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Federal Reserve Bank President Says ‘Entire Notion of Crypto Is Nonsense’ – Regulation Bitcoin News

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The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, says crypto exchange FTX isn’t “one fraudulent company in a serious industry.” Stating that the “Entire notion of crypto is nonsense,” the Fed president claimed it is “just a tool of speculation and greater fools.”

Minneapolis Fed President Neel Kashkari on Crypto and FTX Collapse

Federal Reserve Bank of Minneapolis President Neel Kashkari shared his view on the collapse of cryptocurrency exchange FTX Friday.

“This isn’t [a] case of one fraudulent company in a serious industry,” he tweeted, elaborating:

Entire notion of crypto is nonsense. Not useful for payments. No inflation hedge. No scarcity. No taxing authority. Just a tool of speculation and greater fools.

Kashkari has never been a fan of bitcoin or crypto. He previously called them “a giant garbage dumpster.” In August last year, he said bitcoin and crypto were “95% fraud, hype, noise, and confusion,” stating: “I’ve not seen any use case other than funding illicit activities like drugs and prostitution.”

Following the FTX meltdown, several Fed officials called for stricter cryptocurrency regulation. Federal Reserve Vice Chair Lael Brainard has stressed the importance of strong cryptocurrency oversight. “It’s really concerning to see that retail investors are really getting hurt by these losses,” she opined.

Michael Barr, Federal Reserve’s vice chair for supervision, said in response to a question at a Senate Banking Committee hearing last week:

We’re concerned about the risks that we don’t know about in the non-bank sector. That includes obviously crypto activity … that can create risks that blow back to the financial system that we do regulate.

While Kashkari believes that the FTX collapse is not the case of one fraudulent company in the crypto industry, some people have pointed out that the exchange meltdown is not crypto-specific. FTX and its former CEO Sam Bankman-Fried have been compared to the Enron fraud or Bernie Madoff’s Ponzi scheme.

Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, explained that recent blowups of companies in the crypto space, including FTX, “have not been crypto blowups.” He emphasized: “They have been banking blowups … Lending to the wrong entity, misvaluations of collateral, arrogant arbitrages, followed by depositor runs.”

What do you think about the comments by Federal Reserve Bank of Minneapolis President Neel Kashkari? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




Image Credits: Shutterstock, Pixabay, Wiki Commons, lev radin

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Elon Musk Says Apple Has Threatened to Withhold Twitter From App Store as Battle for Free Speech Escalates – Bitcoin News

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Tech giant Apple has threatened to withhold Twitter from its app store, according to Tesla CEO and Twitter chief Elon Musk. The billionaire added: “This is a battle for the future of civilization. If free speech is lost even in America, tyranny is all that lies ahead.”

Apple’s Threat to Musk and Twitter

The battle for free speech has escalated for Elon Musk and his newly acquired social media company as Apple has threatened to withhold Twitter from its app store, Tesla CEO and Twitter chief Elon Musk revealed Monday, noting that Apple will not say why.

In a follow-up tweet, Musk confirmed that Apple is “making moderation demands.”

According to reports, Apple was one of Twitter’s top advertisers, spending more than $100 million per year advertising on the social media platform. However, Musk tweeted Monday:

Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?

Replying to Musk asking who else has been withheld by Apple, blockchain firm LBRY shared: “During Covid, Apple demanded our apps filter some search terms from being returned. If we did not filter the terms, our apps would not be allowed in the store. Apple may make good products, but they have been opposed to free speech for some time.” The company added, “Apple disallowed almost anything related to Covid, especially vaccines or human origins of the virus,” elaborating:

We had to build a list of over 20 terms to not show results for, only on Apple devices. Apple also later rejected us because users included Pepe images in videos.

In addition, Musk tweeted: “Did you know Apple puts a secret 30% tax on everything you buy through their App Store?” According to Apple’s website, the company takes a 30% “processing” fee from all sales made through its in-app purchase system.

As the free speech discussion intensified, a Twitter user warned Musk: “Is this really a fight we want to pick? An awful lot of your Tesla customers use iOS to access their cars … if that app gets pulled, it’ll significantly impact your ability to sell to Apple customers.” Musk replied: “Are you suggesting Apple would use its duopolist powers to hurt Tesla?”

Battle for Free Speech Intensifies

As the free speech discussion deepened, Musk tweeted that if free speech is lost in the U.S. then tyranny is all that lies ahead, stressing that this is a battle for the future of civilization.

The Tesla executive asked in another tweet: “Why are so many in the media against free speech? This is messed up.”

Many people joined in the free speech thread. “Monopolies should be subject to the same limits we placed on our government in the Bill of Rights,” the pro-bitcoin CEO of Microstrategy, Michael Saylor, opined. “Make no law abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” Musk agreed, tweeting: “Absolutely, especially if done in collusion with the government.”

Musk said Friday that he will make an alternative phone if Apple and Google boot Twitter from their app stores.

What do you think about Apple threatening to withhold Twitter from its app store and Elon Musk’s fight for free speech? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Polkadot Reflects Accumulation, How Long Will It Trade Sideways?

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Polkadot price seems to be returning on its feet, courtesy of recent developments. DOT’s network released its newest update, highlighting some core developments that could pave a path for its foundational roadmap for 2023.

Polkadot has plans to delve deeper into smart contract development through its project Substrate. This focuses on the network’s intention to bring more utility. DOT has also expressed interest in wanting to enter the NFT section. Looking at the technical outlook, the coin has picked up on some positive price action. Over the last 24 hours, DOT moved upward, albeit slowly.

This slow price movement could be attributed to broader market weakness. The buyers seemed to pick up the pace, indicating increased demand for the asset. To correspond with the same sentiment, DOT registered a significant increase in its market cap.

Polkadot Price Analysis: One-Day Chart

Polkadot was priced at $5.31 on the one-day chart | Source: DOTUSD on TradingView

DOT was trading at $5.31 at press time. The altcoin has been sandwiched between the $5 and the $5.6 zone for weeks. The increase in accumulation, however, makes it seem as though Polkadot might be able to breach the overhead resistance of $5.70.

In the event of breaching the immediate resistance, DOT might also reach $6.21, giving investors significant gains. On the flip side, if DOT remains stuck under the $5.60 mark for too long, demand will wane, resulting in depreciation. Polkadot’s next stop would be $4.50 in that case.

Technical Analysis

Polkadot Price
Polkadot depicted rise in buying strength on the one-day chart | Source: DOTUSD on TradingView

DOT has registered a slow uptick in buying strength in the last few weeks. At press time, the chart witnessed a surge in buyers. The Relative Strength Index showed a rise as the indicator moved past the 40-mark and closer to the neutral zone.

This was a sign of increased demand and incoming positive price action. On the same note, Polkadot was attempting to move above the 20-Simple Moving Average line due to an increase in buying strength. However, the reading reflected that sellers were still in control and driving the price momentum.

Polkadot Price
Polkadot displayed sell signal on the one-day chart | Source: DOTUSD on TradingView

In correspondence to the Simple Moving Average, DOT received sell signal on the 24-hour chart. The Awesome Oscillator indicates its price momentum and strength. The indicator formed red signal bars underneath the neutral line, which were sell signals, but those were declining.

This meant that there was a chance that the price action would change during the next trading session. Parabolic SAR, however, remained negative with dotted lines above the candlesticks. DOT must push past the $5.70 price ceiling with the support of the broader market.

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Learn from FTX and stop investing in speculation

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The FTX collapse marks more than just the failure of another crypto exchange. It signals the time has come for the industry to grow up and embrace value. The value schism is here. 

FTX was the world’s second-largest crypto exchange. Now, it is a meme for the death rattle of absurd amounts of money being poured into refurbished centralized business models whitewashed in faux decentralization.

As legendary investor Warren Buffet famously said, “Only when the tide goes out do you discover who’s been swimming naked.” It seems there were more than a few nude bathers in this last cycle. But we’ve seen this before, right? Actually, not quite.

Bitcoin (BTC) emerged at the start of the longest financial market bull run in history. The industry it spawned proliferated, literally, in the best of times. But all good things must end. Crypto is now facing the unhappy confluence of worsening macroeconomic conditions and regulators hungry for control.

Related: FTX fiasco means coming consequences for crypto in Washington DC

Traditional markets, meanwhile, are seeing the return of cautious, value-based investment. The reason is simple: When rates were at rock bottom, money was free. Now it’s not. The dizzying ascents of the Ubers, Airbnbs and DoorDashes were possible because when cash was free, businesses generating it weren’t valued. But promises no longer cut it. Investors will demand evidence of value before fronting up their increasingly expensive capital.

With the demise of FTX, crypto markets too will, for the first time, be subject to value-driven investment. Tokenomics was never real — see FTX Token (FTT). And however much we ignore its lessons in boom times, economics decidedly is. There is supply, and there is demand. When in balance, markets function. If they are not, markets do not.

We know now centralization in crypto markets does not work. There are too many opportunities for profiteering charlatans to prey on those with a weak grasp of opaque technologies. The result? Shattered illusions of those who believed in the pot of gold at the end of the crypto rainbow.

But among the debris, there is a shimmering light of hope: the value schism.

What is the value schism?

Crypto is in the midst of, in industry parlance, a “hard fork.” Those remaining once the FTX dust settles can choose to hunt for value that can be harvested and delivered to users, or they can persist with naked bets dependent on finding a “greater fool.”

Related: From the NY Times to WaPo, the media is fawning over Bankman-Fried

Some will stick with the latter path. Old habits die hard. But they will fall away as investors demand more. Meanwhile, we will see the rise of Web3 projects that drive real value by returning to basic commerce.

For those that succeed, rewards will be massive. For those offering merely the empty cheerleading of the past, the end will be swift.

Navigating a new paradigm

There are two guideposts to consider within the value schism. The first refers to cryptocurrency as a financial asset class; the second to blockchain as technological scaffolding.

The stumbling block to assessing crypto as a financial asset class is that there is simply no functioning model for valuing protocols — not unexpected in a nascent industry. In the earliest stages, no yardsticks existed to assess these networks. Retrofitted ones were built for mature markets.

Crypto has evolved since. We now have some grasp of different ways decentralized finance (DeFi) protocols are being used, allowing us to categorize networks.

Related: It’s time for crypto fans to stop supporting cults of personality

Bitcoin, a proof-of-work chain, is highly distributed — slow but secure. We can see how many wallets hold Bitcoin as well as how those wallets interact with the chain. The value moving across the secondary transaction layer, the Lightning Network, can be calculated.

Ethereum is a proof-of-stake chain. While more centralized than Bitcoin, it is the beating heart of DeFi. With DeFi has come a tool to help assess value: total-value-locked calculations. Although they have their limits, the emergence of advanced financial gauges outside traditional institutions is of great interest. Clearly, traditional finance thinks so — hence the increased regulatory focus.

The point is that in 2016, trading Ether (ETH) or Bitcoin felt similar. With increasing differentiation, we now have a range of data-driven gauges to assess these networks. Cryptocurrency is maturing into a real, measurable asset class.

The rise of functionals

Functionals are non-financial Web3 assets: products and services delivered via blockchain.

Take a zero-knowledge (ZK) proof. A homebuyer wants to show a real estate agent they have enough to cover their purchase without revealing the contents of their account. They can pay for this service to be executed through a ZK. In this case, they are paying solely for a privacy-preserving service, not speculating on an asset —not holding or trading.

Many such data-handling projects are emerging, offering services such as identity tooling, cloud storage, and search and indexing. Their decentralized infrastructure means they are priced very competitively relative to centralized counterparts.

The collapse of FTX is not unique, nor is it over. Contagion is working its way through the system, complicated by downward pressures exerted by macroeconomic forces. But when all is said and done, FTX will become a growth ring in the cryptocurrency narrative — evidence a fire passed through, leaving hardened systems that will drive value.

The value schism will force blockchain ecosystems to choose one of two paths: Continue to use hype cycles to generate speculative profits, or build models that surface real user value.

Just as personal computers migrated from hobbyists’ garages to the desks and pockets of the world, blockchain-based systems are growing up at last.

Joseph Bradley is the head of business development at Heirloom, a software-as-a-service startup. He started in the cryptocurrency industry in 2014 as an independent researcher before going to work at Gem (which was later acquired by Blockdaemon) and subsequently moving to the hedge fund industry. He received his master’s degree from the University of Southern California with a focus in portfolio construction and alternative asset management.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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