Square's Cash App has been helping people send and receive money without fees for a while now. Originally an money-by-email service, Cash App has grown into a more robust offering with its own prepaid Visa card. The company has been testing buying an...

This article originally appeared on Bitcoin Magazine.

• Tax Day falls on April 17 this year.
• Free tax filing is offered by many online tax services, like H&R Block and TurboTax.
• You can file your taxes for free if you made less than $66,000 in 2017.

Tax season shouldn't scare you.

Filing your tax return can be super easy — and even free.

If your income was less than $66,000 in 2017, many online tax services, like H&R Block and TurboTax, offer the option to file for your federal taxes — and sometimes state taxes — at no cost. You can check your options using the IRS Free File Lookup tool.

You can still file for free if you make more than $66,000, but to do so you'll need to use the Free File Fillable Forms. The IRS recommends using those forms only if you have experience preparing tax returns on your own.

Most tax-related documents must be submitted by your employer or other institution by January 31, and the statements must be postmarked by that date as well. That means you should have everything you need by early February.

If you're an employee, that means your W-2; if you're a freelancer, you may have multiple 1099 forms. In some cases, you may have other statements, such as income earned from an interest-bearing savings account or interest paid on a loan, or even taxable bitcoin gains.

If you haven't received these documents yet, it's worth following up in case your forms were lost in the mail. The IRS began accepting tax returns on Monday, January 29, but Tax Day falls on April 17 this year, so there's no need to scramble yet.

Once you're ready to file your taxes, the IRS recommends electronically filing and requesting direct deposit for your refund. You'll typically get your tax return within three weeks, rather than the standard six weeks.

Although President Donald Trump signed the Republican tax bill into law at the end of December, new tax brackets will only affect income earned starting January 1, 2018. In other words, you'll see those changes when you file your 2018 taxes next year.

SEE ALSO: How to use TurboTax to file your taxes for free in 2018

DON'T MISS: How to use H&R Block to file your taxes for free in 2018

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NOW WATCH: Here’s your year-long guide to financial stability

• Japan has come to dominate the market for digital currency trading.
• Still, it is far more cash dependent than other countries. 

Japanese investors are going bananas for cryptocurrencies, but the country still has a love affair with paper money. 

Japan has become a big market for cryptocurrency trading. 40% of bitcoin trading from October to November was conducted in yen, according to a Nikkei report cited in a note by Masao Muraki, a global financial strategist at Deutsche Bank. The country was among the first to designate bitcoin as a legal tender and it has one of the most well-established and supportive regulatory environments for cryptocurrencies. 

"While neighboring China and Korea have been scrambling to close down exchanges and clamp down on cryptocurrencies, Japan in April 2017 passed a law (the Payment Services Act, 改正資金決済法) recognizing cryptocurrencies as legal tender," CLSA analyst Nicholas Smith wrote. "The result was that China, which had dominated Bitcoin trading, dropped off the map, while Japan has risen to number one."

But that doesn't mean the country has thrown paper money to the dogs, according to Smith. On the contrary, Japan is one of the most cash-dependent nations in the world.

"For all its technological sophistication, Japan is decidedly olde worlde in its heavy dependence on cash, at 62% of consumer transactions -almost triple the US," Smith wrote. 

The reason the country is so cash-centric is because there is a profusion of ATM machine and bank branches, relative to other countries. 

However, this could mean that there is still a big upside for further digital currency and financial technology adoption in the country. 

Fintech adoption has been a focal point of Japanese Prime Minister Shinzo Abe's economic plan. As Business Insider previously reported, his government was moving forward with a plan to roll back regulations on some fintech startups to help spur the development of emerging technology and drive growth in the country.

"When one wants to conduct a world-first trial, such as with new financial services made possible through fintech, it is impossible to predict the sort of regulations with which the trial will come into conflict," Abe said speaking at the New York Stock Exchange in September. 

SEE ALSO: Saudi Arabia is working on an official policy for bitcoin but a ban is unlikely

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NOW WATCH: A $445 billion fund manager explains what everyone gets wrong about the economy

• Shares of payment services company, Square, jumped on news that its Cash App will now allow some of its users to trade bitcoin on its platform.
• Square's stock rose 3.08% at $46.92 per share on Wednesday.
• The company's CEO Jack Dorsey made the announcement on Twitter, saying the move was made in a bid to move toward "greater financial access for all."
• Bitcoin trading does not extend to users located in New York, Georgia, Wyoming or Hawaii.
• Square allows its users to buy up to $10,000 worth of Bitcoin per week.
• The company said it does not charge a fee for Bitcoin transactions.
• The price it sells Bitcoin for is based on the average price across other major exchanges.
• View Square's stock move in real-time here.

Read more about how Twitter is faring after an unconfirmed rumor of a Salesforce takeover.

SEE ALSO: Twitter spikes after unconfirmed Salesforce takeover rumor

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

• Shares of payment services company, Square, jumped on news that its Cash App will now allow some of its users to trade bitcoin on its platform.
• Square's stock rose 3.08% at $46.92 per share on Wednesday.
• The company's CEO Jack Dorsey made the announcement on Twitter, saying the move was made in a bid to move toward "greater financial access for all."
• Bitcoin trading does not extend to users located in New York, Georgia, Wyoming or Hawaii.
• Square allows its users to buy up to $10,000 worth of Bitcoin per week.
• The company said it does not charge a fee for Bitcoin transactions.
• The price it sells Bitcoin for is based on the average price across other major exchanges.
• View Square's stock move in real-time here.

Read more about how Twitter is faring after an unconfirmed rumor of a Salesforce takeover.

SEE ALSO: Twitter spikes after unconfirmed Salesforce takeover rumor

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

• Airlines are worried about passengers bringing fake emotional support animals onto their flights.
• Delta, American, and United require passengers to provide a signed document from a mental health professional to verify that an emotional support animal is not merely a pet.
• There are some animals that airlines do not have to accept as emotional support animals, including reptiles, snakes, and spiders.

Airlines are worried about passengers trying to pass off pets as emotional support animals, which fly for free. But airlines are not always clear about what qualifies as an emotional support animal.

Sometimes, it's obvious, like the recent incident involving  a woman who unsuccessfully tried to designate a peacock as an emotional support animal. But in other cases, it might not be as clear where to draw the line between pet and medical necessity.

After Delta Air Lines announced new regulations that require passengers to provide documentation verifying their emotional support animals have been trained and vaccinated, we looked at the rules Delta, United Airlines, and American Airlines set out for emotional support animals. We found that while they require passengers to provide documentation proving their emotional support animals are not merely pets, they leave the job of determining what qualifies as an emotional support animal to licensed medical professionals — with some exceptions. 

Here are the steps passengers have to take to bring an emotional support animal into the main cabin on one of the three major US airlines:

• American — Passengers must submit a document signed by a licensed doctor or medical health professional which states that the passenger has a "mental health or emotional disability" and needs the animal "for emotional support or psychiatric service" on the flight or at the passenger's destination. The document needs to have been signed within the past year and must be submitted at least 48 hours before the flight.
• Delta — Starting March 1, passengers will have to submit three documents if they wish to travel with an emotional support animal. In addition to a signed statement from a medical professional, passengers will have to provide vaccination dates and the contact information of the animal's veterinarian and sign a statement that claims the animal is properly trained "to behave in a public setting" and take the passenger's "direction upon command." The document needs to have been signed within the past year and must be submitted at least 48 hours before the flight.
• United — Passengers must submit a document from a medical or mental health professional which states that the passenger has a "mental health-related disability" and that the emotional support animal "is necessary to the passenger's mental health or treatment." The document needs to have been signed within the past year and must be submitted at least 48 hours before the flight.

While passengers who can complete these steps will often be able to bring their emotional support animals into the cabin with them during a flight, there are some exceptions.

The US Department of Transportation says that airlines don't have to let support animals into the cabin if they're too large, heavy, disruptive, or threatening to the crew and passengers. And airlines don't have to accept ferrets, reptiles, snakes, spiders, or sugar gliders as emotional support animals. American Airlines adds hedgehogs, insects, rodents, amphibians, non-household birds, and any animals with tusks, horns, or hooves, to its no-fly list.

SEE ALSO: A woman tried to bring an emotional-support peacock on a United flight, and it reveals a growing crisis for airlines

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NOW WATCH: A crypto expert explains the difference between the two largest cryptocurrencies in the world: bitcoin and Ethereum

The post Goldman Sachs Isn’t Launching a Bitcoin Trading Desk (Because It Already Owns One) appeared first on CCN

Recently, Goldman Sachs chief executive Lloyd Blankfein shot down longstanding rumors that the investment bank was launching a cryptocurrency trading desk. Now, we know the reason why: the bank already owns one. Goldman Sachs ‘Not’ Launching Bitcoin Trading Desk As early as October last year, there were rumors that Goldman Sachs was considering opening the

The post Goldman Sachs Isn’t Launching a Bitcoin Trading Desk (Because It Already Owns One) appeared first on CCN

• Chain CEO Adam Ludwin thinks blockchain technology is not the answer to all problems, but rather a tool like many others that should be applied where relevant.

• Ludwin thinks there is a false dichotomy between cryptocurrencies and their underlying blockchains. Although a blockchain may be able to support a cryptocurrency, it doesn’t mean it has to and has many other use cases.
• Ludwin says there is no right price for bitcoin just like there is no right price for gold. There is a limited supply of bitcoin and the price is driven by demand. Ludwin says it is a better question for psychologists than it is for entrepreneurs.

Business Insider's Sara Silverstein spoke with Adam Ludwin, CEO of blockchain technology firm Chain, at the World Economic Forum in Davos, Switzerland. The following is a transcript of the interview.

Silverstein: Can you help me understand what Chain does?

Ludwin: We build software and sell it to financial institutions — help them with two things. First create a blockchain accounting model in the backend of their business — the sort of transactional back office. It makes it easier to manage and secure the assets in an institution and also increases the integrity of the data for third parties that might want to verify. And the second thing we do is we help those institutions connect into — essentially being on-ramp and off-ramp — into various various blockchain networks including public blockchain networks.

Silverstein: And you're already working with companies. This isn't like a future thing?

Ludwin: That's right. We're about four years old. We have — I say we were best known for our work with companies like Nasdaq, Visa, Citigroup. But also for a lot of the projects we do with smaller cryptocurrency companies.

Silverstein: And why does the blockchain software — why does that always come with the word integrity?

Ludwin: Because the core innovation in a blockchain — now a blockchain by the way is just a data model; it's being used — to meet — to address a lot of different things in, you know, corporate marketing at an event like Davos. But the technical reality is blockchain's just a data model. It's a database innovation. And that innovation is applying cryptography to every transaction update in that database, so that anyone can independently verify whether there's been a change to the database and can independently verify therefore, sort of, the state of say a balance in a checking account, or the current custodian of a security, or the current owner of a cryptocurrency.  So it's really in the context of an institution using a blockchain, it's really about increasing the trust in them. But, as I think many people know, a blockchain can also be used without an institution — in other words a trust replacement in a more decentralized model. But in our view, a blockchain is as relevant as an accounting model as it is as a mechanism to create decentralization.

It just depends on the design goal and the intention of the company or group that's deploying the technology.

Silverstein: And this is the biggest question that I have coming out of the these conversations at Davos — everybody is telling me that blockchain can solve all these different problems. I understand why blockchain makes sense for not being able to sell the same asset twice. That makes sense to me. What else — why is blockchain used as a solution for so many things, and why is that any better than a centralized database?

Ludwin: So I think the primary reason around the hype for blockchain is it's just a part of the hype cycle we're in. It's, sort of, captured the zeitgeist of digital transformation and a lot of folks are looking at it as a panacea for a lot of different things. When it's not. It's a tool like many other tools in your modern software suite. And it should be applied where relevant. And in the case of financial institution a relevant place to apply it would be where it's important for a particular product or service to have either more trust from third parties or to engage third parties in building a network without a traditional intermediary. That's really where it's most relevant. So I'm also equally, sort of, surprised maybe dismayed by the type of — let's call them — airport advertisements that I see proclaiming blockchain to be the cure-all for every corporate ail. it's not.

Silverstein: And when you sell — when you're talking about of a software for an institution, because when we look at bitcoin and all these currencies, every person that's involved in the network has a copy of the database right? So they can all verify that. But when you're talking about selling it to an institution, who are you getting that integrity from where is that security coming from?

Ludwin: Right, so let's start with bitcoin. So as you rightly pointed out in the case of bitcoin, the model is peer-to-peer network — no predetermined intermediary. There are, in fact, intermediaries in bitcoin known as miners, but they're not predetermined. They have to compete and you never know which one's going to actually process those transactions. And that all serves a purpose, which is to create an alternative payment rail that's censorship resistant, meaning no one can stop anyone from transacting on that network. And whether that is useful really depends on your context.  For some people in some places, having the ability to transact with someone else without censorship is important — whether those are you know people that are facing strict capital controls, or in a country of hyperinflation. Because in a particular place if you donate to a non-profit, you go to jail for political reasons. There's a lot of legitimate — I would call them —civil society reasons why bitcoin is a powerful mechanism. Very different context if your talking about an organization like Visa or Nasdaq, where we don't need miners, because we already know in advance who's going to process those transactions; who's going to order and ensure that no double spending is happening.

At the same time, the value that they see and gain from the technology is being able to cryptographically prove to third parties that they're not manipulating data; no one in their company has manipulated any data — intentionally or accidentally; no hackers have changed any state. So it's simply about increasing the robustness of that institution. It's a security and transparency innovation when we use it there. So very different uses — both in my mind legitimate, but both serving different goals depending on how it's deployed

Silverstein: Great, that was a wonderful explanation actually. So this leads me to another question — there's bitcoin is very associated with the blockchain that the bitcoin’s based on; a lot of people look at the blockchain as supporting the value for cryptocurrencies, like this cryptocurrency is as valuable as the blockchain that it's on, because that's what's basically funding it and keeping it going.

Ludwin: Right

Silverstein: So how does — but your blockchain, many blockchains exist without a cryptocurrency.

Ludwin: Right

Silverstein: So how important is the connection between the two or do you envision a future of blockchain without cryptocurrency?

Ludwin: So I think there's this false dichotomy that's pretty popular at conferences like Davos where you hear — you hear many different languages at Davos. But when I don't understand what someone is saying, I just assume they're saying, "you know, I don't like bitcoin, but the underlying blockchain technology..." I think I know how to say that in 20 languages now.

So yeah, I think it's a false dichotomy. Like I said, they're both useful and they're actually on more of a continuum than people appreciate. So a lot of the work we do, for example, is linking private blockchain — where there is no cryptocurrency — into a public blockchain.

But to answer your question, you're right our protocol does not have a cryptocurrency. And the reason for that is we don't need one, because the cryptocurrency — or cryptoasset — its purpose is to provide an economic incentive to a decentralized operating group.

Silverstein: To keep it going?

Ludwin: To keep going and we don't need that, because we already know who's going to run the business. So yes, we could create a currency to cash in on the the hype, but we're much more interested in building a real business. And so that's why we're focused on that. And that's not to suggest that there's anything wrong with creating new cryptocurrencies. Again, I think it's just such a different context; it's hard to compare them. And I think over time, especially this year, I think one of the big trends is they'll converge more than people are expecting.

Silverstein: They'll converge in what way?

Ludwin: They'll converge in the following way — we have different payment networks and financial markets all around the world quite fragmented; there's very little mesh or interoperability between networks. So right now, for example, if you're in China, and you open up the Alipay app and you want to send money out of China, do you know what option you have? Do you know what it says in the app? It says Western Union. So, you know, I think that is going to change. I think the interoperability between say WhatsApp — if they ever have payments — and Alipay will be something that looks somewhat like a public blockchain. So I think that's where we're going to see real penetration and links between the existing financial institutions — some of which run blockchain architecture, some of which don't — and public networks, which will, sort of, drive interoperability. And then in parallel, I think you'll continue to see cryptoassets that are serving, you know, these alternative software models that for many people, don't get them anything new, but for certain people in certain contexts, it's really a good solution for them.

Silverstein: And what do you think about where cryptocurrency values are if you have an opinion?

Ludwin: I think they're high. It's a very hard question to answer, because it's as if I asked you what is the right price for gold?  You know there's no — there's no like business school like, "oh we'll do a discounted cash flow or we'll look at a property, and we'll look at the rents and the market." There's really nothing like that. There's a fixed supply in the case of bitcoin.  And so the price is driven by demand.  So it's really a question of what's driving demand and what's driving kind of the mass psychology of belief in the potential of this thing. And that's a question for the psychologist here like, you know, not for the entrepreneurs.

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 A few months ago we wrote that Square’s peer-to-peer payment app called Square Cash was running a bitcoin trial for select users. These users had the ability to buy and sell bitcoin using whatever payment method they had attached to the app. Well now the payments company just announced that all users (except those in New York, Georgia, Hawaii, or Wyoming) have access to bitcoin trading… Read More

• Two recently launched blockchain exchange-traded funds are off to a scorching start. 
• But not every market-watcher is convinced that the funds are a solid investment. 

Two blockchain exchange-traded funds that began trading this month are off to a scorching-hot start, but some market watchers are raining on the parade.

Earlier this month, Reality Shares and Amplify ETFs launched funds that aim to provide investors exposure to blockchain technology, which is best known for powering cryptocurrencies such as bitcoin. The size of Amplify's blockchain ETF, which trades under the ticker BLOK, has ballooned to $180 million in the ten days since it began trading on the New York Stock Exchange. Reality Shares' Nasdaq NexGen ETF, which trades under the ticker BLCN on Nasdaq, has soared past $100 million, the company announced Wednesday. 

Still, UBS said in a note out to clients Wednesday that blockchain, a distributed ledger technology, is too nascent a tech to properly capture in a fund. 

"What we believe is important to consider when investing in a fund targeting an emerging industry is that, often times, pure-plays do not exist," the bank said.  

Since pure-play blockchain companies that are fully built around and focused on the new technology don't really exist (yet), funds attempting to offer exposure to the space will invest in companies that are to some degree integrating blockchain into their infrastructure, even if their core businesses lie elsewhere.

For example, Overstock, one of the companies included in the Reality Shares ETF, has a venture arm that invests in blockchain startups, but its main business is in ecommerce. The problem, according to UBS, is that blockchain won't have a meaningful impact on those businesses in the near-term. 

"If as an investor you are targeting early [distributed ledger technology] investment, either with an individual company or with an index, ensure that you are comfortable with the company or index members' fundamentals as a whole, as we believe this will be what drives returns over the short-to-medium-term," the bank said. 

Kian Salehizadeh, a senior analyst at Reality Shares, told Business Insider that UBS' point about there being no pure-plays in the space is valid. 

"You are not going to have any fund that would be made up completely of pure-plays," Salehizadeh said. 

"The fund is structured so that you are getting a mix of US and global players involved in the eco-system at various stages," he added. "It is a long term play."

One investor, however, said he is skeptical about whether these funds offer a unique alternative to other funds on the market.

"I love the hundreds of millions piling into blockchain ETFs to pay 70bps to buy OSTK, IBM, CSCO, MSFT, and NVDA. Now that’s a good business,” David Schawel, chief investment officer at Family Management, said in a tweet soon after the funds launched. “When you go to sleep, you can feel good knowing the ETF symbol you paid 70bps for kind of sounds like Blockchain.”

As noted by Bloomberg reporter Sarah Ponczek, the returns of the two ETFs correlate 90% with State Street's Technology SPDR Fund. 

Still, Salehizadeh said that since the fund's make up will evolve over time, the companies that make up a standard tech fund won't necessarily match-up with the companies in his firm's ETF. 

"Every six-months we re-evaluate," he said. "The mix of companies will change."

SEE ALSO: Saudi Arabia is working on an official policy for bitcoin but a ban is unlikely

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NOW WATCH: Wharton marketing professor says Trump hasn't helped America's brand and that isn't good for the economy

The post Proxy Card Launches Proxy Wallet in Partnership with eBitcoin Foundation appeared first on CCN

This is a submitted sponsored story. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the content below. As cryptocurrencies march towards the mainstream, financial services must evolve without jeopardizing cybersecurity. A result of a strategic partnership between Proxy Card and eBitcoin Foundation, Proxy Wallet has developed a secure,

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Welcome to Finance Insider, Business Insider's summary of the top stories of the past 24 hours. Sign up here to get the best of Business Insider delivered direct to your inbox.

Tech earnings season is upon us, with Microsoft and Facebook both set to report today after the bell. 

Wall Street is expecting Facebook to post another blowout quarter — but analysts are worried about fake news and other problems. Millennials are bearish on the company — but they love Microsoft.

A Wall Street analyst downgraded Apple, saying there's one big problem with the iPhone X. Meanwhile, the company responded to a report that the US government is investigating its software that slows down some older iPhones with aging batteries.

Nintendo just had its best Q3 in 8 years thanks to the Switch — which analysts predict will continue to be a rainmaker for the company. 

AMD beat expectations, as did Boeing.

In other markets news:

• The Fed could be about to rattle the stock market
• What a $2.8 trillion asset manager is watching for proof that the bull market in stocks is really over
• It's still shockingly cheap to protect against big stock market losses — here's how to do it
• Janet Yellen's departure from the Fed is a huge loss for anyone who cares about unemployment
• Traders betting against healthcare firms made $294 million in a single day after the Amazon-JPMorgan-Berkshire Hathaway mega-announcement

In deals news: A tiny advisory firm with just three partners will earn a slice of the $80 million in advisory fees from the $17 billion Reuters-Blackstone deal. Fujifilm is taking over Xerox with a $6.1 billion deal. Morgan Stanley says these 15 companies are the most likely to get bought this year.

Hedge fund managers are celebrating big pay increases — here's how much you can expect to earn working at one.

Fox has nabbed Thursday Night Football in a massive five-year deal, reportedly worth $660 million a year.

In crypto:

• A 21-year-old college student invested 80% of his summer paycheck in cryptocurrencies and made an enormous profit
• APPLE COFOUNDER STEVE WOZNIAK: I've sold all my bitcoin
• Ethereum has outpaced its rival cryptocurrencies since the start of 2018
• CNET founder Halsey Minor has raised $25 million for a new cryptocurrency-based effort to take on Amazon in cloud video services

The head of the CDC resigned after a report said she purchased shares of a tobacco company while in office.

Jaguar will unveil its all-electric Tesla rival in March — and it looks awesome.

Lastly, here are the 32 most fun, friendly, and affordable cities in the world. 

Join the conversation about this story »

NOW WATCH: Kimbal Musk tells us how traumatic experiences helped shape his food empire

This article originally appeared on Bitcoin Magazine.

Digital payments company Square has rolled bitcoin payments out to most of its Cash App users.

This article originally appeared on Bitcoin Magazine.

• Square customers can now use the Cash App to buy and sell bitcoin.
• The feature has been in a limited trial phase since December, but now anyone can use it except customers in New York, George, Hawaii, and Wyoming.
• Square CEO Jack Dorsey called it a "small step" toward "greater financial access for all."

Two months after Square teased cryptocurrency enthusiasts with a sparsely distributed trial, the payments application has enabled bitcoin buying and selling capabilities for most of its Cash App customers.

Square CEO Jack Dorsey took to Twitter on Wednesday to endorse the view that cryptocurrencies like bitcoin could be a way for marginalized people around the world to access wealth.

"We support Bitcoin because we see it as a long-term path towards greater financial access for all. This is a small step," Dorsey tweeted.

Though Cash App, a Venmo competitor, is primarily used to settle small payments between friends, the bitcoin feature is only for buying, selling, and holding the cryptocurrency, which has traded around $10,000 for the last couple of weeks. 

Cash App's main advantage is that it lets its users buy and sell instantly, since the app already has access to cash balances and bank accounts. Other bitcoin exchanges like Coinbase and Gemini can take days to fully activate accounts because they review identity and bank account information. 

The company also lets its users spend bitcoin balances off of a Visa debit card — a project many bitcoin startups have attempted. Some, like Centra, didn't succeed because the credibility of the company discouraged Visa from supporting its efforts. 

Cash App bitcoin trading isn't available in four US states — New York, George, Hawaii, and Wyoming — though Square said it is working on rolling it out in those locations. 

SEE ALSO: Bitcoin investors can now use Square's Cash app to buy and sell the cryptocurrency

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NOW WATCH: North Korea's leader Kim Jong Un is 34 — here's how he became one of the world's scariest dictators

Lawmakers in Arizona have advanced a proposal that would allow residents in the state to pay their taxes in bitcoin.

The post Lisk Price Spikes 65% on BitFlyer Listing appeared first on CCN

The Lisk price surged more than 65 percent following its listing on Japan-based cryptocurrency exchange bitFlyer. Lisk Price Makes 65 Percent Advance Wednesday has been brutal for the cryptocurrency markets. The Bitcoin price dropped below the $10,000 barrier, while the cryptocurrency market cap entered sub-$500 million territory for the first time since Jan. 17. One

The post Lisk Price Spikes 65% on BitFlyer Listing appeared first on CCN

• Economist Ken Rogoff thinks the biggest concern for markets is the Fed raising rates more than the markets expect which he says "absolutely could happen." Rogoff says quantitative easing unwinding is a non-event. 

• Rogoff believes cryptocurrencies will eventually be regulated and issued by the government. He thinks they will follow the same trend as standard coinage and paper currency where the private sector invented it, but the government regulated it and took it over.

• Rogoff says that people should be paying attention to the low volatility index. He is optimistic but he hasn't seen complacency like this since 2006. 

Business Insider's Sara Silverstein spoke with former IMF chief economist Ken Rogoff at the World Economic Forum in Davos, Switzerland. Rogoff is the author of "The Curse of Cash" and is a professor at Harvard University. 

Sara Silverstein: So one of the things that you've been talking about here is the panel that you were on is about the next financial crisis. Do you think that we're headed for another financial crisis?

Ken Rogoff: Well broadly speaking, I think we're coming out of the last financial crisis and some of the pessimism that had been going on— at least in the academics — was the secular stagnation; we'll never grow again.

Demographics, slower productivity yes, but some of it was the cloud of the financial crisis. Eight to ten years is the norm after a deep systemic financial crisis. That said — I don't think I'm as complacent as the average here. I can't remember when it was this complacent — maybe in 2006. But that doesn't mean we're going into another financial crisis.

I tend to think the big move that markets might not be expecting — and I'm not saying it's going to happen — but that would really, you know, knock people back is if interest rates started rising faster than the markets have built-in. And I don't mean it's because the Fed goes crazy or the ECB goes crazy.

I mean it's because maybe the US and Europe start growing. Maybe they start investing again. Well, that'll be good for the pockets of growth, but there might be other places — Italy maybe Japan — that aren't growing so well, have a lot of debt, and you could get problems that way. Obviously the stock market could fall — I mean obviously — I don't think that in itself causes the same kind of problem. The people here really wouldn't like it, but I don't think it's such a big deal. And then there's China. I mean, I think if you're going to look at a "this time is different" story at the moment, of course it's China very hard —

I hope you're not in danger there from the snow falling.

Maybe it's China where the housing prices are booming; debt is very high. It is different because it's one big organization; they say they can act very quickly; they can stamp out the problems. But I tend to think they could have trouble maintaining their growth without some kind of big bump.

Silverstein:  And what do you think the probability of a financial crisis is?

Rogoff: Low — I mean outside of China — if one's going to happen it's in China. I don't think it's particularly high. Of course, that's probably a leading indicator it's going to happen tomorrow. But a recession  — Oh, that's another matter. I mean a recession in — certainly a 15 or 20 percent chance for 2018. And I'm optimistic for my baseline.

But stuff happens, and, you know, that I don't think you can get any lower than that.

Silverstein: Is there any policy issue that you think is concerning enough that could cause at least could wreak havoc on the economy?

Rogoff: You know, the thing honestly that worries me the most is that — while President Trump's coming here — and I think a lot of people — part of the reason they kind of ignore him — is, you know, they say, "Well, he's left the Federal Reserve alone."

I think maybe the investor's attach too much weight to the importance of the Federal Reserve. You know, if the Fed's ok, we're not going to worry about this other noise. And I wish he had reappointed Janet Yellen, but Jay Powell is excellent— the person he picked. And the people that he's nominated have been pretty good technocrats. It's been pretty reasonable. But let me tell you — if the stock market falls 20% — and I'm not saying it's going to — but it wouldn't take much to have it fall. It just, you know, went up a lot, so it could fall. And if there's inflation this year — and I think there will be with the output gap closing; with the fiscal stimulus — and the Fed's going to say, "I'm sorry. We don't look at the stock market. We look at prices. They're going up. We have to start raising interest rates." And then if Trump starts undermining the independence of the Federal Reserve — and I don't know if he could keep his hands off in that situation — I think that would really scare the daylights out of investors. And you might see a very big movement in that case.

Silverstein:  And do you think there's already more inflation than we're seeing in the inflation numbers?

Rogoff: No.You know, I mean I don't have any special information. I do hear that about China — inflation's much higher than people see. No, I wouldn't necessarily say that. But I do think this year it will go above two percent.

Silverstein: Okay, yeah, that would do something. And you're not worried about QE unwinding and that being the cause of interest rates rising?

Rogoff: QE unwinding is a non-event. Quantitative easing if your audience doesn't know what it is, they don't want to. I don't think it actually did that much one direction and I think it didn't do that much in the other. It's the raising interest rate. That's what I think we should be worried about.

Silverstein: Great, and two years ago, you wrote a book "The Curse of Cash." And a lot of the premise of that is getting rid of big bills in large part to reduce the amount of tax evasion and criminal activity and a lot of people might think the solution then would be something like a cryptocurrency. But you actually addresses this in your book two years ago. Can you explain why you don't think bitcoin is the solution to the hundred dollar bill problem?

Rogoff: No, it's certainly bitcoin — it is a solution if you're wanting to launder money or tax evasion. I think the government will eventually have to regulate it severely and I think someday will issue its own digital currency.

We have to remember the private sector invented standardized coinage, and then the government eventually regulated it, took it over — different times different places. Same thing with paper currency — private-sector invented it, government regulate it, took it over. What makes you think it will be different? And that bitcoin evangelist say, "no, no, no; this is Libertarian. They will not touch us." I'm sorry when it comes to the monetary system, the government makes the rules. You cannot win the game. If they're not winning, they will change the rules. That's what will happen here.

Silverstein:  And is that what you think that ten years from now looks like — is that cryptocurrency will exist, but that the government will have taken over?

Rogoff: Well, I think the government will have a much bigger hand in regulating. We will see a new generation that's used for transactions, but not anonymous transactions. That's where I think the government really has to step in. There's some great technologies here, but I think it's a little bit like with the internet, which they say, but it's a little bit like internet 1.0. And we will see at some point a cryptocurrency 2.0, which is not crypto, it's not anonymous. But substitutes for debit cards, credit cards, cash, makes electronic transfers more secure. I think there are a lot of ideas out there. They're also a lot of people who are rushing to cash in on the craze and just trying to make money. We see it here at Davos. They've quite a presence.

Silverstein: And this might be a hard question to answer, because it's hard to understand exactly where all the value in bitcoin comes from and it's already come down a lot. But how much of the value do you think will be lost if it loses anonymity and it loses its libertarianism?

Silverstein: So not the whole space, but bitcoin in particular?

Rogoff: Yeah like bitcoin in particular, I think it's much more likely to be worth $100 than $100,000 ten years from now. I don't think it's going to zero, because they'll be places like North Korea, maybe even Russia that, you know," you have all sorts of financial sanctions on us. We're not benefiting from the system. We're going to let people launder money." So I don't think you're going to wipe it out. I think you will have governments use it. But in the mainstream government, it's not going to be legal in banks; it's not going to be legal in retail transactions unless it's not anonymous. And bitcoin, you know, it's funny just the energy that it uses, but it's the anonymity that's really the problem.

Silverstein: And last question, just generally speaking what do you think that people are missing the most when they're talking about — I mean when you're looking at financial crisis or the markets and everything here the conversations that people are having?

Rogoff: One thing in general, the volatility index, the complacency index is phenomenal. I'm optimistic, but I'm not this complacent like this group. And if I had to put my finger on the thing which really would have people jumping off bridges, it's interest rates going up faster than you think. It absolutely could happen. They're at historical lows and a lot of papers show when this happens, you know, sometimes they go up. It'll hit art, it'll hit the stock market, it'll hit the housing market — not necessarily the end of the world, but in the places that aren't getting fast growth, it's going to hurt.

Join the conversation about this story »

The post Bitcoin Futures Prompt CFTC to ‘Reconsider’ Relaxed Approach to Derivatives Markets appeared first on CCN

The launch of Bitcoin futures contracts is prompting US regulators to reconsider their hands-off approach to new derivatives products. On Wednesday, the Commodity Futures Trading Commission (CFTC) — the top US derivatives regulator — will hold a public meeting to discuss the self-certification process by which exchanges are allowed to list new products without prior

The post Bitcoin Futures Prompt CFTC to ‘Reconsider’ Relaxed Approach to Derivatives Markets appeared first on CCN

• Blackstone just announced one of the largest leveraged buyouts in its history, paying Thomson Reuters $17 billion to take a 55% stake in its financial data business.
• A tiny investment bank out of London that has been around for less than a year was a lead adviser to Blackstone.
• Canson Capital Partners formed in early 2017 and has just five bankers, but it'll share in the pie of as much as $80 million in advisory fees on the deal.

Blackstone just completed one of the largest leveraged buyouts in the company's history, paying Thomson Reuters $17 billion to take a 55% stake in its financial data business.

Including debt, it values Thomson Reuters' Financial & Risk business at $20 billion, making it the largest deal Blackstone has arranged since the financial crisis. 

Guiding Blackstone on the mammoth deal was a tiny investment bank out of the United Kingdom that has been around for less than a year.

Canson Capital Partners, a boutique advisory firm founded in early 2017 by ex-HSBC bankers James Simpson and Matteo Canonaco, had a lead role advising Blackstone, which will net the firm a healthy chunk of the $10 million to $20 million in fees Blackstone is expected to pay its bankers, according to Jeffrey Nassof, the director of consulting firm Freeman & Co. Bank of America Merrill Lynch, Citigroup, and JPMorgan also advised Blackstone.

Canson, formerly named DuCanon, is an outfit of just three bankers and two senior advisers based out of a Mayfair office building in London, where it focuses on private equity transactions.

"Very proud to announce Canson Capital Partners Lead Advisory role in Blackstone's Partnership with Thomson Reuters," Simpson wrote on LinkedIn.

It's not their first time advising Blackstone, the world's largest private equity firm. The boutique's inaugural deal came last July, four months after launching, when it helped Blackstone buy Clarion Events for £600 million ($850 million), according to the Financial Times.

Guggenheim Securities was the lead adviser to Thomson Reuters. It'll split a fee of $50 million to $60 million, according to Nassof, with TD Securities and Centerview Partners, a small advisory boutique that had a stellar year in advising on megadeals in 2017.

Still, at 37 partners, Centerview almost looks like a bulge bracket bank compared with the three partners at Canson. 

In total, the banks could earn as much as $80 million for advising on the transaction.

The deal is expected to be financed with $13 billion in debt, which Bank of America Merrill Lynch, Citigroup, and JPMorgan will split $130 million to $160 million in fees for arranging, according to Nassof

Join the conversation about this story »

NOW WATCH: Principal Global Investors CEO: Bitcoin lacks fundamental value and it won't replace gold

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

Welcome to Crypto Insider, Business Insider’s roundup of all the bitcoin and cryptocurrency news you need to know today. Sign up here to get this email delivered direct to your inbox.

Here are the current standings: 

• Bitcoin (BTC): $9,950 (-1.1%)
• Ethereum (ETH): $1,091 (+2.9%)
• Ripple (XRP): $1.09 (-1.0%)
• Bitcoin Cash (BCC): $1,476 (-1.1%)
• Litecoin (LTC): $160 (-2.9%)

What else is happening:

• Ethereum has easily been the best-performing crypto so far in 2018, outpacing bitcoin, XRP, and bitcoin cash.
• Everything you need to know about Tether, the cryptocurrency that people worry could crash bitcoin and that regulators are investigating.
• The CEO of the bank which had its $600 million ICO proceeds seized by the SEC has released a statement vowing to fight the accusation. 
• Ripple's XRP on Tuesday sank to its lowest levels since the cryptocurrency 'bloodbath.'
• Facebook is banning all ads for bitcoin, cryptocurrencies, and ICOs. 
• Cryptocurrency exchange Bitfinex was reportedly subpoenaed in December by a top US regulator.
• A tiny soccer team announced itself to the world by becoming the first to ever buy a player with bitcoin.
• Saudi Arabia is working on an official bitcoin policy  — a ban is unlikely. 

SEE ALSO: A popular bitcoin stock announced a 91-for-1 split that could make it more accessible to the masses

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.

Chinese cryptocurrency exchange BTCC has been acquired by an unnamed Hong Kong-based blockchain investment fund. BTCC is the fifth-largest cryptocurrency exchange by daily Bitcoin trading volume.

Additionally, part of its services are now registered in the UK, where it likely plans to deploy its services. The company said it will now shift its focus exclusively to international markets, concentrating on its three major products: mining pool BTCC Pool, Mobi Bitcoin Wallet, and USD Exchange. As of December, BTCC stopped operating its DAX cryptocurrency exchange.

The acquisition comes after China's September 2017 decision to suspend all cryptocurrency exchanges in the country. As a result of that move, BTCC has had to find new ways to bring in revenue and continue to operate, likely pushing it to explore its options outside of China. This acquisition should help BTCC’s international expansion efforts, as Hong Kong is often seen as a gateway into Western markets.

Additionally, that the blockchain investment fund acquiring BTCC is Hong Kong-based means it will likely have knowledge of BTCC's previous market and operations, making it easier for the two to work together.

BTCC's approach to breaking out of the Chinese market could serve as an example to its peers. With cryptocurrency exchanges still barred from operating in China, many are likely looking to relocate elsewhere. And contemplating a sale could be a smart way to accomplish this, as it's cheaper and more efficient for an exchange to work with another company, likely with greater expertise and resources, than it would be to comply with regulations in different markets on its own.

An acquisition could also provide an exchange with a ready-made pool of customers in potential new markets. If BTCC successfully moves away from China with this acquisition, we will likely see other China-based cryptocurrency exchanges seeking to be acquired in the future.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has put together a report that compiles various fintech snapshots, which together highlight the global spread of fintech, and show where governments and regulatory bodies are shaping the development of national fintech industries. Each provides an overview of the fintech industry in a particular country or state in Asia or Europe, and details what is contributing to, or hindering its further development. We also include notable fintechs in each geography, and discuss what the opportunities or challenges are for that particular domestic industry.

 In full, the report:

• Explores the fintech industry in six countries or states, and identifies individual fintech hubs.
• Highlights successful fintechs in each region.
• Outlines the challenges and opportunities each country or state faces. 
• Gives insight into the future of the global fintech industry. 

 Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
2. Purchase & download the full report from our research store. >> Purchase & Download Now

Join the conversation about this story »

• Amazon, Berkshire Hathaway, and JPMorgan announced Tuesday they're teaming up to launch a new nonprofit healthcare company. 
• Venture capitalist Bill Gurley — the legendary investor who backed Uber, Snap, and eBay — thinks employers should get out of healthcare.
• But there's one piece that needs to fall into place before much change can happen, Gurley said: narrow networks.
• At Kaiser Permanente, a health system on the West Coast that has both a health plan and a hospital, members see the doctors Kaiser Permanente employs in network. The model is a favorite of Berkshire Hathaway vice chairman Charlie Munger.  

Amazon, JPMorgan, and Berkshire Hathaway plan to build a new nonprofit healthcare company that will provide to their employees "simplified, high-quality and transparent healthcare at a reasonable cost."

Depending on how that company takes shape, it could have a big impact on the role employers play in healthcare.

Bill Gurley, a general partner at Benchmark Capital, told Business Insider that the new venture could be a sign that companies are trying to create change in how employers interact with healthcare for their employees. 

But there's one piece that needs to fall into place before much change can happen, Gurley said: narrow networks.

In the US, employers are mandated to provide health insurance for their employees. The US isn't alone in having an employer-funded healthcare system, but in many other countries, it's supplemental to a government-run insurance system as opposed to full coverage.

Narrow networks are plans that offer fewer health providers in the hopes that it will keep costs lower and members will get better quality care than if health plan members could go to a wider selection of doctors. And Gurley thinks for the JPMorgan-Amazon-Berkshire Hathaway health venture to work, it will need to include one of those.

In the case of Kaiser Permanente, a health system on the West Coast that has both a health plan and a hospital, members see the doctors Kaiser Permanente employs in network. The model is a favorite of Berkshire Hathaway vice chairman Charlie Munger.  

"If the whole nation had Kaiser Permanente care, the average quality of the care would go way up and the cost would go way down," Munger has said.

Narrow networks are becoming standard, especially among Medicare Advantage plans, or private insurance alternatives to Medicare. About 35% of Medicare Advantage members were in narrow network plans, while 22% were in broad-network plans in 2015, according to the Kaiser Family Foundation. They're also common in the Affordable Care Act marketplace. 

But still, the majority of health plans aren't built around narrow networks, especially employer-funded plans, which proponents of narrow networks say keeps healthcare costs high.

"I don’t know how we get to reform until there’s narrow networks," Gurley said.  

SEE ALSO: Bill Gurley — the legendary investor who backed Uber, Snap, and eBay — is now betting big that healthcare has hit a 'tipping stage'

DON'T MISS: Warren Buffett has been speaking out about the cost of healthcare for years — and it could hint at what’s to come with a new health venture

Join the conversation about this story »

NOW WATCH: A crypto expert explains the difference between the two largest cryptocurrencies in the world: bitcoin and Ethereum

• Ethereum is the best performing major cryptocurrency so far in 2018. 
• The second-largest coin by market cap has gained 46% since January 1, compared to the overall market's 15% drop. 

The global cryptocurrency market might have lost 15% — or $93 billion of value — since January 1, but not all coins have declined equally.

Ethereum has fared well in 2018, avoiding the drastic selling that has left other coins in the red. The second-largest cryptocurrency by market cap is up more than 46% this year, according to Markets Insider data, far outpacing bitcoin’s 25% decline. 

XRP, the third-largest cryptocurrency, controlled largely by its creating company Ripple, is down more than 45% since January 1.

Cryptocurrencies worth less than $1 billion haven't fared well either. The fourth-largest digital coin, bitcoin cash, has plunged 35.9% so far this year.

2018 has been marked by wild price movements, often over 10% in either direction, as fears of regulation in the US and abroad routinely wipe out billions of dollars in market value on any given day. That’s a near complete departure from 2017, a year in which prices seemed to move upward at a breakneck pace.

"The state of cryptocurrency is incredibly strong," Andy Bromberg, CEO of CoinList, an ICO hosting platform, told Business Insider. "Looking far beyond the prices, we're seeing an increasing number of high-quality projects in the space, with experienced teams, impressive early technological breakthroughs, and rigorous legal structuring.

"We expect to see this continue into 2018 as the industry matures and professionalizes -- a necessary step for it at this time."

SEE ALSO: Sign up to get the most important updates on all things crypto delivered straight to your inbox.

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

• Ethereum is the best performing major cryptocurrency so far in 2018. 
• The second-largest coin by market cap has gained 46% since January 1, compared to the overall market's 15% drop. 

The global cryptocurrency market might have lost 15% — or $93 billion of value — since January 1, but not all coins have declined equally.

Ethereum has fared well in 2018, avoiding the drastic selling that has left other coins in the red. The second-largest cryptocurrency by market cap is up more than 46% this year, according to Markets Insider data, far outpacing bitcoin’s 25% decline. 

XRP, the third-largest cryptocurrency, controlled largely by its creating company Ripple, is down more than 45% since January 1.

Cryptocurrencies worth less than $1 billion haven't fared well either. The fourth-largest digital coin, bitcoin cash, has plunged 35.9% so far this year.

2018 has been marked by wild price movements, often over 10% in either direction, as fears of regulation in the US and abroad routinely wipe out billions of dollars in market value on any given day. That’s a near complete departure from 2017, a year in which prices seemed to move upward at a breakneck pace.

"The state of cryptocurrency is incredibly strong," Andy Bromberg, CEO of CoinList, an ICO hosting platform, told Business Insider. "Looking far beyond the prices, we're seeing an increasing number of high-quality projects in the space, with experienced teams, impressive early technological breakthroughs, and rigorous legal structuring.

"We expect to see this continue into 2018 as the industry matures and professionalizes -- a necessary step for it at this time."

SEE ALSO: Sign up to get the most important updates on all things crypto delivered straight to your inbox.

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

• Ethereum is the best performing major cryptocurrency so far in 2018. 
• The second-largest coin by market cap has gained 46% since January 1, compared to the overall market's 15% drop. 

The global cryptocurrency market might have lost 15% — or $93 billion of value — since January 1, but not all coins have declined equally.

Ethereum has fared well in 2018, avoiding the drastic selling that has left other coins in the red. The second-largest cryptocurrency by market cap is up more than 46% this year, according to Markets Insider data, far outpacing bitcoin’s 25% decline. 

XRP, the third-largest cryptocurrency, controlled largely by its creating company Ripple, is down more than 45% since January 1.

Cryptocurrencies worth less than $1 billion haven't fared well either. The fourth-largest digital coin, bitcoin cash, has plunged 35.9% so far this year.

2018 has been marked by wild price movements, often over 10% in either direction, as fears of regulation in the US and abroad routinely wipe out billions of dollars in market value on any given day. That’s a near complete departure from 2017, a year in which prices seemed to move upward at a breakneck pace.

"The state of cryptocurrency is incredibly strong," Andy Bromberg, CEO of CoinList, an ICO hosting platform, told Business Insider. "Looking far beyond the prices, we're seeing an increasing number of high-quality projects in the space, with experienced teams, impressive early technological breakthroughs, and rigorous legal structuring.

"We expect to see this continue into 2018 as the industry matures and professionalizes -- a necessary step for it at this time."

SEE ALSO: Sign up to get the most important updates on all things crypto delivered straight to your inbox.

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

• Ethereum is the best performing major cryptocurrency so far in 2018. 
• The second-largest coin by market cap has gained 46% since January 1, compared to the overall market's 15% drop. 

The global cryptocurrency market might have lost 15% — or $93 billion of value — since January 1, but not all coins have declined equally.

Ethereum has fared well in 2018, avoiding the drastic selling that has left other coins in the red. The second-largest cryptocurrency by market cap is up more than 46% this year, according to Markets Insider data, far outpacing bitcoin’s 25% decline. 

XRP, the third-largest cryptocurrency, controlled largely by its creating company Ripple, is down more than 45% since January 1.

Cryptocurrencies worth less than $1 billion haven't fared well either. The fourth-largest digital coin, bitcoin cash, has plunged 35.9% so far this year.

2018 has been marked by wild price movements, often over 10% in either direction, as fears of regulation in the US and abroad routinely wipe out billions of dollars in market value on any given day. That’s a near complete departure from 2017, a year in which prices seemed to move upward at a breakneck pace.

"The state of cryptocurrency is incredibly strong," Andy Bromberg, CEO of CoinList, an ICO hosting platform, told Business Insider. "Looking far beyond the prices, we're seeing an increasing number of high-quality projects in the space, with experienced teams, impressive early technological breakthroughs, and rigorous legal structuring.

"We expect to see this continue into 2018 as the industry matures and professionalizes -- a necessary step for it at this time."

SEE ALSO: Sign up to get the most important updates on all things crypto delivered straight to your inbox.

Join the conversation about this story »

NOW WATCH: Microsoft President Brad Smith says the US shouldn't get 'too isolationist'

The post Bitcoin Price Holds Above $10,000 But Markets Remain Firmly in the Red appeared first on CCN

The cryptocurrency markets extended their decline for another consecutive day on Wednesday, as just five of the 100 largest coins and tokens managed to post an advance against the dollar. The Bitcoin price, meanwhile, recovered past $10,000 after yesterday’s report that US regulators had subpoenaed Bitfinex and Tether briefly caused it to dip into four-figure

The post Bitcoin Price Holds Above $10,000 But Markets Remain Firmly in the Red appeared first on CCN

Tennessee lawmakers have put forward a new bill that would bar state government retirement funds from investing in cryptocurrencies.

• Byron's creditors approved a CVA plan on Wednesday.
• As many as 20 restaurants could close as a result .
• Britain's casual dining sector is suffering from a nationwide consumer spending squeeze.

LONDON — Creditors of stricken burger chain Byron have voted almost unanimously to approve a company voluntary arrangement (CVA), which could result in as many as 20 restaurants closing.

99% of the firm's creditors voted in favour of the proposal on Wednesday, which was initially proposed on January 8. The CVA needed 75% approval to pass.

A CVA is a restructuring effort that will help Byron cut its bills, and will include the closure of a number of restaurants. The number to be closed has not been disclosed, although it was earlier reported that Byron could close as many as 20.

"As a result of this restructuring process, a number of our restaurants will close and we will do everything possible to redeploy staff to other sites and initiatives," Byron's CEO Simon Cope said.

Cope, who lead a turnaround of Japanese casual chain Wagamama, was brought in to help revive Byron last May.

According to City AM, the CVA "divides Byron's 67 leasehold sites and nine non-operational leaseholds into three categories."

The first category will see 51 sites with unchanged arrangements, the second will see Byron pay two-thirds rent on five restaurants, while the final category contains the 20 restaurants under threat of closure. Byron will pay 55% rent on those sites. These arrangements will be in place for six months while Byron's management negotiates what to do with the sites that are under threat.

"Today’s creditor vote in favour of the CVA proposal will allow Byron to conclude its previously negotiated financial restructuring and is a key step in the directors’ turnaround plan," Will Wright, a restructuring partner at KPMG and joint supervisor of the CVA, said in a statement

Byron was founded in 2007 and was one of the first restaurants to spearhead a revolution in the UK's burger market, transforming the image of the fast food from an unhealthy, down-market food to an indulgent treat.

The chain expanded quickly and was sold in 2013 for £100 million to London private equity group Hutton Collins Partners.

But Byron has struggled with "gathering economic headwinds" recently, according to KPMG partner Will Wright. Sales growth slowed from 24.4% in 2015 to 16.7% in 2016, the Telegraph reported, with profit also dipping.

Byron's trendy burger offering has suffered in recent years amid a consumer spending squeeze driven by rising inflation. Inflation peaked at 3% last year, driven by the slump in the value of the pound after 2016's Brexit vote.

Fulham Shore, the owner of trendy pizza chain Franca Manca, another prominent fixture in the UK's casual dining scene, saw shares crash 20% in September after the business issues a profit warning citing a "sector-wide slowdown."

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• Halsey Minor, who founded CNET and cofounded Salesforce, is spearheading a new distributed computing project focused on encoding, storing, and streaming video.
• The effort is designed to tap into so-called zombie servers, which are unused or underutilized computers in data centers.
• Server owners will be paid via a new cryptocurrency called VideoCoin; Minor plans an initial coin offering for the token in March and has already raised $25 million in pre-ICO funding for it.
• The VideoCoin Network is designed to be a rival to Amazon Web Services and other cloud-based video processing offerings. Minor says the service will be 60% to 80% cheaper and give video producers greater ability to create their own apps on top of it.
• It's unclear whether Hollywood or other video producers will buy into the system.

Halsey Minor was one of the pioneers of cloud computing. Now he thinks he's come up with a way to replace the cloud with an even more avant-garde technology — a blockchain-backed cryptocurrency.

Minor is developing a distributed computing project for encoding, storing, and streaming video. His goal is to create a system that could offer everyone from Hollywood studios to amateur videographers a way to process their videos that would be just as easy to use as Amazon Web Services or Google Cloud, but far less expensive. And because the effort will be open source, anyone will be able to build whatever applications they want to on top of it — including, potentially, the next YouTube.

The system would work kind of like the SETI@home project, which harnesses the power of participants' home computers to crunch astronomical data for signs of alien life. But instead of searching for E.T., this technology would process the video for what could be the next "E.T." film. And instead of people sharing their computing resources for free, they'd be getting paid for it via a new cryptocurrency called VideoCoin.

"We can harness all these computers around world," said Minor. "We can do things Amazon can't."

Minor plans to launch VideoCoin with an initial coin offering in March; as of this week, the effort had already raised $25 million in pre-ICO investments. Trading in the cyber token will begin the following month. His plan is to begin testing the distributed computing service built around VideoCoin later this year and have it fully up and running within 12 to 18 months. However, before the service launches, token purchasers will be able to use the token to buy processing power on the cloud servers of Live Planet, Minor's virtual reality video startup.

Minor has a history of launching and funding innovative startups

Perhaps best known for founding CNET (where I once worked), Minor is a serial tech entrepreneur and investor who cofounded or was an earlier investor in Salesforce, Grand Central Communications, which became Google Voice, and OpenDNS, which was later acquired by Cisco. VideoCoin is an outgrowth of two of Minor's most recent companies, the cryptocurrency exchange Uphold and Live Planet, which offers a 360-degree stereoscopic video camera and a cloud service for hosting and streaming video.

We can harness all these computers around world. We can do things Amazon can't.

Live Planet's camera is designed to capture enough video information to send a 4K stream to each eye in a virtual reality headset. Minor's dream is to have the cameras located just about everywhere, streaming video 24 hours a day, seven days a week. But encoding all that data and streaming it to users around the planet via the existing cloud services would be incredibly costly; Minor estimated that for just one camera, it would cost $30,000 a month.

So, he got to thinking that there must be a better way — and Uphold suggested a possible solution. With Bitcoin and other cryptocurrencies, anyone on the internet can earn money by using their computing power to solve complex algorithmic problems. As the algorithms have become more difficult to solve, the market has responded by adding more computing power.

Minor figured he could tap into a similar idea. But instead of using computing power to solve complex puzzles just to do the simple accounting task of adding a line to a digital ledger, he figured he could have those computers do something that's already processor-intensive — encoding video.

"We're trying to bring the same idea to a form of computing that's useful," he said.

VideoCoin could undercut the competition on price

Hollywood studios and streaming services frequently encode their videos multiple times so they can be streamed to a variety of devices at a range of resolutions. Video providers also need places to store and stream their videos.

Right now, many upload their videos to cloud service providers. Each of the major ones has its own video encoding or streaming technology built-in. Other players in the space include IBM and dedicated video companies such as Brightcove and BAMtech.

Video providers will be able to use the VideoCoin Network in much the same way they would those services, Minor said. Meanwhile, whether a video is streaming from AWS or from a server on the VideoCoin Network should be invisible to consumers.

VideoCoin will be able to undercut the competition on price, Minor said. Unlike SETI@Home, which relied on computing power of millions of idle home PCs, VideoCoin is designed to be run largely on unused or underutilized servers in data centers. There are lots of them out there — some 20 million according to Live Planet. Minor estimates that at any given time, about 30% of the computing power in data centers is idle, being reserved for peak demand. Another 20% isn't being used at all.

"You've got $10 billion to $20 billion of data center assets that are doing nothing," he said.

You've got $10 billion to $20 billion of data center assets that are doing nothing

These so-called zombie servers and data centers could all be tapped to process video, he said. And because they're not being used for much of anything else at the moment, their owners would likely let them be used for far cheaper than it would cost to have video processed on AWS or other cloud services. Indeed, Minor thinks VideoCoin can turn the computing power needed to encode video into a commodity and, in the process, cut the price by 60 to 80%.

"The terrifying thing for Amazon and Google … is that the way to make money in bitcoin is not by having better software or hardware. It's having the lowest cost of power," he said. He added: "We're trying to bring that same idea to a form of computing that's useful."

But Minor thinks that the even bigger draw for VideoCoin will be the freedom video providers will have to build applications on top of it.

"A lot of new things will happen, because it's open source," he said.

Minor and VideoCoin have some big challenges ahead

And at least some in the industry think he's onto something. VideoCoin has quickly raised money from some of the leading cryptocurrency investors, including Alphabit and Galaxy Investment Partners.

There are several efforts to use cryptocurrencies to underlie distributed cloud storage and cloud processing efforts, including Filecoin and Golem, noted Lex Sokolin, a partner at Autonomous Research, a financial research firm. But VideoCoin appears to be the first to really focus on using a cryptocurrency to create a distributed computing project focused on processing video, he said. That could be a big benefit, especially given how important video already is online and how much more important it's becoming, he said.

"You have the components of a large global opportunity," Sokolin said.

You have the components of a large global opportunity

Of course, even Minor acknowledges that VideoCoin has a long road ahead of it, including some major engineering challenges. And it's not at all certain that video providers, particularly Hollywood studios, will feel comfortable sending their intellectual property to unknown servers operated by unknown people through a system that hasn't been tested.

Video providers are already saving lots of money by using cloud services rather than processing and streaming video from their own data centers, noted Dave Bartoletti, a principal analyst at Forrester Research who focuses on cloud computing. Even then, it took years for AWS and other cloud service providers to convince companies such as the video providers that their systems were secure enough to store those companies' most valuable data.

Even if such companies are tempted by saving even more by using VideoCoin, it will likely take a while for the service to earn their trust, Bartoletti said.

"Especially with Hollywood studios," he said, noting that distributing their videos securely is fundamental to their business. "If they don't get that right, they're screwed. It requires a massive amount of trust."

Meanwhile, there's more to distributing video than just encoding, storing, and streaming it, said Greg Ireland, a video analyst at research firm IDC. Video providers need to be able to insert ads, be prepared for peak demand, distribute their video to different partners, and more. Companies that offer video production and encoding services already handle much of that, Ireland said.

"It's not like there's a shortage of solutions," he said. "The question is whether they're solving a valid problem."

For his part, Minor's convinced VideoCoin is solving a big problem. To convince video producers to try out the service, he plans on building into it easy ways for them to move some of their videos from AWS and other cloud services to it.

"We're not going to have to hire an entire sales staff. They'll just adopt it," he said. "They'll try it, and if they like it, they'll adopt it."

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• Brexit poses significant risks to US interests around the world.
• In an interview with Business Insider, former US diplomat Ambassador Charles Ries discussed Brexit's impact on the "serious" threat of Russia, how it could weaken the NATO alliance, and how losing Britain's "economically liberal" voice in Brussels could spell bad news.

LONDON — Donald Trump intends to visit the UK later this year, when all focus will be on a much-hyped Brexit trade deal between the UK and US.

The truth is that a deal is much more important to the UK than it is to the US, which is a bigger market and counts UK trade as a much smaller fraction of its total.

Analysts do, however, believe that Brexit poses significant risks to US interests, and they are generally under-explored. A recent report from the RAND Corporation, which specialises in public policy research, said these threats are wide-ranging and serious, ranging from foreign policy to economics.

Business Insider spoke to Ambassador Charles Ries, vice president of the RAND Corporation and a former US diplomat whose career included posts overseeing the US-European Union relationship and working as a member of the North American Free Trade Agreement (NAFTA) negotiating team, which created the world's largest free trade arrangement between Canada, Mexico, and the United States.

He discussed three ways in which Brexit could negatively affect US political and economic interests.

1. The "serious threat" of Russia

Russia's attempts to divide and weaken Europe are well-documented, and an investigation into whether Russia meddled in the EU referendum is ongoing. Some say Brexit represents a fragmentation which serves Russia's interests at the expense of the transatlantic alliance.

"The highest concern [for the US] is the potential impact of Brexit on European cohesion," said Ries.

"Thus far the impact of the Brexit process has actually been to [weaken] Euroscepticism and increase support for the European Union.

"But the Russians and other adversaries have welcomed signs of Euroscepticism and perhaps encouraged it. Our interests are the opposite to that. Our interests are to keep Europe strong, because Europe together with the United States and the transatlantic alliance are an important element in our security."

"I think [Russia] is a serious threat ... it has supported nationalist movements in central and eastern Europe designed to pull those countries away from Brussels and from the European Union, and supported parties that have taken such views."

2. Losing Britain's "economically liberal voice" in Brussels

In economic terms, Ries said the biggest impact of Brexit on the United States could be the loss of Britain's "pragmatic and economically liberal voice" at the European Council.

"For those of us who worked on US-EU affairs, the British were more likely than not to suggest that the EU be open to international trade and investment. That was a voice we thought made a difference in terms of outcomes," he said.

There was a rare and notable exception when the British adopted a protectionist stance: the Great US-EU Banana Fight of the 1990s. The UK, along with 10 other countries, tried to slap a 20% import tariff on bananas imported from the Americas, which the US baulked at.

"In that case, the British were not the liberals, the Germans and the Dutch and Swedes were the liberals," Ries said.

On balance, however, Ries said it's "not very controversial to say that the British favoured an open trading regime and relationship and tended to resist more protectionist approaches in areas like data protection and other regulatory issues."

3. A weaker foreign policy

North American and European countries are bound together by the North Atlantic Treaty Organization, a powerful military alliance whereby member states agree to mutual defence in response to an attack.

Since the EU was created, it has developed its own security and defence policy, leading to fears in Washington that Nato would be sidelined. As a member of the EU, Ries says the UK was key in ensuring that didn't happen.

"The British ... have been leaders of those who felt that European [defence policy] should not sideline Nato and should be collaborative with the alliance."

"Speaking from Washington, the concern has always been that somehow the development of a stronger European Union defence structures — either headquarters or brigades or other kinds of initiatives — might weaken the commitment of key European member states to the alliance and to competing structures.

"When you get down to it it has to do with, where do the leading admirals and generals spend their time? Are they spending their time at EU structures, are they spending their time at [Nato] structures?"

"Given the challenges the alliance faces, particularly after [Russia's annexation of] Crimea, and the conflict in Ukraine, Washington's attitude is that it's all the more important that there be transatlantic co-operation or political security issues and adequate resources for that."

SEE ALSO: How the government's leaked economic forecasts for Brexit compare to 4 others

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Bitcoin is back above the $10,000 mark, but may soon head back below $9,800, the technical charts indicate.

• A Turkish sports club claims it is the world's first football team to purchase a player using bitcoin.
• The player — 22-year-old Omar Faruk Kiroglu — received 0.0524 in bitcoin (approximately £385) and 2,500 Turkish Lira (£470) as part of the deal with Harunustaspor.
• It was a move to put the club on the global football map.

A little-known sports club in Turkey claims it has completed the world's first football transfer using bitcoin.

Amateur club Harunustaspor, who competes in the Sakarya First Division Group B, paid for 22-year-old Omar Faruk Kiroglu using the cryptocurrency.

Club chairman Haldun Sehit told CNN Turk that the club completed to world first "to make a name for ourselves in the country and the world."

Kiroglu received 0.0524 in bitcoin (approximately £385) and 2,500 Turkish Lira (£470) as part of the deal. He added: "As my chairman said, we are doing something new."

Cryptocurrency is becoming increasingly popular in sports.

Premier League football club Arsenal recently signed a deal with cryptocurrency partner and official blockchain partner CashBet, and retired boxer Floyd Mayweather has promoted a number of initial coin offerings.

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• Bitcoin price fell on Tuesday on news that US regulators are investigating companies behind cryptocurrency Tether.
• Rumours have been circulating that Tether, a crypto pegged to the dollar, does not have the currency reserves to back it up.
• The company behind Tether strongly denies allegations.
• Fears that if they are true, Tether crash could tank bitcoin and crypto exchanges due to the central role it plays in the market.

LONDON — The price of bitcoin dived late on Tuesday night after news that two companies, Bitfinex and Tether, had been subpoenaed by the US Commodity Futures Trading Commission (CFTC).

Concerns have been swirling in the cryptocurrency market for months about the status of Tether, a cryptocurrency issued by Tether Limited. It plays a central role in the operation of many leading cryptocurrency exchanges, including Bitfinex, but there is speculation that the company behind it may not hold the dollar reserves it claims.

If this theory is true, it has the potential to crash the price of bitcoin and potentially hobble the operations of many exchanges. Here's what you need to know:

What is Tether?

Tether is a cryptocurrency that's meant to be backed one-for-one by the US dollar. The idea is to have the price stability of the dollar combined with the operational ability of a cryptocurrency. It's what people in the crypto world call a "stable coin."

The cryptocurrency was created in 2015, originally called Realcoin, and there is $2 billion-worth of so-called USDT in circulation today, according to industry data source CoinMarketCap.com. It was hit by a $31 million hack last November.

Who is behind it?

Tether tokens are issued by Tether Limited, a company based in the British Virgin Islands according to the New York Times. Tether's website says it is incorporated in Hong Kong, with offices in the US.

The company has many of the same management team as Bitfinex, the Hong Kong-based cryptocurrency exchange that is one of the biggest in the world. Jan Ludovicus van der Velde is CEO of both Bitfinex and Tether, and Philip Potter is chief strategy officer for both businesses, for example.

Who uses Tether?

"Anybody who's trading on some of the major exchanges [holds Tethers]," Mati Greenspan, a market analyst with eToro, told Business Insider. "What exchanges like Bitfinex do is, rather than having a client's balance held in dollars, they hold them in USDT. So if somebody's got their money on an exchange such as Bitfinex and they don't have any current open positions, they're actually probably in Tether."

Many cryptocurrency exchanges have difficulty working with traditional banks, who are wary of working with crypto businesses. Tether offers a stable alternative, offering the low volatility of the dollar to both exchanges and users.

An industry source who didn't want to be quoted told BI: "Tether is used by crypto-to-crypto exchanges as it allows them to price crypto assets in USD without having to maintain/own USD-denominated bank accounts – this is of particular interest to many platforms due to the difficulties involved in maintaining banking relationships in the crypto space."

Tether's website says that it "allows you to store, send and receive digital tokens person-to-person, globally, instantly, and securely for a fraction of the cost of alternatives." Holding client funds as Tether means exchanges can cut down on transaction costs until a client wants to redeem their funds as dollars. Then, Tether can be exchanged for those dollars.

Traders also use USDT to lock in returns during times of volatility and also transfer funds from one platform to another.

Why are people worried?

The company that controls and issues Tether is meant to hold US dollar reserves to back up all of the Tethers that have been issued — a little like the Federal Reserve backstops dollars with gold. In theory, Tether holders can sell one USDT back to Tether Limited for $1.

But fears have emerged in the cryptocurrency community that Tether Limited doesn't hold sufficient currency reserves to back all the Tethers in circulation.

"The claim is — and the claim has been growing lately — that they're not holding those reserves," Greenspan told BI. "They haven't been incredibly transparent about where they're holding them and how much they're holding in different places."

The New York Times reported in November: "One persistent online critic, going by the screen name Bitfinex’ed, has written several very detailed essays on Medium arguing that Bitfinex appears to be creating Tether coins out of thin air and then using them to buy Bitcoin and push the price up."

A recent anonymous statistical analysis of Tether published online and circulated in the crypto community made the same claim, saying: "It is highly unlikely that Tether is growing through any organic business process, rather that they are printing in response to market conditions."

The report claims that the printing of Tethers tends to coincide with a dip in the price of bitcoin, suggesting it may be being used to buy up cheap bitcoin. "Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet," the analysis said.

$850 million worth of new Tethers have been printed in January alone and many market participants are worried about the pace at which new Tethers are being minted without proper documentation showing their backing.

Tether published an accounting document last September meant to verify its holdings but a lawyer told the New York Times that the phrasing of the document "did not prove that the Tether coins are backed by dollars."

Accountants Friedman LLP prepared that document and were auditing Tether's books fully, but news emerged earlier this week that the relationship has "dissolved." This has further fuelled concerns.

What could it mean for crypto markets?

If there is a problem with Tether, it could have wider knock-on effects for the cryptocurrency market as a whole due to its central role in many exchanges.

"The issue is that the volumes against Tether have been growing lately," Greenspan said. "They've been above 10% of total volumes on bitcoin for a few weeks already.

"If there aren't sufficient reserves in US dollars, then the price of Tether should not then be pegged to the US dollar and it'll just be decided by the market."

The fear is that a collapse in the price of Tether could also bring about a collapse in the price of bitcoin and other crypto assets that people have been trading with USDT.

The Daily Express predicted a price drop of as much as 80%, calling it a "bloodbath." Bitcoin fell modestly on the news Tuesday that the CFTC has subpoenaed Tether and Bitfinex.

If Tether becomes untethered from the dollar then it will also cause problems for exchanges that use it as a proxy for client funds. This could potentially create liquidity issues and, in a worst-case scenario, force them to seek extra capital. Wired wrote this week: "If traders lose faith in tether, they could end up triggering the crypto version of a bank run."

What does the company behind it say?

Tether Limited has strongly denied all the accusations against it, insisting that it has the dollar reserves to back up all Tethers in circulation and saying it is using its funds properly.

The company said in a statement in December that it is aware of "questions and doubts throughout the community" but said it "cannot disclose much about ongoing investigations," related to the hack in November.

It said that accusations it does not hold dollars to back up its cryptocurrency are "uninformed and baseless" but admitted that it "cannot create or redeem tether for any U.S.-based customers at this time." The company has hired a law firm to take legal action against the person behind the anonymous Bitfinex'ed Twitter account.

Tether told Business Insider this week in an emailed response to questions about its audit:

"We confirm that the relationship with Friedman is dissolved. Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame. As Tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success.

"We remain committed to the process and, as we’ve consistently done, we will continue to provide material updates at the appropriate times."

The company told Bloomberg in an email responding to the CFTC subpoena: "We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests."

What happens next?

"I hope that this whole thing gets shaken out as soon as possible," Greenspan told BI. "The uncertainty isn't very good for the market."

After a huge price run-up before Christmas, the price of bitcoin has collapsed by around 40% in January. Other cryptocurrencies have seen similar retractions. While this slump is not driven by Tether fears, the issue comes at a jittery time for cryptocurrencies.

The next steps for Tether are somewhat unclear at this stage. Possible scenarios include further action from US regulators or Tether Limited engaging a new auditor to look over its books.

Nolan Bauerle, director of research at CoinDesk, told Business Insider he's optimistic because Tether has issued new USDT since the CFTC's subpoena in early December.

He said: "That means Bitfinex has issued Tether under the eye of the CFTC since then, which in important ways suggests the coin is indeed backed by USD. If Bitfinex has been issuing Tether not sufficiently backed by USD, despite being under CFTC monitoring, it'll be one of the most brazen acts we've seen from an exchange in this space."

Whatever happens, Greenspan is optimistic that cryptocurrency markets can survive it.

"Look, this market survived a blanket ban from China," he said. "It can survive anything."

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 Fresh from toppling Intel as the planet’s biggest seller of chipsets, Samsung has confirmed that it has begun manufacturing ASIC chips which are used to mine bitcoin, ether and other cryptocurrencies. “Samsung’s foundry business is currently engaged in the manufacturing of cryptocurrency mining chips. However we are unable to disclose further details regarding our… Read More

• The pound has appreciated aggressively against the dollar in 2018, partly down to weakness in the US dollar.
• Part of its strength has been related to rising market expectations that Britain will avoid a hard Brexit.
• That means that much of sterling's rally for the year is over, and sterling could be fairly boring for the rest of the year, according to Samuel Tombs of Pantheon Macroeconomics.

LONDON — The pound's aggressive rally at the start of 2018 may now be over, and the rest of the year could be pretty calm for the currency, analysis from research house Pantheon Macroeconomics suggests.

Writing in a note to clients published on Tuesday, Samuel Tombs, Pantheon's chief UK economist said that following the rally that has taken the pound above 1.40 against the dollar, that he now does "not see scope for a major shift in sterling this year."

That's down to the fact that markets have now largely priced in any possible Brexit good news — which is in the eyes of the market a soft Brexit — and sterling has appreciated accordingly. Now that's out of the way, the pound will plod along for the rest of the year.

"With this good news now largely priced-in, though, sterling probably won't continue to ascend rapidly," Tombs writes. 

"We see sterling slipping back to about $1.38 by mid-2018, as the pace of monetary tightening in the U.S. exceeds investors' expectations. But we expect sterling to rise against the euro gradually this year, ending 2018 at about €1.20, as the Eurozone economy starts to disappoint investors very optimistic expectations." 

Tombs finds that the pound has now decoupled from the market's expectations of interest rates in the UK — usually a key driver of cyclical currencies — as few Bank of England policymakers have spoken during 2018, so markets have had little to go on.

"Sterling has decoupled from markets' interest rate expectations," Tombs writes.

"Our third chart shows that sterling now is $0.15 above the $1.25 level implied by its relationship in the first half of this decade, with expectations for the difference between overnight interest rates in the U.S. and the U.K. over the next two years. The picture looks similar if expectations for interest rates over a longer period are examined."

Here's the chart mentioned above:

Sterling has gained several percent against the dollar in just a few weeks, continuing the strong performance it saw towards the end of 2017.

Sterling, in fact, is the strongest performer in the G10 basket of major currencies over the past six months when compared to the US dollar.

Market consensus is that much of the pound's recent rally is a story of a weak dollar than a strong pound, with the greenback dragged lower by a number of factors.

However, Tombs argues that the recent rally is "a story of genuine sterling strength too." He points to the fact that "sterling hit a seven-month high against the euro last week and it has appreciated against nearly every other major currency."

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Samsung is manufacturing bitcoin mining chips in partnership with an unidentified Chinese firm, according to an Asian news report.

• Shares in outsourcing firm Capita plunge 40% on Wednesday morning.
• Fall comes after the FTSE 250-listed firm issued a profit warning, announced plans for a rights issue, and suspended its dividend in a single announcement.
• "Today, Capita is too complex, it is driven by a short-term focus and lacks operational discipline and financial flexibility," the firm's CEO Jonathan Lewis said in a surprisingly frank statement.
• Capita, like Carillion, which collapsed earlier in January, has numerous government contracts.

LONDON — Capita, an outsourcing firm with a substantial involvement in government contracts, has seen its shares plunge 40% on Wednesday morning after the FTSE 250-listed firm issued a profit warning, announced plans for a rights issue, and suspended its dividend in a single announcement.

Described by the company in an announcement to the stock market as a "multi-year transformation programme" Capita said the announcements are part of a plan to fix the firms issues after it "underinvested in the business," and placed "too much emphasis on acquisitions to drive growth."

"Capita has underinvested in the business and there has been too much emphasis on acquisitions to drive growth. As our markets have evolved, the Group has not responded consistently to new customer demand," Jonathan Lewis, Capita's CEO said in a surprisingly frank statement.

"Since December, we have continued to experience delays in decision making and weakness in new sales.

"Today, Capita is too complex, it is driven by a short-term focus and lacks operational discipline and financial flexibility.

"Capita needs to change its approach."

Shares are selling off aggressively during early trading. Around an hour after the open, shares are down more than 40%, as the chart below illustrates:

Less than a month after the collapse of Carillion, Capita's bad news is likely to be a source of worry for the government as the firm is involved in many of the same business areas, and has numerous contracts with the central government.

Among Capita's contracts are administering the pensions of Britain's teachers, working with the Cabinet Office, running the UK's electronic tagging service for criminals on behalf the Ministry of Justice, and running numerous helplines for the Department for Work and Pensions.

"Following the recent demise of Carillion, and with Capita also highly exposed to government contracts (Army on-boarding, Teachers pensions, Pensions regulator, HSE, DWP, Cabinet office, MoJ and many more), investors will be quite rightly wondering whether the flood gates are steadily opening to cast light on the risks of government reliance on public-private partnership," Mike Van Dulken, head of research at Accendo Markets said in an email.

"Too complex, too diverse and just haemorrhaging cash – no we’re not talking about Carillion, but fellow outsourcer in a spot of bother, Capita," Neil Wilson, senior market analyst at ETX Capital added.

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• Leaked Treasury report forecasts lost GDP growth of between 2% and 8% under various Brexit scenarios.
• Kay Swinburne MEP told BI the forecasts are not that different to other City and think tank forecasts, showing a "consensus" is emerging.
• Swinburne, vice chair of the influential EU economic committee, voted to remain but says she would now vote to leave.

LONDON — An influential Tory MEP who helped to draft the biggest change to European finance laws in the last decade says the government's leaked Brexit impact report shows a "consensus" is emerging around the effects of leaving the EU.

BuzzFeed News obtained a UK government analysis examining the economic impact of the different forms of Brexit. The Treasury report concluded that all types of Brexit — from membership of the European Economic Area to crashing out without a deal — would be worse for the economy than staying in the bloc.

Kay Swinburne MEP, the most senior British legislator on the EU's influential Economic and Monetary Committee, told Business Insider: "I don't think there's anything that's come out that isn't already in the public domain in one form or another.

"If you look at the broader numbers that have come out of the IMF, the OECD or the financial analysts in the City, there's not that much diversion around them. It does suggest that there's a consensus emerging around what these numbers are actually crystallizing at."

Swinburne voted to remain in the EU but has since said she would now vote to leave because she is concerned about the union becoming "a more centralised system."

Forecasts from groups such as the IMF and OECD in the run-up to the 2016 referendum were dismissed by pro-Brexiteers as "Project Fear" — intentionally over the top forecasts designed the scare the public into voting to remain in the EU.

Swinburne told BI: "I think there's a greater understanding now than there was two years ago, in terms of what trading relationships with the EU as a bloc actually entail.

"There are several models you can participate in. You can be part of the EU as a full member, and therefore full access to the single market, which is unique because you have access to goods and services.

"Or you can be an affiliated member in the EEA where you sign up to part of this, pay into the budget, and sign up to all four freedoms, and therefore have access to goods and services.

"You can be part of the customs union, like Turkey is, but that means you can't sign your own free trade deals, because you're part of a customers union.

"Or, the final and only option you're left with, is you can negotiate a free trade deal. We're in that corner right now and I think people are finally realising that with the red lines that we have, there's only one box left to go into and that is the free trade deal."

The Treasury's forecasts predict lost GDP growth of between 2% and 8% depending on which form of Brexit the UK secures.

Swinburne said: "It's a question of how long it takes us to get from where we are now to a bespoke trade deal, and that takes time. So the impact on our economy is going to be that journey and how pain-free we can make that and mitigate some of the disruptions around what happens."

Swinburne, who worked in the City of London before becoming an MEP in 2009, said all the projections were probably the "worst case scenarios" as they don't take into account anything businesses may do to mitigate the impact of Brexit.

"You can say: assuming these criteria, assuming this, this is the range you get," she told BI. "Somewhere within there, you're going to end up. I would take worst case and best case and guess we'll end up somewhere in the middle."

"Nobody wants to see economies fail right now and anything that damages the UK economy damages the EU27 as well. Therefore it's in everyone's interest to mitigate as much of the risk as possible."

Swinburne has been called "the architect of Mifid II" for her role in shaping the far-reaching European financial legislation that took six years to complete and came into force in January.

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Good morning! Here's what you need to know in markets on Wednesday.

1. Facebook is banning all ads related to cryptocurrencies, from ICOs to bitcoin. The social network says the ban, which includes both Facebook and Instagram, is to crack down on scams.

2. US stocks traded lower overnight on Tuesday, putting the market on track for its weakest two-day performance in at least six months. The Dow Jones industrial average fell 362 points, or 1.37%, in its third biggest single-day point drop since Brexit.

3. Asian stocks eased on Wednesday, pulling further back from record highs, as the recent rise in global bond yields weighed on equities. Japan's Nikkei share index closed down 0.71%, while the Hong Kong Hang Seng is down 0.01% at the time of writing (6.30 a.m. GMT/1.30 a.m. ET), and China's Shanghai Composite is down 0.74%.

4. Eurozone inflation and unemployment figures are coming. Eurostat will report preliminary figures for January at 10.00 a.m. GMT (5.00 a.m. ET). Inflation is forecast to dip to 1%, while unemployment is expected to hold steady at 8.7%.

5. Startups and projects raised $5.6 billion (£3.9 billion) last year through so-called initial coin offerings (ICOs), according to a new report. Venture capital fund Fabric Ventures and cryptocurrency data provider TokenData shared the figure in their "State of the Token Market" report, which was shared with Business Insider ahead of publication this week.

6. Samsung Electronics posted a record quarterly profit, as expected, for the three months through December, led by strong demand for memory chips. Operating profit for the world's biggest chipmaker was 15.15 trillion won ($14.1 billion, £9.9 billion) in the fourth quarter, up 64.3% from a year ago and in line with the 15.1 trillion won the company had estimated.

7. Japanese telecom giant SoftBank has invested $300 million (£211.3 million) in dog-walking startup Wag. Hilary Schneider, who most recently led LifeLock through its $2.3 billion (£1.6 billion) sale to Symantec in 2016, is taking over as Wag's CEO.

8. Amazon, Berkshire Hathaway, and JPMorgan Chase are creating a new business designed to lower healthcare costs for US-based employees in a move that could shake up the managed-care industry. The companies were not specific about what kind of enterprise they aim to create, noting only that they wanted to improve employee satisfaction while reducing costs, according to a joint release.

9. The Commodity Futures Trading Commission has issued subpoenas to Bitfinex, a cryptocurrency exchange, and Tether, the company behind a digital coin that claims to track the US dollar, Bloomberg reported Tuesday. Tether says its cryptocurrency, called USDT, is pegged to and backed by the dollar. It is meant to function as a "stablecoin," a cryptocurrency that allows you to avoid the volatility of bitcoin but still have the operability of a cryptocurrency.

10. South Korea has uncovered cryptocurrency crimes worth 637.5 billion won ($594.3 million, £418.6 million), which includes illegal foreign exchange trading, a statement released by the country's customs service said on Wednesday. The statement said domestic investors bought 1.7 billion won worth of cryptocurrencies, which they sent to overseas partner companies through virtual wallets.

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• Fabric Ventures and TokenData report: $5.6 billion raised through "initial coin offerings" in 2017.
• There were 435 successful projects, raising an average of $12.7 million.
• The 10 largest projects raised 25% of the money.
• "On average, tokens have returned 12.8x the initial investment in dollar terms," but the majority of gains come from early projects and returns are trending downwards.

LONDON — Startups and projects raised $5.6 billion last year through so-called initial coin offerings (ICOs), according to a new report.

Venture capital fund Fabric Ventures and cryptocurrency data provider TokenData shared the figure in their "State of the Token Market" report, which was shared with Business Insider ahead of publication this week.

2017 saw a huge boom in companies raising money by issuing their own digital currencies, which are structured similarly to bitcoin, in return for funds to build their business. These "coins" can then be traded freely on online exchanges, offering greater liquidity to investors than traditional equity investment.

"More than $5.6 billion of capital was raised in 2017 according to the metrics used by the TokenData team," the report says. "This compares to $1 billion of ‘traditional’ venture investing in blockchain startups in the same time frame and a ‘mere’ $240 million raised by token sales in 2016."Fabric Ventures and TokenData found 435 successful ICOs out of an attempted 913 last year — meaning just 48% were successful.

The average amount raised was $12.7 million but the report notes: "Collectively, the 10 largest sales raised close to $1.4 billion and roughly 25% of the total capital raised in 2017."

Almost a third of funding went towards blockchain infrastructure projects. The biggest ICO of last year was Filecoin, a project to build a decentralized data storage solution based on the blockchain. The project raised $257 million in September.

The majority of people investing in these ICO projects have been retail or small-time investors but institutions are increasingly looking at ICOs due to their eye-catching returns.

"On average, tokens have returned 12.8x the initial investment in dollar terms versus 7.7x for ETH and 4.9x for BTC during 2017," the report notes. That tallies with finding from Mangrove Capital Partners last year, which recorded returns of 1,320% up to October of last year.

But not all ICOs are equal. Fabric Ventures and TokenData note: "A closer look shows that returns are skewed towards a handful of tokens issued in the first quarter of 2017, when the ICO hype had not fully erupted, and that average token returns have been trending down since."

Fabric Ventures and TokenData voice some concern about the nature of the ICO market, which is attracting increasing regulatory attention due to the amounts of money pouring into the sector.

"The majority of investors are more interested in the speculative nature of cryptocurrencies than in the efficiency of open source development," the report notes. "A lot of these projects have raised massive amounts of money upfront before receiving any market validation, creating problems for long-term incentivisation of the team.

"We expect a Darwinistic process to kick-in, in which projects with better governance will raise funds more successfully and operate more efficiently (we can already see that over 40% of projects do not achieve their target raises)."

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China-based Huobi, previously one of the country's largest cryptocurrency exchanges, plans to launch an office in San Francisco.

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