Daily Bit #99: Facebook Hits the Blockchain
By: Daily Bit
Tags: Fintech, Crypto, Bitcoin, Cryptocurrency, Blockchain

Bulls and Bears

Bull: Consensus will be the talk of the town for the next several days. And for a market that is strongly influenced by hype, blockchain week offers a prime catalyst for price rallies.

Big price rallies, if the forecasts by Fundstrat hold their weight. When comparing Consensus’ past attendance records to Bitcoin price action, Tom Lee and company identified seasonality patterns that suggests crypto may be on the brink of a 70% uptick or more.

Connecting The Dots

To be fair, we chuckled at the prospect of seeing Bitcoin back above $15,000 that soon. However, history shows that the proof is in the pudding. Looking at the numbers:

2015: 500 attendees / 95% rally pre-Consensus / 56% rally post-Consensus

500 attendees / 95% rally pre-Consensus / 56% rally post-Consensus 2016: 1,500 attendees / 9% rally pre-Consensus / 78% rally post-Consensus

1,500 attendees / 9% rally pre-Consensus / 78% rally post-Consensus 2017: 2,750 attendees / 176% rally pre-Consensus / 552% rally post-Consensus

2,750 attendees / 176% rally pre-Consensus / 552% rally post-Consensus 2018: 7,000+ attendees / TBD / TBD

Would a bull run be nice? Of course it would — but bears aren’t allergic to statistics. However, the digital currency market has taken the world by storm and companies have dropped major announcements at Consensus in the past due to the added eyeballs…

…such as Enigma. The privacy coin’s CEO is making “an important Enigma announcement” at Consensus. Other companies will undoubtedly do the same, with each update remaining a mystery until then.

Bear: We have another Pump N’ Dump fiasco on our hands. On a related note, Bytecoin (BCN) has a fresh batch of community members (translation: bagholders).

What Went Down

It all started on May 3rd, when Crypto_Ed_NL noticed that Binance created a new wallet for BCN, which immediately began rising in value despite no announcement being made by the exchange.

For the record, this is just another day at the office. Exchanges regularly add support for coins several days before they are listed and there are bots that scrape listing data from exchanges that can be used to settle into positions prior to listing announcements.

Things got fishier from there. Although BCN was also listed on HitBTC and Poloniex, users couldn’t withdraw their coins from either exchange. BCN withdrawals on web-based wallets also weren’t working at the time. That’s about when BCN price activity got a little more… aggressive.

Due to low liquidity on Binance, BCN rocketed up roughly 3,200% (that’s 32x for those at home) before plummeting back down to Earth. The other exchanges saw tamer spikes closer to 150%.

And despite the fact that Bytecoin is a relatively unknown coin, it climbed to a market capitalization of roughly $40 billion during peak pump — roughly the combined value of Bitcoin Cash (~$26B) and EOS (~$15B).

Takeaways

For starters, Bytecoin has a lousy track record to begin with. The developers retained fake identities, lied about how long Bytecoin existed for, andpremined 80% of the supply.

Remember, developers staking a massive chunk of a token’s supply is a huge red flag. That’s why Bytecoin supporters forked the code base and created Monero. A free history lesson for our favorite band of readers.

The bottom line: People got burnt — again. And Binance arguably lit the fuse. Listing a hailed scam coin into a bubbling market without proper notification is by all means a bad look and pours gasoline on the theory that the P&D was coordinated by Bytecoin and other players.