Nouriel “Dr. Doom” Roubini: “99 Percent of Cryptocurrencies are Worth Zero”

An interview with Mr. Roubini about “buggy” smart contracts, Ethereum being a scam, why he might want to give the industry another try

The interview has been edited and condensed.

Nouriel Roubini is a New York-based economist that famously predicted the 2008 financial crisis when only a few considered there might be a threat to the existing course of events at the time.

A Harvard alumnus and now a professor at NYU Stern School of Business, Mr. Roubini has always been critical of the crypto and blockchain industry. Oct.11, 2018 he testified at the Congressional hearing on Capitol Hill, Washington D.C., warning U.S. senators about “the mother or father of all scams and bubbles,” — crypto.

We met with Mr. Roubini during BlockShow Americas in Las Vegas and talked about why he doesn’t believe in smart contracts, thinks Ethereum is a scam, and the fact that he might want to give the industry another try.

On being “against” the crypto industry

“I’m not against [it], I’m open to any type of innovation, but I’m an expert on financial crises and asset bubbles. And I became famous [by] predicting the global financial crisis  — the burst of that bubble.

I can see a bubble when there is one — and to me, this entire space has been the mother and the father of all financial bubbles and now it’s [going to] burst

Last year, almost everybody I knew was asking me every other day, “Should I buy Bitcoin?”
And the price of Bitcoin doubled, tripled, quadrupled, and went to $20,000. And when that bubble burst, it collapsed — collapsed from $20,000 down to $6,000 today (at the time of the interview).

If you bought it at the peak, you lost 70 percent of your value. And it’s typical of all these financial bubbles: They go up until they collapse. And Bitcoin is actually the best [example], because the average cryptocurrency has lost, in the last nine months, more than 90 percent of their value.

I spoke about the bubble existing and this bubble going bust. And guess what? In the last year, [it] has gone bust. So I think I’ve been vindicated and proven right.

Bitcoin could go to the moon or zero, I’m not going to make a penny either way because I’m neither short or long.

And I’m just an academic that speaks his mind. And I saw a big bubble, and I think that it’s fair as an intellectual to discuss these things and then figure out what’s going wrong.”

To watch the interview go here:

On future price movement and Ethereum being a “scam”

“An academic study suggests that 81 percent of all ICOs were a scam to begin with; 11 percent of them have failed or have died; and of the remaining eight percent that is traded on exchanges, the top 10 have lost on average, in the last year, 95 percent of their value — more than Bitcoin.

So, there was a bubble — and everybody was riding the bubble, everybody was issuing an ICO, raising money — but now it’s gone bust.

I think that they’ve lost already 95 percent of their value and they could lose another 95 percent.

I would say 99 percent of cryptocurrencies are worth zero. Just because some people believe in something alternative to fiat currencies — alternative to gold — then, like collectibles, some people are going to hold some Bitcoin. Bitcoin is not going to disappear. But, you know, Ethereum is a bubble and it’s a bit of a scam — it’s worth nothing — XRP, all the other ones, they’re all going bust.”

Catherine Ross: Why do you think Ethereum is a scam?

It’s a scam because the technology. They talk about smart contracts — there’s nothing about them that is smart, they’re all buggy. They’re not real contracts because you have to enforce certain contracts, you cannot have just the code.

They’ve tried things that have failed: Their DAO was a failure.

You know, there’s a lot of people [who] talk about their DApps or their distributed apps. 75 percent of those apps are what? CryptoKitties, Ponzi schemes and other pyramid schemes, and other casino games, like Las Vegas. So, after a decade, what does Ethereum have to show us? CryptoKitties and Ponzi schemes? And that’s what they’re doing? They’re not doing anything that is of any use to anybody.

CR: But if a smart contract is a technology, — and you said “it’s buggy” — technology can be buggy and it can be fixed. Don’t you think we need more time to see the technology rise and smart contracts working better?

NR: I don’t believe, first of all, in smart contracts. By definition, any contract has to be enforced by lawyers — [there is nothing that is enforced] by itself. So, the idea that you put everything in a code in a contract is silly to begin with. And, you know, a typical other program has less than one percent of bugs in its code, and a typical smart contract has 10 percent of its code  is buggy [sic].

I mean, this is the reality where we are in now.

And by the way, the broader question about cryptocurrency is that they are not scalable, and there’s no system that makes them scalable; they’re not decentralized because the entire system is [becoming] centralized; and they are not secure because there are so many ways to hack them.

So, it doesn’t have any functions [it] should have: It’s not scalable, it’s not secure, it’s not decentralized. So, what is it worth for? With Bitcoin, you can do five transactions per second; with Visa, you can do 25,000 transactions per second.

They’ve [the blockchain community] been saying for a decade, “We are going to resolve it with proof-of-stake rather than proof-of-work.” It has not worked yet. And even if there was something scalable, it’s going to be centralized and therefore is not secure. So, there’s a fundamental flaw in the technology.

At least financial systems that we know are centralized, yes, but they’re secure and they’re scalable.  

They’ve been talking about fixing it, but Vitalik Buterin, who is the creator of Ethereum, said you cannot have a blockchain system that has three characteristic of the same time: being scalable, decentralized, and secure.

On trusting financial system

CR: Even after the 2008 global financial crisis, you still believe in the traditional financial banking banking system?

Traditional financial systems are centralized —  and there’s nothing wrong with institutional centralizing in my view. They [the blockchain community] criticize it, saying “We want it decentralized.”

But I prefer a centralized system with a trusted authority — but at least they’re secure and scalable.

There’s a lot of talk about decentralization: Miners are centralized as an oligopoly, coders are centralized, exchanges are centralized — as 99 percent of all transactions occur on a centralized exchange — and there’s a massive concentration of wealth. This is worse than North Korea in terms of income and wealth inequality.

The reality is just the opposite: It’s a totally centralized system.

[At the same time] there are many problems with the traditional financial systems. And I’ve been one of the biggest critics of the financial system. And I believe that there are ways to [democratize] finance and [to] make it more efficient, but this is not based on blockchain.

There is a revolution in financial services: It’s called fintech and it has zero to do with cryptocurrency and  blockchain.

Interview

It’s based on AI, machine learning, Internet of Things and big data. It’s revolutionizing payment system, insurance, credit allocation, capital market functions, and asset management.

Take, for example, payment systems: There [are] already plenty of digital payment systems — that do billions of transactions a day, and are used by billions of people around the world — that are not based on blockchain. In China, you have AliPay and WeChat Pay; in India, you have all these UPI systems; in Africa, you have M-Pesa; in the United States, you have Venmo, PayPal, Square — and so on, and so on. These are useful transactions.

With these models, you can do millions of transactions — and there are billions of transactions done by billions of people today. They are digital payment systems based on [the] traditional financial institution and fintech. They have nothing to do with blockchain. We don’t need blockchain, we don’t need crypto to [democratize] finance.

There is already a revolution: there’s going to be much more competition, there’ll be much more access. If you are a poor farmer in Kenya today, you are using M-Pesa. On your little smartphone, you can make transactions, you can borrow and lend, you can buy and sell your goods and services, you have a whole slew of financial services without the brick-and-mortar bank. And all these things are available to billions of poor people in Africa. What [do] they have to do with blockchain or crypto? Nothing, zero. So, there is a revolution and it has nothing to do with blockchain.

CR: The entire philosophy of the industry was to create a transparent system and create a new world from a financial system that you can trust, a financial system that thinks about a user, a client. So you think it failed to do what it was supposed to do?

NR: Of course, it completely failed: After 10 years, there is no killer app; the crypto assets are going bust; they’ve lost 99 percent of their value; all these experiments have led not a single corporation or single financial institution using this technology; and there is no reason why they want to use this technology. And why would you want [to]?

Why would I want to trust somebody in Russia or China to verify my transactions? It’s not safe. Why would I want to do it? There are central banks, there are corporations, there are institutions that have been existing forever that are based on trust — on the reputation. And I know what I’m dealing with.

I’d rather have those institutions verify my transaction rather than somebody in China who can manipulate everything I am doing. Why should I trust somebody while I don’t even know what the name is, who they are, what they do.

CR: So, you would rather trust a bank? How can you be sure that your money is safe?

NR: We have security laws. If a bank manipulates, there’ve been hundreds of billions of dollars in fines on the banks and their misbehavior — people ended up in jail. There are lots of problems with the traditional financial system: Blockchain and cryptocurrency do not resolve this problem. Fintech resolves it, but fintech has nothing to do with blockchain or cryptocurrencies.

I’m the first one who criticized the financial system, I’ve been writing about financial crises, I’ve been criticizing [the] banking system. I don’t believe that crypto or blockchain resolves any, any of the problems of our existing financial system, [and they] don’t resolve anything.

It’s just something for a bunch of self-serving people speaking about decentralization, speaking about freedom, speaking about [the] democratization of finance — and there is no democratization of finance, there is no more access to financial services through crypto or blockchain. There are other alternatives that exist out there, like M-Pesa, that are giving power and giving democratization of finance to billions of people in Africa. Those things have nothing to do with blockchain. I believe in those things.

I don’t believe in blockchain.

CR: I see your point of view, but just to be clear, the banking system has been around for centuries, right? So, maybe you should give the crypto industry and blockchain industries a try?

NR: No. I’m not giving it a try. I’m gonna give a try to financial innovation that changes the financial system.

All those things [mentioned above] —  they are revolutionizing finance, they are leading to competition, they are forcing the banking system to innovate or not survive, and they are changing the world. But they have nothing to do with blockchain. Why should I give the benefit of the doubt to something that has not provided any application which is used by anybody. I don’t believe in it and the proof is in the pudding.

CR: My last question is, have you ever tried trading cryptocurrency?

NR: I haven’t tried it. Some people say, “Oh, you are critical of crypto because you are shorting Bitcoin or cryptocurrencies.” I have zero position — I have no long position, no short position.

I may be right or may be wrong, but crypto could go to the moon to go to zero; I’m not going to make a penny out of it. I’m an intellectual. I’m an academic. I have no conflicts of interest.

My only thing is my own academic reputation. If I’m proven wrong, my reputation is going to be negatively affected. But I’m not going to make a penny. And therefore, I’m not going to take a position one way or another because if I take a position, I have a financial interest to talk down or up a particular cryptocurrency; and that’s not my interest.

I’m an intellectual and I’m not going to make money —  one way or another — out of it.

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Vitalik Buterin: I Quite Regret Adopting the Term ‘Smart Contracts’ for Ethereum

Vitalik Buterin

Ethereum cofounder Vitalik Buterin revealed his regret for adopting the popular term ‘smart contracts’ – a term that has become almost synonymous with Ethereum. Should Crypto Be ‘A-Legal’? Buterin weighed in on Twitter, October 11, in a discussion on ‘crypto law.’ The Ethereum (ETH) cofounder’s response was triggered by Cryptoecongames, who stated that cryptocurrencies “should have stayed a-legal.” “We’ve been clear since the start: *crypto* should’ve left “law out of it” & stayed a-legal,” they

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Bitcoin, Altcoin Prices Shun Volatility Amid Multi-Year Trade Volume Lows

A trough in global trade volume is seeing Bitcoin markets calm, sparking less volatility across major cryptocurrencies.

Bitcoin (BTC) remained stable Sunday, October 7, capping a week of sideways trading as overall exchange volumes reached their lowest level for thirteen months.

Market visualization

Market visualization by Coin360

Data from Cointelegraph’s price tracker and Coin360 show BTC/USD hardly moving compared with the same time last week, with daily and weekly movements concluding at around 0.03 percent up and 0.65 percent down respectively.

At press time, Bitcoin is trading at around $6,545, slightly up on its position during the first week of September, while seeing volatility topping $1,500 in the intervening period.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

As commentators noted on social media, October is unlikely to see major announcements on issues that could significantly affect the Bitcoin price. Regulatory decisions on products such as a a U.S. Bitcoin exchange-traded fund (ETF) are expected in November, while Bakkt, the “regulated ecosystem” for institutional investors seeking Bitcoin exposure, is also scheduled to launch in November.

In the meantime, existing investors appear reluctant to trade, some sources claim, preferring Bitcoin as a store of value as global trade volumes hit their lowest point since July 2017 — below 2.2 million BTC as of October 1.

Other statistics, such as those from public resource Bitcoinity, suggest trading has not been so low for many years.

In altcoin markets, smaller movements than usual came on the back of Bitcoin’s recent stability, with Ethereum (ETH) dropping 0.3 percent on the day to trade around $222 at press time. On the week, ETH/USD lost about 4 percent, while still being up around 3.5 percent versus the same time last month.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: Cointelegraph Ethereum Price Index

Markets appeared ambivalent to casual comments from ETH co-founder Vitalik Buterin, who on Friday revealed he was in the process of withdrawing from his active development role.

Other major altcoins fared broadly similarly, with Ripple (XRP) delivering the largest losses in the top ten assets, losing around 2 percent on the day. TRON (TRX) gained almost 10 percent in a reverse of the overall trend, while assets such as Litecoin (LTC) and Stellar (XLM) barely moved higher or lower.

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Corrupt Governance? What We Know About Recent EOS Scandal

EOS found itself in hot water after allegations against its governance arose.

This week, EOS found itself in hot water after allegations arose that a major part of its blockchain governnance, led by Chinese crypto exchange Huobi may be involved in a corruption scheme. EOS’ parent company and Huobi have issued public statements since these allegations, but refrained from admitting or denying the charges.

What is EOS?

EOS.io is a blockchain-powered smart contracts protocol for the development, hosting, and execution of decentralized applications (dApps). It aims to operate in a way similar to the web-based applications and retains similar structural principles, which makes it comparable to Google’s Play Store or Apple’s App Store.

EOS.io is supported by the native cryptocurrency EOS, currently the fifth largest crypto by total market cap. Those tokens could be staked for using network resources either for personal use or leased out for developers use — as per the project’s whitepaper, dApp developers can build their product on the top of the EOS.io protocol and make use of the servers, bandwidth and computational power of EOS itself, as those resources are distributed equally among EOS cryptocurrency holders. Hence, EOS.io attempts to represent a decentralized alternative to cloud hosting services.

The EOS.io platform was launched in June 2018 as open-source software. Its first test nets and the original whitepaper emerged earlier in 2017. The platform was developed by block.one, a startup registered in the Cayman Islands and lead by Daniel Larimer and Brendan Blumer.

EOS holds the absolute record in terms of funds raised during initial coin offerings (ICOs): it has managed to gather around $4.1 billion worth of investments, or about 7.12 million Ethereum, after fundraising for nearly a year. Its predecessor, messenger Telegram, has raised less than half this much – $1.7 billion.

Who are ‘block producers’?

EOS employs a consensus model called Delegated Proof-of-Stake (DPOS). That means that its investors are rewarded with voting power and decide who gets to mine the EOS blockchain.

Indeed, the EOS network is constantly governed by a total of 21 block producers (BPs). Those are decentralized bodies who, well, produce the blocks of EOS blockchain — just like miners do within the Bitcoin’s (BTC) blockchain. In reward, BPs earn EOS tokens produced by inflation. The total inflation of EOS tokens is reportedly 5 percent, only 1 percent of which goes to BPs.

Whilst BPs have the option to keep the tokens, they are also encouraged to reinvest them “to create better infrastructure growth, better community and financial support, along with better education on the EOS network and EOS dApps”, as blockchain analyst and tool builder Ben Sigman explains in a Medium post.

What does ‘mutual voting’ mean? Nuances of blockchain governance

BPs are elected through the voting system since June 2018, when the mainnet went online. EOS’s total supply is set at 1,000,000,000 (1 billion), and the EOS main platform was fully activated, or handed over to the community, when 15 percent of total circulating supply had voted. That occured on June 14, when 21 EOS block producers primarily from the US, China, and South America came ahead in the voting race. The voting process with EOS is constant — that means that the top 21 is fluid and BP candidates who earn enough votes can replace the BPs in power any minute.

The supposedly democratic voting system soon showed its flaws: for instance, cryptocurrency exchange Bitfinex secured its position as a block producer allegedly due to the votes of just few EOS holders, one of which accounted for 27 percent of all votes for Bitfinex, as community members pointed out on Reddit.

‘Mutual voting’, in turn, would imply a process when block producers are voting for each other in order to remain in power and keep their passive income – according to some estimations, top three EOS BPs earn around 1000 EOS per day. That process violates Article IV of the current EOS Constitution titled “No Vote Buying”, which states the following:

“No Member shall offer nor accept anything of value in exchange for a vote of any type, nor shall any Member unduly influence the vote of another.”

Moreover, the EOS voting system seems to be designed for casual users who vote with their private wallets, whilst investors who have their EOS tokens on exchanges’ wallets appear to be stripped off of their voting rights — instead, they are passed over to the exchanges who hold their tokens. While Bitfinex has attempted to introduce a scheme that would allow its customers holding EOS to participate in the voting, other exchanges have remained inactive on the matter.

This problem was recently discussed by members of Chinese EOS Community, who argued whether exchanges should be allowed to vote with customer funds. As per the meeting notes posted in English, “general consensus was mixed between yes and no, but favored yes with the caveat that all voter participation must be increased [… and] exchanges should be expected to provide greater transparency to their voting selection process”.

The allegations: geopolitical conspiracy

The allegations were originally raised by Eosone, a non-profit supervisor of BPs and builder of EOS ecosystem who regularly reports on BPs’ activities. On September 26, Eosone posted what it claims was an Excel spreadsheet of the large Chinese cryptocurrency exchange Huobi, currently the fifth largest exchange by reported volume globally per Coinmarketcap, that was allegedly leaked by its former employee Shi Feifei.

The supposedly leaked document includes four tables with titles “node mutual voting table” and “node income statement” among them. Eosone implied that chief EOS BPs, including Huobi, which is bthe fourth largest BP in current producer ranking, according to EOS Titan data, were involved in mutual voting along with pay-offs.

According to the explanation of Twitter user and EOS investor Maple Leaf Capital, who summarized the document’s findings in English, Huobi voted for 20 other BPs, and 16 of them voted back for Huobi. Moreover, Huobi allegedly voted for three other BPs in exchange for significant paybacks:

“Huobi votes for eosiosg11111, cochainworld, and eospaceioeos in exchange for 170, 150, and 50 percent of the returns respectively…”

Maple Leaf Capital also argued that such agreements could “increasingly compromise the integrity of the network,” noting that at least 12 of 21 major BPs were controlled by Chinese entities:

“This file documents the collusion, mutual voting, and pay-offs that occur amongst the Chinese BP community.”

Thus, Maple Leaf Capital essentially accused a number of Chinese companies of forming a cartel to collude together, adding:

“I view such action with utter disgust, and there is a reason why our Mapleleafcap proxy only votes for a very selective [sic] group of Chinese BPs.”

Furthermore, the Twitter user linked the alleged mutual voting with the recent promotion of Huobi Pool Token (HPT,) which shared tokens with users in exchange for locking their EOS on Huobi. The Chinese crypto exchange might then capitalize those votes, Maple Leaf concluded.

EOS response: neither confirmed nor denied

On October 1, Block.one’s CEO Brendan Blumer published a statement addressing EOS public blockchain governance problem. In it, he neither confirmed nor denied the allegations, stating his company is “aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims”.

Without specifying which “denials” of allegations he referred to, Blumer stated that EOS will continue to “ensure a free and democratic election process and […] vote with other holders to reinforce the integrity of this process”:

“We continue working on our potential involvement with the goal of empowering the intent of the greater community through a transparent process that incorporates community feedback.”

Huobi response: investigation is required

On October 2, Huobi responded to the accusations. In a brief statement, the exchange said an investigation into the allegations was “still ongoing”:

“Based on the initial investigation, there were no financial contracts involved between Huobi and any third party… The investigation is still on-going [sic] and therefore, we seek your patience and co-operation [sic] in this matter.”

Previously, on September 26, Danny Wu, Senior Manager at Huobi Pool, defended against the allegations on Telegram, claiming that the document in question was faked by their former employee.

Community backlash and Vitalik’s “I told you so” 

Expectedly, the alleged Huobi spreadsheet provoked a major backlash in the EOS community and beyond.

EOS Alliance, an non-profit organization formed by EOS community members and block producers with the role to “facilitate the dialogue within community”, has released a statement on the situation:

“Dan Larimer’s Delegated Proof of Stake (DPOS) was designed with the requirement that 15 of 21 independent votes are required to operate the network securely. If, as some alleged recently, some current Block Producers are coordinating together, this might call into question the transactional reliability of the EOS blockchain data for all users and the attractiveness of EOS as a platform for dApps.”

Additionally, EOS Alliance stressed that “there are geopolitical considerations, given that Chinese corporations and investors are potentially being demonized, and the consequences in China might be more dire for the individuals involved than they would be in other countries”.

The community’s reaction on EOS’s official Reddit channel seems mixed. “I don’t find that surprising giving the governance model of EOS.”, wrote user bhiitc. “If you optimize your system under the assumption that most players aren’t malicious and thus reduce the number of nodes for more transactions per seconds, such an outcome like this was likely”.

Ethereum co-founder Vitalik Buterin commented on the aforementioned thread started by Maple Leaf Capital, arguing the vote-trading was “completely predictable”:

“Interesting! I mean, it was completely predictable and I did predict it,  but I did not expect it to happen so thoroughly and so soon!”

Buterin also criticized the very system of EOS nodes:

“As a followup, *this* is why I do not believe in coinholder-voted on-chain treasuries. Any chain where coinholder-voted on-chain issuance is used to supposedly fund public goods can easily collapse into this kind of ‘I vote for your crappy project, you vote for mine’ equilibrium.”

Interestingly, the Ethereum co-founder has criticized the EOS voting system before. In August 2017, Buterin clashed with EOS’ Daniel Larimer after he responded to an Ethereum Reddit thread post claiming that EOS was superior to Ethereum in terms of number of transactions and flexibility.

In his comment, Buterin mentioned that EOS’s reliance on voting, among other features, is problematic, and the scenarios where “exchanges would vote on users’ behalf, with users not really caring how exchanges vote with their money” were “likely to happen”.

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Market Rebounds: Ethereum Soars 18% Back over $200, Bitcoin Regains $6,500 Mark

Total market cap has today soared by almost $12 billion, as a flush of green spreads across virtually all of the top 100 crypto assets.

Thursday, September 13: total market cap has soared by almost $12 billion today, as a flush of green spreads across virtually all of the top 100 cryptoassets.

Several  top 20 cryptocurrencies are seeing double digit gains, with Ethereum (ETH) leading the pack, up over 18 percent on the day, as data from Coin360 shows.

Market visualization by Coin360

Ethereum has skyrocketed almost 20 percent on the day to trade at $207 at press time. After accelerated losses yesterday, September 12, saw the top alt sink below the $170 mark to post new 2018 lows, Ethereum has today rapidly recovered back to September 9 levels, reversing several days of declining value.

Ethereum nonetheless remains down around 9 percent on its weekly chat, and over 35 percent down on the month.

Recent comments by Ethereum co-founder Vitalik Buterin that the days of “1,000-times growth” growth in the crypto space are over left their mark on cryptosphere sentiment this week, prompting Buterin to publicly deny claims he is a crypto “pessimist,” arguing that media publications had “spun” his words.

Ethereum 24-hour price chart. Source: Cointelegraph Ethereum Price Index

Bitcoin (BTC) is trading just above $6,500 as of press time, up a solid 3.17 percent over the 24 hour period. The leading crypto has seen a volatile week, with major losses briefly taking hold September 8-9, since which Bitcoin has made a jagged and fragile recovery.

After a mild dip yesterday, Bitcoin has today bullishly traded upwards, reclaiming the $6,500 mark it held at the start of its weekly chart.

On the week, Bitcoin remains down by just over 3 percent, with monthly gains at 2.76 percent.

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

Among the other top ten coins on CoinMarketCap, ubiquitous green shows gains within a 3 to 12 percent. Ranked 9th by market cap, altcoin Monero (XMR) is up about 11 percent to trade at $112.84 at press time, spiking as high as $116 earlier today.

Nonetheless, the anonymity-oriented alt is yet to reclaim its high towards the start of its weekly chart, when it was trading just above $119.

Monero’s 7-day price chart from CoinMarketCap

Other strong top ten contenders are Litecoin (LTC), up a bullish 8.24 percent at $54.90, EOS (EOS), up almost 12 percent at $5.46 and Cardano (ADA), up just 8.46 percent at $0.067.

Among the top twenty, Dash (DASH), IOTA (MIOTA), TRON (TRX) and VeChain (VET) are all in double-digit green, seeing 24-hour growth of between 9 and 13 percent. Dogecoin (DOGE) has seen the mildest growth of the top twenty coins, up 2.65 percent to trade at $0.0065 by press time.

As alts spearhead the market recovery, Bitcoin dominance – or the share of total market capitalization that is Bitcoin’s – is slightly down from yesterday’s multi-month highs at close to 58 percent. As of press time, BTC dominance is at 55.9 percent, according to CoinMarketCap.

Total market capitalization is up a bullish 6 percent, or almost $12 billion, on the day at $201 billion by press time. Total market cap is nonetheless still shy of its intraweek high at $208.8 billion on September 7.

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Bullish price movement today has been accompanied by more positive news for potential institutional investor exposure to Bitcoin and other cryptoassets. Today saw reports that U.S. banking giant Morgan Stanley plans to offer clients Bitcoin trade swaps, the same week as Citigroup insiders hinted it is also planning an entry into crypto-based products.

Meanwhile, a joint report from the World Economic Forum (WEF) has today claimed that distributed ledger technologies (DLT) such as blockchain could generate $1 trillion in new trade globally over the next ten years.

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‘There’s No Room for 1000x Price Increases,’ Reaffirms Vitalik Buterin

Vitalik Buterin

Ethereum co-founder Vitalik Buterin hit back at reports he said claimed he was a “pessimist” September 11, accusing media outlets of misrepresenting his views on cryptocurrency’s future. Bloomberg Interview Raises Eyebrows In a series of tweets, Buterin said coverage of his interview with Bloomberg September 8 had been “spun” to paint an overly negative view. Commentators had reacted to one response Buterin had given in particular, in which he said the Blockchain industry was about

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Cryptocurrency Markets Slump Midweek as Ethereum Hits New 2018 Lows

This week sees an uninspiring performance from cryptocurrency markets as Ethereum leads losses to hit 15-month lows.

Cryptocurrency markets are feeling the pressure from an extended downturn on Wednesday, September 12, with Bitcoin (BTC) losing 2.5 percent and Ethereum (ETH) hitting its lowest levels since May 2017.

Data from Cointelegraph’s price tracker and Coin360 confirms the lackluster picture across cryptoassets continuing another day, with all of the top twenty coins — with the exception of Dogecoin (DOGE) — in the red.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin had climbed to almost $7,400 last week before turmoil hit markets again, prices tumbling over claims Goldman Sachs had shelved its crypto trading plans, something officials have since dismissed as “fake news.”

Regulatory pressure also continues, with U.S. authorities ordering a ten-day halt of two exchange-traded notes (ETNs) over the weekend.

The combined effect has meant BTC/USD was tending towards $6,200 at press time, support nonetheless holding at around $6,251 to prevent a deeper slide below the $6,000 barrier.

Bitcoin’s 7-day price chart

Bitcoin’s 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

For Ethereum, the outlook appears bleaker.

Recent comments by co-founder Vitalik Buterin about the lack of growth perspectives in blockchain appeared to exacerbate ETH’s descent to 2018 lows.

Buterin has since denied claims he is a “pessimist” about the outlook for cryptocurrency, arguing media publications had “spun” his words.

Nonetheless, ETH has faced a bearish tide for several months, with industry research from Tetras Capital in July warning the asset faced a prolonged cooling-off period after the intense growth it saw from the 2017 Initial Coin Offering (ICO) phenomenon.

At press time, ETH/USD traded around $172, down almost 11 percent on the day. Ethereum last saw this price point in July of 2017.

Ethereum price chart

Ethereum price chart. Source: Cointelegraph’s Ethereum Price Index

For other major altcoins, losses came as a result of Bitcoin’s downturn, Dash (DASH) and Litecoin (LTC), and Bitcoin Cash (BCH) all almost matching ETH’s minus 11 percent performance. Altcoin Cardano (ADA) went further, dropping around 14 percent.

The suppression of altcoin prices had meant Bitcoin’s overall market dominance has reached multi-month highs nearing 58 percent, according to data from CoinMarketCap. Bitcoin last achieved that market share in December, when prices hit all-time highs around $20,000.

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Parity Forced to Shut Down ICO Passport Service (PICOPS) Due to GDPR

Parity, the wallet and blockchain provider, is shutting down its PICOPS platform effective May 24, 2018, due to complications stemming from the new EU GDPR guidelines. The company announced the decision in a blog post on its website on May 18. PICOPS: The Latest Casualty of the New EU GDPR The General Data Protection Law (GDPR) of the EU is causing problems for blockchain and cryptocurrency. Part of the fundamental principle of the blockchain is

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