Crypto bart pattern

Every Friday, we take a light-hearted tour through the best memes, artwork, and oddities from the cryptoverse. After another sudden drop in the market, Carty Sewill explorers a meme that pops up all over trading charts: The Bart Pattern.

If you’re like me, staring at the BitMEX chart at 1:00 am on a Thursday, you probably knew it was coming. A classic setup and typical execution. A big green stick followed by a red one a day or even a few hours later. Some of you know it as a ‘pump and dump,’ but veteran traders know it by its true name “The Bart Pattern.” A meme so literal, named after the top of Bart Simpson’s head, it’s uncanny. 

crypto meme bart pattern
Figure 1. The Classic Bart Pattern.

But that’s what happens when everyone’s leveraged and the whales decide to have some fun. Profiting while the rest of us “have a cow, man.” It’s no secret. And, furthermore, it’s no surprise so many in the BitMEX trollbox claim to trade based on ‘Bart Pattern Analysis.’ Longing Inverse Bart patterns and shorting the classic Bart. A sort of meta Technical Analysis if you will.

bart pattern inverse
Figure 2. Classic Double-Bart Reversal. (An inverse Bart followed by a Classic Bart.)

It’s hard to pin down exactly when the Bart pattern appeared as a Technical Analysis meme in the crypto-sphere but if I was to hazard to guess, its origins lie somewhere deep in the BitMEX trollbox sometime around the end of February 2018. As Bitcoin began to settle under $10K. When the action slowed, the manipulation flowed, and the whales were forced to keep themselves entertained.

Soon, Barts began appearing on 4chan’s /biz/; as with any good crypto-meme. Some decrying latent manipulation while others boasting of their TA prowess in identifying an ‘obvious Bart.’ All with an image of the same lovable, menacing, iconic yellow-faced dude’s hair sitting under the Bitcoin chart. In no time, Bizonacci was making light and posting videos. Even going so far as identifying ‘Marges’ and ‘Lisas’ on the 1m chart. 

Today it’s a regular sight and topic of discussion on TradingView. And not without merit. Veteran and newbie traders alike yielded to the power of the Bart pattern. Bears and bulls both living in fear of the instant liquidation of the first and last stick while smart traders set stop losses and call for Bart Simpson to make a cameo.

bart pattern tradingview
Figure 4. The Bart Pattern being discussed on TradingView.

I’ve even tried to play a few myself. Though, with little success. But like many before me I’ll keep taking my chances and, hopefully, one day call a Bart like a boss. 

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blockchain association SEC clarity

The Blockchain Association has called on the Securities and Exchange Commission (SEC) to issue more formal guidance on cryptocurrencies. As such, it has outlined a proposed regulatory framework based on previous SEC comments.

Through a post on Medium, The Blockchain Association attempts to codify language issued by the SEC’s Corporation Finance Direction William Hinman. Titled The Hinman Token Standard, Blockchain Association suggests the following guidance:

“A project should meet the standards for decentralization if it more decentralized than the Bitcoin or Ethereum networks on June 14th, 2018.”

The logic behind this statement stems from Hinman’s clarification in June 2018 that bitcoin and ethereum were not considered securities. It follows that if bitcoin and ethereum were sufficiently decentralized on that date, then other projects should aim to meet that standard.

“This uncertainty has a stifling effect on investment”

The SEC has yet to issue any formal guidance on the issue. However, it has shut down various crypto projects and initial coin offerings (ICOs) it deemed illegal.

Further, the SEC chairman Jay Clayton publicly said: “I believe every ICO I’ve seen is a security.”

If cryptocurrencies are considered securities, they will be subject to much more stringent investor regulations. As the Blockchain Association explains, “we must know when tokens qualify as securities and when they do not so innovators know which regulatory regime applies.”

The contradicting statements and lack of clarity is stifling creativity and forcing promising startups out of the US.

“More decentralized than the Bitcoin or Ethereum networks on June 14, 2018”

The Blockchain Association’s proposed guidelines suggest the SEC stick to its conclusion that Bitcoin and Ethereum are sufficiently decentralized. Future policymaking should use this starting point as a foundation, they urge.

The association argues that this is a reasonable starting point with room for a somewhat centralized leadership when required.

Other proposals suggest implementing The Howey Test to cryptocurrency projects. The Howey Test outlines the definition of a security or investment contract and circles around the expectation of profit from a particular promotor or third-party.

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crypto layoffs erik voorhees shapeshift

Edit: This list of crypto layoffs was updated on January 14th to include the latest restructures.

Crypto Winter has hit hard. The sharp downturn in cryptocurrency prices has forced blockchain companies to take drastic measures to ensure their sustainability. Late in 2018, crypto startups began to announce layoffs and restructures, including some of the biggest names in blockchain. Here’s what we know so far:

ShapeShift (third of staff)

Crypto exchange ShapeShift is the latest to announce layoffs which will hit 37 employees – a third of its staff.

In a passionate and honest Medium post, CEO Erik Voorhees said: “It’s a deep and painful reduction, mirrored across many crypto companies in this latest bear market cycle.”

Like many blockchain companies, ShapeShift’s balance sheet is comprised of cryptocurrencies, leaving them significantly exposed during the downturn. After rapid growth of 3,000% in 2017, ShapeShift expanded to include market tracker coincap.io and hardware wallet KeepKey. Voorhees cites a lack of focus on the recent decision to downsize: “they were pulling our attention in too many directions.”

Voorhees ended his statement with an apology to his former employees: “I am sorry this happened. Your confusion, your sadness, your anger… all of it is understandable, and I am sorry to put you through it. Your contributions — of effort, of personality, of experience — remain part of our fabric.”

ConsenSys (up to 60% of staff)

ConsenSys is a startup incubator for Ethereum projects. CEO Joseph Lubin was a co-founder of Ethereum and since moved on to foster Ethereum startups.

However, ConsenSys is now re-evaluating its future. Initial reports emerged in December that ConsenSys would lay off 13% of staff. However, further rumors point to a much larger restructure involving the layoffs of 50-60% of its workforce.

In a statement, Lubin said: “Our first step in this direction has been a difficult one: we are streamlining several parts of the business including ConsenSys Solutions, spokes, and hub services, leading to a 13% reduction of mesh members.”

In its bid to fund the next generation of Ethereum projects, ConsenSys reported burn rate was $100 million.

Bitmain (up to half of all staff)

Bitmain is the biggest name in cryptocurrency mining. The company has even filed an initial public offering (IPO) to list itself on the Hong Kong stock exchange.

However, crypto winter has hit Bitmain hard. It closed its research and development arm in Israel late last year. Rumors then began to circulate that half of all staff were at risk.

The rumors spread to social media network MaiMai (China’s version of LinkedIn) to which a verified Bitmain employee wrote: “It’s affirmative. The layoff will start next week and involves more than 50 percent of the entire Bitmain’s headcount.”

The layoffs are reportedly in Bitmain’s non-core departments such as artificial intelligence.

Steemit (70% of staff)

Steemit is a blockchain-based social media and blogging platform. Similar to Medium, but contributors are paid in cryptocurrency for their writing.

The platform laid off 70% of staff in 2018. Founder and CEO Ned Scott cited “the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes” for the decision.

He also explained the need for sharp focus on the core product before expanding: “In order to ensure that we can continue to improve Steem, we need to first get costs under control to remain economically sustainable.”

Kraken (57 staff members)

Kraken is one of the oldest and largest cryptocurrency exchanges. It’s also considered one of the most secure. However, the exchange is not immune to falling prices and lower volume on its platform.

The company cut 57 staff members from its Halifax office in Canada in 2018. However, the company maintains it is still “aggressively hiring” in many areas of the business.

Huobi (exact figures not disclosed)

Another of the world’s largest cryptocurrency exchanges, Huobi, released a vague statement about “optimizing” its staff. Although exact figures have not been disclosed, this is widely assumed to mean broad layoffs and restructure at the company.

Coinfloor (most of its 40 employees)

London-based Coinfloor is the oldest crypto exchange in the UK. It reportedly cut most of its 40 staff members in October 2018 in response to low volume. 

CEO Obi Nwosu said “We are currently working on a business restructure to ensure that we focus on our competitive advantages in the marketplace… As part of this restructure, we are making some staff changes and redundancies.”

Spankchain (more than 50% staff)

Spankchain ran a successful ICO, launching a coin to fund an adult entertainment platform. But when the coin’s market cap dropped from $190 million to just $6 million, the company was forced to rethink. It cut its employee and freelancer base from 20 to 8. 

Blockfolio

Blockfolio, a crypto portfolio tracker, has cut staff from 41 to 37 in an effort to restructure the company. Despite a recent $11.5 million injection of funding, Blockfolio has refocused its operations, putting an affiliated venture called Datablock on the backburner.

340 UK Blockchain Companies Shut Their Doors

Sky News in the UK scoured the Companies House and Open Corporates database and discovered that 340 blockchain or cryptocurrency companies in the UK closed down in 2018.

The harsh market conditions are forcing companies in the space to rethink their strategies, refocus, and concentrate on their core business. Let’s hope we see fewer headlines like this in 2019.

blockchain artwork

The world’s first blockchain auction took place last year.

A 31.5% stake in Andy Warhol’s painting 14 Small Electric Chairs was tokenized and sold to bidders who could pay with bitcoin, ethereum, or a native cryptocurrency ART. Each token share was determined by a smart contract on Ethereum. 

Is this fractional ownership system the future of artwork auctions?

The gallery behind the initiative, Dadiani, thinks so: “For the first time ever high-value, blue-chip art works will be available for everybody to own utilizing the unique [blockchain] platform.”

75% of Auction Houses Are Looking Into Blockchain

According to one of The European Fine Art Fair Reports from 2017, called TEFAF Art Market Online Focus, 75% of auction houses are looking into offering some sort of blockchain technology within the next five years.

The tokenization of assets is a huge theme across the blockchain industry. And, alongside real estate, the art world is among the first to embrace the revolution.

artwork blockchain stats

But Why Blockchain and Artwork? 

Let’s dig into some stats and think about it. 

Issue #1.  Even though art is considered a great investment, there’s no consistent data on value

The Mona Lisa was evaluated at $100 million back in 1962. More than 50 years later, in 2017, ERGO insurance specialists now estimate that figure at $750 million – $1 billion considering inflation and other factors. 

But there are only a handful of masterpieces in the world. So, the overall return on investment is quite unpredictable. Even the data points from different market players are entirely inconsistent.

For example, a well-known art expert, Melanie Gerlis, who combined “all the research on the broad market points to an average compound return on investment-grade art” came up with 4% annual return.  

Warhol blockchain artwork

When the researchers from Stanford Business School tried to do the math and analyze data from 1972 to 2010, they found out that the return was closer to 6.5%. And The Blouin Art Sales Index, popular amongst art dealers database, estimates a 10% annual return. For reference, the average yearly return from the S&P 500 was about 11.46% from 1988 to 2018. 

Even experts not sure about the changing value in fine art. How are average folks suppose to deal with all that?

By recording auction and gallery sale prices on an immutable, transparent blockchain, we could theoretically bring some clarity to art values over time.

Issue #2. Investing in art is not easily available to the general public. Selling art is easier for dead geniuses. 

Works by 52,105 artists appeared at fine art auctions in 2017 according to the Art Basel and UBS’s The Art Market | 2018 report. But only 1% of those names accounted for 64% of the sales (works priced and sold higher than $1 million per pop). 

According to the same report, nearly all artworks up to $1 million declined in value. On the contrary, the market for works priced over $1 million increased. The number of items sold in that segment grew by 76% along with the 50% value increase.

Successfully investing in art is therefore limited to those who can afford million-dollar auction prices.

Artwork on the blockchain

Apart from the price, think of the transaction fees. There’s no “fair” price for art. It’s just a matter of what are you agreeing to pay as a buyer plus fees (those are sometimes negotiable), that can reach up to 25% depending on the price of the piece. And don’t forget about the ongoing costs of purchasing such a valuable lot – insurance, video surveillance, top-notch security system, etc. 

All that means that you’ve got to have a couple of millions of dollars to spare if you are really into purchasing some fine art. And it’s not clear when you’ll be able to sell your acquisition in case you urgently need your money back. Those investments are amongst the most illiquid. 

Blockchain auctions, like Andy Warhol’s 14 Small Electric Chairs, could change this. By tokenizing a fractional share of expensive paintings, anyone can get into art investing, even with a small amount.

Issue #3. Fraud and lack of transparency 

The art market is not as regulated as more traditional investments classes. There is more temptation to do things wrong. And even when you deal with the most authoritative galleries and auctioning houses and paying the highest fees, there’s still a risk of fraud.

Let’s remember Christie’s case. Christie’s has reportedly sold forgeries from La Horde by Ernst Max to Heinrich Campendonk’s Girl with a Swank. More than that, The Independent claims that at least 20% of the paintings held by world-class museums are fake. 

But imagine, what if there was a database with the history of ownership and proof of the authenticity for all the pieces of art ever existed? Doesn’t it ring “blockchain” to you? 

Who’s Leading the Artwork Blockchain Evolution?

The revolution is already happening. At the moment there are two main types of players in the field: 

  • Those solving infrastructural problems – e.g. recording and verifying artwork authenticity on a blockchain, creating a service solution those tokenizing artwork. 
  • Those democratizing fine art as an investment – e.g. companies selling fractional ownership of artwork via token sales or auction.

Here are some of the biggest players:

Blockchain App Factory

Blockchain App Factory is somewhat equivocal and mysterious. They provide an extraordinary number of services (due diligence, creating of a token, auditing, and legal services for assigning a value for the token).

ArtWallet

ArtWallet is a “blockchain-based ecosystem” which aims to verify the authenticity of artwork by tracking its ownership, history, and provenance on a blockchain. Their whitelist is opening soon.

Monegraph

The much more open and clear Monegraph allows artists to register their works on the publicly verifiable Bitcoin blockchain. It provides users with a certification of authenticity for the tokens, representing pieces of art.

Blockchain Art Collective

Blockchain Art Collective also aims to track and prove artwork authenticity. It tags artwork with a tamper-evident, NFC-enabled Certificate of Authenticity, complete with timestamps, to a blockchain. (Blockchain Art Starter Kit starting at $20).

blockchain art collective

Verisart

Verisart was founded by Robert Norton, the former CEO of Saatchi Art & Sedition Art. It strives to build evidentiary infrastructure for artworks and collectibles that are verifiable by anyone based on a public blockchain. 

Artory

My personal favorite from this list is Artory. Founded in 2016 by Nanne Dekking, the former chairman of Sotheby’s, the company tracks provenance of fine artwork and collectibles. Due to his background, Dekking has some aces up his sleeves, so in November Artory partnered with Christie’s New York to sell $318 million Barney A. Ebsworth collection and keep the transactions data recorded on its blockchain. 

Maecenas

Maecenas is the company that powered the sale of 31.5% ownership of Andy Warhol’s piece last summer. Maecenas is currently working to organize a second auction, this time featuring Picasso. The auction is preliminarily scheduled to be held during the 1st quarter of 2019. 

Masterworks

Masterworks was founded by Scott Lynn, who has been a passionate art collector for more than 15 years and accumulated a pretty impressive selection of Abstract Expressionism including Mark Rothko, Willem de Kooning, and Barnett Newman. And now Masterworks offers a clear framework for its users along with well-researched analytical data about the investment in fine arts.  The team has acquired Warhol’s “1 Colored Marilyn (Reversal Series),” and at the moment of writing 97% of it has been reserved by retail investors. A minimum investment of $1,000 will give anyone 50 shares of an artwork. Payment can be made via bank transfer (for the citizens of the US and Canada) or via credit card (5% fees applied). The next on the Masterwork’s selling list is Claude Monet. 

Masterworks blockchain artwork

TheArtToken (TAT) 

TAT was issued by Swarm, a non-profit provider of open infrastructure for digital securities. The project’s team already owns a pre-funded art collection of $4.1 million value and currently is in the process of its own token sale that is due to end at the middle of January 2019. Each token sold represents partial ownership of a Post War & Contemporary Art collection. It is stored in a Swiss bonded warehouse and managed by FineArtDigital AG.

R.A.R.E Digital Art Network

R.A.R.E is a company selling digital artwork. Using blockchain technology, each piece of digital artwork can be given a unique identity or a limited run. It brings scarcity and value to digital artwork that was never possible without blockchain.

Snark

Snark is selling “atoms,” which represent fractional ownership of Eve Sussman’s acclaimed video 89 seconds at Alcazár. 

Conclusion

As mentioned before at BlockExplorer, tokenization of real assets is something I am very excited about. For now, the only thing that’s left to do is to relax and observe how all of those startups will bring the technologies of the distributed ledger to a new level of adoption at least in the art space. 

Baby steps. 

How long will it take to allow anyone in the world to purchase a share of an authentic Rembrandt or Van Gogh in a matter of a couple of clicks from a mobile device? Go ahead and share your predictions in the comment section below.

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Ripple XRP

Euro Exim Bank will be the first bank to use Ripple’s cryptocurrency service xRapid. The London-based bank will actively use XRP to source liquidity and settle cross-border payments.

It’s a major development for Ripple. As reported by Block Explorer, a handful of Ripple’s partners in the finance world now use xRapid, but most are money-transfer services. None have a banking license. 

Euro Exim Bank is the first official bank to flip the switch to xRapid.

What is xRapid?

xRapid is Ripple’s flagship service that uses XRP as a bridge currency to speed up cross-border payments.

Tests have reported 70% savings and almost instantaneous settlements.

xRapid is a solution to the outdated foreign exchange system which takes days and incurs high fees.

Learn more: What is xRapid (Everything You Need To Know About Ripple’s Crypto Service)

While Ripple now has more than 200 banking partners, only a few are actively using xRapid. The companies include Mercury FX, Cuallix, Catalyst Corporate Credit Union, and Viamericas. 

“Dozens of banks” will be using xRapid by the end of 2019

Ripple CEO Brad Garlinghouse has previously boasted that “dozens of banks” will be using xRapid by the end of 2019. But XRP holders have been disappointed by the lack of fully-licensed banks switching over to the cryptocurrency service.

Alongside the Euro Exim announcement, Garlinghouse also revealed that four additional companies will tap into xRapid: JNFX, SendFriend, Transpaygo, and FTCS.

“We’re beginning to see more customers flip the switch and leverage XRP”

During the announcement Garlinghouse expanded on Ripple’s progress: 

“In 2018, nearly 100 financial institutions joined RippleNet, and we’re now signing two—sometimes three—new customers per week. We also saw a 350 percent increase last year in customers sending live payments, and we’re beginning to see more customers flip the switch and leverage XRP for on-demand liquidity. At the end of the day, our goal is to make sure our customers can provide excellent, efficient cross-border payments experiences for their customers, wherever they are in the world.”

Euro Exim Bank director, Kaushik Punjani, said: “We have designed, tested and are implementing both xCurrent and xRapid in record time, and we look forward to the benefits these will bring our customers.”

Further reading: What is Ripple XRP (Absolutely Everything You Need to Know)