Over the past few weeks, a virus in the coronavirus family (same family as the common cold, SARS, MERS, etc.) has started to circulate the globe. This novel coronavirus (2019-nCoV) originated in China, specifically in the Chinese city of Wuhan and seemingly due to infected animals being sold at a local market.
The virus has thus far infected 1,400 individuals, official numbers state, with cases existing mainly in China though starting to spread to the U.S., France, Malaysia, Singapore, and beyond.
Although these numbers may seem small, reports indicate that hospitals in Wuhan are being overrun due to the influx of cases and those believing they are sick with this coronavirus. Independent videos published to social media, in fact, say that there is a shortage of masks and other protective materials, along with too few doctors.
Thus, the world has sprung into action, attempting to support the victims.
Crypto Giant Binance to Support Coronavirus Outbreak
Changpeng “CZ” Zhao, the Chinese-Canadian businessman that heads the world’s largest crypto exchange Binance, revealed in a tweet published minutes ago that his company has pledged “10m RMB ($1.5m USD) to help coronavirus victims.”
Zhao seemingly denied any use of crypto assets in this, writing that it “is not realistic to do crypto to end beneficiaries [for the Wuhan outbreak].”
Binance is purportedly still working on the logistics for this move, with the industry executive writing: “We didn’t make any announcements. But BCF/Binance team has been busy for the last few days. Still need help to arrange logistics locally.”
This seemingly makes Binance the first crypto company to have started a charitable initiative to support victims of the latest Chinese coronavirus.
This isn’t the first time Binance has been charitable in times of need. It in 2018 contributed $1 million to aid those affected by the massive flood in the west of Japan. The crypto firm also has its own charity arm.
Bitcoin is the Only Asset With “Sharpe Ratio” More Than 1: PlanB
Bitcoin Twitter commentator PlanB has claimed that BTC is the only asset that has a Sharpe ratio of greater than 1. The Sharpe ratio describes the increased rate of return received for the extra volatility sustained when holding a riskier type of asset.
Risk vs. Reward
To understand the Sharpe ratio, one must take into consideration the returns of holding a risk-free asset, compared to holding a riskier asset with higher returns. In this case, a risk-free asset is considered something like a US treasury T-Bill, which is backed by the full faith and credit of the US government, along with the world’s largest economy.
The Sharpe ratio is the difference between the returns of the higher-returning, more volatile assets when compared to the risk-free, much lower returns of a safer asset like US T-Bills. It is important to note that Sharpe ratios only measure the returns based on the amount of risk and the ratio doesn’t actually measure the volatility of the underlying asset itself.
PlanB makes the case that Bitcoin has an extremely high Sharpe ratio compared to the returns on other investments in much more popular assets, including the FAANG stocks, which have dominated the last decade. This is especially surprising when considering that PlanB even skipped the first few years of Bitcoin’s price history when the fledgling cryptocurrency when from having a value of $0.83 cents to a high of $424 USD in 2012. PlanB withheld the price data from 2009-2012 for his calculation.
Taleb disagrees with PlanB’s Bitcoin Sharpe Ratio assessment
World-renowned author of The Black Swan, Nassim Nicholas Taleb, a former options trader and risk analyst, who has been a long-time Bitcoin commentator, countered by saying that the Sharpe Ratio can not be reliably applied to BTC.
Taleb is a brilliant trader and statistician but unfortunately did not elaborate on his claim that The Sharpe ratio and Bitcoin don’t play well together. Many other traders in the thread seemed to agree with PlanB’s initial post and echoed positive sentiments towards the Sharpe ratio claim.
Bitcoin’s volatility is legendary, with the cryptocurrency often suffering corrections of 80%. It is this volatility that many detractors say that Bitcoin has no future as currency because it is too unreliable for commerce. On the other hand, traders make all their money through volatility so assets with a high Sharpe ratio are very attractive to speculators.
Bitcoin advocates ask how a new cryptocurrency, with a small market cap, that came from an open-source project which was released anonymously, can become the world’s reserve currency without volatility? Despite Bitcoin’s volatility recent data has shown that it’s volatility has actually been on the decline. Wild price swings or not, many traders and Hodlers are still in profit.
What do you think? Can the Sharpe Ratio be applied to Bitcoin reliably? Let us know in the comments!
Images via Shutterstock, Twitter: @100trillionUSD, @nntaleb
The crypto industry was surprised to hear reports that Ripple CEO Brad Garlinghouse is considering taking the fintech company public in the near future, with many analysts speculating as to how this couple impact XRP.
The news regarding their intent to eventually conduct an Initial Public Offering (IPO) isn’t too shocking while considering their recent $200m Series-C funding round, but it is being viewed by investors as a bearish thing for XRP.
It is important to note, however, that XRP’s close ties to the company may actually be the sole thing that stops Ripple from listing on the public markets, due to the lack of clarity on the token’s potential status as a security.
Ripple Muses Possibility of an IPO as Investors Cry Foul
During a discussion at the World Economic Forum in Davos, Ripple CEO Brad Garlinghouse told the Wall Street Journal that Ripple will be on the “leading side” of blockchain companies that go public.
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company,” he noted, as quoted by Asheesh Birla, Ripple’s SVP of Product.
The problem with Ripple going public – in the eyes of XRP investors – is that the stream of funding and liquidity garnered through a public listing would no longer make it of critical importance that the company builds utility around the XRP ecosystem.
This is because the company would no longer be semi-reliant on the stream of income they receive from their quarterly token sales.
Will XRP Be the Sole Factor That Stops the Company from Going Public?
Jake Chervinsky, General Council at Compound Finance and an ex-litigator, spoke about the possibility that the lack of clarity surrounding XRP’s status as a securities product will stop the company from actually moving forward with an IPO.
“‘We might IPO in twelve months’ is something you might say to reassure your Series C investors, but not something you actually do when your book value derives largely from a digital asset that could be an unregistered security,” he explained in a recent tweet.
Although there is no foreseeable timeline for when the regulatory situation surrounding XRP will grow clearer, it is highly probable that Ripple will need to continue deriving income from their quarterly sales in the near-term, thus making it imperative that they continue generating utility for XRP.
The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors
In late 2019, the remnants of multi-level Ponzi scheme Onecoin crumbled. However, Onecoin’s founder, dubbed the ‘crypto queen,’ Ruja Ignatova, remains on the run and law enforcement haven’t caught up with her yet. Moreover, police are investigating two churches in New Zealand that allegedly have links to the Onecoin operation and founders.
After Onecoin Operations Implode in Cairns, Investors Accept They Were Scammed
In 2014, Ruja Ignatova, Sebastian Greenwood, and Konstantin Ignatov launched a project called Onecoin and allegedly acquired $4 billion from investors unlawfully. Ignatova and her cohorts claimed that Onecoin was a legitimate cryptocurrency and the project followed the coattails of the crypto hype up until mid-2019. Multiple reports had disclosed that there was no blockchain behind Onecoin and the product was merely a multi-level marketing (MLM) Ponzi.
A few weeks ago, news.Bitcoin.com reported on the Onecoin project falling apart at the seams as leaders were arrested and various websites were seized. For a while, a few Onecoin websites remained operational but most have since been taken down by domain hosts or local law enforcement. Websites like onecoin.eu, oneworldfoundation.eu, and oneacademy.eu show a “server hold” notice when entering the site.
Now in certain locations around the world, Onecoin side projects are also imploding and revealing how large the crypto Ponzi operation has grown over the years. Reports are now showing how Onecoin was very prevalent in Australia and New Zealand, signing up investors from numerous cities. On January 25, the Cairns Postreported on how investors from the east coast have started to accept that they have lost money. The Cairns Post exposed how the scheme was affecting Cairns residents in November but at the time investors were still in disbelief. Now Cairns residents have come to a point of acceptance, the news outlet notes. “I have come to the realization that the truth has been misrepresented to the Onelife network,” a Cairns-based Onecoin investor wrote.
Shilling Onecoin Packages in Church and Living the ‘High Life’ in Florida on House Arrest
Further, it seems that the Onecoin Ponzi infected the town of Auckland, New Zealand, and the region’s Samoan church. New Zealand’s Department of Internal Affairs (DIA) is currently investigating the Auckland-based Samoa Worship Centre over connections with the Ponzi. Onecoin leaders allegedly sold high-profile Samoan church community members “tens of thousands of dollars” worth of Onecoin products.
Reports disclose that both the Samoan Independent Seventh Day Adventist Church (SISDAC) and the organization’s sister worship center were used to shill Onecoin packages. According to the Auckland worship center’s pastor, Avele Tanielu, his church had no ties to the Onecoin operation. The DIA is investigating both churches and Onecoin operations are banned in Samoa. SISDAC has told the press that it was cooperating with authorities and maintains the church itself did not transgress against any money laundering laws.
In addition to the church investigations and the implosion in Cairns, in the U.S. former attorney Mark Scott has been allowed an extension to prepare motions to defend himself against a prison sentence. Scott is accused of laundering $400 million worth of Onecoin’s proceeds. Currently, Scott is under house arrest in Florida and his lawyers are allegedly preparing for a new trial or an acquittal motion. Additionally, Scott’s legal team says that Scott needs to undertake treatment for “longstanding medical issues” and they are requesting more time to prepare for new motions. However, media reports and prosecutors also note that Scott was recently “spotted out to dinner” with bodyguards and was living the “high life” in Florida.
New York Southern District Court Gives Victims Permission to Serve the ‘Crypto Queen’ by Alternative Means
While the aftermath of Onecoin’s demise continues to shake victims, it seems as though most of the operations are coming to a halt. The so-called crypto queen Ruja Ignatova has been missing for well over a year and she has yet to be charged like Sebastian Greenwood and Konstantin Ignatov were last year. In the U.S., Judge Valerie Caproni has authorized victims who are suing Onecoin and Ignatova to serve her by alternative means.
The people suing Ignatova attempted to serve her through the onecoin.eu email account she used since 2016. Now thanks to Caproni’s court order, Onecoin victims have permission for alternative service. This means the plaintiffs can serve her with registered first-class mail to the Dubai headquarters, message her social media accounts and other means of contact. Caproni stressed that the plaintiffs must notify the court in writing whether they received a sender-return error for Ignatova or a contact message.
What do you think about the Onecoin Ponzi? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Fair Use, Twitter, Wiki Commons, and Pixabay.
Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.
A 1% donation of the block reward to fund Litecoin (LTC) development – this is what Charlie Lee, the coin’s founder, proposes as a solution to underfunded initiatives.
Litecoin Miners May Afford to Support Development with 1% Fee
Litecoin miners, which also take rewards for Dogecoin and other Scrypt-based algorithms, can afford to share some of their block rewards, commented Lee.
The Litecoin Foundation, one of the most prominent development entities, has gone through funding deficits, seeking other ways to survive the effects of the bear market.
The suggestion somewhat angered the community, as mining has been an unrestricted and voluntary activity. Rewards remain for the miner, and any attempts to take a part of the reward have caused discontent. Litecoin has started without a premine, but other projects like ZCash (ZEC) built the idea of a developer reward in its early years of mining.
But the proposal also arrives right after Bitcoin Cash (BCH) decided to introduce a tax on miners. The coin, from May 15 onward, will levy a 12.5% miner tax to all entities wishing to discover blocks. If the tax is not paid, any blocks discovered will not be considered and propagated.
The LTC approach is different and intended to be voluntary, but it opens a can of worms on an activity that is supposed to have no barriers to entry. Additionally, Litecoin mining has slowed down enough, as a 12.5 LTC block reward made most miners give up after the most recent halving. If a donation is levied, it would possibly bring around $3,816 per day for LTC development, based on the current block reward, and a bit more if Dogecoin is included.
Currently, the mining rate of LTC has fallen by about 70% from the all-time peak ahead of the halving. Miners produce around 142 TH/s, just a fraction of the activity of Bitcoin Cash, or Bitcoin’s networks. Scrypt mining is happening on a much smaller scale, with less popular machines, as the most activity is pointed to the SHA-256 mining for Bitcoin and its forks.
LTC trades at $53.51, still going through unstable rallies above $60. But the altcoin remains one of the most liquid markets, with volumes above $3 billion, outpacing XRP and BCH. LTC is also viewed as a harbinger of a bull market for BTC and altcoins and has remained a stable of trading, preserving most of its liquidity. Still, the coin has sunk from highs above $350.
What do you think about Litecoin miners paying a donation fee? Share your thoughts in the comments section below!
Although the past few weeks have proven to be highly bullish for Bitcoin (BTC) and the aggregated crypto markets, it is important to note that the local highs set by most major digital assets are looking increasingly like mid-term tops, and bears are slowly regaining control over the markets.
It does appear that most major cryptocurrencies have formed an incredibly close correlation with Bitcoin over the past several days, which means that where the crypto trends next will likely determine the state of the entire market moving forward.
This comes as BTC faces some turbulence, with one analyst noting that it is hovering above a key level that, if broken below, could lead to major losses.
Bitcoin Guides the Crypto Markets as Weakness Grows
At the time of writing, Bitcoin is trading down just under 2% at its current price of $8,350, which marks a notable decline from its daily highs of nearly $8,600 that were set yesterday when bulls attempted to spark a rally.
The rejection from this level and inability for bulls to catalyze and sustainable momentum has led the entire crypto markets to similarly decline, with analysts closely watching for further near-term downside.
Josh Rager, a prominent crypto analyst on Twitter, explained in a tweet that he is closely watching to see how BTC responds to its support at $8,000.
“BTC price was unable to reclaim level and has made its way back toward support. All is not lost, want to see how it reacts at $8k. Be patient, you’ll be happy you stuck around this emotional roller coaster of a market in a couple years,” he noted.
Analyst: BTC Is on the Brink of Looking Incredibly Bearish
Teddy, another well-respected crypto analyst, also noted in a tweet that Bitcoin is currently on the cusp of looking incredibly bearish, as it has been struggling to hold above the lower boundary of a descending channel.
“BTC Quick update: Looks okay but on the brink of looking like [trash]… As mentioned about this “bullish” structure is valid as long as support is held above dotted lines – below, ouch,” he noted while referencing the channel seen below.
If Bitcoin does break below its key technical support levels, it will likely be a catalyst for a massive selloff amongst most major cryptos.