through a trust, LLC or other entity, then you do not owe tax on the crypto transactions and do not have to report. Besides (the myth continues), income generated through LLCs is tax-free.

Actually: Owning crypto through an entity may keep the income off your tax return. But unless the entity qualifies (and is registered) as a tax-exempt entity, the entity itself will likely have tax reporting obligations and may owe taxes. For tax purposes, LLCs are taxed as corporations or partnerships, depending on their facts and tax elections. Single-member LLCs are disregarded, so the LLC income ends up on the sole owner’s return. If your entity is a foreign entity, there are complex U.S. tax rules that can make you directly liable for certain income produced within the foreign entity.

Myth 4

If I structure the sale of my crypto as a loan (or some other non-sale transaction), I don’t have to report the proceeds.

Actually: Consider if you are loaning or selling the crypto. The IRS and courts have robust doctrines to disregard sham transactions. Are you getting the same crypto back that you are loaning? Are you charging interest on the loan, and paying tax on the interest as you receive it? Some loans may not hold water. And if you sell crypto and receive a promissory note, that may complicate your taxes further with installment sale calculations.

Myth 5

A crypto exchange is a type of trust since you can’t unilaterally change the policies of the exchange. So you do not own the crypto in your account for tax purposes and do not have to report transactions through an exchange.

Actually: The IRS has not said any of this. IRS guidance suggests that the IRS views taxpayers as owning the cryptocurrency held through their exchange accounts. It seems highly unlikely that the IRS would view crypto held through an exchange account as owned by the exchange itself (as trustee), rather than owned by the account holder. Taxpayers often own their assets through accounts held by institutions, such as bank accounts, investment accounts, 401(k)s, IRAs, etc.

In most cases, the tax law treats taxpayers as owning the money and assets held through these accounts. Some special accounts like 401(k)s and IRAs have special tax rules. And having an account treated as a trust is not necessarily a good tax result. Beneficiaries of trusts, and particularly foreign trusts, have onerous reporting obligations. Thus, before you consider crypto exchanges as trusts, be careful what you wish for. Calling something a trust does not mean income generated within the trust is exempt from income tax.

Myth 6

Congress’s amendment to Section 1031 of the tax code that limits like-kind exchanges to real property doesn’t make crypto-to-crypto exchanges taxable.

Actually: Section 1001 of the tax code provides that a taxable gain results from the “sale or other disposition of property.” The sale of any type of property for cash or other property can create a taxable gain. The IRS says crypto is property, so trading crypto for other crypto is a sale of crypto for the value of the new crypto.

Before the Section 1031 amendment took effect in 2018, a crypto-for-crypto swap might have been ok as a like-kind exchange under Section 1031. But the IRS is pushing back on this position in tax audits and has issued guidance that denies tax-free treatment for certain cryptocurrency swaps. That is not precedential and does not cover the waterfront, but it tells you what the IRS is thinking. In any case, now that Section 1031 has limited like-kind exchange treatment to real property, crypto-to-crypto swaps are taxable unless they qualify for another exception.

Takeaways

Every taxpayer is entitled to plan their affairs and transactions to try to minimize taxes. But they should be wary of quick fixes and theories that sound too good to be true. The IRS appears to believe that many crypto taxpayers are not complying with the tax law, and being careful in the future and doing some clean-up for the past is worth considering. Be careful out there.

This article is for general information purposes and is not intended to be and should not be taken as legal advice.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Robert W. Wood is a tax lawyer representing clients worldwide from the office of Wood LLP in San Francisco, where he is a managing partner. He is the author of numerous tax books and frequently writes about taxes for Forbes, Tax Notes and other publications.

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AVAX tops the crypto predictability list... but the other tokens may surprise you

Two of the top DeFi tokens are also the most perplexing, while layer one and two coins trade more predictably.

You can’t predict the future, but you can learn from the past.

And some crypto tokens are much (much) more predictable than others, when you analyze their historical trading patterns.

In fact, five cryptocurrencies in particular have exhibited the kind of trading predictability that could give sharp-eyed crypto traders a huge advantage in the markets.

These five tokens have all demonstrated one thing in common:

After strong bullish conditions were detected, they averaged an increase in value when measured after 24, 48, and 72 hours
After extreme bullish conditions were detected, on average they also rose after 24, 48, and 72 hours
The minimum average gain over 72 hours following an extreme flag was a startling 10%

While this is a measure of past trading activity and (of course) not a promise of future performance, it’s remarkable to note that these tokens, led by Avalanche (AVAX) exhibit behaviors that consistently average out to major gains, even as other tokens - including AAVE and Curve (CRV) - tend to *decrease* in value over similar timeframes, and still other tokens exhibit few correlations to historical trading conditions at all.

Background to identifying predictability

If you have been following Cointelegraph at all this past year, you have probably read about proprietary data intelligence platform Markets Pro, and the quant-style trading indicator called the VORTECS™ Score.

In purely hypothetical, automated tests the metric generates some mind-bending ROI that can reach dozens of thousands of percent when compounded over several months.

When it comes to putting historical precedent to work as a regular investor, though, knowing each crypto asset’s individual habits is more helpful than marveling at the aggregate data. Here’s one way traders could tell which assets are more likely to follow familiar paths on the way to massive returns.

get markets pro right now

Whose history rhymes most?

The idea behind the VORTECS™ Score is to provide traders with a birds-eye view on multi-dimensional patterns in crypto assets’ past performance data. The key principle underlying the Score’s utility is that oftentimes individual tokens behave in recognizably similar ways in terms of trading metrics and social sentiment... days before their prices explode (or tank). When spotted early, these regularities can inform trading decisions, even though they are by no means predictive of price action.

Average historical gains

The chart features twenty coins that have had the most instances of VORTECS™ Scores above 80 or 90, counted since the platform’s launch.

High scores indicate the algorithm’s confidence that the coin’s current outlook is historically bullish. A score of 90, while quite rare, is expressive of the algorithm’s confidence that prices have usually moved higher and with more purpose when it has seen similar trading conditions in the past.

The bars represent average gains after certain times from hitting the high score. For example, the green bar, marked as 72/90 in the legend, represents average gains that the asset has generated 72 hours after hitting the score of 90; the orange bar shows the average returns after 48 hours from hitting the VORTECS™ Score of 80.

Avalanche (AVAX) is perhaps the most obvious and consistent trade for crypto investors using historical analysis as part of their research. Not only have high scores directly correlated with price appreciation, but the gains have reinforced the algorithm’s thesis perfectly.

Score 80, Sell after 24 hours: Average gain 3%

Score 80, Sell after 48 hours: Average gain 6%

Score 80, Sell after 72 hours: Average gain 9%

Score 90, Sell after 24 hours: Average gain 12%

Score 90, Sell after 48 hours: Average gain 16%

Score 90, Sell after 72 hours: Average gain 28%

Some others are also highly consistent, with bars sitting closely together.

Axie Infinity (AXS) is a great example: 4% at 24/80, 7% at 48/80, 9% at 72/80.

Others delivered modest returns after hitting 80 but did exceptionally well after scoring 90:

For example, Tellor (TRB) with average returns of 5% at 72 hours after hitting 80 and 17% at 72 hours after scoring 90.

Some bars even point below zero, marking those tokens that tended to lose value following high VORTECS™ Scores – however, these are vastly outnumbered.

The majority of crypto assets that cross the VORTECS™ Score of 80 see consistent appreciation in the next 24 to 72 hours, and often for a longer time.

What the chart suggests is that traders can be more confident when the VORTECS™ Score lights up on AXS, MATIC, AVAX, LUNA, and TRB while exercising more caution with the likes of AAVE or CRV.

The Markets Pro team constantly tracks the performance of individual assets as well as the Score itself. Detailed breakdown of relevant data points is published every weekend in the weekly VORTECS™ report to help subscribers make the best out of their membership.

Cointelegraph Markets Pro is available exclusively to members on a monthly basis at $99 per month, or annually with two free months included. It carries a 14-day money-back policy, to ensure that it fits the crypto trading and investing research needs of subscribers, and members can cancel anytime.

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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Elon Musk-named meme token 'Dogelon Mars' gains nearly 4000% in October

The humongous bull run appeared in sync with similar price rallies across Dogecoin-inspired joke cryptocurrencies, notably Shiba Inu.

A so-called meme cryptocurrency named after Tesla and SpaceX CEO Elon Musk is rising in value, namely by a whopping 3,780% in October.

Dubbed Dogelon Mars (ELON), the cryptocurrency reached $0.00000233 Saturday—its highest level since May 13—after opening the month at $0.00000005 (data from Poloniex).

The massive upside move pushed Dogelon Mars' market cap from around $26 million on Oct. 1 to as high as $1.19 billion on Oct. 30, thus making MUSK the 92nd-largest cryptocurrency in the world by market capitalization.

*ELON/USDT daily price chart featuring its all-time high. Source: TradingView*

What launched ELON price to the moon?

A major portion of ELON's October gains came from its performance on Oct. 29 and 30, when the token rallied by more than 200% alongside a listing on OKEx and Crypto.com on Oct. 29.

Thank you Martians for all of your overwhelming support to get us listed on OKEx. It is only one of many stops on our intergalactic mission. $ELON emissions are being transported to your wallets right now!
— Dogelon Mars (@DogelonMars) October 28, 2021

ELON's impressive gains come amid an ongoing retail mania across Dogecoin-like meme cryptocurrencies.

Most notable is Shiba Inu (SHIB), a Dogecoin-inspired joke cryptocurrency, which rose by more than 850% in October to attain a market cap of around $38.50 billion and even surpassing Dogecoin itself.

*Top meme cryptocurrencies by market cap. Source: CoinMarketCap*

Similarly, Samoyedcoin (SAMO) surged by around 2,925% to reach a market valuation of around $458 million. Hoge Finance's (HOGE) rallied by 2,923% in October to become a $458 million asset in comparison to $15 million at the beginning of this month.

“Whenever one of these coins starts to pump a little bit, everyone starts to think this could be the next nonsensical rally,” Eric Wall, chief investment officer of cryptocurrency investment firm Arcane Assets, told the Wall Street Journal.

“It’s a casino, and it’s more fun than a roulette table.”

Bull Flag in play

The Dogelon Mars price corrected by almost 30% after topping out for the year at $0.00000233. In doing so, it formed a parallel descending channel that appeared like a Bull Flag, a bullish continuation indicator.

*ELON/USDT hourly price chart featuring Bull Flag. Source: TradingView*

Bull Flags appear as the price consolidates lower after a strong move upside, known as Flagpole. Typically, traders anticipate the price to break above the Flag's upper trendline and rise by as much as the Flagpole's height afterward.

The Flagpole's height in ELON's case is around $0.00000102.

Conversely, if the price breaks below the Flag's lower trendline, accompanied by strong volumes, then it risks invalidating the entire bullish setup. Should it happen, ELON may fall towards its 50-hour exponential moving average (the velvet wave) around $0.00000140.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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7 lessons learned from building and scaling Bitcoin mining operations

Building industrial-scale BTC mining farms isn’t easy, but learning from the experience of others will help you to navigate your next moves in crypto mining.

It all started with mining Bitcoin (BTC) in a dorm room. What started as a hobby with a few mining rigs scaled into twenty industry-scale mining farms across the globe. Because we scaled our operations in a new industry, we had to discover what worked and what didn’t through trial and error — because there’s no handbook for this.

Building a multi-site, scaled operation like ours isn’t easy, but if you’re looking to start your mining operations, scale what you have, or invest in a mining company, here are the seven biggest lessons we learned to help you navigate your next moves.

Lesson 1: It takes (a lot of) money to make money

There was a time when you could mine Bitcoin from a laptop, or set up some mining rigs in your room and mine, profitably. But once more miners created more competition and those who wanted to stay profitable had to scale their operations.

Soon a hobby miner couldn't keep up with mining in a dorm room but needed a warehouse — or warehouses — full of mining rigs running day and night to stay profitable. We scaled with the industry and bootstrapped our growth as we went, but those wanting to join today no longer have the option of starting at the bottom and working their way up. That means investing in capital-intensive projects from the get-go.

Lesson 2: Establish long-term relationships

While the Bitcoin mining industry has been growing quickly, it's still very much consolidated with only a few key players holding the power. For example, a large-scale mining operation can’t simply just order new hardware from whatever vendor they want.

There are only a few vendors supplying hardware at this point, and their production cycles are based on just a few chip manufacturers who are tightly controlling the supply — not to mention that we’re currently in a global chip shortage. This means that success relies not just on efficient and well-run operations but on building relationships in the industry, many of which will be for the long term.

Lesson 3: Obsess over operational efficiency

Speaking of operational efficiency, large-scale miners stay profitable when they have the edge over their competitors. This means optimizing electricity, having the most up-to-date hardware, and not having any downtime or issues that would cause a loss of computing power.

Make operational efficiency a priority. For example, in March 2020, when Bitcoin dropped below $4,000, many miners couldn't survive the uncertainty and volatility, and were forced out — yet we survived due to our operational efficiency.

Lesson 4: Never stop innovating

The adage is "innovate or die." In Bitcoin mining, where data centers have to stay powerful and fast to stay profitable, there's no option but to keep innovating. Most importantly, this means keeping your equipment updated and not letting it get obsolete. Mining operations need to plan ahead to replace equipment and time it correctly as hardware may be on backorder for a while. Remember that any type of downtime will cost you.

Innovation also means creating better, more efficient ways for your company to run, like creating software programs specifically designed for mining operations management. In this industry, technology will give you the edge, and even the smallest improvement will keep you ahead of your competition.

Lesson 5: Choose your location wisely

"Location, location, location," they say. Even though Bitcoin can be mined anywhere, large-scale mining operations need to consider their location when setting up shop for a variety of reasons. Not all locations will offer the same sources of electricity for the same prices, so miners need to find locations that not only have abundant, cheap electricity but to ensure that that electricity is green and sustainable as well.

Finally, go to a location that's encouraging of Bitcoin miners, where you know political winds won't shift overnight and shut down all operations will be shut down, like they were recently in China and Iran.

Lesson 6: Time is money

I've said it already, but time really is money, and any downtime or lag in computing power can be costly. This means having great operational control over hardware upgrades, a plan for serving mining rigs, and software that can manage operations efficiently. It also means getting creative: In 2015, we knew that having to wait months for mining hardware shipments was going to cut into our revenue. So we rented 747s to get the machines to us quicker, which allowed us to generate millions in extra revenue that would've been lost due to standard shipping.

These are the types of calculated moves you have to not only be willing to take but be knowledgeable enough about your operations to know to take.

Lesson 7: Scale is everything

Finally, scale is everything. I said before that you can no longer start at the bottom and work your way up. The race instead is to be as big as you can because scale is directly correlated with revenue: The larger you are, the more profit you make.

Building forward

The term “bigger, better, faster” really does apply to Bitcoin mining, so if you’re not ready to strategize, invest time and money, problem solve, and take risks, then another industry may be for you.

There are many more lessons that we've learned, and plenty of lessons that we’ll learn in the years to come. Today, we’ll continue to build this new industry that’s already creating a future of decentralized currency and new ways to exchange value throughout the world.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Marco Streng is the CEO and a co-founder of Genesis Group and Genesis Mining — one of the largest crypto mining companies in the world. Prior to co-founding Genesis in 2013 and becoming an impassioned advocate for blockchain technology and cryptocurrencies, Marco studied mathematics at the Ludwig-Maximilian University of Munich.

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Saturday, October 30, 2021

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Takeaways

What launched ELON price to the moon?

Bull Flag in play

Lesson 1: It takes (a lot of) money to make money

Lesson 2: Establish long-term relationships

Lesson 3: Obsess over operational efficiency

Lesson 4: Never stop innovating

Lesson 5: Choose your location wisely

Lesson 6: Time is money

Lesson 7: Scale is everything

Building forward