Plans to launch a Bitcoin futures contract
* One of the senior figures at derivatives giant CME Group believes that Bitcoin is on course to become its own tradable asset class. In an interview with Reuters, the company's chairman emeritus Leo Melamed said Bitcoin will likely come to trade in a similar way to HOW gold and stocks are exchanged today. Notably, CME Group last week announced plans to launch a Bitcoin futures contract, aiming to have the product available by the end of the year. The product is still contingent on approval from the Securities and Exchange Commission, the firm indicated at the time.
* Melamed told Reuters that he expects institutional investors to take part in the futures contracts, rather than just speculators, and called the move a "very important step for Bitcoin's history." The product will enable investors to bet on Bitcoin, as well as short-sell the crypto currency. He went on to say: "We will regulate, make Bitcoin not wild, nor wilder. We will tame it into a regular type instrument of trade with rules."
* In the interview, Melamed explained he initially did not believe in Bitcoin, but that his interest later grew. "I’m still that same guy who believes in, at least examining change," he explained.
Bitcoin thieves imprisoned
* A former U.S. Secret Service agent has been sentenced to an additional prison term on charges associated with his role in the bust of now-defunct dark market Silk Road. Shaun W. Bridges, who pleaded guilty to stealing hundreds of thousands of dollars in Bitcoin during the U.S. government's investigation of Silk Road, was found guilty of money laundering and sentenced to a 24-month prison term yesterday by US district judge Richard Seeborg in San Francisco.
* Judge Seeborg ordered the sentence to be served consecutively with jail time Bridges is currently serving for the theft of the Bitcoin. He further ordered Bridges to pay a penalty of 1,500 Bitcoins and other fiat currency that roughly totals $10.4m in value, according to a press release. Bridges had earlier pleaded guilty to the charges, following admitting using a private key to access a digital wallet be-longing to the government and transferring 1,600 BTC to wallets he controlled.
* The case was investigated by the FBI's San Francisco Division, IRS-CI's Washington, D.C. Field Office Cyber Crimes Unit, among other agencies. Bridges was originally arrested in 2015 for the Bitcoin theft, and was later arrested in February 2016 as he tried to leave the US before beginning his prison term. Later, court filings stated that Bridges stole additional Silk Road funds after having pleaded guilty to the first charges.
Bitcoin re-discovers its MOJO but is SegWit2x really that popular?
* Overnight, Bitcoin re-discovered its MOJO to trade at $7,497.40 after dipping briefly below $7,000, as the market continued to show support for the ‘original’ Bitcoin block chain over SegWit2x. Charlie Lee, the creator of Litecoin and former Coinbase executive, revealed that Nick Szabo, block chain, Bitcoin, and smart contracts pioneer whom the Bitcoin community considers as a figure closest to bitcoin creator Satoshi Nakamoto, has publicly expressed his opposition against SegWit2x.
Developers behind the SegWit2x upgrade announced that they were suspending plans for the upgrade, which was slated to activate around November 16.
"Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin's growth. This was never the goal of Segwit2x," a group of developers said in a note on Wednesday.
The next iteration of the Segregated Witness update – Segwit2x – would have increased the speed of transactions on the bitcoin network by increasing the size of “blocks” - files that store information on the network - from one megabyte to two megabytes (hence, the 2x).
Bitcoin transactions are limited to 1-megabyte every 10 minutes - or seven transactions per second. This compares to 2,000 per second for Visa and means that at peak times bitcoin transactions can take hours to be fulfilled, inhibiting the currency.
* Scaling is a sensitive but important topic to bitcoin developers, community, and the industry. But, the community has been adamant that developments within the Bitcoin protocol and other crypto currencies should be executed and conducted in a decentralized manner, like any other open-source project. Over the past few months, the conflict between SegWit2x supporting businesses and the bitcoin community has been portrayed as a battle between small block supporters and the so-called “big blockers,” and that has certainly not been the case.
* The community has rejected SegWit2x because of various technical reasons, beginning with closed-source development, opaque agreement made between a restricted group of businesses, developers, and miners, and the SegWit2x development team’s refusal to implement strong replay protection. As such, the demand for SegWit2x and support for the software has declined in the past few weeks, even from the mining community. Bitcoin journalist Kyle Torpey noted that hash rate support for SegWit2x has substantially decreased in the past week as well. More to that, an increasing number of mining pools in the industry have started to terminate their support for SegWit2x.
* Several analysts have stated this week that the surge in the price of Bitcoin should be attributed to the allocation of funds from Bitcoins to Bitcoin, from investors hoping to obtain B2X upon the SegWit2x hard fork. However, it is far- fetched to claim that the upward momentum of Bitcoin in the past month was triggered by the SegWit2x movement, given that the majority of investors in the market are not technical enough to understand the implications of SegWit2x.
* Such claims imply that investors and traders within the Bitcoin and crypto currency market have underlying knowledge in hard forks and technical developments in regards to Bitcoin development, which is not the case. Bitcoin has appealed to the mainstream since early 2016 and billions of dollars’ worth of funds are likely held by institutional and large-scale retail investors that consider Bitcoin as a safe- haven asset and a store of value.
This does not constitute investment advice. Please remember that CFD trading is risky so trade wisely.