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Online Sentiment Toward Crypto Market in 2019 — Attitudes Are Positive

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Despite all of the bad press that the digital asset industry continues to receive on an almost daily basis, it appears as though the overall sentiment of the online communities in regard to this burgeoning domain is still pretty positive. For example, Comparitech — a research firm that provides its consumers with a host of specialized data that allows one to make more informed decisions — recently used a machine learning-based analysis tool to study more than 48K Reddit posts to determine which cryptocurrencies were viewed most favorably by the masses. Not only that, the study also took into consideration a total of 7,500 crypto/blockchain-related articles from a variety of different national and international media outlets.

All of the posts, tweets and articles analyzed by the researchers were scored on the basis of their positive/negative sentiment — primarily in relation to other articles included in the study. In this regard, there were a few notable trends that jump out at the reader upon first glance. While over 85% of the analyzed Reddit posts were deemed to be positive in nature, articles published by various mainstream media publications such as HuffPost, Business Insider and The International Business Times were, by and large, dismissive of the crypto market.

To get a better overview of the matter, Cointelegraph has reached out to Craig Russo, owner of Peer, a Boston-based startup that is behind the popular crypto and gaming media outlet SludgeFeed. When asked about what the overall sentiment of the average social media user toward the crypto industry (at large) was like, Russo pointed out:

“While there will always be different camps or schools of thought on the crypto industry, the overall sentiment across social media continues to be bullish, both on future price growth and mainstream adoption of the technology.”

A similar point of view is also shared by Sritanshu Sinha, an independent crypto author and analyst, whose work has been shared online by the likes of John McAfee and Kim DotCom. Sinha pointed out that the overall reception that the crypto industry has received thus far on forums such as Reddit and Twitter has been quite warm. He is also quick to point out that, since the Reddit community as a whole views itself as being anti-establishment, the platform’s users are usually drawn to crypto much more than your average investor. Similarly, in the case of Twitter, he believes that there are a few independent analysts who have hundreds of thousands of followers and therefore have the power to influence the community toward fostering a positive view regarding various altcoins/digital offerings.

Has the public views on crypto changed over the years?

Another pertinent question is how the crypto industry’s general perception has evolved since the novel asset class came into the spotlight a few years back. For example, it is no secret that all through 2018, investor confidence in this space has been dwindling. However, Russo believes that Bitcoin’s (BTC) financial upswing over the last eight months has been a turning point for the industry, especially across different social media outlets. Further elaborating on his views, Russo added: 

“This is in stark contrast to those invested in the altcoin markets, as many are in disbelief towards the poor performance of their assets. The regulatory environment definitely plays into the latter, as increasing pressure from the U.S. government has undoubtedly hurt investor interest in Bitcoin alternatives (i.e., Binance shutting down to U.S. customers).”

When compared to the previous years, the general sentiment toward the crypto sector has certainly become less hostile. For example, back in 2017, a time when Bitcoin was witnessing astronomical growth, the industry was still facing a lot of heat from many financial experts of differing pedigree. And while the market, at the time, was replete with countless scams (especially Twitter bots) such activities have largely died out now. 

As mentioned earlier, a host of recent surveys seem to suggest that more than 80% of all crypto talk online is positive. This number seems abnormally large for an industry that is usually on the receiving end of a lot of criticism from various traditional media outlets. Sharing his thoughts on the subject, Sinha pointed out:

“80% seems about right. Mostly, because that’s the nature of evangelism. Most of us on social media seems to be crypto-evangelists. However, positive sentiments and bull markets are highly correlated and they seem to be feeding off each other to create a positive feedback loop. If I have to prophesize, the 80% positive sentiment will not be the case during a bear run. Then the voices of the skeptics will become louder and sentiments will turn increasingly negative.”

Tweet interpreters are being used to gauge global investor interest

A number of hedge funds and asset managers are currently turning to software developers to help them interpret and harness sentiment signals to their advantage. Speaking to Reuters on the subject, Bin Ren — CEO of Elwood Asset Management — was quoted as saying that this latest trend of identifying price clues from tweets and other social media messages is slowly turning into an “arms race for money managers.”

To put things into perspective, it can be seen that the costs involved with conducting such types of research analyses are quite steep. As per Andrea Leccese, president of New York-based investment firm Bluesky Capital, a simple bot-driven Twitter data exploration can cost firms anywhere between $500,000-$1 million.

Will increasing regulations stifle the industry’s growth?

Ever since Facebook announced its decision to enter the digital asset market — via its much-hyped stablecoin offering called Libra, which is backed by the Libra Foundation — the regulatory noose surrounding this space seems to have tightened considerably. However, contrary to popular belief, a number of crypto analysts seem to believe that increased regulations can be a good thing for the industry. 

Cointelegraph spoke to Mohanned Halawani, the founder and CEO of Crypto PR, one of the first blockchain-specialized communication firms. He seems to be quite optimistic and believes that some of the latest regulations are actually quite advantageous for prospective investors, especially those regarding security token offerings (STOs) and initial coin offerings (ICOs). Halawani went on to add:

“The SEC has facilitated the emergence of Security Token Offerings which it felt was a more worthy investment vehicle when compared to traditional Initial Coin Offerings… Security tokens allow their investors to get information about the issuer on a fully transparent framework, providing complete visibility on all token allocations. Thanks to the regulatory benefits of these assets, authorities are beginning to their raise their standards among tradable asset classes and even support their implementation.”

Similar opinions are also provided by Joe Mercurio, project manager for Comparitech, who believes that the goal behind these regulations is to ultimately make consumers and businesses more comfortable with using cryptocurrencies on a regular basis. Mercurio shared his thoughts with Cointelegraph:

“I think that government entities will eventually adopt blockchain technology and new cryptocurrencies will begin to emerge. That said, I do believe that the market will remain volatile.”

Whether we like it or not, government regulations are crucial for any financial commodity — be it crypto or otherwise — to gain mainstream acceptance. And while these rules and guidelines may appear to hamper an asset’s growth at times, a majority of these regulations are a step in the right direction. Also, because Bitcoin and other digital currencies are basically tools for individual financial freedom, governments do not want to give up financial control over their citizens.

Simply put, when we see the history of such revolutionary technologies getting adopted by countries en masse’, we are sadly faced with a long and painful path that eventually leads to widespread human well-being.

How much of a role does social media play in shaping the public’s opinion on crypto?

Mercurio, whose core field of work includes the analysis of tweets and other online content to gauge public sentiment, is of the belief that there currently exists a strong correlation between the volume of social media posts related to a particular digital asset and its price. As part of his research, he claims to have often observed spikes in online articles when the price of a specific cryptocurrency changes. Mercurio went on to add:

“Social media posts remain more positive during times of price fluctuation compared to media coverage overall. Online enthusiasm regarding crypto has been overwhelmingly warm. We found that cryptocurrency-related subreddits were 55% more likely than media publications to have content with positive sentiment toward various cryptocurrencies.” 

In a similar vein, to look at the impact that social media influencers have on the crypto industry, we can turn to a few high-profile individuals such as Elon Musk and LA Chargers’ star Russell Okung, both of whom have been advocating for the widespread adoption of crypto for quite some time now. In fact, Okung has sent out several requests to the NFL, asking the league (since the start of 2019) to provide its employees with the option of getting paid in crypto — a petition that is backed by fellow NFL star Matt Barkley.

Looking ahead

It thus appears as though the crypto market will continue to grow, mainly because people want to find newer economic avenues that are free from the involvement of any corporations or government-controlled agencies. However, a lot of this growth will depend on the use cases that emerge from this space. Also, as social media continues to play an ever-increasing role in arenas such as politics and public affairs, there is no reason to doubt its utility when it comes to crypto adoption.





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Crypto Custodian BitGo Expands Japanese Presence, Builds Team

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Digital asset trust and security company BitGo is reportedly expanding into the Japanese market, The Block reported on Aug. 9.

A source familiar with the matter told The Block that BitGo is expanding its presence in Japan. According to the report, BitGo is planning to grow its Japan-based team, including hiring a sales director for the company’s sales team in Tokyo.

Per a dedicated job post published by BitGo last week, the sales director will specifically be responsible for the company’s “digital wallet and offline vault solutions across your agreed territory.”

In May, BitGo appointed a veteran Wall Street trader Nick Carmi as its head of financial services. The hire was ostensibly spurred by an intent to forge a stronger connection between technologically innovative digital assets and the traditional financial sphere.

In late July, BitGo and decentralized identity startup Civic announced plans to launch a new wallet using BitGo’s multisig technology in Q4 2019.

Using BitGo’s multisig security technology, the wallet will require users to undergo identity authentication using a blockchain system for secure verification. The underlying data is not shared between multiple parties and aims to grant users more control over their personal information.

As reported in June, about 30 Japan-based crypto-related businesses and 50 individuals had not declared their revenues from cryptocurrency trading as of March, allegedly due to a high tax on this type of income.





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Weapon in US Trade War or Attempt to Manipulate Bitcoin?

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After a short stay in the red zone, Bitcoin (BTC) has recovered toward $12,000, with traders turning bullish as ever. Experts call the United States-China trade war a key reason for the main cryptocurrency’s price fluctuations. Fuel to the fire has been added by the recent announcement by the People’s Bank of China (PBoC) of plans to get ahead of the U.S. and Facebook’s Libra by issuing a national cryptocurrency.

Chinese government is set to digitize yuan, challenge U.S. and Libra

As Cointelegraph reported, the PBoC plans to focus on developing its own legal digital currency. On Aug. 2, during a video conference devoted to discussing financial tasks for the second half of 2019, heads of financial and economic institutes in China touched upon the topic of cryptocurrencies. The country’s central bank announced its intention to accelerate the development of its own digital currency and also confirmed its plans to allocate more resources to the implementation of this task.

It is notable that the decision of the Chinese bank to intensify the creation of a national cryptocurrency was preceded by the hotly debated development of the Libra coin. Initiated by Facebook in 2019, the project is now actively being lobbied for in the U.S. government, but without any results so far. 

Related: US Congress on Libra Overview: Trust, Privacy and Genocide Accusations

In July, Wang Xin, director of the PBoC Research Bureau, said that, with the development of the Libra cryptocurrency project, the People’s Bank of China should accelerate the growth of its own digital currency, which it has been working on over the past few years. Wang believes that the risks Libra bears for the traditional financial system will force regulators to devote many more resources and forces to develop its digital currency. Wang asked:

“If [Libra] is widely used for payments — cross-border payments in particular — would it be able to function like money and accordingly have a large influence on monetary policy, financial stability, and the international monetary system?”

In particular, China is concerned about which currencies Libra will be tied to and what role the U.S. dollar will play in this project. Wang said:

“If the digital currency is closely associated with the US dollar, it could create a scenario under which sovereign currencies would coexist with US dollar-centric digital currencies. But there would be in essence one boss, that is the US dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”

Former PBoC Chairman Zhou Xiaochuan also believes that the concept of a global digital currency introduced by Facebook that can be exchanged into fiat money threatens existing cross-border payment systems and could weaken the position of national currencies, which he spoke about at a conference in Beijing, as reported by the South China Morning Post.

According to Zhou, Chinese authorities need to strengthen the national currency and consider the Hong Kong model to create a digital renminbi, which involves issuing money through commercial enterprises under the supervision of the central bank. Some analysts have already expressed the belief that technology giants Alibaba and Tencent may be assigned such a task. Large corporations in the country appear to be supportive of the ideas coming from government ​​members, as Huawei CEO Ren Zhengfei commented:

“China can just issue our own version of Libra. Why should we wait for others to do it? The power of a country is always stronger than that of an Internet company.”

Stablecoin to support the local economy

A future national cryptocurrency may be issued in the form of a stablecoin tied to the yuan (also called the renminbi). Researchers at the PBoC published a review of recent initiatives in this area back in October last year. Most of the coins discussed in the material are pegged to the U.S. dollar, such as Gemini Dollar (GUSD) and Paxos Standard (PAX). The researchers are convinced that the development of cryptocurrencies tied to USD strengthens the role of the dollar in the global monetary system, while also having a negative impact on other fiat currencies. According to the researchers:

“If the stablecoins tied to the U.S. dollar end up being widely recognized by the market and prove their applicability in the real economy, we will have to redouble our research efforts in this direction, as well as in studying the relevant experience. This is necessary to support local institutions and issue stablecoins tied to the renminbi.” 

At the same time, the authors note that stablecoins still have a long way to go before the financial system begins to feel any significant influence from new assets. Star Xu, the founder of cryptocurrency exchange OKCoin, expressed a similar point of view in his post on Weibo, writing: “The dollar-pegged #stablecoin regulated by the US government will strengthen the penetration of the US dollar 100 fold.”

Bitcoin is growing due to the yuan’s rate falling

Analysts have drawn parallels between the declining rate of the yuan and Bitcoin’s growth. The price of the preeminent digital currency rose sharply the very moment when the Chinese currency fell by 7% to an 11-year low. On Aug. 5, Bitcoin’s price surged to $11,786, with the daily increase amounting to an 11% gain.

Evolution of PBoC's relations with cryptocurrencies

U.S. President Donald Trump alleged on Twitter that the Chinese government is manipulating the price of the renminbi:

“China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

As financial analysts suggest, the renminbi declined due to investors’ concerns about a new round of escalation in the trade war between China and the U.S. This happened a few days after Trump introduced additional tariffs on goods imported from China. Now that U.S. products could become more expensive for Chinese consumers, a lower exchange rate might adversely affect U.S. exporters. The prices of U.S. stock futures have already declined, while the cryptocurrency market has demonstrated the opposite tendency.

Some analysts have postulated that the reason for this dynamic could be because Chinese investors use Bitcoin as a means of saving money. Simon Peters, an analyst at trading platform eToro, suggested that Chinese investors could want to diversify as the yuan fell. According to Peters:

“Given that Chinese investors make up a large proportion of crypto investors, there’s a strong possibility some are backing bitcoin’s chances against the yuan.”

However, Peter Schiff, an economist and CEO of brokerage company Euro Pacific Capital, rejected this explanation, claiming it was more about speculation rather than about real need:

“CNBC is trying its best to dupe its audience into buying Bitcoin. Despite gold being a much larger market, CNBC devotes far more airtime to Bitcoin. The Chinese aren’t buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven!”

The internet says…

An ambiguous statement made by the PBoC regarding the creation of a national cryptocurrency has sparked intense discussion around the world. Several points of view, primarily negative, have appeared on the internet in response. Some users suggested that both the U.S. and China need cryptocurrency to strengthen control over their citizens. Crypto enthusiast Richard Heart opined:

“Nations want more control over their cirizens. Nothing new…or good.”

And some even suggested that the confrontation between China and the U.S. in the cryptocurrency field could lead to a world war.

Place your bets

How soon Chinese residents will be able to see — and most importantly use — the local digital cryptocurrency is still unknown, as it may take years to implement such an idea. The full process may require the development of a regulatory framework, instruments of taxation and regulation, as well as creating special entities and hiring specialists who will work with cryptocurrency.

Previously, attempts to create a national cryptocurrency have already been undertaken by countries such as Iran, Turkey, Saudi Arabia, Russia, Estonia and Venezuela. The South American country allegedly raised $1 billion during the presale of the supposedly oil-backed cryptocurrency Petro, and Venezuelan banks began to display the citizens’ account balance in the new currency. This year, Venezuela intends to make Petro OPEC’s main digital currency, according to Oil Minister Manuel Quevedo.

Related: Venezuelan Petro Against US Sanctions: History and Use of the Crypto

In regard to China, such an initiative has been discussed since January of 2016, when representatives of the PBoC announced the plans outlining their desire to create the country’s own digital currency as soon as possible. At the same time, the Chinese central bank also clearly articulated the advantages of cryptocurrencies over traditional money:

“Digital currencies are much cheaper in circulation than traditional fiat money, promote trade, increase transaction transparency and reduce the risks of money laundering and tax evasion. The use of digital currency will help build a new financial infrastructure, strengthen the payment system in China, increase the efficiency of mutual settlements and accelerate the modernization of the economy.”

Notably, the PBoC has been following the development of the digital currency market for a long time, with an appropriate research group created back in 2014. And since 2015, the Chinese government has been actively studying the regulatory experience of other countries in order to prepare an appropriate regulatory framework.

Correlation between yuan’s fall and Bitcoin’s surge

It is noteworthy that in a report published on the PBoC’s official website, the word “Bitcoin” is not mentioned even once, although China is one of the top players in the crypto industry. The principles and technologies on the basis of which it is planned to create a state digital currency are also not explained. 

At the same time, blockchain technology is mentioned only once as one of the iconic phenomena in the information technology development. However, the general context of the statements suggests that the future digital currency will have much in common with Bitcoin — at least, from a technical point of view. 

Wang noted that the PBoC was one of the first central banks to start exploring the possibility of creating its own digital currency, but research experience alone is not enough. Wang said, “We had an early start […] but lots of work is needed to consolidate our lead.” He also confirmed that the central bank has already received approval from Chinese authorities to create its own digital currency, though it is not yet known at which stage its development is currently at. Huang Yiping, a Beijing University professor and the chairman of the research initiative, said that China is ahead of the U.S. in promoting digital finance. He continued:

“It remains unclear if Libra will succeed […] but the concept won’t disappear. But it has sent a warning to China that its lead [in digital finance] is not a sure thing.”

However, in an interview with Cointelegraph, one of the senior PBoC representatives — who wished to remain anonymous — said that the implementation of such a fundamental project may not do without risks, continuing:

“Digital currency is a sphere very important to look at in the future. The turbulence caused by the Chinese-American trade war and the negative implications of it will last for a long time. Under these circumstances, we will have to monitor the development of digital assets since it brings both risks and opportunities. I believe that China will create its digital currency one day.”





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Disgruntled Bitcoin Investor Brings $22.5M Class Action Suit to Israeli Bank

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An unnamed investor has filed a lawsuit against the Israeli Bank Hapoalim in the amount of approximately $22.5 million, on account of the bank allegedly refusing to accept deposits of profits earned via Bitcoin (BTC). 

Industry media outlet BlockTV discussed the lawsuit in a report on Aug. 9. According to the report, the complaint is being filed as a class action suit, and the investor ultimately plans to sue other Israeli banks on the same grounds. 

According to the report, Israeli banks are largely anti-crypto because they wish to avoid being scrutinized in connection with crypto-related firms and individuals. However, the disgruntled investor’s lawyer, Lior Lahav, has said that this is not sufficient grounds for banks to refuse services to cryptocurrency investors. Lahav stated:

“The banks have an obligation under the law to accept money from the clients […] They can check on their clients, do their due diligence, and find out where the money is coming from. The problem with the banks is that they are doing nothing. They are not asking their clients: ‘Provide me documentation of the origin of the money.’”

Lahav further illustrated the scale of the issue, arguing that there are tens of thousands of Israeli investors who are similarly being punished for no apparent wrongdoing:

“There are more than 70,000 bitcoin investors in Israel who are facing the same problem from their banks […] 99 percent of them are ordinary people that invested in a thing that’s completely legal.”

Ross Gross

Lahav pointedly noted that his client is not Ross Gross. Gross is a Bitcoin investor who claimed that the bank Hapoalim refused to accept his deposit, purportedly because it came from crypto trading profits.

As previously reported by Cointelegraph, Gross began investing in Bitcoin back in 2011, and has reported his earnings to the Israeli tax authority. However, as of 2017, Bank Hapoalim stopped accepting his deposits of funds earned from Bitcoin trading. 

As a result, Gross has not been able to pay his capital gains taxes and the tax authority has put a lien on his bank account, home and scooters. Gross said, “the tax authority is aware of the problem, but they say the ball isn’t in their court.”





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