A MassMutual investment subsidiary has agreed to pay $4.75 million to resolve allegations by Massachusetts securities regulators including that it failed to supervise its agents, among them the social media persona "Roaring Kitty," whose online posts helped spark January’s trading frenzy in GameStop shares.

Massachusetts Secretary of the Commonwealth William Galvin on Thursday said MML Investors Services failed to detect the activities of Keith Gill, who touted GameStop stock in his spare time while he was working at the company.

Galvin, the state’s top securities regulator, alleged MassMutual also inadequately supervised other agents and failed to review their social media usage or catch excessive trading in their personal accounts.

MassMutual, who did not admit wrongdoing, settled an investigation over a general failure to supervised its employees and having inadequate procedures in place to detect stock-based social media posts and the personal trading of employees, including the employee that goes by Roaring Kitty on YouTube and is largely credited with starting the GameStop Reddit-fueled meme stock volatility.  Keith Gill, Roaring Kitty's real name, is also under investigation by the Massachusetts Securities Division for failure to report his outside business activity he conducted while employed by MassMutual, which as a registered broker he was required and failed to do.

Gill is separately being sued civilly in a proposed class action lawsuit alleging he committed securities fraud for misrepresenting himself as an amateur trader online while pumping up GameStop stock prices as a registered broker.

So this makes it the largest loss of bitcoin under such circumstances when you consider the contemporary value of the coins lost.  The exchange, Africrypt, told investors they were the victim of a hack and not to alert the authorities, you know, cuz that's super legitimate.  Some law firm attempting to investigate have tracked the stolen coins to tumblers and mixers to try and obscure where the stolen bitcoin was going.  I guess it remains to be determined if they were actually hacked or stole the money themselves, but the two founding brothers can't be found.

From Endgadget:

Cryptocurrency investors in South Africa may have lost nearly $3.6 billion in Bitcoin following the disappearance of two brothers associated with one of the country’s largest cryptocurrency exchanges. According to Bloomberg, a law firm in Cape Town says it can’t locate Ameer and Raees Cajee, the founders of Africrypt. In April, the exchange told its investors it was the victim of a hack and asked them not to report the incident to the authorities on account it would “slow down” the process of recovering their missing money.

Some of those involved in the exchange hired Hanekom Attorneys, the law firm that said it couldn’t find the two brothers, to investigate the incident. It found that someone had withdrawn Africrypt’s pooled funds from the local accounts and client wallets where the coins were stored originally and put them through tumblers and mixers, making it difficult (though not impossible) to trace the money. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” the law firm told Bloomberg. The outlet attempted to call both Cajee brothers multiple times only to get their voicemail each time.

Complicating any recovery attempt is that South Africa’s Finance Sector Conduct Authority can’t launch a formal investigation into the incident because cryptocurrency isn’t legally considered a financial product in the country. If no one can recover the money, it will go down as the largest cryptocurrency loss in history, easily overshadowing the approximately $200 million CAD that disappeared when the founder of Canada’s QuadrigaCX exchange died while travelling in India.

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

The Associated Press is reporting that US authorities have seized the ransom that was paid to the Colonial Pipeline hackers.  Since the payment was made in cryptocurrency, I'm actually really interested in what they're going to say at the press conference later about how they "seized" the ransom.

The U.S. government has seized millions of dollars in a cryptocurrency payment made to hackers after a cyberattack that caused the operator of the nation’s largest fuel pipeline to halt its operations last month.

WASHINGTON -- The U.S. government has seized millions of dollars in a cryptocurrency payment made to hackers after a cyberattack that caused the operator of the nation's largest fuel pipeline to halt its operations last month, a law enforcement official said Monday.

FBI and Justice Department officials were to disclose the operation at a news conference later Monday. The official was not authorized to discuss the news ahead of the news conference and spoke on condition of anonymity.

Georgia-based Colonial Pipeline, which supplies roughly half the fuel consumed on the East Coast, temporarily shut down its operations on May 7 after a gang of criminal hackers known as DarkSide broke into its computer system.

Colonial officials have said they took their pipeline system offline before the attack could spread to its operating system, and decided to pay a roughly $4.4 million ransom in an effort to bring itself back online as soon as it could.

The FBI generally discourages the payment of ransom, fearing it could encourage additional hacks.

President Biden is seeking $80 billion in extra funding to bolster IRS and tax enforcement.  There is an estimated one trillion dollars in uncollected taxes, and the program will more than pay for itself, boosting tax receipts by more than $700 billion over ten years.  To be clear, this is not a tax increase, but the enforcement of tax laws that are already on the books and which tax payers regularly skirt.

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

London has long been the stock-trading center of Europe, but post-Brexit losses continue to siege traditionally strong British industries.  From the Financial Times:

Amsterdam surpassed London as Europe’s largest share trading centre last month as the Netherlands scooped up business lost by the UK since Brexit.

An average €9.2bn shares a day were traded on Euronext Amsterdam and the Dutch arms of CBOE Europe and Turquoise in January, a more than fourfold increase from December. The surge came as volumes in London fell sharply to €8.6bn, dislodging the UK from its historic position as the main hub for the European market, according to data from CBOE Europe.

The shift was prompted by a ban on EU-based financial institutions trading in London because Brussels has not recognised UK exchanges and trading venues as having the same supervisory status as its own.

Without this so-called equivalence to ease cross-border dealing, there was an immediate shift of €6.5bn of deals to the EU when the Brexit transition period concluded at the end of last year. It was about half of the amount of business that London banks and brokers would normally handle.

This happened only 1 month after Brexit went into effect.  Other industries have seen even worse consequences:

• UK Fish Exports Fall 83% in January
• British Exports to EU Fall 40% in First Month Since Brexit

GDP was down 2.9% in January as the supply chains have been thrown into havoc and business disruptions have been described as "endemic," and it turns out the government didn't do an economic assessment on the trade deal despite it being the most consequential trade agreement in memory.  It's one thing to have the economy torpedoed by global macro economic conditions, it's an entirely different one to steer the ship headlong into the iceberg as Britain has done.

Found this interesting:

The Carolina Panthers will pay half of Russell Okung's $13 million contract for 2020 in Bitcoin, according to NFL Network's Ian Rapoport. The two-time Pro Bowler signaled his desire in May 2019 to be compensated in the form of the popular cryptocurrency and confirmed he got his wish...

Source: https://bleacherreport.com/articles/2924583-russell-okung-to-be-1st-nfl-player-paid-in-bitcoin-65m-of-panthers-salary

After reviewing some of Okung's tweets, he appears to be quite the bitcoin bull, and backing it up by requesting half his 2020 salary in bitcoin.

The Chinese economy is expected to surpass that of the U.S. in 2028 - five years earlier than previously forecast - following fallout from the coronavirus pandemic, according to an analysis released Saturday.

Source:  https://www.msn.com/en-us/news/world/china-expected-to-surpass-us-economy-in-2028-analysis/

As stated, this is 5 years earlier than last projected, due to the effects of the pandemic. The US is not going to like being in the number two spot, and even less when India’s economy then surpasses the US after that. The biggest benefit to this massive Asian economies is the sheer number of people. The United States’ best hope of competing is to increase the number of Americans and, and quickly.

The US should be drastically overhauling the skilled worker visa program to greatly increase the number of tech workers brought into the country so that the next tech mega companies are created here, and not in Asia. This is should be viewed as an area of national security. Larger militaries inevitably follow larger economies, and the US can not afford to squander the advantages while they still have them.

US Wholesale prices are up just 0.1% in November, 0.3% in October and 0.4% in September, trending towards deceleration over this period.  Overall, wholesale prices are up just 0.8% from a year ago, which is far below the Fed's target annual inflation rate of 2% and despite the unprecedented amount of money creation during the pandemic. 

The core inflation rate, which excludes volatile food and energy costs as a means of measuring attempting to more accurately measure the inflation rate that isn't subject to short term volatility, is up 1.4% in the past 12 months.  (It seems the more volatile segments of are weighing down overall inflation currently.)

Source:  https://www.sfgate.com/news/article/US-wholesale-prices-up-0-1-in-November-food-and-15794160.php

Sweden's government will start exploring the feasibility of having the country move to a digital currency. The country expects the review to be completed by the end of November 2022.  Sweden is among the first countries in the world to consider introducing a digital currency, where it's central bank already runs a pilot project to introduce an electronica krona based on blockchain technology. 

Before everyone starts circlejerking all over how great this is for bitcoin, you should recognize that such a system would be a competitor to bitcoin, not necessarily enhancing bitcoin value. It's built on the promise of digital currencies and blockchain generally, not bitcoin specifically, though bitcoin has demonstrated the use-case invariably.  I don't know that it would bring any tangible benefit to bitcoin specifically, but I think it would bring further legitimacy to digital currencies as a whole, of which bitcoin could potentially be a beneficiary in some capacity, though how much specifically would be hard to gauge.

Source:  https://www.bloomberg.com/news/articles/2020-12-11/sweden-explores-the-feasibility-of-moving-to-a-digital-currency

For some reason, user Lucius deletes comments from a thread he started.  My guess is he doesn't like being corrected on his wildly inaccurate posts.  So here's a proper discussion that is not moderated. 

After Warren Buffett surprised the business world by investing in a gold mining company (by buying a stock worth $565 million), this did not seem to be an isolated case, because as much as $6.3 billion is invested in "Japan’s five biggest trading houses".

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

The response that was deleted:

Berkshire has how many hundreds of billions invested in the US market and US companies? And you think $6 billion in Japan demonstrates he’s bearish on the US market?  Buffet likes investing on favorable terms, and the five biggest trading houses that dominate the Japanese market represent exactly that- a chance to put capital to work in a group of businesses that dominate a market with few outside competitors. It’s not an indication of what he thinks of the US economy at all.


You can argue back or ignore it, but one thing you can't do here is delete the message because you disagree with it.  Maybe grow up a bit.

[Tilray, Inc.]

The newest fad volatile industry: marijuana stocks.

Gains over the last 5 days:

• Tilray, Inc. 88.14% (112.65 to 211.95)
• Canopy Growth Corporation 8.15% (50.075 to 54.16)
• Aurora Cannabis Inc. 54.47% (6.189 to 9.56)
• Aphira Inc.  7.64% (15.1608 to 16.32)

Gains over the last 30 days:

• Tilray, Inc. 532.69% (33.50 to 211.95)
• Canopy Growth Corporation 50.40% (36.01 to 54.16)
• Aurora Cannabis Inc. 76.42% (5.419 to 9.56)
• Aphira Inc.  94.75% (8.38 to 16.32)

Gains over the last 6 months:

• Tilray, Inc. 846.63% (22.39 to 211.95)
• Canopy Growth Corporation 109.92% (25.80 to 54.16)
• Aurora Cannabis Inc. 15.46% (8.28 to 9.56)
• Aphira Inc. 44.17% (11.32 to 16.32)

Yes, legal weed is currently in a bubble. People are being just as stupid here as they were with Bitcoin. Canopy currently has a market cap of $12.3 billion on sales TTM sales of just under $88 million. Tilray is far worse with a market cap of $19.7 billion on TTM sales of $27.6 million. Anyone buying Tilray at these prices is making an astoundingly risky bet for what I consider to be very limited upside. The other two companies, Aurora and Aphira, fund their operations by printing shares and devaluing current investors. I consider them to be the spam coin equivalent of the two larger companies. There are dozens of others, these are just four of the largest I consider to be the biggest players.

Nvidia released absolutely dismal sales related to crypto chip sales today after market close. This is another sign to me that the bear market is not reversing any time soon. Bitcoin is in a sustained decline, and I view the culprit as the stupidity and hype that sent it to $19,000 in the first place. It was unsustainable and it has now very much poisoned mentality as crypto continues to fail to prove a suitable replacement to digital fiat and traditional centralized payment processors.

Specifics on Nvidia's release:

Last quarter, they posted $289m in crypto-related chip sales, which is really a small percentage of their overall revenue. Despite that, they projected sales of only $100m this quarter, which at the time they made the prediction sent their shares down (despite it representing such a small portion of revenue). Today, they reported only $18m in crypto-related chip sales. Shares are now getting whacked in after-hours trading, which frankly makes no sense because they beat expectations on over all revenue and profit. Just shows that the idiotic crypto mentality has creeped into traditional investing.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-Warren Buffet

This quote is constantly bandied about as justification to invest in Bitcoin, and especially now that there has been some nice price movement in the upward direction. But this Warren Buffet quote is only relevant with the proper context, which is that Warren Buffet only invests in things he has a fundamental understanding of and can quantifiably value. You can confidently be greedy when others are fearful if you have a sound investment thesis and are a fundamental value investor. This is how he turns his investments into home runs, he knows what he's buying and what it's worth and can weather the negative sentiment until the market learns what he already knows. This doesn't apply at all to a speculative investment like crypto. Following this advice willy-nilly is gonna get you burned because you're misunderstanding the intent and the application.

Don't not buy Bitcoin if that's what you want to do, but don't fool yourself into thinking you're following Warren Buffet's advice. Warren Buffet doesn't speculate, and if you're buying crypto, you're speculating.

[White House officials did not respond to a request for comment.]

File this one under collateral damage. Just another data point supporting the notion that tariffs don't happen in a vacuum. There are negative consequences for other sectors of the economy for trying to enforce protectionist policies. In this case, US companies are shelving expansion plans and new solar projects that would have created US jobs because of the import tariffs being slapped on foreign panel manufacturers. Target foreign firms and you shoot yourself in the foot anyway.

https://www.msn.com/en-us/money/markets/billions-in-solar-projects-shelved-after-trump-panel-tariff/ar-AAyl35h

President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters.

...

The tariff’s bifurcated impact on the solar industry underscores how protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition. Trump’s steel and aluminum tariffs, for instance, have hurt manufacturers of U.S. farm equipment made with steel, such as tractors and grain bins, along with the farmers buying them at higher prices.

White House officials did not respond to a request for comment.

You know why they don't comment on these issues? Because they're only concerned with looking like they're winning. They have no idea how to actually win. Distorting the market and causing US job losses? Not winning. The rest of the article details thousands of job losses related to the shelving of these projects.

Nvidia has announced that they expect sales of GPUs related to cryptocurrency mining to drop by about 67% in the current quarter. That's a pretty monstrous drop, and if mining investment is a leading indicator of overall market demand for crypto, it would follow that this decreased demand in mining equipment foretells decreased demand for crypto generally. If not a leading indicator, I think it has to be pretty tightly correlated with general crypto demand, so perhaps there's less investment in mining because there's less interest in crypto.  67% seems to be far too large to be a natural variance in buying patterns.  If this was unrelated variance, I would expect a drop to be no more than 10%, so a drop this large suggests interest may be on the decline. This would seem to coincide with the price weakening we've seen as Bitcoin has failed repeatedly to get back over $10,000. Every time it gets close, it suffers a fall back below $9,000. It's almost impossible to draw any long term conclusions about this, but it's an interesting piece of the puzzle.

Demand from cryptocurrency miners was stronger-than-expected in the first quarter and translated into revenue of $289 million, Nvidia said Thursday on its earnings conference call. Crypto sales will probably fall by about two-thirds in the current fiscal quarter, the company said.

https://www.bloomberg.com/news/articles/2018-05-10/nvidia-reveals-crypto-sales-for-first-time-and-predicts-big-drop

According to a recent article on CNBC, Tom Lee is attributing the current price weakness to selling by American consumers and crypto exchanges to satisfy tax liabilities. At least this is an interesting theory, but keep in mind he's only speculating like everyone else.

Key (speculative) points from Lee:

• U.S. households likely owe $25 billion in capital gains taxes for their cryptocurrency holdings
• Additional selling pressure by crypto exchanges sitting on over a billion dollars in profit denominated in btc/eth and are converting to USD to satisfy tax obligations
• tax-related selling represents a massive outflow from crypto to USD and historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value
• Expects btc to find footing after April 17
• Expects btc to reach $20,000 by mid-year and $25,000 by year-end

Src: https://www.cnbc.com/2018/04/05/wall-streets-tom-lee-predicts-massive-outflow-from-cryptocurrencies-ahead-of-tax-day.html

He's got three essentially short term predictions that will be easy to track, which is the part I'm most interested in.

I've been told I need to upgrade to a SegWit address in order to help the adoption and help cut down on tx fees, but it appears most online wallets don't support it yet. I have found a few places to generate a paper wallet, and have a few questions surrounding this.

• Are https://segwitaddress.org/ and https://coinb.in/#newSegWit reputable places to generate a SegWit address?
• Once I transfer btc from a non-SegWit address to a SegWit address, can a SegWit addresses send transfer back to a legacy address? (Reason being if I needed to sell, my exchange currently doesn't support SegWit, so I assume the only way to sell would be to transfer to a legacy address and then transfer to the exchange?)
• Are SegWit addresses and legacy addresses on the same blockchain, or are they two different chains?
• As online wallets adopt SegWit, I assume if I were to generate an address with either of the above websites (provided they're legit), I would be able to use the private key to sweep the coins into them?
• Is it possible to sweep coins from a SegWit address to a legacy address?

Any help and insight is appreciated.

Now that CBOE and CME are trading Bitcoin futures, there was hope it would push the price of Bitcoin higher. There is, however, no direct link between the futures being traded and the Bitcoin price. The reason for this is Bitcoin futures are cash settled. There is never a point where the expiration of a contract will ever involve the exchange of Bitcoin, so the trading of futures is an artificial tracking of the Bitcoin, just in a more regulated setting. This may give institutional investors more confidence than dealing with unregulated crypto exchanges, but it doesn't mean anything for the price of Bitcoin (directly).

It remains to be seen if Bitcoin futures can indirectly affect the price of Bitcoin. Because there is no settlement in Bitcoin, futures contracts cannot affect supply for sale and demand directly, but if futures traders bid the one-month futures settlement price up $5,000 above the Bitcoin price, it remains to be seen if this will translate into increased confidence for the actual Bitcoin market and lead people to buy more and also push the price up. This is the only way futures can affect the price, indirectly.

My expectation is that because there is no settlement in Bitcoin and settlement has no direct ability to influence price, the futures will not trade wildly differently from the actual price at any given time, and any indirect affect will be negligible. With the volatility of Bitcoin, futures traders will never be able to speculate too far ahead of the actual price because of the speed at which the price can change and leave them on the hook for settlement of an asset they won't even be able to take control of if they bet wrong, but must simply settle in cash for a loss.