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Make sure you check out our previous edition here, now let’s go over what happened in crypto this week. Also, make sure you subscribe for this week’s edition of The CCN Podcast on iTunes or wherever you get your podcasts. Price Watch: Bitcoin increased nearly 9% this week after a non-trivial gain of 18% last week. The price was all over the place this

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A Wells Fargo/Gallup poll has revealed that only 2% of investors in the United States currently hold bitcoin, a finding that optimists will argue shows massive unlocked potential while cynics will paint it as the glass being half empty. Interest in bitcoin remains high, though, with 26% of U.S. investors saying they were intrigued by

The post Only 2% of U.S. Investors Own Bitcoin, Most View it as ‘Very Risky’: Wells Fargo Poll appeared first on CCN

• For a slim device that looks like a USB stick, the Juul e-cig packs a powerful punch.
• But despite the skyrocketing popularity of its devices, Juul Labs — which was recently valued at $15 billion — faces a growing backlash.
• State and federal regulators are probing Juul to see whether it unfairly marketed its products to teens, several lawsuits have been filed against the company, and San Francisco recently banned flavored tobacco products.

For a slim device that looks like a USB stick, the Juul e-cig packs a powerful punch. Each refillable insert contains twice the nicotine as a pack of cigarettes.

American vapers have embraced the device: The Juul now represents nearly 71% of the entire e-cig market. Last month, sales of the devices surged 738%.

But despite the ballooning popularity of its vapes, Juul Labs — a Silicon Valley startup recently valued at $15 billion — is facing a growing backlash.

Several state and federal investigations and a handful of consumer lawsuits highlight concerns about the Juul's health effects and its worrisome popularity among teens. The Massachusetts Attorney General is investigating whether Juul violated state consumer-protection laws by failing to keep minors from buying its products, and the Food and Drug Administration recently cracked down on sales of the Juul to minors.

On top of those concerns, the city of San Francisco recently banned flavored tobacco products like the Juul, a move public-health researchers and leading philanthropists like Michael Bloomberg have said they hope other cities follow.

A startup that's booming

Behind the unassuming, aging brick facade of a shipping warehouse in San Francisco's Dogpatch neighborhood, Juul Labs is growing exponentially. Its five floors are packed with employees. Staff crowd the halls, spill onto balconies for meetings, and squat on the building's sweaty top floor.

Juul's US staff has tripled in the last six months, and more growth is coming. Juul has plans to open offices in 19 more locations across the country, including big cities like Boston and Chicago and smaller ones like Des Moines, Iowa and Manchester, New Hampshire. The company is expanding internationally, too. After launching in London earlier this month, Juul has plans to expand to three more countries.

The company has the money to do it. After scoring a $15 billion valuation that puts Juul in the ranks of startups like Pinterest, Lyft, and Snap Inc., Juul Labs raised $650,000 within just two days.

But as Juul has grown, government groups, nonprofits, and public-health experts have started sounding alarms, calling out the Juul for being addictive and uniquely appealing to teens.

Teen 'Juuling' could be the 'genie you can't put back in the bottle'

The first signs of trouble came from high school bathrooms. In small groups, students began gathering to "Juul" (the verb the product has spawned) under clouds of creme-brulee-scented vapor. Some carried the devices into class, where they'd sneak pulls from Juuls hidden inside the bodies of emptied Sharpie pens.

Worried teachers brought their concerns to principals, who called on public-health researchers to visit campuses and discuss the risks of nicotine.

Then some of those teachers looked at YouTube, and found the platform was full of videos made by teens showing themselves sneaking Juuls into class and vaping on the sly — sometimes even in front of teachers.

Using hashtags like #JuulGang and #VapeNation, teens boasted on social media about the number of devices they could use at once. Some appeared to be linked to viral hashtags that Juul Labs had used in a 2015 advertising campaign when its device launched.

Juul maintains that it does not want teens to use its devices and claims its products are designed solely for adult smokers looking to transition to less harmful devices. The company has also said that sales of its devices did not take off until at least two years after the 2015 campaign was launched.

"Juul is a company that was started by smokers with an objective to switch smokers to non-combustible products," Ashley Gould, Juul's chief administrative officer, told Business Insider in March.

A Juul Labs spokesperson also told Business Insider that the company has been working with social media platforms to remove Juul-related content that involves young people, and has deleted more than 4,000 vape-related posts from Instagram and Facebook collectively.

But experts say these moves have come too late.

"This is really the genie you can't put back in the bottle," Matthew Myers, the president of the nonprofit Campaign for Tobacco-Free Kids, told Business Insider.

Snowballing evidence of vaping's health risks

Alarmed by the prevalence of e-cigs, researchers have increasingly started studying the health impacts of vaping. So far, evidence suggests that although inhaling vapor is healthier than breathing in burned tobacco, e-cigs come with their own health concerns.

Chief among those issues is e-cigs' high concentration of nicotine. This may be part of the reason why teens who vape are seven times more likely to smoke regular cigarettes than young people who never use e-cigs.

Ana Rule, a professor of environmental health and engineering at Johns Hopkins University, said the makers of these devices fail to address "the increased risk to this huge market they are creating among teenagers and young adults that never have smoked, and would have never even considered smoking" had they not vaped.

Researchers are also not convinced that e-cigs actually help adult smokers quit. So far, the evidence suggests they don't. In January, a study in the journal The Lancet found that e-cigs were linked with "significantly less quitting" among smokers. Several months later, a study in the Annals of Internal Medicine found that e-cig users were less likely than non-vapers to abstain from tobacco use over six months. And a study published in the journal PLOS One this month found no evidence that vaping helped adult smokers quit.

"E-cigarettes are widely promoted as a smoking cessation aid but for some, they actually make it harder to quit, so most people end up doing both," Stanton Glantz, a professor of medicine and the director of the Center for Tobacco Control Research and Education at UCSF, told Business Insider.

Nicholas Chadi, a clinical pediatrics fellow at Boston Children's Hospital, spoke about the Juul at the American Society of Addiction Medicine's annual conference in April.

"After only a few months of using nicotine, [these teens] describe cravings, sometimes intense ones. Sometimes they also lose their hopes of being able to quit," Chadi said.

For these reasons, several nonprofit anti-tobacco agencies have come out in recent months in strong opposition to the Juul, including the nonprofit Campaign for Tobacco-Free Kids and the California Department of Public Health.

Mounting legal and ethical challenges

These scientific findings are being used in a snowballing number of legal and regulatory challenges against Juul.

In April, the FDA launched an investigation into Juul's marketing practices to see if the company targeted teens.

In a letter to the company, the agency wrote: "Widespread reports of youth use of Juul products are of great public health concern and no child or teenager should ever use any tobacco product. Juul products may have features that make them more appealing to kids and easier to use, thus causing increased initiation and/or use among youth."

Since April, Juul consumers have also filed several lawsuits against the company — most of them on behalf of teens — for what they allege are deceptive marketing practices that didn't clearly outline how addictive nicotine is.

Then in June, voters in San Francisco approved a ban on flavored tobacco products that includes Juul cartridges, called Juul Pods.

"Most scientists believe flavorings are used to target teenagers into becoming users," Rule told Business Insider. "There are of course many other factors such as marketing and peer-pressure, but when you look at the flavoring names, one has to wonder."

San Francisco has led the nation with similar types of initiatives in the past, such as its 2007 ban on plastic bags, which went statewide in 2014 and has since been copied in 13 other US cities.

Finally, just this week, Massachusetts Attorney General Maura Healey launched a probe to find out whether Juul had marketed its products directly to young people in a way that could violate consumer protections in the state.

"Just when teen cigarette use has hit a record low, Juuling and vaping have become an epidemic in our schools with products that seem targeted to get young people hooked on nicotine," Healey said in a statement. "I am investigating Juul ... to keep these highly addictive products out of the hands of children."

Juul's rapid fundraising suggests that many investors aren't deterred by these challenges, but others have said they're leery for ethical reasons.

"Selling drug addiction with unknown causes isn’t something I want to be associated with," Villi Iltchev, a partner with San Francisco-based investment firm August Capital, told Business Insider.

Villi said he used to smoke, but quit five years ago.

"Would I have switched from smoking to the Juul? Hell yes," he said. "But in terms of kids, they’re starting from scratch. Being addicted as a teen, your probability of quitting is so low. It’s part of you."

If you're a Juul or Pax employee with a story to share, email this reporter at [email protected].

UP NEXT: The head of a top anti-tobacco group says an e-cig that's gone viral among teens is ‘the genie you can’t put back in the bottle’

SEE ALSO: MORGAN STANLEY: A startup valued at $15 billion is singlehandedly reviving the e-cig market, and Big Tobacco should be worried

Join the conversation about this story »

NOW WATCH: China banned smoking meat on the street because of air pollution, but people do it anyway

• A star trader at Barclays has left the firm to join the proprietary trading shop Jane Street.
• Doug Schadewald, 28, managed an S&P 500 and VIX derivatives portfolio at Barclays.
• He's leaving to join an options trading team at Jane Street and help develop its index trading desk.
• He's the latest in a slew of equity derivatives traders to get poached in 2018 as volatility has stormed back.

A rising star on Barclays' equity derivatives desk, one of the most competitive corners of Wall Street in 2018, has left the company to join the secretive proprietary trading juggernaut Jane Street.

Doug Schadewald, a 28-year-old director who managed an S&P 500 and VIX derivatives portfolio at Barclays, resigned from the bank this week to join Jane Street, according to people familiar with the matter.

Spokesmen for Barclays and Jane Street declined to comment. Schadewald also declined to comment.

Equity derivatives traders have been in high demand in 2018 as volatility stormed back after laying dormant for much of 2016 and all of 2017, garnering shoutouts from top executives in quarterly analyst calls for boosting banks' earnings.

As of early July there had been more than 40 moves at the level of vice president or higher in equity derivatives in the US this year — a figure that continues to grow. Multiple factors are driving the trend, but the catalyst that opened the floodgates was the blowup of the Cboe Volatility Index — known as the VIX — earlier this year, according to industry insiders.

The blowup became a feeding frenzy for savvy, well-positioned traders who had suspected time was running out on the uber-popular trade of shorting volatility, leading to eye-popping profits for individual traders and teams — some north of $100 million on a single day. Schadewald and the index volatility team at Barclays would have been at the epicenter of the action those days as well and are said to have pulled in significant profits for the bank.

Traders who scored big during the volatility spike have become coveted, especially given that many expect volatility to remain elevated as central banks withdraw liquidity and continue to hike interest rates.

While most of the ensuing movement in equity derivatives has been bank-to-bank, Schadewald, who was named to the Forbes 30 Under 30 list this year, is leaving banking to join an options trading team at Jane Street and help develop its index trading desk.

Jane Street, a technology-focused firm that does proprietary trading similar to a hedge fund but that is also a market maker, has more than 700 employees and facilitates more than $13 billion in equity trading volumes a day, according to its website. It traded $5.6 trillion across all products in 2017.

Despite its outsized role in financial markets, the firm has traditionally kept a low profile. As has been reported by The New York Times, there's not much known about how the firm operates. Business Insider reported earlier this year that it had started trading bitcoin. 

Join the conversation about this story »

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• Goldman Sachs has hired an up-and-coming equity derivatives trader from Barclays, according to FINRA records and people familiar with the matter. 
• Competition for equities talent has been fierce in 2018 amid a rebound in volatility that has revived banks' stock-trading businesses, a trend that has been epitomized by the equity derivatives sector. 
• But Goldman's equities performance lagged behind peers in the second quarter, and the business represents one of the biggest challenges facing incoming CEO David Solomon. 

Goldman Sachs has waded into the equity derivatives hiring frenzy, poaching an up-and-coming trader from Barclays. 

The bank has hired David Wernert, formerly an equity derivatives trader at Barclays focused on single-stock trading, according to people familiar with the matter. 

He'll join the firm as a vice president in single-stock volatility trading, the people said. 

FINRA records confirm that Wernert, 32, left Barclays and joined Goldman Sachs in 2018. He worked for Lehman Brothers in 2007 and 2008 before joining Barclays around the time of Lehman's collapse during the financial crisis, according to FINRA and Linkedin. 

Spokesmen for Goldman Sachs and Barclays declined to comment.

Competition for equities talent has been fierce in 2018 amid a rebound in volatility that has revived banks' stock-trading businesses, a trend that has been epitomized by the equity derivatives sector. 

Equity derivatives traders have become the focus of an intense Wall Street hiring battleground, with more than 40 moves at the level of vice president or higher in equity derivatives in the US this year. Multiple factors are driving the trend, but the catalyst that opened the floodgates was the blowup of the Cboe Volatility Index — known as the VIX — earlier this year, according to industry insiders.

Goldman lost a rising star amid the talent war earlier this summer, as Borzu Masoudi — a 32-year-old flow derivatives trader who was part of the team which allegedly made more than $200 million in profit during the volatility spike in February  — decamped for JPMorgan Chase. 

Banks reported second quarter earnings over the past week, with many of them showing strong results in equities, and some lauding contributions from their derivatives teams for the performance. 

Goldman lagged behind peers, reporting equity trading revenues of $1.89 billion — flat compared to last year. The business represents one of the biggest challenges facing incoming CEO David Solomon. 

CFO Marty Chavez defended the bank's stock-trading performance during a call with analysts this week, saying, "Our equities franchise is one that I wouldn't trade for anyone else's equities franchise."

Even so, replenishing its derivatives roster with another up-and-coming trader can't hurt. 

Have a tip you'd like to share privately? Email [email protected].

SEE ALSO: 'I've never seen it like this in 10 years': How the VIX blow-up led to a talent raid on Wall Street trading floors

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NOW WATCH: An early investor in Uber, Airbnb, and bitcoin explains why it's actually a good sign that no one is spending their crypto

John McAfee gave an exclusive interview to CCN about his crusade to remove the fees and authority of centralized exchanges. He discussed more details about his plans on shedding light on scams within cryptocurrency exchanges. HitBTC Draws the Most Criticism As CCN reported, one of the most offending exchanges is HitBTC, according to McAfee. The

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There seems to be progress for the EURS stablecoin with the recent announcement that an institutional investor had snapped up a $10 million stake in the coin just a few days after it’s launching in Malta. Now, the coin achieved another milestone when it was recently revealed that the world’s first crypto EUR to crypto

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Despite the rejection of a bid for a bitcoin ETF, the crypto market remains confident other proposals will persevere.

• Statistically, surprises are increasingly becoming unsurprising across all asset classes, according to Morgan Stanley
• A big part of the reason: Investment assets are becoming less liquid.
• Veteran traders will not like this one bit. Lots of surprises + low liquidity were the fundamental triggers of the 2008 crisis.

LONDON — Facebook stock fell by 24% at one point last week, a move that helped wipe 1% off the NASDAQ on the day.

Investors were surprised. FB has been one of the best-performing stocks of the last few years.

But Morgan Stanley analyst Andrew Sheets and his team says that big unexpected moves in asset classes like equities should not, in fact, be all that surprising. That's because, statistically, surprises are increasingly becoming unsurprising. (My colleague Joe Ciolli noticed this last week.)

In 2018, surprise moves across all asset classes — stocks, bonds, commodities, currency etc —  are becoming almost as frequent as they were in 2007 and 2008, the years of the financial crisis that produced the worst global recession since the Great Depression.

A big part of the reason: Investment assets are becoming less liquid.

That's a very worrying sign for asset markets.

The world certainly feels more surprising — Trump, Brexit, North Korea, Facebook falling off a cliff — but the Morgan Stanley team wanted to know if the markets were actually becoming more surprising. So they did some very clever mathematics.

Looking across asset markets (all the above plus currencies), they compared moves in the market versus expectations implied by futures options on those markets. Then they counted all the moves that were at least "three sigma," or three standard deviations from the mean. Very broadly, 68% of results in a set of variables will occur right near the middle of a bell curve; 95% will occur within two standard margins from the mean, and 99.7% within three. So any results outside 99.7% of all results are regarded as a surprise vs. expectations. It is those "surprises" that are occurring more frequently. 

As the chart above summarises, we're on course for a year that contains as many big surprises as 2007.

That was the year that brought us the global credit crisis.

Market liquidity across assets is in decline

MS also has a worrying explanation for why surprises are becoming more frequent: Market liquidity across assets is in decline.

One way to think about "liquidity" is that it describes the ability of a market to get out of trouble. Let's say you are trying to sell a bicycle. If 10 people offer you $100 for the bike, you have a nice market. You can sell the bike for $100 and 90% of the market will be unaffected. Plus, nine other people can find buyers for their bikes, too. This market is liquid.

But if only one person wants to buy your bike, and she offers you $10, then you've got a problem. Selling the bike will wipe out 100% of the available market. The nine other bike sellers behind you are stuck with bikes worth $0. There is no liquidity. 

That is what's happening in global asset markets right now (and it's what happened when financial markets collapsed in 2008), Sheets says. "This isn't the problem of a single asset class. It's everywhere."

As an example, he cites primary bond dealers, whose market share of company bonds is one-tenth the size it used to be — implying that they have fewer assets to sell if need be:

"Dealer holdings of corporate bonds have shrunk from 3% of the market to just 0.3% today. While this means that dealers themselves have less to liquidate, their capacity to move risk to a new buyer may be limited and require larger repricing of the asset class in times of stress."

"Forces are now swinging in the other direction"

And central banks are selling bonds in order to increase interest rates. That is creating a market with fewer buyers and more sellers — the definition of illiquid:

"As central banks built these positions, liquidity in the affected assets was excellent. It's hard to imagine anything better for liquidity than the presence of a steady, deep, well-telegraphed bid. But these forces are now swinging in the other direction. The Fed's purchases have already begun to reverse, the ECB's are likely to over the next six months, and with close to half of its bond market already owned by the BoJ, it will eventually face a constraint."

Veteran traders will not like this one bit. Lots of surprises + low liquidity were the fundamental triggers of the 2008 crisis.

SEE ALSO: FX traders tell us why they're still talking about Nigel Farage and the 'crackpot lunatic conspiracy theory' of a massive short against the pound on the night of the Brexit vote

Join the conversation about this story »

NOW WATCH: An early investor in Airbnb and Uber explains why he started buying bitcoin in 2009

TransferGo, a London-based remittance service, has become the first remittance provider to offer a cryptocurrency trading service, and will offer bitcoin, ethereum, bitcoin cash, litecoin and XRP, in response to a strong demand for cryptocurrency, according to Bloomberg. Daumantas Dvilinskas, founder and CEO of TransferGo, expanded on what he called a strong demand for cryptocurrencies in

The post London Remittance Firm Launches Cryptocurrency Trading Service, Says Crypto’s ‘Here to Stay’ appeared first on CCN

TransferGo, a London-based remittance service, has become the first remittance provider to offer a cryptocurrency trading service, and will offer bitcoin, ethereum, bitcoin cash, litecoin and XRP, in response to a strong demand for cryptocurrency, according to Bloomberg. Daumantas Dvilinskas, founder and CEO of TransferGo, expanded on what he called a strong demand for cryptocurrencies in

The post London Remittance Firm Launches Cryptocurrency Trading Service, Says Crypto’s ‘Here to Stay’ appeared first on CCN

TransferGo, a London-based remittance service, has become the first remittance provider to offer a cryptocurrency trading service, and will offer bitcoin, ethereum, bitcoin cash, litecoin and XRP, in response to a strong demand for cryptocurrency, according to Bloomberg. Daumantas Dvilinskas, founder and CEO of TransferGo, expanded on what he called a strong demand for cryptocurrencies in

The post London Remittance Firm Launches Cryptocurrency Trading Service, Says Crypto’s ‘Here to Stay’ appeared first on CCN

This article originally appeared on Bitcoin Magazine.

Two brothers convicted of creating bitcoin ransomware and infecting more than 1,000 computers have narrowly avoided jail time and will instead perform community service. Authorities initially arrested the two Dutch brothers in 2015 for infecting thousands of computers during the previous two years. Three years later, the story is finally coming to an end, as … Continued

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