Alt-Options Weekly Report (02.19.16)

via Flickr: Anthony Quintano

Remember the summer of 2015? The sun was shining, beaches were hot, and investors in the stock market were high on their horse. Now, global economic strife has caused markets to tank and become extremely unpredictable…but there is hope! Bitcoin’s is outperforming the market with its 70% price increase since July and shows signs of going even higher in the upcoming weeks. This report features articles on Bitcoin’s potential as well as technical analysis on a surging price.

Headlines

The Bitcoin Identity Crisis: Currency or Property?

via Flickr: Images Money

The confusion over Bitcoin grows in the latest lawsuit brought in a California bankruptcy court by Trustee Mark Kasolas against Marc Lowe, a former employee of HashFast Technologies LLC.

The trustee alleges, among other things, that Lowe received fraudulent transfers from the bankrupt Bitcoin mining company which included 3,000 Bitcoin (“BTC”) in September 2013, valued at approximately $363,861.

The lawsuit requires the bankruptcy court to determine whether Bitcoin is property or currency — a finding that would provide the total dollar amount recoverable by a bankruptcy trustee. This is an issue of first impression before the bankruptcy court.

The court’s definition is significant because if Bitcoin is “currency,” the trustee would be entitled to the BTC historical value or the value on the date of transfer, which is $363,861. Alternatively, if Bitcoin is “property,” the trustee would be entitled to receive the value of the BTC at the transfer date or time of recovery, whichever is greater. As of the filing date in May 2014, the BTC increased in value to $1,344,705.

The CFTC treats bitcoin as a commodity; FinCEN and the SEC treat Bitcoin as money/currency; The IRS treats Bitcoin as property. Hopefully, the final decision sets a definitive precedent, moving forward.

IBM stumps for enterprise blockchain technologies, apps

Blockchain in enterprise as a ledger

IBM is aiming to make blockchain technology business friendly enough to be used for a variety of transactions and use cases.

For IBM, the attraction of blockchain tools is simple. Many transactions are conducted on IBM’s mainframes and if it can use blockchain on its developer and cloud services the company can garner more sales. IBM also sees blockchain as a way to manage business contracts and automate agreements.

Among the key items in IBM’s blockchain-as-a-service move:

  • IBM contributed 44,000 lines of code to the Linux Foundation’s Hyper Ledger Project,which aims to create secure ledgers for any transaction. Hyper Ledger has a series of big-name premier partners including ANZ, ABN-Amro, IBM, Intel, JP Morgan, Red Hat, VMware and Wells Fargo to name a few.
  • IBM’s Bluemix platform will allow developers to create digital assets, conduct transactions privately and manage blockchain networks. Blockchain applications can be deployed on IBM’s z System mainframe. APIs will be available at each step of a transaction. Code samples are on Github.
  • Internet of things end points such as devices, RFID tags and scans can be linked to blockchain networks.
  • IBM will open design and development centers in London, New York, Singapore and Tokyo — the primary financial hubs — to experiment with blockchain apps. IBM’s services unit will offer blockchain consulting and design services.

Bitcoin performed better than Stocks, Commodities & Bond Yields

via Flickr: GotCredit

In this piece on Medium, Danial Daychopan explores the success of Bitcoin. Relative to other currencies, Bitcoin has surged while others have slumped. In order to not detract from his piece, we’ve linked his work in the title. Bravo to Danial!

Research

How Can Cryptocurrency and Blockchain Technology Play a Role in Building Social and Solidarity Finance?

via Flickr: Teemu Mäntynen

Brett Scott — February 2016

This paper provides a primer on the basics of Bitcoin and discusses the existent narratives about the technology’s potential to facilitate remittances, financial inclusion, cooperative structures and even micro-insurance systems. It also flags up potential points of concern and conflict; such as the tech-from-above “solutionism” and conservative libertarian political dynamics of some of the technology start-up community that surrounds Bitcoin. As a way of contrast the paper considers “blockchain 2.0” technologies with more overtly communitarian ideals and their potential for creating “cooperation at scale”. It concludes with suggestions for future research.

Technical Analysis

This week NEWSBTC offered us a technical analysis of price movements for February 18th.

It was determined that Bitcoin price could be on track to test its previous year highs at $500 now that an upside break from the triangle consolidation pattern took place.

The following in-depth analysis was provided:

So far, technical indicators don’t seem to have caught up with the sudden upside break yet, although the moving averages are edging closer to make a potential upward crossover. For now, the 100 SMA is still below the 200 SMA and is close to the triangle support at $360.
Meanwhile, stochastic is indicating overbought conditions at the 80.0 level and is starting to turn lower, suggesting that selling pressure might pick up. Similarly, RSI is turning down from the overbought region, hinting at a possible return in bearish momentum.
In that case, bitcoin price could still pull back to the triangle resistance, which might now hold as near-term support. If price breaks below this area, though, it might still find a floor at the $360 triangle support to carry on with the consolidation.

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Disclaimer: Alt-Options does not provide personal investment advice and we are not a qualified licensed investment advisor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies.