Weekend Roundup: Bank of England’s Report, Russia Mulls a BTC Ban, and Volatility Returns

Weekly roundup by CoinTelegraph

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Weekend Roundup: Bank of England’s Report, Russia Mulls a BTC Ban, and Volatility Returns

1. Bank of England Issues a Report on Cryptocurrencies

Carlo Caraluzzo reported last Sunday that while the Bank of England’s report on digital currencies demonstrated a grasp of the technology’s potential, it fell short in other respects or perhaps outright made up its facts.

“The fact is however that the Bank’s report either accidentally or intentionally ignored a great deal of evidence that indicates the exact opposite of their findings and they completely ignored international impact. In actuality, the report seems more like a piece of candy to make the Board feel better than an honest assessment of digital currencies and their potential effect.”

2. Russian Deputy Finance Minister: People Cannot Use ‘Surrogate’ Currencies as Legal Tender

Alyssa Hertig reported Monday that the Russian ministry of finance appears willing to try a ban on Bitcoin within the country, with a new draft piece of legislation that has yet not been made public.

“We will discuss this law in the current session of parliament, and possibly even pass it then, or at the very latest by spring next year,” deputy finance minister Alexey Moiseev told Russia Today. “We are currently dealing with comments from the law enforcement agencies, about the specifics of legal measures, and we will take their remarks into account. But the overall concept of the law is set in stone.”

3. It’s Bitcoin Expo 2014 Weekend in Shanghai

Ian DeMartino reported Monday on the lineup for this weekend’s Bitcoin Expo 2014 event in Shanghai.

“Panels include: Bitcoin in Asia, Regulation, Investment and Trading. There will also be two workshops: Bitcoin Security and Mining.

“Speeches will be headlined by the likes of Sergey Nazarov of NXT, Jacob Henson of Crowdcurity, Rich Teo of itBit, Vitalik Buterin, co-founder of Bitcoin magazine and Eiger founding partner and Chinese law expert Nathan Kaiser.”

4. FBI’s ‘Parallel Construction’ Called Into Question in Ulbricht Case

Ian DeMartino reported Monday that the FBI might not have compiled its evidence against Ross Ulbricht quite in the manner officials say it did.

“The FBI investigator claims that he figured out the IP address of the Silk Road's Icelandic servers by monitoring information packets sent out from a CAPTCHA service that existed outside of the Tor Network.

“Reputable security expert Nik Cubrilovic has a complete break down on exactly why the government's story is impossible. The most damning evidence is that the CAPTCHA used on the Silk Road was not a third party CAPTCHA service but the same CAPTCHA service used by Tor itself.”

5. Bitcoin’s exchange value took a bit of a tumble this week, and as Baron Rothschild said, there is blood in the streets. Figuratively speaking, of course.

CoinTelegraph’s Tone Vays was all over this trend last Sunday:

“Our overall stance remains the same as last week: Long-Term (tentatively) Bullish, Intermediate -Term Bearish, and Short-Term Bearish. We are still keeping our eye on that possible Double Bottom target in the US$440-450 zone. Last Week’s fall into the Mid US$450’s was close to our target, but the action needs to prove to us that this slightly ‘higher’ low is here to stay. Unless that happens we will continue to treat the constant formation of ‘lower’ highs as an indication that prices have some more room to correct as guessing the bottom is not a strategy.

“We will also remain diligent of the following situations:

Bearish: If our current support line of US$440 cannot hold the price up, the next logical line of support is all the way down in the US$360-380 zone.

Bullish: US$500 is now the first line of major resistance and if we can break it to the upside it will also break the cycle of lower highs we’ve been seeing on a weekly basis making the move even more relevant to the possibility of a trend change. However, there is plenty of technical resistance right above it, starting with US$530 (Fibonacci), US$560-580 (Descending Triangle), US$630-650 (Fibonacci) and so on.”

Stories Elsewhere, the Price-in-Freefall Edition

  • Redditor /u/robbonz reminded everyone at /r/bitcoin that the Atlantic predicted Bitcoin’s demise after a similar price drop … in August 2011. According to that redditor: “[A]bout 2 weeks after reading that article I bought 420 bitcoins on Gox for US$4,000. Since then I lost 100 in stupid gox trades, sold 16 for US$20,000 and then lost 200 in the gox fiasco. I've got 100 left. I've learned a lot, the hard way. Now I’m gonna hang onto my last 100 cos they could be worth something one day.”
  • CoinDesk has a piece exploring what is putting downward pressure on the bitcoin exchange rate.
  • Charlie Shrem doesn’t buy that reasoning but also admits he doesn’t know the real answer, either.

Market activity

You already know what happened to the price by now. Let’s look at what’s interesting about the actual number of transactions and trading volume.

On Wednesday, the number of transactions on the Bitcoin network spiked to highs (nearly 90,000 transactions) we haven’t seen since the first days of December 2013, when 1 BTC broke through the US$1000 mark.

But the volume of all those trades was comparatively tiny, less than US$3 million. That’s roughly 1/20th of the daily trading volume we saw during that above-mentioned stretch in December 2013.

Beginning Thursday, the number of transactions began to drop, but the trading volume went way up by the end of the week. The transaction number dipped from a high of 90,000 transaction to around 68,000 per day by late Friday. The trading volume on the other hand saw a jump from 70,000 to 170,000 in the span of the past 6 days. 

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