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Lightning Network Expands – 10,000 Channels and Near 100 Bitcoins

It seems that the Lightning Network keeps expanding. This time, the number of channels and the value of those channels is growing at very good rates. There are 10033 opened… Continue reading “Lightning Network Expands – 10,000 Channels and Near 100 Bitcoins”

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China’s Crypto Millionaires Are Using Bitcoin to Buy Real Estate Abroad

The chives growing in one crypto tycoon’s California mansion carry a hidden message.

Guo Hongcai, a beef salesman turned early bitcoin adopter from China’s Shanxi province, is one of many freshly minted millionaires funneling parts of their wealth out of the country by purchasing real estate abroad.

In April, Hongcai sold 500 bitcoin in the U.S. then used that money to buy a 100,000-square-foot mansion in Los Gatos, a 90-minute drive from San Francisco, California. His Rolls-Royce, also purchased with the fruits of bitcoin arbitrage, sits in the driveway close to a small chives garden.

“It’s very normal to sell bitcoin in the U.S. After selling bitcoin, you can just buy anything you want,” he told CoinDesk.

Guo calls this secondary residence his “Mansion of Chives,” because the vegetable is also Chinese slang for crypto investors who prove vulnerable to big sell-offs.

As Chinese regulators clamp down on industry business on the mainland, crypto millionaires are turning to foreign real estate markets to diversify their holdings. Some purchase property directly with crypto, others like Hongcai use bitcoin to gain foreign currencies without going through a bank.

The founders of one U.S. crypto real estate startup, who spoke on condition of anonymity, told CoinDesk roughly one-third of their prospective users hail from Asia, figures which include Chinese investors seeking tokenized property rights through Hong Kong securities brokers.

According to the South China Morning Post, real estate purchased in Hong Kong doesn’t require the same taxes and documentation as other financial assets held abroad. Chinese investment in foreign real estate, often through Hong Kong brokers, has been rising for years. Now early bitcoin adopters are utilizing new wealth for familiar patterns.

“The requests we have from them start at $50,000 or $100,000 up to, the latest one was $3 to $4 million for Silicon Valley,” Natalia Karayaneva, CEO of Propy, another crypto-powered real estate marketplace, told CoinDesk.

She added:

“We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels.”

Crypto hubs

According to Karayaneva, the U.S. and the U.K. are the most sought-after locations for real estate, especially fintech hubs like London or California’s Bay Area.

“They were mostly interested in residential properties next to good education, like Stanford,” she said. “Also, they want to diversify. They want to have parts of their assets abroad in more stable countries.”

So far, around half of the traffic to Propy’s website comes from China, out of 50,000 monthly views.

It’s a trend that has implications far beyond China, though, especially in California, where, according to statistics gathered over a decade by ATTOM Data Solutions, nearly a quarter of all single-family homes are now purchased in all-cash transactions without a mortgage.

According to CEO Roy Dekel at SetSchedule, a California-based startup helping licensed real estate agents connect with buyers and homeowners, it’s more common for Chinese bitcoin veterans to convert cryptocurrency into cash than to buy property directly with it.

“We have noticed a drop in Chinese interest, but certain cities like Los Angeles, San Francisco, and New York remain strong,” he told CoinDesk. “The ultra-wealthy Chinese have used this source as a diversification of investment.”

High rollers

On the other hand, Dekel also noticed “many blockchain enthusiasts” are buying second homes or investment properties, leading to an uptick in sellers interested in accepting cryptocurrencies directly from international buyers.

Since platforms like Propy are compliant across jurisdictions, the reason behind this trend may go beyond tax evasion, speaking to real pain points in legitimate markets.

In January, The New York Times asserted that China’s exorbitant housing market is “like a casino.” Further, Reuters reported property development restrictions continue to tighten, such as reduced subsidies for housing developers.

“In Beijing, only last year they saw a 40 percent rise in price,” Karayaneva said. “Historically, real estate investors from China are very active abroad because their own property market is going crazy.”

All things considered, Chinese buyers are hardly the only ones purchasing property with cryptocurrency. In 2017, Europeans used bitcoin to buy luxury apartments in Dubai’s Aston Crypto Plaza, a project spearheaded by British Baroness Michelle Mone.

Wherever it’s taking place, though, it has become increasingly clear that crypto wealth could have a real impact on global real estate patterns.

Door image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Trading 101: Bull and Bear Flags (And What They Mean for Price)

When it comes to making big money in trading, the trend is your friend.

But spotting the trend when it is in the nascent stage is challenging, and running along with it right up to the top is an even bigger challenge. That’s because asset prices rarely see a 90-degree rally or collapse.

More often than not, trends (bullish/bearish) will pause briefly to allow traders or investors who missed the initial move (higher or lower) to join the bandwagon. If the participation increases, the asset price extends the bull or bear run, or else a trend reversal may occur.

Continuation patterns

A trader can spot trend extensions with the help of bullish or bearish continuation patterns, which occur in a variety of easily identifiable shapes, some of the most popular of which are known as bull and bear flags.

A bull flag is appropriately spotted in an uptrend when the price is likely to continue upward, while the bear flag is conversely spotted in a downtrend when the price is likely to sink further.

(While the implication of the pattern is far more important than its name, the “flag” terminology derives from its visual similarity to the fabric you’d see hanging outside a government building.)

Each flag pattern consists of two main components: the pole and flag.

The “pole” represents a strong impulsive move (higher/lower) and is backed by a surge in trading volume and the subsequent pause or consolidation the “flag,” which looks like a falling or rising channel.

The flag pattern can be invaluable for a trader in that there are clear points of success and failure to profit or mitigate risk from. If resistance breaks in a bull flag, the trader can be confident price will continue upwards roughly the length of the pole (popularly known as measured height method).

If support of the bull flag is breached, the trader knows the pattern is invalid and continuation is unlikely. The exact opposite is the case for a bear flag.

Calculating the target

An asset usually mimics the pole after a bull flag breakout or bear flag breakdown.

So, the target is derived as follows:

  • Bull flag breakout >> Pole height added to breakout price
  • Bear flag breakdown >> Pole height subtracted from breakout price
  • Pole height = pole high minus pole low

The real world demonstrations of both flag types are depicted below.

The Bull Flag

  • Asset: bitcoin (BTC)
  • Timeframe: 6-hour chart
  • Pattern: Bull flag breakout

The cryptocurrency cleared the flag resistance on Feb. 20, 2017, signaling a continuation of the rally from the $917 low of the pole and opened upside towards $1,228 (target as per measured height method, i.e. pole height ($157) added to breakout price).

Guess what, bitcoin came just $10 shy of price target on Feb. 24, 2017.

The Bear Flag

  • Asset: Ethereum (ETH)
  • Timeframe: 4-hour chart
  • Pattern: Bear flag breakdown

In this case, ether broke the flag support on Mar. 17, 2018 suggesting continued depreciation from the $699 pole high and set scope for $463 (target as per measured height method, i.e. pole height ($133) deduced from breakdown price).

Surprise, surprise, ether was just $12 shy of reaching the exact price target on March 18, 2018.

Conclusion

Bull flags and bear flags can be a trader’s friend in strongly trending markets, but they do not always perform as advertised. In some cases, the pattern can present a trap known as a “false breakout” when price breaches the boundary of the flag and quickly retraces.

Waiting for a candlestick to close outside of the flag tends to add credence to the breakout, and can help the trader mitigate risk.

As a trader, you would want to avoid betting or punting on an asset price if the bull flag breakout of bear flag breakout is not backed by strong volumes. A low volume move usually ends up trapping investors on the wrong side of the market.

Further, using indicators like the Relative Strength Index (RSI) to gauge scope for a rally following a breakout can help boost traders’ success rates.

READ: Timing the Crypto Market With RSI (A Beginner’s Guide)

Trading candles image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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British Police Seize £1.25 Million in Bitcoin from Criminal

The issue of the authorities dealing with cryptocurrencies usually relates to juridical or financial spheres. But the British county police force has proven that it is ready for the mass crypto adoption: the Surrey police confiscated 295 Bitcoins from a criminal. That is the first precedent of the kind in the country.

The starting point for this real-life detective story with a touch of cryptos was the report on the kidnap of Sergejs Teresko, the Latvian national. In April 2017 his girlfriend raised the alarm when she spotted him being bundled into a car in Virginia Water, Surrey. Teresko showed up safe and sound the next day – but this time was enough for the Surrey police to discover the cannabis factory near the rented house from where he was told to be kidnapped.

The safe return of Teresko was marred by a number of links connecting him with that cannabis farm. What is more, the police found vast amounts of cash at his home. Range Rover Evoque, a number of designer watches, gold bars and jewellery also thrown the suspicion on the clean life of an unemployed man. The combination of these factors led to Teresko’s arrest.

The next search of the criminal’s house revealed more valuables among which was a bitcoin wallet with 295 Bitcoins. A court hearing ended in the conviction for money laundering and cultivation of cannabis, Teresko was sentenced to nine years and three months in prison.

After the judgment delivery in October 2017, the Surrey police started to work with the seized valuables. The Surrey police transferred the cryptocurrency to its own wallet and sold it on an offshore exchange. They got £1.25 million from this sell as the price of Bitcoin at that time was about $5,000. Probably, that seemed to be a great deal as the price of Bitcoin in April 2017 – when the story started – was about $1,200. But do not forget that two month after this deal Bitcoin hit its historical maximum

The latest news came from the local court on the 20th of July 2018: it was concluded that Teresko benefited about £2 million from his criminal activity. The court also entitled the Surrey police force to confiscate the seized Bitcoins.

The Surrey police not only became the first in the country to seize Bitcoins discovered during an investigation – they also made use of this money. 18.8 percent of the proceeds contributed to the operational budget of the force.

That is not the first accident which involves both the police and cryptocurrency. Danish police used cryptocurrency transfers as evidence in case of drug dealers.

The tenuous legal situation of Bitcoin can cause problems for the authorities like the police. The lack of legal practice on the cryptos can play against the governmental structures. The precedent created by the Surrey police proves that Bitcoin is not out of the reach of law enforcement.

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Does Bitcoin Price Needs To Fall to $5000 Before Bear Market Is Over?

Bitcoin Mercantile Exchange (BitMEX) CEO Arthur Hayes says the Bitcoin price must still drop to $5000 before ending its 2018 bear market.


Hayes: ‘I’d like To See Us Test $5000’

In comments which echo other prominent trading figures — such as Tone Vays — Hayes told CNBC yesterday that, despite prices rallying this week, sentiment will fizzle out and Bitcoin will continue falling lower.  “I don’t actually think we’ve seen the worst; I think this is a very strong rally on good volume and we definitely could see $8000 or $9000 and maybe just short of $10,000,” he forecast, continuing:

…I would like to see us test $5000 to really see if we’ve put a bottom in.

Bitcoin generated considerable excitement both inside and beyond the cryptocurrency industry on June 16 when prices gained around 12 percent in one hour — seemingly without prior motive.

While initially skeptical, many commentators have since begun to eye the uptick as the start of a stronger period of growth after months of decline.

Specter Of $10k Remains

Hayes, however, remains unconvinced about its longevity. “We’ve been here before earlier in the spring; we rallied from about $5800 to the high $9000 level but didn’t quite crack $10,000 – I think similar action will happen this time,” he continued.

Sharing his uncertainty, Vays had previously predicted that BTC/USD must dip below the significant $5000 barrier in order to prime sentiment for beating 2017’s all-time highs.

Beyond the short term, however, the sense of optimism remains broadly unfazed.

Hayes reiterated his faith that prices could top $50,000 by the end of the year after sufficient downside. “I think everybody is taking a little chill time and come Q3 and Q4 will come back and the party will start again,” he commented about the rest of the year.

While Bitcoin remains around 12 percent up on the start of the week, altcoins meanwhile have yet to catch up, sustaining conspicuous losses in both BTC and USD terms. 

What do you think about Arthur Hayes’ views on Bitcoin prices? Let us know in the comments below! 


Images courtesy of Shutterstock, CNBC.