Cryptocurrency Markets Crash Amid Coronavirus—Some Traders See Opportunity - Newsweek

Posted: 13 Mar 2020 05:45 AM PDT

The price of Bitcoin dipped below $4,000 in the last 24 hours, indicating that cryptocurrencies are not immune to the influence — and downturns — of traditional financial markets.

As fears spiked about the potential economic damage resulting from the outbreak of the novel coronavirus, some of the most popular forms of digital money sharply plunged. The price of Bitcoin — the biggest coin by market capitalization — tumbled by more than 40 percent from the previous day, CNBCreported.

Other forms of cryptocurrency felt the impact, with metrics from price tracking tool CoinMarketCap showing Ethereum, Ripple (XRP), and Litecoin also suffering dramatic downturns.

Bitcoin remains the most popular form of digital currency that is currently traded on the web. Unlike gold, which is physically mined, bitcoins are mined using computing power.

The majority are based on a distributed ledger technology known as a blockchain, which records transactions.

Despite cryptocurrencies often working against the grain of the traditional financial system, in part because they operate without the need for banks, some appear just as vulnerable to stock market shifts. Is Bitcoin considered a safe haven? Why are prices shifting so rapidly? And what is likely to happen next?

"Previously seen as a possible safe haven in difficult times, investors now seem to be selling out of Bitcoin to take back liquidity in case the coronavirus spreads even further," said Simon Peters, analyst and cryptocurrency expert at investment platform eToro.

He added, "In a time of uncertainty, many investors might feel it is better to own cash or gold rather than more speculative crypto assets like Bitcoin, while others might be looking to free up cash to invest in stocks if and when the situation starts to improve."

Broadly, financial markets tanked in response to the COVID-19 outbreak and the political handling of its spread. More than 128,000 people around the world are now infected and the illness had caused over 4,700 deaths. It has fueled massive disruption to the operations of companies and events.

As Newsweek reported yesterday, investors did not appear impressed by moves by president Donald Trump to limit travel between the U.S. and Europe during an Oval Office address.

But one person who did not seem too concerned about the sudden crypto drops was National Security Agency (NSA) whistleblower Edward Snowden, who tweeted today after the disruption, "This is the first time in a while I've felt like buying Bitcoin. That drop was too much panic and too little reason."

This is the first time in a while I've felt like buying bitcoin. That drop was too much panic and too little reason.
— Edward Snowden (@Snowden) March 13, 2020

Daniel Wolfford, who trades Bitcoin and is a former head of cybersecurity of Blockchains LLC, told Newsweek the wider markets and crypto-exchange platforms are easily manipulated by "whales" — people who hold large amounts of cryptocurrency and can mess with supply and demand.

He explained how whales can be "highly emotional and speculative," but also placed some blame for the ongoing volatility on the websites used to trade in cryptocurrencies.

"They are quick to allow anything that generates fees for them such as buy and sell, but very slow about withdrawals," Wolfford said. "Some exchanges allow people to trade with leverage and options which causes huge chain reactions. They trade 24/7 and some people get seriously addicted. Exchanges are the source of fake volume as people can trade back and forth with the exchange rather than each other."

Wolfford rejected the assertion that Bitcoin is no longer a safe haven, and while he acknowledged some users may choose to cut their losses, noted that heavy price drops are generally considered a positive rather than negative. "We call that having weak hands," he said. "When you say $1,000 or worse, I see $1,000 or better, as in cheaper, like it went on sale. I buy when people cry."

Investors are now fixated on charts recording price values in real-time. But with so many factors in play, it's very difficult for any cryptocurrency analyst to predict what happens next.

"Bitcoin is still novel and it is great as a means of transferring value quickly person-to-person but bad at holding value," said Charles Hayter, CEO of tracking platform CryptoCompare.

"The theory is that this will change with time, but quite clearly the cryptocurrency has nascent fragmented markets at present and isn't fulfilling the digital gold story.

"That said, traditional markets are being supported and Bitcoin is a completely free market."

"Can Bitcoin be a safe haven? Potentially, when it is more understood" Hayter told Newsweek. "And if we continue to see nation states erode the value of their currencies and that causes a mindset shift in the general public. But certainly not now." The value of a single bitcoin — a figure that is constantly in a state of flux — is approximately $5,500 at time of writing, according to the CoinDesk price index.

Rapper Akon Shares Whitepaper for Upcoming Cryptocurrency - Cointelegraph

Posted: 15 Mar 2020 01:45 PM PDT

Rapper and entrepreneur, Akon, shared the whitepaper for his upcoming 'Akoin' cryptocurrency project exclusively with Cointelegraph.

The document describes Akoin as a cryptocurrency "designed for entrepreneurs in the rising economies of Africa and beyond," adding that the project's mission is to "unlock the potential of the world's largest growing workforce" using blockchain technology.

Mobile credit trading in Africa

The whitepaper describes Akoins as utility tokens that power "atomic swaps" between cryptocurrencies, fiat currencies, and mobile phone credits on the Akoin network.

Speaking with Cointelegraph, Akon emphasized that mobile credits are being used as a currency in Africa, stating:

"We have so many currencies in Africa - a lot of them are unstable, and most of them are untrusted. It got to the point where the day-to-day African people don't even use the currencies anymore, they're using their cell phone minutes and credits as a way of trading for basic goods like produce, fish, fruits and things on the market."

"Ultimately, outside of the villages, you really can't trade cell phone minutes for anything," he continued. "So we want to utilize that same mindset to take advantage of that mechanism outside of Africa - so even when they leave the continent, they can be able to utilize all of their credits and really be able to purchase real things."

Akoins used to pay fees on network

The token is also used to pay for fees for listing applications, transaction fees, fees for advertising on the platform, and as a means of exchange across the network.

Akoin will be launched on top of the Stellar (XLM) network. Tokens can be held in both Stellar and Akoin wallets.

The whitepaper also notes that private transactions "processed on the Akoin ecosystem" incur a fee of 2.5%.

BitMinutes to launch Dapp on Akoin network

The platform seeks to host an ecosystem of decentralized applications (Dapps), with the Akoin Foundation pledging to support and invest in Dapps that build on top of the Akoin network.

The platform has partnered with peer-to-peer payments and mobile credit exchange platform, BitMinutes, who are working toward launching an app on the network.

The whitepaper identifies several industries that the Akoin team believes can flourish using decentralized applications to target the African market - including mobile credit trading, micro-lending, phone credit trading, solar energy trading, media sharing, and healthcare.

Akoin to distribute 10% of tokens through IEO

Only 10% of Akoin tokens will be distributed via an initial exchange offering (IEO).

The whitepaper states that the IEO will be conducted in partnership with a "top tier cryptocurrency exchange" during the second quarter of 2020, as per the terms of "an agreement with the unnamed exchange partner.

The IEO is slated to distribute 45 million Akoins at $0.15 each, giving the offering a hard cap of $6.75 million. IEO participants will need to contribute in the form of XLM.

Akoin token distribution

The remaining 90% of Akoins supply will be distributed among advisors — who will receive 5%, the team and foundation — with 10% each, the Akoin Wallet Retail Exchange — with 15%, and the treasury — with 20%.

The remaining 30% of supply which will be placed in Akoin's escrow fund, from which 2% will be released each month for 48 months.

The total supply is planned to be released over four years, however, the paper notes that this will be subject to change based on "Escrow tokens being placed back into Escrow if they are not needed in the month they are released."

'Akoincity'

Akon also in the early stages of building "Akoincity" on 2,000 acres of land provided to the project by the president of Senegal. Akon predicts that the city's construction will be complete in five to ten years.

Once complete, the rapper plans to construct additional Akoincities in every major African country in a bid to unify the African economy.

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