worst-performing cryptocurrencies 2018

It’s been a brutal year for cryptocurrencies. After the boom of 2017, the whole crypto market is in the red. Some projects are on the verge of bankruptcy while others are taking drastic measures such as cutting staff and re-organizing. 

However, some cryptocurrencies have performed worse than others. Here, we rank the ten worst-performing cryptocurrencies of 2018 and look at some of the reasons for their poor performance.

Worst-Performing Cryptocurrencies, Criteria: 

  • This list only includes coins in top 100 by market capitalization, thereby excluding lower-ranked altcoins. 
  • We exclude all stablecoins pegged to another asset, such as Tether, PAX, and Dai.
  • We exclude any project that hasn’t been around for at least six months.
  • All prices sourced from CoinCodex, tracked from January 1st, and ranked by percentage fall in market capitalization. 
  • All prices correct at time of publishing (10th December, 2018).

10. Bitcoin Cash (BCH) -95.5%

Bitcoin Cash suffered a disastrous end to the year after a contentious hard fork split the community. A vicious war of words broke out between the two sides and miners went to war. The blockchain ultimately split in two, spawning a new cryptocurrency, Bitcoin Cash SV. The controversy had a wholly negative impact on the value of BCH which has dropped 95.5% this year.

Further reading: Everything You Need to Know About the Bitcoin Cash Fork

Bitcoin Cash price chart 2018

9. Elastos (ELA) -95.58%

Elastos (ELA) is a cryptocurrency that aims to be used as part of the first completely safe and decentralized infrastructure for the internet. According to comments on various social media channels, here are some negative things to note about ELA. The inflation rate is too high, not many exchanges list this crypto, and specialized hardware (Elastos server) is needed to run applications. As of late 2018, there also isn’t support for ELA on major hardware wallets like Trezor and Ledger.

Elastos price chart 2018

8. ICON (ICX) -96.08%

ICON (ICX) launched with the goal to “hyperconnect the world” and “enrich our everyday lives through ‘connection’”. This is one of many projects aiming to improve blockchain interoperability. AION, Wanchain, and ARK are considered by many to be ICON’s top competition. 

Thus far, there have been a few relevant criticisms of the project. For example, after the mainnet launch in January 2018, the token swap was a slow process that dragged on all the way into late October 2018. Although the project has been in development for two years, the website still doesn’t have a proper roadmap listed.

ICON price chart 2018

7. Verge (XVG) -96.35%

Verge (XVG) announced a big partnership with PornHub in April 2018; however, this hasn’t had a positive impact on prices long-term. The biggest issue for this project in 2018 has been the constant 51% attacks. Although security issues have affected a number of exchanges and blockchains this year, Verge’s security woes are some of the most reported in crypto, and for good reason. 

In May 2018, one attack alone affected over 35 million coins in around five hours. The hacker stole around $1.8 million in XVG. While other projects that have suffered from 51% attacks, XVG has clearly been the most impacted this year. 

Verge price chart 2018

6. Populous (PPT) -96.69%

Populous Platform Token (PPT) is a cryptocurrency for Populous’ smart contract invoice finance platform, which runs on the Ethereum & RSK blockchains. There appears to have been a number of issues with the project’s technical features throughout 2018. For example, users of the beta version of the platform received error 502 and faced other problems. Therefore, many found it difficult to test the platform’s functionality. 

Another common criticism is a lack of responsiveness from the project team to questions from the community. As this article points out, this issue was also prevalent in 2017. The Telegram channel account owner has been inactive since July 2017, and this platform only had around 1,300 members.

PPT price chart 2018

5. Ardor (ARDR) -96.86%

Ardor (ARDR) is a cryptocurrency designed specifically for business applications. Looking at the project website, the Ardor platform itself is being developed for blockchain-as-a-service purposes. This project evolved from the Nxt blockchain, the first Proof-of-Stake consensus network. Ardor also features a unique parent-child chain architecture. 

Compared to others on this list, there doesn’t seem to be too many negatives regarding this project in 2018. Despite some wallet and network issues earlier in the year, it’s tough to pinpoint the exact cause of ARDR price declines. Perhaps the biggest issue (as with many blockchain projects) is that the tech is still underdeveloped.

Ardor price chart 2018

4. Bitcoin Diamond (BCD) -97.11%

Bitcoin Diamond (BCD) raises a few potential red flags for some people. For instance, its two main developers go by the pseudonyms “007″ and “Evey”, and source code isn’t available. Regardless, BCD aims to reduce transaction fees and completion times. Compared to BTC, BCD has larger block sizes, a higher total supply, and simplified mining processes. 

According to the first Weiss Cryptocurrency Ratings released in April 2018, BCD and a few other Bitcoin hard forks are merely copycats. While this report does highlight some of the positives of these new cryptocurrencies, it notes that BTC being the first-mover does take away some momentum from projects like BCD.

Further reading: 5 Failed Bitcoin Forks that Never Made It

Bitcoin diamond price chart 2018

3. Bitcoin Private (BTCP) -97.26%

Bitcoin Private (BTCP), as the name suggests, provides the possibility of private transactions. If you’re well-versed on cryptocurrencies, you know that BTC isn’t really anonymous. That’s why BTCP was created as a merge fork of Bitcoin and ZClassic. BTCP aims to compete with Verge, Monero, and other privacy coins. 

Earlier in 2018, a big discussion on the BTCP subreddit surrounded the lack of listings from top exchanges. Since then, low liquidity trading and conflicts within the team and community have all continued to be major issues. Still, it’s important to note that BTCP is one of the newer projects (launched in March 2018), in the top 100 market cap rankings.

Bitcoin Private price chart 2018

2. Qtum (QTUM) -97.36%

Qtum (QTUM) is another project that aims to become a leader in the smart contract market. The project made significant progress after its ICO ended in March 2017. The testnet launched only three months later. 

The mainnet launched three months after the testnet release, very quick when compared to the vast majority of blockchain projects. The issue seems to be that Qtum’s competition has implemented better technology, at least as of late 2018. According to one article, Aion and ICON are both ahead of Qtum. There are also other competitors to consider like Ethereum, NEO, Zilliqa, and many more.

Qtum price chart 2018

1. Aion (AION) -97.57%

Aion (AION) is a third generation blockchain project that (as mentioned above) competes with ICX and others by focusing on increasing interoperability between various chains. Some potential use cases listed on the project website include supply chain logistics, Internet-of-Things, online media marketplace, fundraising, and digital identities. 

As with Ardor, Aion doesn’t seem to have faced too many major issues in 2018. Nonetheless, some people have said that the project is too ambitious and it finds itself with the biggest percentage drop in market cap of 2018.

Aion price chart 2018

Conclusion

After the euphoria of 2017 and the rapid growth of altcoins, this year has been tough for cryptocurrency projects. It has been predicted that most altcoins will “go to zero,” but can the projects on this list turn it around next year? Join us tomorrow for our run-down of the best performing cryptocurrencies of 2018.

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bigstock-Gold-Bitcoin-Crypto-Currency--213810058

2018 was epic. It started with the madness of altcoins rally at the beginning of the year. Followed by massive steps towards bitcoin and crypto mass-adoption made by regulators, large enterprises, and institutional investors. 

And it ended with the blood and tears of traders on the streets (we can still hear some of them screaming). 

Block Explorer is willing to reflect on the most important events that brought the industry to its current state. So, here are the major crypto announcements that shaped 2018: 

1. January: The Perfect Month to Ban Something

Bitcoin price: $14,112 (on the first of the month)

The beginning of January was marked by the huge news splash made by the South Korean government. They unveiled plans to ban anonymous trading on cryptocurrency exchanges over tax avoidance. And sent the police and tax-collecting authorities to their offices. 

As a result, the bitcoin price decreased by $2,000.

At the end of the month, crypto was in trouble again, as Facebook decided to ban all ads related to digital currencies. Since Facebook marketing was a major driving force for many initial coin offerings (ICOs), it cut the source of easy promo for many blockchain startups. 

2. February: China and Bankers Join Forces Against Bitcoin

Bitcoin price: $10,264

It’s not easy living in China without the freedom of internet browsing, catching up with friends on Facebook or just googling. All of that is restricted by the “Great Firewall of China.”  At the beginning of February, the list of undesirable foreign websites was supplemented with bitcoin-related websites to eliminate the financial risks for Chinese citizens.

Next, the head of the Bank for International Settlements (BIS) called bitcoin “a bubble, a Ponzi scheme, and an environmental disaster”. The media went nuts over it, and the more they referred to it in the following articles the more the price of crypto was sliding down, falling as much as 14% in one day. 

3. March: SEC has a Crush on Crypto Exchanges. Google Doesn’t

Bitcoin price: $10,433

Some more heartbreaking and uncomfortable milestones for bitcoin and crypto included the U.S. Securities and Exchange Commission (SEC) announcement made in March. They obliged all cryptocurrency exchanges to go through the registration procedure through the agency. 

One week later, news from Google set an overall moody tone of the blockchain scene: the company joined Facebook to ban all cryptocurrency-related ads. 

google bans crypto ads

4. April: India Joins the Strike Against Bitcoin 

Bitcoin price: $7,030

In April, crypto’s misadventures continued. This time the Central Bank of India (The Reserve Bank of India) banned financial institutions from allowing transactions from people’s accounts to bitcoin wallets. 

5. May: Goldman Sachs is Going Crypto, “Rich Dudes” are Boiling Over

Bitcoin price: $9,037

A little happy bitcoin rally happened when it was uncovered that Goldman Sachs had its own team dedicated to entering the crypto market. 

Although some people were are not happy about it. Including some very “rich dudes” that were on a mission to come up with the most-quoted insult for bitcoin. For instance, well-known billionaire value investor Warren Buffett referred to bitcoin as “rat poison squared,” and Bill Gates, one of the kindest billionaires in the world, labeled it a “greater fool theory”. 

Later this month the U.S. Justice Department started an investigation into bitcoin price manipulation. Oh, boy, it’s getting tougher.

But even in spite of all those troubles, crypto was still on a good path to wider acceptance. Or how else could you explain the 25 million crypto wallets registered at blockchain.com?  

6. June: Facebook is Stricken by FOMO  

Bitcoin price: $7,519

In June it was time for more bad news. It’s never enough in the crypto world. A panic sell-off happened in the first half of the month after Coinrail’s hack announcement. Even though this South Korean exchange was relatively small it led to a rapid 10% drop in bitcoin price. 

A couple of weeks later, big news came from Facebook who decided to reconsider the crypto advertising ban. Promoting initial coin offerings was still off the table though. 

7. July: Winklevoss Twins Keep Being Stubborn With SEC

Bitcoin price: $6,366

July was relatively calm for cryptocurrencies. Probably because most of the troublemakers were on vacation. But some news was still in the air, including the fact that asset-management heavy-weight BlackRock was looking into crypto assets and another SEC rejection of exchange-traded fund (ETF) proposal filed by Winklevoss twins. 

8. August: Too Many Rejections of ETF Proposals

Bitcoin price: $7,634

August was all about ETF proposals, their postponing and rejections. The bitcoin exchange rates struggled at first, but at the end of the month, after the U.S. Security Exchange Commission declined nine bitcoin ETFs, the price of the major crypto remained stable. How resilient is it? 

9. September: The First Crypto-Related Company Files for IPO

Bitcoin price: $7,192

Most of September’s announcements were quite positive. First, there was more news about Goldman Sachs jumping into crypto. The company’s chief financial officer Martin Chavez confirmed that the Wall Street giant was working on the development of bitcoin-based derivatives that will be accessible to the bank’s clients. 

At the end of the month, one of the leading bitcoin miners, Bitmain, spilled out their intention to run an initial public offering (IPO). And the application for the process was already filed. Bitcoin Cash prices (one of the assets Bitmain is mining) surged up to 20% rapidly. 

10. October: Happy birthday, Bitcoin. Here’s Your Mass-Adoption

Bitcoin price: $6,619

More happy news to celebrate the ten-year anniversary of Bitcoin’s whitepaper. Big steps from institutional investors happened in the middle of October when Fidelity Investments announced the launch of a spin-off company, dedicated to crypto assets exclusively. The new firm named Fidelity Digital Assets was onboarding its first clients and still preparing for the grand opening for the general public in 2019. 

Also, the launch of the first blockchain phone, made by HTC, stole the headlines in October. 

11. November: Blood, Sweat, and Tears of Bitcoin Cash Fork 

Bitcoin price: $6,427

Fights over the Bitcoin Cash fork got completely out of control. The battle between BCHSV (Satoshi Vision), lead by Craig Wright, aka Fake Satoshi and BCHABC (Adjustable Blocksize Cap), driven by Roger Ver, previously labeled as Bitcoin Jesus was observed by the entire industry. It triggered huge crypto volatility, increased trading volume and, as some experts might say, a bitcoin nosedive to a new bottom. And we are still in the middle of that roller coaster.

On the other hand, we had some good news too. Like the announcement about the first state in the U.S. will be accepting bitcoin as a tax payment. Way to go, Ohio! 

This year is not over yet, and we don’t know exactly what the future holds. As you know in crypto, “one day you are in, and another day you are out”.  But we promise to keep you posted. 

And what was your favorite news break of the year? Go ahead and share it in the comment section below.

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Silk Road bitcoin drugs ross ulbricht

“People should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.”

That was Ross Ulbricht’s vision when he launched the Silk Road, but it soon turned from a utopian ideal to the world’s most notorious dark-web marketplace. What emerged was an “anonymous amazon.com” attracting drug dealers across the planet, all transacting in bitcoin.

It drew mainstream media attention to bitcoin and cryptocurrency, but ultimately the website was shut down, leading to the arrest and imprisonment of Ross Ulbricht, a 34-year-old now serving a double life sentence plus 40 years without parole.

But this story is not straightforward. It’s a story of drugs, aliases, corruption, conspiracy, and the dark web.

Outlined below are the many twists and turns on the road to justice (or injustice). Rebecca Campbell reports:

The Beginnings of Silk Road

Launched in February 2011, the Silk Road website, created by American Ross Ulbricht, was envisioned to be a “free-market economic experiment” that focused on user anonymity. 

Using two key pieces of technology, bitcoin and Tor – a network of computers that makes it impossible to trace by routing internet traffic through servers by anonymizing IP addresses, Ulbricht believed that “people should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.”

ross ulbricht silk road
Ross Ulbricht: the founder of Silk Road

However, while counterfeits, weapons, pedophilia and anything that could be used to defraud or harm others were prohibited, what could be listed for sale was left open to interpretation. 

As time went on many vendors began to realize that Silk Road was a safe haven for the sale of drugs. Of course, while Ulbricht may have envisioned an open market platform driven by the community, it wasn’t long before it started to gain the attention of the media.

“The Underground Website Where You Can Buy Any Drug Imaginable”

In June 2011, shortly after it was launched, an article was published on Gawker. Titled The Underground Website Where You Can Buy Any Drug Imaginable, the exclusive report detailed how Silk Road enabled people to buy drugs of any kind – cannabis, weed, hash, ecstasy – and that it was like Amazon, “if Amazon sold mind-altering chemicals.” 

Silk Road marketplace screenshot
A screen capture of the Silk Road website before it was shut down

At the time, however, while many embraced Silk Road and what it stood for, others believed that it would tarnish the emerging cryptocurrency, bitcoin, attracting the attention of the federal authorities.

Unsurprisingly, it wasn’t long before an American politician called for federal authorities to shut down Silk Road. Not long after the Gawker article was published, Senator Charles Schumer called for the Drug Enforcement Agency (DEA) and the Department of Justice to shut the site down now that it had become public knowledge.

At the time, Schumer said in a report to NBC New York: “It’s a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It’s more brazen than anything else by lightyears.”

He also added that “I’d bet my bottom dollar in this instance [an investigation] is underway.”

Who is Dread Pirate Roberts?

The person operating the site did so under the pseudonym Dread Pirate Roberts, named after a character in the 1973 novel The Princess Bride. 

The name is often used to refer to Ross Ulbricht, but that’s not entirely accurate. There’s good evidence to suggest that Ulbricht handed over the site to someone else, and that person is the Dread Pirate Roberts.

Ross Ulbricht
Ross Ulbricht: Ulbricht reportedly sold the Silk Road website to someone else, the infamous Dread Pirate Roberts

Ulbricht Reportedly Sells Silk Road

With the website growing, Ulbricht initially turned to Richard Bates, a college friend, who had studied computer science and was working for PayPal and eBay. According to a court transcript filed in 2015, Bates offered help with the site but distanced himself over concerns with law enforcement.

Over time, Ulbricht turned to an anonymous person he met through the site who eventually took control of it. 

This person then operated under the pseudonym Dread Pirate Roberts (DPR).

In a 2013 Q&A interview with Forbes, Dread Pirate Roberts confirmed that he was not the original owner, confirming that Ross Ulbricht had sold the site.

DPR spoke about how the torch was passed to him from Ulbricht and that Ulbricht was fairly compensated for the site. The interviewee mentioned that he had discovered a major vulnerability in Silk Road and that while Ulbricht ignored him at first, DPR eventually got his trust.

Back in 2011, Ulbricht is reported to have told Bates that he had sold the website to someone and that it was no longer in his hands to shut down.

In was in 2012, that Dread Pirate Roberts first announced his screen name on the site, which, would become the main point of interest for the authorities.

If Not Ulbricht, Who Else Could Be Dread Pirate Roberts?

French-born Mark Karpeles, former-owner of the now-defunct Mt. Gox Bitcoin exchange, was, at one time, a suspect in connection with Silk Road.

Karpeles ran a DNS registrar and a web hosting company during the time the Silk Road launched, and it was this connection that aroused suspicion.

Investigator Jared Der-Yeghiayan, who went undercover to help bring down Silk Road, discovered that www.silkroadmarket.org was registered to a domain name server (DNS) called XTA.net. 

He then discovered that this DNS was registered with Mutum Sigillum, a company owned and operated by Mark Karpeles. 

Mark Karpeles suspect in Silk Road case
Mark Karpeles: at one time, a suspect in the Silk Road case

In a report dated 6th July 2012, Der-Yeghiayan claimed: 

“I believe since KARPELES has used his [email addresses redacted] to register with a few internet companies that he may have received record of registering, paying for or owning certain aspects of the www.silkroadmarket.org website.”

Mark Karpeles has denied the accusation and the judge in the investigation asked the jury to ignore it because it was based on Der-Yeghiayan “beliefs” rather than hard evidence.

Investigators Went “Rogue”

The case was supposed to be kept as quiet as possible, in order to make sure suspects were not aware of the investigation.

However, information was ultimately leaked to two Baltimore agents – DEA agent Carl Mark Force and Secret Service agent Shaun Bridges.

Bridges then went “rogue,” according to court documents.

As part of their rogue investigation, Bridges and Force hijacked a number of Silk Road accounts and arrested one Silk Road administrator named Curtis Green. At the same time, around $350,000 disappeared from Silk Road vendors, tracing back to Green’s account.

Dread Pirate Roberts heard about the missing money, and turned to another Silk Road colleague, “Nob.” But “Nob” had also been hijacked by Carl Force.

It’s alleged that DPR asked Nob to track Green down and retrieve the stolen money. Green was still in custody at this time, but Force played along, and even pretended to kill him.

In the end, the rogue pair were discovered. Force was sentenced to 6 ½ years. Bridges was initially sentenced to nearly six years in prison; however, in 2017 he was sentenced to an additional two years after admitting to a new crime.

Ross Ulbricht on trial for Silk Road case
Ross Ulbricht in courtroom sketch during Silk Road trial. Credit: STRINGER/Reuters

Conspiracy?

As Der-Yeghiayan continued to pursue Karpeles, who he believed to be Dread Pirate Roberts, another Silk Road account by the name “notwonderful” was reportedly feeding DPR inside information about the investigation.

According to the defense, this insider information gave Dread Pirate Roberts enough time to get get a plan in place that “incriminated Mr. Ulbricht falsely.”

In other words, they claim Ross Ulbricht was set up by the new Dread Pirate Roberts.

Connecting Ross Ulbricht to Silk Road…

It wasn’t long before the government then apprehended Ulbricht. Yet, it had to provide an explanation as to why Ross was DPR. 

An IRS agent, Gary Alford, found a forum post on bitcointalk.org by a user named Altoid. It was posted in January 2011 and read:

“Has anyone seen Silk Road yet? It’s kind of like an anonymous Amazon.com.”

Alford then tracked everything written by Altoid and eventually found a post where he revealed an email address. Altoid asked for programming advice and gave the address: [email protected]

ross ulbricht altoid post on bitcointalk forum

Of course, with Ulbricht’s email and a plausible explanation linking him to Silk Road, it was only a matter of time before the authorities found him.

The Arrest of Ross Ulbricht – October 2013

Ross Ulbricht was arrested in a San Francisco library while logged in to Silk Road as the Dread Pirate Roberts admin. He was unknowingly talking to an undercover agent at the time.

Why was Ulbricht logged in as DPR even though he had allegedly sold Silk Road and moved on? The defense claims that someone convinced him to briefly get involved again. DPR then gave him access to all accounts, files, software, and records. 

When he was arrested on 1st October 2013, all this information was on his laptop, including a bitcoin wallet containing 144,000 bitcoins.

Dread Pirate Roberts Logs On Again, While Ulbricht is Locked Up…

Notably, at the time of Ulbricht’s solitary confinement, it was reported that someone accessed DPR’s Silk Road account before it was eventually taken down. 

According to Motherboard, “the logical conclusion is that someone else had access to the account that was said to belong to the mastermind of the massive Dark Web drug bazaar.”

It confirmed what many believed: Ross Ulbricht might have started Silk Road, but he wasn’t the only one operating as Dread Pirate Roberts.

Ulbricht Appears in Court

Ross’s first courtroom appearance was in front of Judge Kevin Fox, who ultimately denied his Eighth Amendment right to bail. On the 4th February 2014, Ulbricht was indicted. In another case in front of Judge Katherine Forrest, who had been recommended to the bench by Schumer, she said in her ruling that Ulbricht was acting as a “sort of godfather.”

Ross Ulbricht in court Silk Road trial
Ross Ulbricht stands trial. Credit: Wall Street Journal

At one stage during the trials, Ulbricht’s defense lawyer was to call Andreas Antonopoulos, a best-selling author and someone with the technical expertise to explain complex matters, and Steven Bellovin, Computer Science professor at Columbia University and leading expert on computer networking and internet security. However, the court precluded these two experts.

Yet, Judge Forrest was more flexible with the prosecuting side.

Two Life Sentences, with No Possibility of Bail

Before his sentencing, one hundred people who knew Ulbricht wrote to Forrest asking for her to apply the shortest sentence. In a court transcript, it said: “The district court was confused by the letters which showed Mr. Ulbricht to be a different man than the one [Forrest] thought him to be.”

Ultimately, though, Forrest gave Ulbricht two life sentences plus 40 years in prison without the possibility of parole for non-violent charges. In this case, it was not in her power to give him the death penalty.

Following the verdict, even Curtis Green tweeted: “Ross Ulbricht got a raw deal. There is so much more to the Silk Road story than people know, and I can’t yet talk about. I don’t believe Ross is dangerous or that it’s in his character to order a hit on anyone. He should never have gotten that horrible sentence.”

Seven weeks after Ulbricht’s trial, Force and Bridges were indicted for corruption. Compared to Ulbricht’s sentence, though, they got off lightly. 

An appeal was filed to a Second Circuit panel consisting of Judges Jon Newman, Gerard Lynch, and Christopher Droney in 2016. However, the Second Circuit judges decided in 2017 to deny Ulbricht’s appeal.

Last December, a petition was filed to the Supreme Court by Williams and Connolly LLP, led by Kannon Shanmugam, who was representing Ulbricht. It was arguing questions on constitutional law, focusing on the impact of the Fourth and Sixth Amendments. The petition was supported by 21 groups. On 28th June 2018, the petition was denied.

The Fight Continues

Silk Road remains a complicated story that has more twists and turns in it than a cheap garden hose. 

Corruption, deception, and intrigue are wrapped up in this case. Yet, despite the truth coming out about several of those involved in the investigation, the sentence against Ulbricht still stands.

After five years in prison and unable to communicate with the outside world, Ulbricht is speaking through his family at the @RealRossU Twitter account that was set up in June 2018. The first tweet went out in July. There is also the FreeRoss.org website that has been set up by “friends, family and supporters who are working to free Ross Ulbricht from a barbaric, double life sentence for all non-violent charges.”

A petition, which was launched by his mum, Lyn Ulbricht, has received over 100,000 signatures. The goal is to hit 150,000 as his family seeks clemency for him.

His next hope of clemency lies with the President of the United States.

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Swiss crypto ETP

The world’s first fully-regulated crypto ETP (exchange-traded product) will launch in Switzerland this week, allowing people to trade a basket of cryptocurrencies including bitcoin, ethereum, XRP, bitcoin cash, and litecoin.

It’s important to point out that, contrary to some misleading news reports, this is not the much-hyped bitcoin ETF (exchange-traded fund).

The cryptoverse is eagerly awaiting the approval of a bitcoin ETF, with many calling it the future catalyst for a bitcoin price surge. But how is this Swiss crypto ETP different? And what exactly do you need to know?

Amun crypto ETP
The new Amun crypto ETP will track Bitcoin, Ripple XRP, Ethereum, Bitcoin Cash, and Litecoin

What is a Crypto ETP?

An ETP is an acronym for “exchange-traded product.”

In simple terms, an ETP tracks the price of an underlying asset (or a basket of assets), like gold, stocks, and now cryptocurrencies.

The beauty of ETPs is that they are simple and cheap. With this new ETP, investors don’t need to buy cryptocurrencies directly or figure out how to store them. They simply buy the ETP from their broker and instantly get exposure to a basket of five cryptocurrencies.

The ETP is traded on the Swiss stock exchange and can be bought through a traditional stockbroker.

In essence, they’re more accessible to institutional investors which may lead to more money flowing into the crypto market.

Sounds a Lot like an ETF…

It is. The difference is that “ETP” is an umbrella term for different types of exchange-traded products. Those products include ETFs.

ETFs are the most popular type of ETP, but there are others, including exchange-traded notes (ETN) and exchange-traded vehicles (ETFV).

Further reading: What is a Bitcoin ETF? (And Will It Trigger a Price Surge?)

Swiss Crypto ETP Launches This Week

The Amun Crypto ETP will begin trading this week on the Six exchange. It will track a basket of five cryptocurrencies, weighted heavily to bitcoin and XRP. The exact makeup of the ETP is listed below:

Bitcoin: 49.7%

XRP: 25.4%

Ethereum: 16.7%

Bitcoin Cash: 5.2%

Litecoin: 3%

crypto ETP bitcoin, ripple xrp, ethereum, bitcoin cash, litecoin

It’s interesting to note that XRP receives a significantly higher weighting compared to ethereum. Although XRP overtook ethereum as the second-largest cryptocurrency last week, the heavier weighting may be an indication of Amun’s expectations for the future.

Note: the weighting will be rebalanced automatically on a monthly basis.

Amun notes that it aims to provide a diverse holding of crypto assets. However, it removes any assets that are tied to a fiat currency, like tether, and any currencies with anonymity features (such as zcash and monero).

The Amun Crypto ETP also avoid any coins without sufficient liquidity and those that don’t trade on reputable exchanges.

Speaking to the Financial Times, Amun CEO Hany Rashwan said: 

“The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments.”

The ETP carries a management fee of 2.5% annually.

Jane Street and Flow Traders will back the fund and have agreed to pour money into the ETP to give it liquidity. They are known as “market makers.”

Ticker: “Hodl”

In true cryptocurrency style, the ETP will trade under the ticker $hodl. It’s a nod to the popular crypto meme “hodl,” a misspelling of “hold” which was adopted by crypto enthusiasts as a term for holding bitcoin even through the biggest price drops.

just-hodl-it

It launches on the Swiss SIX exchange, the fourth-largest stock exchange in the world. Based in Zurich, it has a market capitalization of $1.6 trillion.

Swiss Stock Exchange: Bullish on Crypto?

This isn’t SIX’s first foray into the cryptocurrency world. In July 2018, SIX announced plans to launch a fully-regulated crypto exchange, overseen by Swiss banks and regulators.

At the time, SIX CEO said: “For us, it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry.”

Set to launch in 2019, the exchange will facilitate trading, settlement and storage custody services.

How Is This Different to the Anticipated Bitcoin Etf?

First, there’s the makeup of the ETF itself. The Amun Crypto ETP tracks a basket of cryptocurrencies, rather than purely bitcoin.

Secondly, there’s the scale and impact of the ETP. While the Swiss ETP is an important first step, launching an ETF in the US is a much bigger beast. 

The size of the exchange is the first point of difference. The Swiss exchange has a market capitalization of $1.6 trillion, compared to the New York Stock Exchange’s $21.3 trillion and the Nasdaq’s $7.8 trillion.

Simply put, launching a bitcoin ETF on one of the major US exchanges would have a much larger impact.

Then there’s the regulatory process. Switzerland, as explained, is much more open to the crypto industry in general. Approval in Switzerland is less of a groundbreaking move. Whereas the approval of a bitcoin ETF in the US would break down the door for countless other cryptocurrency products and investment vehicles.

The Securities and Exchange Commission (SEC) faces a deadline of December 29th to rule on the next bitcoin ETF proposal put forth by VanEck. However, there’s a good chance the SEC will push the decision back into 2019.

Commentators expect a bitcoin ETF approval to kickstart a new bitcoin price surge. It would, theoretically, allow institutional investors to flood into the market.

Currently, many Wall Street traders are forbidden to buy or hold cryptocurrencies as part of their client portfolios. Others are worried about the risk involved with buying and storing so much crypto directly.

A bitcoin ETF would give them an easier way to gain exposure to the crypto market, without the risk and complexity of buying it directly.

Conclusion

The Swiss crypto ETP is an impressive and important milestone in crypto adoption. It provides a simple route for institutional investors to wade into the crypto market. However, this is not the catalyst many are waiting for, and it does not make a bitcoin ETF approval in the US any more likely.

As always, Block Explorer will bring you more information as and when the true bitcoin ETF is approved in the US.

bitcoin cash hard fork

This article is regularly updated to include the latest Bitcoin Cash fork developments.

What is the Looming Bitcoin Cash Hard Fork?

As part of the Bitcoin Cash system, the community schedules a bi-annual upgrade to keep the network up to date.

The next upgrade is due on November 15th, around 4.40pm GMT. However, there is disagreement over the upgrade itself. The split in the community is likely to create a “hard-fork,” where the blockchain splits with two different rules or “protocols.”

Background reading: What is a hard fork in cryptocurrency?

Bitcoin Cash ABC vs nChain

The dispute centers around two developer communities: Bitcoin Cash ABC and nChain.

Both aim to release a different version of the upgrade on November 15th.

The difference in opinion means this is a “contentious hard-fork.” When the upgrades are made, there will be two versions of the Bitcoin Cash blockchain, and it remains to be seen which will be the “dominant” chain.

The Argument: Bitcoin Cash ABC

One of the most prominent features of the Bitcoin Cash ABC proposal is to move beyond monetary transfers. An improvement to the scripting language may lead to the introduction of smart contracts on the Bitcoin Cash blockchain.

Further reading: What is a Smart Contract? (In Simple, Easy-to-Understand Terms)

The upgrade will also introduce “canonical transaction ordering,” which alters the way transactions are listed in a block. Bitcoin Cash ABC claims this will act as the foundation for enormous scaling potential in the future.

The current proposal maintains the current block size of 32MB, although ABC is open to increasing it in the future.

The Counter Argument: nChain

The major feature of the nChain upgrade is the quadrupling of blocksize. nChain proposes a new blocksize of 128MB, which is their solution to scaling issues.

nChain will release a “full node implementation” reflecting these changes on November 15th. nChain calls this upgrade Bitcoin SV, or “Satoshi’s Vision,” as they claim it is a true reflection of Bitcoin founder Satoshi Nakamoto’s ideals.

The Two Upgrades Are Incompatible

The two differing proposals cannot function together. So, when the two parties activate their upgrade, two different chains will be created, hence the hard fork.

Who’s in Favor of Bitcoin Cash ABC?

Software company Bitcoin Cash ABC put forward the proposal, hence the name.

Their software is used by two-thirds of Bitcoin Cash mining nodes, who simply need to upgrade the software to implement the upgrade.

As for the big name support, Roger Ver and his website bitcoin.com are vocal supporters of Bitcoin Cash ABC. Bitmain, the world’s largest cryptocurrency mining company, has also publicly stated support for Bitcoin Cash ABC.

Pre-fork trading on Poloniex showed that ABC was initially valued four-times higher than rival SV, suggesting that traders backed the ABC project. However, the two coins are now trading at near parity ahead of the fork.

Who’s in Favor of Bitcoin Cash SV

The loudest voice for Bitcoin Cash SV is Craig Wright, who has publicly declared himself as Satoshi Nakamoto in the past.

His software company nChain proposed the alternate vision, called Bitcoin SV (or “Satoshi Vision”)

The argument reached boiling-point when Roger Ver published an email reportedly from Craig Wright which read “You are my enemy… You will now discover me when pissed off.”

Bitcoin Cash also has support from the vast majority of Bitcoin Cash mining pools. Current estimates suggest that SV will command up to 72% of mining power, which could give it the edge when the fork initially happens.

Coinbase, Binance, and Ledger Support?

Two of the world’s leading crypto exchanges, Coinbase and Binance, have both expressed support for the hard fork. Although, it remains to be seen which fork they will ultimately follow.

As Coinbase explains:

“Unlike previous BCH hard forks, there is a competing proposal that is not compatible with this published roadmap. Coinbase will monitor the hard fork process and work to minimize customer disruption until the network meets Coinbase security standards.”

 

Binance didn’t comment on the contentious nature of the fork, but did express support:

“Binance would like to confirm support for the upcoming Bitcoin Cash hard fork.”

 

Hardware storage company Ledger will also support the forked coin, but clarified it would only support the dominant chain:

“Ledger will pause Bitcoin Cash service to avoid unwanted transactions until it is clear which of these chains will be the dominant one.”

 

In all cases, transactions will be paused at least an hour before the fork is due to take place (roughly 4.40pm GMT).

What Happened to the BCH Price?

Generally speaking, a hard fork often triggers a price run in anticipation of free tokens. When a hard fork occurs, holders of the coin are often granted the new forked token on a 1:1 basis.

This was the case when Bitcoin forked to create Bitcoin Cash. Everyone holding bitcoin also received the same number of bitcoin cash tokens.

Traders initially flocked to BCH in anticipation of a new, valuable forked coin.

However, that excitement has run out, with Bitcoin Cash falling almost 20% this week. After the initial gold rush, traders are contemplating the fact that vicious infighting could have a negative effect on the future of Bitcoin Cash.

Conclusion

Unless nChain and ABC come to a compromise or agreed solution, Bitcoin Cash will fork on November 15th, resulting in two separate blockchains. The dominant chain will likely be supported by major exchanges and third parties, but it remains to be seen which chain that will be.

Block Explorer will keep you updated on the developments as we move closer to the November 15th upgrade.

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