Venture Capitalists: Ethereum yes, but later

A few months after the launch of the Ethereum platform, the first Ethereum startups aroused the interest of investors. But only in some cases did this lead to tangible investments by venture capitalists focusing on digital currencies.

According to interviews with the four leading investors in the blockchain/digital currencies sector, the first due diligence checks are carried out on start-ups in these areas, so these companies are assessed with the intention of investing. Ethereum has made a name for itself in this context thanks to the successful hard fork and the early interest of large financial firms.

According to Travis Sher, investment associate of the Digital Currency Group (DGC), between 20 and 30 Ethereum start-ups have been scrutinised to date. Bart Stephens, managing partner at Blockchain Capital, even revealed that the company had now invested in two start-ups. Blockchain Capital, one of the most active early-stage investors in the technology sector, is bullish about Ethereum, according to Stephens. The reason for this is the positive feedback that Ethereum does not only receive from Techies. The company has appointed a junior associate to focus on this area in its investment portfolio.

This portfolio also includes more well-known Bitcoin trader startups such as Coinbase and Xapo

We love Bitcoin and its Bitcoin trader, but we see a future with many blockchains. Some companies are interested in regulated or private blockchains – and Ethereum is at the top of those. Read more here:

The interest so far is a sign of great confidence in a system that only recently came onto the market with a limited number of features. Ethereum plans to expand the list of features further and wants to move from a proof of work to a proof of stake system regarding the verification of transactions. So the interest will rather increase.

With DGC, BoostVC and Pantera Capital, several venture capitalists with a focus on Bitcoin and the Blockchain have expressed their interest in investing in Ethereum startups – even though they have not yet given financial support to the entrepreneurs behind them.

DGC, for example, would like to invest in a digital currency company in the second or third quarter of 2016 and that „probably“ Ethereum sSartups will be included in their portfolio by the end of the year.

This sounds sobering, but you have to remember that the first investment in a Bitcoin company was delayed until 2012 – three years after the Genesis Block mines. this investment, donated by Draper Associates, went to the former CoinLab incubator.

Investment challenges for crypto trader

Most VC firms stated that they found the time for a solid investment too early, they did not yet know whether Ethereum would remain on the crypto trader market in the long term.

Such statements coincide with statements about the developer scene behind Bitcoin, which is perceived as very healthy, stable and attractive.

„It is still difficult to evaluate Ethereum start-ups. The community is still quite small and the experience of young entrepreneurs in the cryptoscene can often not be assessed. This all leads to the fact that it is difficult to penetrate this startup scene“.

says Melten Demirors, Director of Community at DCG.

Demirors continued that the old Bitcoin community was more networked and technically savvy than the Ethereum ecosystem is now.

„We wanted to be the first to find talented people who wanted to solve a problem they believed Ethereum was the solution to or provided tools to find the solution to. That’s why we want to avoid those who want to speak up to the Ethereum hype and look for a problem that fits.“

Paul Veradittakit is a venture investor at Pantera Capital. Pantera Capital is often seen as a pure Bitcoin investor, but has recently adopted a multi-blockchain approach. According to Paul Veradittakit, Ethereum would fit in here, but there are still some concerns about Ethereum’s ability to meet future challenges.

„The issues of security and scalability need to be thought through. Clear use cases must also be identified.“

According to Veradittakit, Pantera does not yet plan to set up an Ethereum Fund in the style of the Bitcoin Fund, founded in 2014.

Grexit: Bitcoin Prize still unimpressed

GrexitIn the past week did not do much in things Bitcoin price. The price per BTC oscillated somewhere around the 225 dollar mark throughout the week.

According to the CoinDesk BPI (Bitcoin Price Index), the Bitcoin price started last week at 226.40 US dollars and closed the week at 222.87 US dollars. This represents a small loss of 1.56% over the 7-day period.

Bitcoin news seems to have fallen into a kind of price rigidity

At the beginning of the week there was still some price movement in play. On Monday the Bitcoin news price rose by 16 dollars to a high of 242 US dollars, then fell again by 22 dollars the following day and closed Tuesday at 226.96 US dollars. Sentiment Indicators: According to the Bitcoin news on Bitfinex, the mood on the Bitcoin market is slightly bullish optimistic.

The hourly swap activity was dominated by the longs over the shorts. The shorts were only slightly more dominant on the 4th and 5th, but were unable to hold their position for the rest of the week.

Overall, active swaps showed an upward trend for the longs. On the 08th, active swaps finally stood at 78%.

Short swaps reached their high of 27%, but are now back at around 20%.

On the regulatory front, Italy created a positive mood. The Italian central bank announced that digital currencies are not affected by the anti-money laundering laws for the time being.

Grexit‘ good for Bitcoin news?

On the macro front in Europe Greek banks are on the verge of a debt crisis. They could even withdraw from the Eurozone. According to Bitcoin news, the chances of a so-called „Grexit“ are currently at 50% like explained here:

Arthur Hayes of BitMEX is bringing the Swiss franc into play. He says if Greece were to leave the Eurozone, there would be a panic reaction and many people would invest their money in Swiss francs. This in turn would increase the demand for Swiss francs so massively that Switzerland would be forced to introduce capital controls. And that’s exactly where Bitcoin comes in.

Hayes writes:

„When investors feel threatened by the threat of their assets being confiscated, they start to think outside the box. Bitcoin offers the possibility of a decentralised investment. In other words, the government could not access the assets. The bottom line is that events in the Eurozone could once again bring many cash buyers into the market and create a bull market.

Perhaps wishful thinking in the current lull on the Bitcoin market

Advantages of Bitcoin payment with the Coinsnap module

Following the integration of the Coinsnap payment module, the eCommerce retailer now offers its customers a new payment channel that makes all other known payment methods look old in terms of security, user-friendliness and costs:

If the end customer has selected a product for e.g. €100,-, he can simply click on the button „Pay by Bitcoin“. The module then automatically converts the Euro amount into Bitcoins in the background, based on the current market prices, and asks the buyer to transfer the corresponding Bitcoin amount to a Bitcoin Wallet.

Bitcoin formula is the first address for all online merchants

Once the payment has been successfully booked, the merchant receives Bitcoin formula notification of the successful receipt of payment and can ship the ordered goods or provide the service offered on

Coinsnap prepares a statement of account for the merchant and pays the product price in Euro to the account specified by the merchant – additional bookkeeping for Bitcoin sales is therefore not necessary, nor is it necessary for the merchant to keep its own Bitcoin Wallet available.

Even if the merchant sells goods worth €100,- against Bitcoins in his shop, he still receives €100,- billed and paid out. He doesn’t need any previous Bitcoin knowledge for this, nor does he have to take care of anything except to integrate the Coinsnap payment module into his shop once.

Coinsnap offers the merchant a unique complete package consisting of shop module, conversion of the Bitcoin exchange rate, recording of the incoming payments of the Bitcoins and sale of the Bitcoins on the stock exchange as well as booking of the payment amount in the „official“ shop currency on his account in a cost-effective, easy-to-install process.

About Bitcoin trader

Coinsnap, one of Europe’s leading Bitcoin trader payment providers, specialises in Bitcoin payment solutions for eCommerce, digital content and services tested by onlinebetrug.

The Dutch Bitcoin payment provider is part of a group of companies, some of which have European financial institution licenses, and is led by a management team that has acquired the highest level of expertise in the most diverse online payment methods for global online providers in over twenty years of cross-system payment processing.

As a full service Bitcoin payment provider, Coinsnap offers its customers the complete processing of all payment transactions with Bitcons: For over 30 of the most important shop systems, Bitcoin shop modules enable the integration of Bitcoin payments at the push of a button. Coinsnap assumes all risks (including exchange rate fluctuations) and thus saves the merchant all possible „headaches“ when dealing with this alternative currency system. In addition, Coinsnap offers – for proprietary shop systems – an easy-to-integrate API connection.

Coinsnap thus enables online merchants to pay their customers for their goods, services or goods simply and inexpensively via Bitcoin.

Coinsnap is the first address for all online merchants who want to offer their worldwide customers payment via Bitcoin and at the same time attract millions of additional customers.

Bakkt Announces Bitcoin Futures

The crypto exchange Bakkt will delight the market with futures contracts in the future. According to a press release, the futures for the crypto currency Bitcoin are due to come this year. This announcement follows a recent personnel change.

Bitcoin futures and their influence on the market should have been known since last December at the latest. The announcement and launch of Bitcoin’s futures contracts by the CME and the CBOE (among other things) resulted in strong growth in the Bitcoin price. The signal behind it: We are dealing with regulated, government-approved financial products, so they must be legitimate.

Announcement after Bitcoin code review

The fact that this does not always have the desired effect for investors became apparent a few months later. The launch of the Bitcoin futures coincided with a (so far) incomparable bull run, which flattened out just as quickly. The air from the bubble escaped with high speed, many were alienated. The accusation of manipulation was not far off – according to studies, the Bitcoin code review futures had as much a share in the price rise as in the price fall. But as we now know, the brief bubble formation only led to the market now being more mature than before.

Physically Backed Bitcoin code scam

Now Bakkt is entering to bring a new product to the market: physically deposited Bitcoin Futures. In contrast to the common Bitcoin code scam futures, you bet a little differently here:

„These are futures contracts, the fulfilment of which changes the asset (here: Bitcoin) or the ownership right to it the owner. This means that the short position undertakes to sell the previously determined quantity of Bitcoin to the counterparty at the previously agreed price after the expiry of the contract and to transmit it „physically“ (if this can be spoken of at Bitcoin). Should the Bitcoin price at this time be higher than the agreed price, the short position has made a loss. The deal for the long position was accordingly good“.

Here you can find the explanation in detail.

The physically deposited Bitcoin futures were originally planned for November. Having recently received prominent support from Adam White of Coinbase, the Exchange announced in a press release the final date for the launch of the futures contracts: 12 December 2018.

Study on price reactions to Bitcoin-News

Crypto currencies like the Bitcoin became prominent because of their extreme exchange rate fluctuations, but also aroused distrust on the part of the regulators. In a study, the Swiss Bank for International Settlements (BIS) has now examined the effects of Kryptonews on the price development of crypto currencies.

In its empirical study, the BIS examined the price reactions to a total of 151 messages from the cryptographic sector. She makes her approach clear using the example of two messages that noticed the cryptographic market at the time. The first is the SEC rejection of a Bitcoin ETF in March 2017. The second example is the decision of the Japanese financial supervisory authority FSA, which became known in June, to demand increased measures against money laundering from six crypto exchanges.

Thus, within the first five minutes after the SEC decision became known, Bitcoin’s share price slumped by 16 percent. The FSA report also caused the Bitcoin share price to crash in June.

Good news, bad news

The BIS concludes that positive news carries an average Bitcoin price increase of 0.33 percent; this applies to a time window of 120 minutes, 60 minutes before and 60 minutes after a headline is published. If this window is extended to 24 hours, the gains become more substantial. Here it is 1.52 percent by which the BTC price increases on average.

Negative news is reflected – at least in the 24-hour view – in clearer price movements. Although the price losses for the 120-minute time window around a negative report are at the same level as the increases for „good news“ at 0.32 percent, the 24-hour window shows average price losses of 3.12 percent.

Bitcoin is a security

The fact that price movements can already be detected before a report becomes public suggests that news and information flows are gradually spreading.

When it comes to Bitcoin’s legal status reports, the BIS distinguishes between four subordinate topics:

specific set of rules for Bitcoin (outside its consideration as a security)
While reports on points 1-3 have a negative impact on the price both in the course of the day and in a 10-day comparison, news on specific regulatory guidelines (which do not regard the Bitcoin as a more strictly regulated security) have resulted in price increases for the Bitcoin.

For the Altcoins, the analysis comes to comparable results – especially for the „Bitcoin clones“ Bitcoin Cash and Litecoin. Ethereum also reacts to news with similar intensity as Bitcoin. The privacy coin Monero is also susceptible to message-related price fluctuations, while competitor Zcash is less influenced by the current news situation. The XRP token, which is a special case due to its centralized structure, runs out of competition.