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China may be on the verge of banning Bitcoin mining.

From this article: China Bans Bitcoin Executives From Leaving the Country, Miners “Preparing for the Worst”

Chinese media is reporting executives of crypto exchanges have been ordered to not leave the country with a very rough translation stating:

“A number of informed sources say the executives of special currency trading platforms are not allowed to leave Beijing to cooperate with the investigation. In accordance with regulatory requirements, trading platform shareholders, the actual controller, executives and financial executives need to fully cooperate with the relevant work in the clean-up period in Beijing.”

As such, miners are seemingly preparing for the worst, with some thinking of relocating to neighboring countries or to very cold areas, such as Iceland.

China has been ramping up pressure on Crypto. So far they have banned ICO’s, Exchanges and now possibly they may ban the Bitcoin mining industry which creates 7.2 million dollars in new Bitcoins every day 365 days a year.

The world’s largest miner is in China: Bitmain. Bitmain controls 28% of Bitcoin hashing power. From: China’s Bitmain dominates bitcoin mining. Now it wants to cash in on artificial intelligence (well worth reading)

The Sophon unit will include Bitmain’s first piece of bespoke silicon for a revolutionary AI technology. If things go to plan, thousands of Bitmain Sophon units soon could be training neural networks in vast data centers around the world.

To grasp how a Beijing startup is poised to challenge the likes of Google, Nvidia, and AMD in the deep learning arms race, it’s essential to understand Bitmain’s pivotal role in the $70 billion bitcoin economy.

The company is a marvel of vertical integration. Bitmain designs the silicon that goes into its bitcoin mining rigs, assembles the machines, then sells them to customers around the world. It also operates the machines for its own account, runs vast bitcoin mines

Bitmain is run by a 31 year old named Jihan Wu. I assure you the Chinese government have paid him a visit.

China shutting down the miners would have a big impact on Bitcoin. Chinese miners going offline would reduce hash rate which would increase bitcoin transaction times and fees.

It would be a bad time to own a lot of crypto that does not have an emergency difficulty adjustment built in.

Bitcoin Cash, which has an EDA feature, is breaking out.

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Buy the Blood in Crypto

China has Kim Jon Un’ed the Crypto world and fired a first strike. The rumor is the PBOC will issue its own digital token, possibly for trading with other BRICS, as a way to sidestop the USD. Maybe they will back this asset with gold? A Chinese digital currency sounds worse for the dollar than for Bitcoin. Get out your WWJD (what will Janet do) bracelets and start praying to your bearded Bernanke Buddha. The China man is sick of your American Bullshit.

In the meantime, don’t be surprised to see stories about Kim Jong Un’s rockets being powered by Bitcoin. We are approaching McCarthyism level hysteria. Crypto currencies are going to be the devil incarnate for the foreseeable future.

China has banned Google, Facebook and many other companies, services and technologies. Guess what, people in China still use those services. China issuing its own token solves nothing regarding their ghost cities, inefficient markets and socialist (communist?) government. China would be better off joining the Bitcoin party but China gonna China.

What does this all mean? There is blood and panic in the streets. Should you be selling? NO! Because you sold above $4k if you have a brain in your head. Right?

This is a Category 6 Fudnado. Bitcoin still operates perfectly and will continue an upward trajectory. Let’s be real for a moment shall we:

Bitcoin Cash and Monero remain my top picks. I added Decred a month ago. Stay away from Ethereum. Trade Litecoin at your own risk.

We may dip again to $2500 on BTC. I’d wait for an uptrend to confirm before buying but you want to buy before the blood in the street dries.

Choose wisely, in a few years you will either be In Da Club or parking my Lambo.

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Jamie, u mad bro? Oh, u mad.

Jamie Dimon, Grand Wizard of JP Morgan, Forger of Chains, Master of Trading Desks, Ruler of the Golden Men, Father of Bailouts and the first of his name has come out swinging on Bitcoin. Again.

This is the same position Dimon has had on Bitcoin for years. In 2015 he said “you’re wasting your time with Bitcoin”. Bitcoin was trading at ~$320 the week this video was uploaded to YouTube in November 2015. If his comments about the government never letting go of control of currency doesn’t cause a concern for you then you *might* be a JP Morgan employee.

The price correction the past few days was overdue. I’ve been tweeting about it for weeks. I expect $3200 Bitcoin before the correction completes. Bitcoin was already sliding. Dimon’s comments shook weak hands who were going to capitulate soon anyway.

Here’s what there is to remember. If you have possession of your private keys there is no counterparty risk. Governments can shut down exchanges or attack fiat onramps but they can’t stop bitcoin. Exchanges DO NOT equal Bitcoin. Shut one exchange down and there are dozens of others to use.

So why would Dimon say this now? The word on the street is Dimon is privy to pending US government action on one or more exchanges. So he’s wrong on bitcoin but he’s not dumb. He’s making statements now because he knows the next move coming.

There is risk if you are holding your crypto on an exchange. Then you are vulnerable. If you hold your private keys then you have s swiss bank in your pocket, extra Obama.

Decentralized exchanges will be big in 2018. Today’s exchanges are a choke point and a tracking mechanism for big brother. With decentralized exchanges truly there will be no way to shut down crypto.

But what if governments outlaw crypto currency? Well, we’ll probably see them try. China has taken measures to put controls in place. Too late, the cat is out of the bag. I think a more likely scenario is we’ll see state level actions in the crypto space. Rumors are N Korea is mining Bitcoin. China may be on verge of nationalizing their largest Bitcoin mining operations.

It’s an interesting time for Crypto. Practice safe crypto and keep your keys safe offline and ride it out.

Bitcoin Cash and Monero are my top picks.

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Hurricane Irma has nothing on the Fudnado surrounding Bitcoin.

Let’s recap what happened this week. But first, some context:

Let’s start with: China bans ICOs. Good! ICOs are complete crap. ICOs are designed to separate fools and their money. ICOs were raising millions of dollars in hours based on very short whitepapers. There is a website where you could create your own fake whitepaper to go with your make believe Crypto project and get rich overnight. Market digested and discarded China banning ICOs within 24 hours.

Next: Bitcoin hit $5,000 for first time. Then it retraced to ~$4,000. Then back to $4,700. Now trading at $4,300. Nothing like 15-20% swings in your portfolio every 12-24 hours to keep you alert and engaged in the market!

Yours truly warned about the correction when BTC was at $4,800. Unlike most of the crypto perma bulls I believe we have another correction coming. Sideways action is healthy for the charts now.

What else….oh yeah….Paris Hilton tweeted about Crypto. What that picture has to do with Crypto I have no idea other than to remind you she is Paris Hilton?

There were rumors China was “banning Bitcoin”. This has happened before. This recycled news even has it’s own South Park meme. (BTW, Crypto has the dankest memes)

China banning Bitcoin news was discredited, then confirmed, then discredited. I honestly don’t know what’s true at this point and don’t really care. This could be fake news?

China has banned Google and Justin Bieber. Doesn’t seem to affect them too much. I think Bitcoin will be fine.

Now we have renewed rumors about www.poloniex.com being close to collapsing or being seized by the government. If you have any funds on Poloniex I recommend you get your crypto/fiat out of Poloniex ASAP.

My current allocation is 80% Bitcoin Cash and 20% Monero. I believe Bitcoin Cash has more upside than Bitcoin and that privacy will be the theme of Crypto in 2018.

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On June 29th I wrote about The Crypto Stock that’s better than GBTC. MGTI is up 189% since that post.

Why? Well, it may be related to these tweets. On July 18th John tweeted that Bitcoin would be $500,000 in three years.

When someone replied they would bet him here was John’s response:

And here is MGTI’s chart since that tweet. This shows the market likes a committed CEO! You don’t hear about Elon putting his dick on the line do you? Forget getting an MBA, swing your dick around the boardroom and see your company reap the rewards.

Elon Musk has nothing on John McAfee.

End of year target for MGTI >$10. Short term pullback likely. John is aggressively positioning MGTI to be the largest Bitcoin miner in North America.

If you want to make money in a gold rush sell shovels.

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Bought some Alt Coins here

Posting from the road so will be brief.

I am now ~10% in Bitcoin Cash and plan to increase that stake. Added some FCT, DCR, ARDR and ETC here. A BTC correction will pump all the other coins. Also hold some XMR but I have lost faith/patience in Monero as a whole.

4H Charts of $LISK $DASH and a few others show a rapid rise in past couple days.

That’s the precursor to what’s to come in my opinion. I believe the alt rally will be short lived. Alts are where Bitcoin bulls go when Bitcoin corrects. Alts were destroyed when Bitcoin started running. Alts will recover a bit when BTC corrects.

It’s all foreplay for Bitcoin vs Bitcoin Cash. It is going to be epic.

I am buying dips on Bitcoin Cash.

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Bitcoin Cash Lays Siege to the Crypto Throne

In this blog I am going to highlight the recent Bitcoin Cash developments and share a possible scenario that could have you banking mad Bitcoin Cash.

I will endeavor to lay off the technical details but I encourage you to look up and understand any terms that are not clear to you. Bitcoin is not going anywhere. You cannot ignore it. The sooner you understand the basics the sooner you will join the early adopters in the greatest wealth transfer in history.

If you are not up to date read my prior blog posts or this excellent Medium article.

How did we get here?

Bitcoin is a protocol for exchanging value peer to peer. Bitcoin is decentralized. However, for the past several years, a small group of coders called Bitcoin Core had exclusive access to update the protocol. As markets matured there were demands for changes to the protocol which Core did not approve. After years of heated debate a group chose to split from Core and they created Bitcoin Cash. Bitcoin Cash is the same as Bitcoin except there are a few upgrades now available.

So there are two Bitcoins?

That comes down to semantics. The short answer is yes. There is Bitcoin and Bitcoin Cash. There is disagreement about which CryptoCurrency gets the benefit of the Bitcoin name/brand. As of today, Bitcoin has the most miner support so it is Bitcoin. However, that may be changing…..

What do you mean this might be changing?

Bitcoins are created through “mining”. Bitcoin mining is a process by which computers must solve difficult math problems to bring new Bitcoins into existence. There are large companies that exclusively mine Bitcoin (John McAfee’s MGTI in the USA is aggressively entering this field). Think of Bitcoin miners like Gold miners. Rather than dig into the Earth Bitcoin Miners invest resources into large scale computer operations to solve math problems that provide ROI when they are first to solve a math problem and receive a Bitcoin reward.

Imagine a Gold miner has a profitable mine. The miner has millions invested in operating the mine and they are profitable. Then one day Gold crashes and Silver rockets 100 times in price. A traditional Gold miner would be in deep trouble. With Bitcoin miners there is a key difference. If the price of Bitcoin crashes and Bitcoin Cash goes up then miners can “flip a switch” and their entire mining operation will mine the more profitable Bitcoin Cash. This would be like a Gold miner having the ability to flip a switch in their mine and dig for Silver if it were more profitable than Gold.

How would miners switching to Bitcoin Cash affect Bitcoin?

Miners provide the backbone for the Bitcoin network. If you send Bitcoin your transaction is validated and recorded on the blockchain by the miners. If Bitcoin Cash becomes more profitable to mine than Bitcoin then miners will switch to mining Bitcoin Cash and the Bitcoin network will become slower and more expensive. A vicious circle of death. Bitcoin Cash value would increase and Bitcoin would decrease, perhaps very rapidly.

Here is the important part….

If you read the Medium article linked above they mention there is an upgrade in Bitcoin Cash in how it manages changes in difficulty. Simply put, Bitcoin auto adjusts mining difficulty to maintain an equilibrium in the distribution rate of new Bitcoins. This auto difficulty adjustment is key because Bitcoin Cash is now more nimble than Bitcoin. Bitcoin Cash is also as of this week more profitable to mine than Bitcoin. This could be the tipping point. When Bitcoin Cash split from Bitcoin the programmers updated the important way Bitcoin Cash handles difficulty adjustments. Bitcoin is running the old code. Bitcoin adjusts to difficulty changes VERY slowly…..

If you understood all of the above something may have clicked. When the miners start moving to Bitcoin Cash then the Bitcoin Cash network becomes more robust and adjusts to the new miners quickly. On the flip side, when the miners leave Bitcoin there is a problem…..Bitcoin does not adjust to the loss of miners quickly. The network suffers because it operates at a much higher difficulty level with much less mining support. Bitcoin becomes slow and expensive while Bitcoin Cash becomse faster and cheaper.

This could lead to…..

It’s possible this could lead to a “flippening”. Bitcoin Cash becomes “Bitcoin”. They are two unique coins now and if the current Bitcoin network moves to mining Bitcoin Cash then you’d see Bitcoin Cash replace Bitcoin. Bitcoin Cash holders would profit. Bitcoin holders could get #rekt.

Bitcoin Cash is trading at >80% discount to Bitcoin, despite doubling this week.

I’ve already offloaded a portion of my Bitcoin for Bitcoin Cash. If the flippening happens then I have exchanged Bitcion for Bitcoin Cash at 16 to 1 and lower. Today you can exchange Bitcoin for Bitcoin Cash at 5 to 1. The flippening has the potential to be the greatest wealth transfer inside of the greatest wealth transfer in histroy. A Russian nesting doll of financial windfalls.

If you are just getting started in Bitcoin and deploying new fiat do not overlook Bitcoin Cash. To play it safe you can deploy 50% Bitcoin/Bitcoin Cash. If you are more risk friendly up your ratio of Bitcoin Cash.

Ask questions. I am traveling in Asia so responses will likely be delayed.


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The Crypto stock that’s better than GBTC

You have to love Crypto. Besides the real world Tom Clancy shit that is the backstory on Satoshi Nakomoto (to this day people hotly debate if Satoshi Nakomoto is Craig Wright, or was Hal Finney or Dave Kleiman. By the way, 2 of these 3 gentlemen are dead) you have characters like John McAfee of McAfee Antivirus and killing your neighbor in Belize notoriety making YouTube videos of himself snorting coke with hookers and guns whilst CEO of a publicly traded company with big Bitcoin investments. (scan to 1:12 mark where the good stuff starts)

John happens to have a company called MGTI which as far as I can tell is his pet project company. It has a project in the works for a privacy phone:

Introducing the world’s first smartphone featuring hard kill switches, empowering its users to take back control of their privacy. All phones feature a built-in privacy control center giving users full control of access and functions of their phone.

That’s interesting but will likely fail. Most people don’t care about privacy.

But THIS is where things get interesting. From the Company Info webpage:

Also as part of its corporate efforts in secure technologies, MGT is growing its capacity in mining Bitcoin. Currently at 5.0 PH/s, the Company’s facility in WA state produces about 80 Bitcoins per month, ranking it as one of the largest U.S. based Bitcoin miners. Further, MGT is in active discussions with financial partners to grow Bitcoin output materially.

McAfee gets it. He’s steering his company towards Bitcoin mining. Let’s say Bitcoin doubles or triples in price. Boom, his profit on the mining investment will follow. GBTC is a publicly traded tether to Bitcoin but it’s disconnected from reality. MGTI is the sleeper stock that has potential to explode as it is discovered by the masses and the profits begin to roll in.

MGTI was up 28% today.

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Rally caps on: Bitcoin correction is OVER

Yesterday I entertained Bitcoin Bears with forecasts of doom for Bitcoin and a correction to $1,400.

Today I am here to tell you that the correction is over! I hope you got your cheap Bitcoins at $2,200. Barring any further detours, Bitcoin has reset it’s course to $10,000.

For perspective, the move from $3,000 to ~$2,200 is a correction inside a MUCH bigger move. Look at what Bitcoin has done before:

A 30% correction doesn’t concern crypto veterans. Here is a link to the chart above you can click on for live update. Notice the price goes off the chart? Bitcoin has doubled in price since that chart was created. Bitcoin is repeating larger and larger Wyckoff cycles one after another and they are happening closer and closer to each other. By 2019 I predict we’ll have $1,000 INTRADAY moves in Bitcoin price.

In all seriousness, if Bitcoin does not retrace to $2,000 (the 38% fib on chart below) from the top at $3k that is extremely bullish.

Once in a generation an investment comes along like Cryptocurrencies. This week’s drama will be a blip on the chart later this year when we’re over $5k and possibly flirting with $10,000 Bitcoin.

And … Cryptocurrencies are highly volatile. Most of the current coins won’t survive. But to the winners will go the spoils, and the spoils of this currency war will be large indeed. Therefore Crypto should be part of everyone’s portfolio.

As with any investment, consider dollar cost averaging into a position over time. If you’re lucky you’ll get some sub $2k coins.

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Bitcoin downside target: $1400

Putting a target on anything is a fool’s game. Well, I’m your Huckleberry.

A daily chart of Bitcoin with a fib retracement of 61.8% is ~$1400. I’d say we’re 50/50 to see $1700 price by August 1st and we’ll overshoot it to touch $1400.

However, much like baseball, there’s no crying in Bitcoin.

You either believe Bitcoin is a game changer or you don’t. Buy hold or sell. Those are your choices.

Am I concerned? Sure. And yet I know Bitcoin has been here before many times. The global macro economic situation remains bullish for Bitcoin. Japan has made Bitcoin a currency. India is warming up to Bitcoin. Bitcoin is a GLOBAL phenomenon. There will be bumps in the road to world domination.

Bitcoin remains Bitcoin’s major enemy as we move towards August 1st and the New York Agreement. The New York Agreement is the literal fork in the road and, besides the parabolic price rise, a possible cause for a rocky Summer in cryptoland.

The Bitcoin bulls are like early bulls in any sector. Ridiculed and sometimes publicly humiliated. But in the end Bitcoin will prevail. Even if you aren’t a believer can you afford to sit out a game changing financial instrument with zero exposure in your portfolio?

Make your plans to dollar cost average in under $2,000. See you in 2018 at $10,000 or I’LL SEE YOU IN HELL.

These are your future masters of finance. Prepare accordingly.

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