Currency

Study: Price Manipulation Was Behind Half Of Bitcoin’s Historic Run

Between March 2017 and March 2018, the media affixed various adjectives to bitcoin’s run: impressive, amazing, historic. Now it’s adding a new descriptor: deceptive.

A new study said an unknown trader on the Bitfinex exchange manipulated Bitcoin’s price so sharply that the scheme accounted for about half of the cryptocurrency’s rally, The Wall Street Journal reported.

What Happened

According to professors from the University of Texas and Ohio State University, a single trader used Tether, a cryptocurrency generally used to facilitate bitcoin trades, to boost Bitcoin demand and prices.

They found that Tether Ltd. created Tether units in the absence of customer demand — and typically when Bitcoin prices were falling — so that traders could exchange Their tether for Bitcoin and create artificial demand. This sent Bitcoin prices higher.

“Even a fairly small amount of capital can manipulate the price of bitcoin,” John Griffin, a Texas finance professor and co-author of the report, told the Wall Street Journal….CLICK for complete article

Facebook’s Libra: Does the World Need Frictionless Money?

People typically think of money as something that exists mainly to facilitate the buying and selling of goods and services, or current account transactions. But in fact, one of the major uses, if not the major one, is to facilitate debt, investment, and other capital flows, including across national boundaries. Digital money like Libra, in other words, won’t just be used to buy cups of coffee. Unless strictly regulated, its major use will probably be to facilitate capital flows. This has really important implications—both good and bad—that weren’t addressed in the Libra White Paper . The most important one is that as the digital currency is now structured, the more successful Libra is the more it may facilitate destabilizing capital flows.

I have never been terribly knowledgeable about digital and cryptocurrencies (although like most people living in China, I pay for a lot of things with my WeChat app), but I had drinks at my home earlier this week with the very smart Cristian Gil. He is an old friend who at the turn of the decade started a digital-currency trading company called GSR as a hobby, only to watch the firm morph into a serious business. After our interesting discussion on cryptocurrencies, I decided to read up on Facebook’s new digital currency and try to figure out how it might operate….CLICK for complete article

Pound Continues To Slide As No-Deal Brexit Looms

The pound is taking a pounding versus the dollar, euro and other currencies as the possibility of a no-deal Brexit looks increasingly likely.

Under new Prime Minister Boris Johnson, the government has strengthened its stance on a no-deal Brexit, which it has said is “now a very real prospect”.

The pound – which was trading at about $1.50 versus the dollar before the EU referendum in June 2016 – has fallen by 2.4% since Monday, when a spokesperson for Downing Street said that the UK would not enter talks with Europe unless the so-called Irish backstop is scrapped.

This week’s selloff shows little sign of a rebound, with options markets implying more pain on the horizon. Three-month implied volatility, a contract that expires just before the Oct. 31 Brexit deadline, jumped to the highest since before March 29, the original date for Britain to leave the European Union….CLICK for complete article

Foreign Exchange Trading Soars to $6.6 Trillion a Day, US Dollar is Total King

Ginormous numbers, FX swaps and spot trades, USD, EUR, JPY, GBP, Australian & Canadian dollars… but where the heck is China’s CNY?

It happens every three years: The Bank for International Settlements released its Triennial Central Bank Survey about the global foreign exchange (FX) and over-the-counter (OTC) derivatives markets, as it occurred in April. The numbers are ginormous, and get more ginormous with every survey, with trading volume measured in trillions of dollars per day. This is a huge data trove, and I will focus here on global FX trading.

To start with, there are the amounts. Currencies are traded in pairs, such as the US dollar against the euro. In April 2019, trading in FX markets reached $6.59 trillion per day, up 30% from the prior survey period, April 2016. Trades with the USD on one side of the trade averaged $5.82 trillion per day in April 2019. This was up 31% from the daily average in April 2016 and was over five times the daily average in April 2001…CLICK for complete article

Central Banks Have Printed $22 Trillion Worth Of New Credit Since 2008

Last week we wrote about how global central banks have created an economic time machine by forcing $17 trillion worth of bond yields below zero percent, which is now 30% of the entire developed world’s supply. Now it’s time to explain how the time machine they have built has broken down.

In parts of the developed world, individuals are now being incentivized to consume their savings today rather than being rewarded for deferring consumption tomorrow. In effect, time has been flipped upside down. These same central bankers then broke that time machine by guaranteeing investors they will never cease printing money until inflation has been firmly and permanently inculcated into the economy.

They have printed $22 trillion worth of new credit in search of this goal since 2008. This figure is still growing by the day. But by doing so, they have destroyed Capitalism. Freedom is dying; not by some Red Army but by central banks….CLICK for complete article

Are Blockchain Stocks Poised For A Comeback?

Along with cryptocurrencies, the blockchain concept has been adopted in many spheres of business and social life, too. We’ve celebrated the tenth anniversary of Bitcoin recently, and since its invention, it has firmly entered into the lives of millions of people. Moreover, the technology that underlies the main crypto helps people solve problems that seemed intractable before.

We now can improve the efficiency of logistics, protect our businesses from...Click here for full article.