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Hodler’s Digest, February 11–17: Top Stories, Price Movements, Quotes and FUD of the Week
by Molly Jane Zuckerman on February 17, 2019 at 5:40 pm
Fundstrat Global Advisors thinks that crypto prices can see higher price points, and JPMorgan plans to launch its own coin. Top Stories This WeekFundstrat Global Advisors Expects 2019 to Bring More Institutional Investors to CryptoAccording to a report on the 2019 crypto outlook released by New York-based research company Fundstrat Global Advisors, incremental improvements in the crypto space can provide support for higher prices for cryptocurrencies. The report notes that as the United States dollar is expected to weaken, and more institutional investors enter the space, a visible market recovery can be expected. Fundstrat states that the current year’s crypto hangover can be attributed to the waning interest in the initial coin offering (ICO) sector as well as adverse regulatory achievements.JPMorgan Chase Launches JPM Coin to Increase Settlement Efficiency in Three OperationsUnited States banking giant JPMorgan Chase announced this week that it was planning to launch its own digital asset. After previous negative comments about cryptocurrency from the bank’s CEO Jamie Dimon, the company has released information about its new JPM Coin, which is designed to increase settlement efficiency initially within three operations: international settlements by major corporations, treasury services and securities transactions. According to the head of JPM’s blockchain focus, only a small amount of the total funds involved will at first involve the JPM Coin.Crypto Miners and Investors Are Turning to Derivatives to Survive Crypto WinterA recent analysis by Bloomberg has found that crypto investors and miners are looking more and more towards derivatives like options as a way of surviving the recent market downturn. According to Bloomberg, the increasing popularity of complex traditional market trading instruments is a reflection of the difficulty of weathering the current bear market. Although official statistics are scare, Bloomberg notes that miners are now becoming one of the main sellers of a type of derivative similar to a covered call option.Coinbase Wallet Users Adds Support to Backup Encrypted Keys on Google Drive, iCloudCoinbase Wallet users will now be able to backup their private keys on Google Drive or iCloud. According to an official announcement, Coinbase Wallet users will be able to upload their keys to the cloud as a safeguard against lost keys, which then protects against losing funds in the case that keys are misplaced. The users can also store an encrypted copy of the recovery phrase on their clouds accounts, and Coinbase has noted that neither they nor the cloud services will have access to user funds. Experts opinions differ on the issue of security of such backup.QuadrigaCX Controversy Continues as $500K Accidentally Transferred to Inaccessible Cold WalletEarlier this week, it was reported that major Canadian crypto exchange QuadrigaCX accidentally transferred nearly $500,000 in Bitcoin (BTC) to its cold wallets earlier this month. Ever since the death of its founder Gerald Cotten in December 2018, the exchange has been unable to access these wallets, leaving around CA$190 million dollars ($145 million) missing in digital assets. Also this week, evidence emerged from an old podcast that Cotten had suggested in 2014 that he kept private keys for the exchange’s wallets printed out and stored in a safe deposit box.Winners and LosersThe crypto markets have seen an end-of-the-week calm, with Bitcoin trading at around $3,644, Ethereum at $124 and Ripple at $.30. Total market cap is at around $121.5 billion.The top three altcoin gainers of the week are UltraCoin, dietbitcoin and SegWit2x. The top three altcoin losers of the week are MMOCoin, The Currency Analytics and ZenGold.For more info on crypto prices, make sure to read Cointelegraph’s market analysis.Most Memorable Quotations“We would love to make [Bitcoin payments] as fast and efficient and transactional as possible and that includes looking at our seller base and our register. It’s not an ‘if,’ it’s a ‘when’.”Jack Dorsey, Twitter co-founder and CEO, founder of Square“By its nature, blockchain technology doesn’t recognize borders, [...] It’s unstoppable.”Eva Kaili, a Greek member of the parliament (MEP) of the European Union“We could step into Venezuela with six laptops and create not only a functioning society but arguably one with the most advanced government systems in the world. We could bring them a central bank on the laptop. Everyone in Venezuela downloads a free app, and suddenly you have the most advanced monetary system on the planet.”Patrick Byrne, founder and CEO of retail giant Overstock.com“Technologically, regulation-wise it [a BTC ETF] could happen tomorrow. There is no particular motivation because the ‘powers that are be’ in the fund industry have no incentive to give up their market share.”Ric Edelman, founder of advisory firm Edelman Financial Engines“I’m not a believer in the vast majority of digital tokens and I believe most will go to zero.”Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments“As predicted, banks are changing their tune on crypto. But this JPM project misses the point — introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer.”Brad Garlinghouse, CEO of Ripple (XRP)Prediction of the WeekZhu Fa, the co-founder of Poolin, a Chinese-based crypto mining pool, predicted this week that Bitcoin’s price could hit 5 million Chinese yuan (around $738,000 USD).FUD of the WeekMajor US Crypto Exchange and Wallet Gives $30,000 Reward for Finding Critical BugUnited States crypto exchange and wallet service Coinbase has given out a $30,000 reward for reporting a critical bug on its system, according to data from its vulnerability disclosure program. Coinbase has confirmed that the vulnerability has since been fixed, but has not provided any additional details on the scope of the bug. According to Coinbase’s four-grade reward system, the bug was rated towards critical impact, as their highest bug bounty is capped at $50,000. This is the fourth bug bounty handed out by Coinbase over the past year.Software Dev Finds Possibility for Attack Vector in Constantinople Upgrade, Buterin Denies Earlier this week, software developer Tim Cotten wrote on Medium about the possibility for the new smart contract creation function, dubbed Create2, to introduce a new attack vector to the platform. Cotten wrote that since the contract with Create2 is created at an address that can be determined by different parties, it could allow the change of smart contract addresses after being deployed. In an Ethereum developers call at the end of the week, ETH co-founder Vitalik Buterin addressed the issue, noting that the new feature will not have negative security implications.Turkish Police Arrest 24 Suspects Over Hacking of Around $2.5 Million From Crypto FirmPolice in Turkey have arrested 24 people that were allegedly involved in a 13 million Turkish lira ($2.46 million) hack from an unnamed cryptocurrency-related firm in Istanbul. The city’s Cybercrime Department found that the stolen money had been moved out of hacked accounts to accounts on other exchanges, with the funds denominated in Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). During the investigation that covered 8 provinces, the cybercrime unit discovered that the suspected individuals were communicating through online multiplayer battle royale game PlayerUnknown’s Battlegrounds (PUBG). Best Cointelegraph FeaturesFrom Last-Minute Will to Past Banking Problems: What Makes the QuadrigaCX Case Seem So StrangeCointelegraph looks at the strange and often perplexing case that has unfolded in the aftermath of the QuadrigaCX’s death in December 2018. With money apparently being moved around their cold wallets, their cold wallets not existing, and the money possibly even not existing, Cointelegraph examines the conflicting rumors and theories surrounding the financial status of Canada’s largest crypto exchange.Iran: Still Waiting for the Blockchain RevolutionComing off of the heels of the announcement of an Iranian-backed cryptocurrency, known as Paymon, the crypto space has discussed the implications of Iran using a digital asset. Facing sanctions and cut off from SWIFT, a blockchain-based digital asset could help the country economically, but how much has really been done?Ordinary Stablecoin or XRP Killer? What We Know About JPMorgan Chase’s New CryptocurrencyJPMorgan Chase took the world by surprise when it announced that it would be releasing its own digital currency, dubbed the JPM Coin, for use in several areas of its business. Considering CEO Jamie Dimon’s past negative comments on Bitcoin, crypto commentators have been highly skeptical of the move, even as others have brought up the possible competition between JPM Coin and Ripple. Cointelegraph examines how the JPM Coin will really work out. […]
Bitcoin Hovers Near $3,630 as Top Cryptos See Minor Losses
by Adrian Zmudzinski on February 17, 2019 at 4:14 pm
The top 20 cryptocurrencies are reporting minor losses, as Bitcoin falls under the $3,650 mark. Sunday, Feb. 17 — most of the top 20 cryptocurrencies are reporting minor losses on the day by press time. Bitcoin (BTC) has fallen under the $3,650 mark again, according to Coin360 data.Market visualization from Coin360At press time, Bitcoin is down 0.18 percent on the day, trading at around $3,631, after a brief mid-day high of $3,680, according to CoinMarketCap data. Looking at its weekly chart, the coin has mostly traded sideways for the past week. The current price is about 0.3 percent lower than $3,643, the price at which Bitcoin started the week. Bitcoin 7-day price chart. Source: CoinMarketCapEthereum (ETH) has regained its position as the largest altcoin by market cap, which is at about $13.2 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $12.3 billion.Ethereum is one of the largest top twenty gainers on the day, up by about 2 percent over the last 24 hours. At press time, ETH is trading around $126, after having started the day at $123. On its weekly chart, Ethereum has seen a steady climb upwards, its current value increasing over 7 percent from $117, the price at which the coin started the week.Ethereum 7-day price chart. Source: CoinMarketCapRipple has lost just over half a percent in the 24 hours to press time and is currently trading at around $0.30. On its weekly chart, the coin is also trading sideways — its current price is one percent lower than $0.303, the price at which XRP started the week.Ripple 7-day price chart. Source: CoinMarketCapAmong the top 20 cryptocurrencies, the only ones experiencing growth other than Ethereum are Iota (MIOTA), which is up 0.65 percent, Neo (NEO), up 2.8 percent and Maker (MKR) up 1.7 percent.In a recent interview with Cointelegraph, the founder and CEO of digital currency investment firm BKCM LLC, Brian Kelly, said that “right now Bitcoin is about 50 percent undervalued.”Also, recently news broke that Liberstad — a private, anarcho-capitalist city in Norway — has adopted a cryptocurrency that is native to its blockchain-powered smart city platform as its official medium of exchange. […]
Japan: E-Commerce Giant Rakuten’s New Payment App Appears to Support Crypto
by Adrian Zmudzinski on February 17, 2019 at 1:32 pm
According to a new report from e-commerce giant Rakuten, the new version of its payment app will support “all payment solutions” — evidently including crypto Japanese e-commerce firm Rakuten announced that a major update of its Rakuten Pay mobile app will be released on March 18, according to the firm’s 2018 earnings release, published on Feb. 12. The app’s new structure appears to indicate that it will support cryptocurrency payments in addition to fiat.According to the company’s presentation material for the fourth quarter and the full year of 2018, the new version of the app will feature “all payment solutions embedded into one platform.”As Cointelegraph reported in January, and the recent materials confirm, Rakuten — known informally as “Japan’s Amazon”— revealed a revision to its corporate structure. The restructured company includes the firm’s cryptocurrency exchange “Everybody’s Bitcoin” as part of a newly established payments subsidiary, Rakuten Payment. The payment subsidiary, which was previously its loyalty subsidiary under the name “Spotlight,” will also include the corporation’s prepaid card service, Rakuten Edy.The firm’s earnings release specifies that Edy will be supported in the updated app and also indicates support for QR code payments. Though the app update does not explicitly note crypto support, the company’s specification that “all payment solutions” will be supported on the platform implies support for crypto payments as a part of its subsidiary, Rakuten Payment.Rakuten acquired Japanese crypto exchange Everybody’s Bitcoin in August 2018 in a $2.4 million deal. At the time, company representatives reported that the firm was “considering entry into the cryptocurrency exchange industry” as it believes "the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future."In its earnings release, Rakuten reported a net income for 2018 of about 141.9 billion yen (about $1.3 billion), a 28.4 percent year-over-year increase from 2017.In March 2015, Rakuten also announced that it had started accepting Bitcoin (BTC) as a payment option on its American portal, Rakuten.com.Another Japanese internet and finance giant, SBI Holdings, has also shown major interest in the crypto sphere. The firm launched its own crypto exchange, Vctrade, in July. The exchange started accepting deposits in several major cryptocurrencies in December 2018. […]
Coinbase Wallet Users Can Now Back Up Their Private Keys on Google Drive and iCloud. How Safe Is It?
by Stephen O'Neal on February 17, 2019 at 12:56 pm
A look into the Coinbase Wallet’s new feature. On Feb. 12, San Francisco-based cryptocurrency exchange Coinbase announced that users of its Coinbase Wallet can now back up their private keys on cloud storage, namely on Google Drive and iCloud.The move has received mixed reaction from crypto community and cybersecurity experts, some of whom seem skeptical about the idea of storing private keys on centralized servers. Others are confident about the new feature, stressing that it entails encryption.A brief introduction to Coinbase Wallet, formerly known as ToshiCoinbase Wallet differs from the main app, Coinbase (or Coinbase.com). With the latter, the cryptocurrencies purchased by customer and their private keys are stored by Coinbase. With Coinbase Wallet, in turn, users store their own crypto protected by their unique private keys. Those keys are purportedly secured with Secure Enclave and biometric authentication technology.Initially, Coinbase developed Toshi, an open-source, mobile-focused decentralized application (DApp) browser and Ethereum (ETH) wallet that launched in April 2017. The project was inspired by Chinese mobile payments app WeChat and had a built-in messaging support and reputation system, enabling users to rate other users and apps within the platform. According to its developers, Toshi aimed to provide financial services to people in developing countries, especially to the unbanked population. It was also allegedly the first wallet to launch crypto collectibles.A year later, in April 2018, Coinbase merged Toshi with its recently acquired Cipher Browser, a similar decentralized app browser and wallet for the ETH blockchain. Cipher’s creator and only developer, Pete Kim, became the head of engineering at Toshi, joining Sid Coelho-Prabhu, Coinbase’s product lead for the DApp project.In August 2018, Toshi was rebranded to become Coinbase Wallet. The official announcement read:“This is not just a new name, but part of a larger effort to invest in products that will define the future of the decentralized web and make that future accessible to anyone. [...] With Coinbase Wallet, your private keys are secured using your device’s Secure Enclave and biometric authentication technology.”Thus, at the time, Coinbase Wallet supported ETH and ERC-20 tokens management, airdrops, crypto collectibles trading and storage, as well as access to DApps and decentralized exchanges, among others things. According to the firm's Medium entry published at the time, Coinbase Wallet would start supporting Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC) “very soon.”In November 2018, Coinbase Wallet added support for Ethereum Classic (ETC). In February 2019, the exchange’s wallet began hosting BTC. The firm repeated that it is considering adding BCH, LTC as well as other major cryptocurrencies.More about the new feature: support for Google Drive and iCloud, more cloud storage providers in the featureThus, on Feb. 12, Coinbase Wallet declared that its users can now back up their private keys on Google Drive and iCloud.In the accompanying statement, Coinbase explained that allowing users to upload their keys to a cloud provides a safeguard against lost keys and will help them avoid losing funds should the keys be misplaced:“The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to backup their 12 word recovery phrase in a safe place, thus losing their funds forever.”Now, users of Coinbase Wallet can store an encrypted copy of the recovery phrase on their cloud accounts. Coinbase notes that neither they nor the cloud services will have access to user funds, as the recovery phrase key is unlocked by a password known only to the user. The backup is reportedly encrypted with AES-256-GCM encryption, which is only accessible through the Wallet mobile app.Coinbase notes that, in addition to Google Drive and iCloud, they will expand support to other clouds in the future. The feature is an opt-in service that does not replace or supersede the original recovery option.Interestingly, the feature was rolled out against the backdrop of the QuadrigaCX case. Earlier this month, the Canadian cryptocurrency exchange filed for creditor protection after the sudden death of its founder, who was reportedly the sole executive responsible for the exchange’s keys and cold wallets. Following his death, the exchange has been unable to access $145 million in digital assets it allegedly needs to remain payable.Community reactionThe new feature received mixed reaction among the crypto community, as some criticized the idea of storing private keys on centralized servers. “You might want to rethink this,” one of the most popular replies to Coinbase’s announcement on Twitter reads. “I don't understand, how do you misunderstand your target audience so bad?” the other one says.The reaction among Reddit users seems more collected, as many users stressed that the new feature entails encryption. For example, u/CryptoNoob-17 wrote:“At least it's not unencrypted private keys like what blockchain.info did some time ago by sending private keys as plain text over http. If this keeps some noobs from losing their coins and telling all their friends how stupid cryptocurrency is because they lost it all, I don't see a problem.”So, is the new feature safe enough? Experts weigh inCybersecurity specialists also seem on the fence about the new feature. Taylor Monahan, the founder and CEO of MyCrypto, a noncustodial wallet, told Cointelegraph that trusting users to come up with complicated enough passwords is not a good idea:“Regardless of the strength of the encryption, the weak link will always be the user selected password (on both their wallet AND their cloud storage account). People simply aren't capable of generating a password with enough entropy, nor do they always use unique passwords for every service.”Monahan adds that, if hackers realize that an influx of people start using cloud servers to store their cryptocurrency, “we will undoubtedly see an increase in attacks against these cloud storage providers.” She added:“Players like Coinbase should not be encouraging this type of unsafe behavior. I understand the desire for a better user experience, but the worst user experience is one where people lose all their crypto assets due to theft.”Hartej Sawhney, co-founder and president at Hosho, a startup protecting investments and providing multiple smart contract services including audit, does not agree that individual users will be targeted by hackers as a result of the new upgrade.“Hackers tend to want maximum information for minimum effort. This means they will likely attack the heart of a cloud storage service rather than its individual users. Google Drive and iCloud have historically been secure,” he told Cointelegraph, adding that, to him, Coinbase still seems much safer compared to other platforms:“If anything, cryptocurrency exchanges should take some notes from Coinbase on how to bolster security. Additionally, Coinbase follows robust security features such as multi factor authentication, email confirmation, and an active bug bounty program, making it far more robust than any other crypto exchange.”Josh Datko and Thomas Roth, members of a team of security researchers who study hardware and software vulnerabilities under the title “Wallet.fail,” also told Cointelegraph that the new feature is safe enough, given that certain precautions are made:“In our opinion, an user encrypted cloud backup does not significantly increase the risk of compromised given that the password is complex enough, the key derivation from the password to the AES-256-GCM key is sufficient, and there are no implementation mistakes.”Additionally, Datko and Roth warned that the implementation also matters:“Unfortunately, while this sounds like a straightforward feature, many organisations have made mistakes here. To the best of our knowledge, we are not aware if this new feature is open source or if Coinbase had this independently reviewed.”Cointelegraph has also reached out to Coinbase for further comment, but the company has not replied as of press time. […]
Interview With Crypto ‘Optimist’ Brian Kelly: Bitcoin Is Still 50 Percent Undervalued
by Catherine Ross on February 16, 2019 at 9:52 pm
CNBC’s Brian Kelly outlook on crypto in 2019, Bitcoin ETF in 2020, and inevitable recession. This interview has been edited and condensed.The author of the "The Bitcoin Big Bang — How Alternative Currencies Are About to Change the World," Brian Kelly calls himself an optimist when it comes to the future of the cryptocurrencies. CNBC’s prominent commentator, who is also the founder and CEO of digital currency investment firm BKCM LLC, analyzes markets on an everyday basis and tends to be 50 percent right “trading-wise.”We met with Brian Kelly at the Crypto Finance Conference in Switzerland and talked about Bitcoin ETFs, the next financial crisis, and the best and worst jobs at the same time.Catherine Ross: The most obvious question to you is, what is 2019 going to look like for the crypto industry?Brian Kelly: That's a great question! The trillion dollar question. I think it's going to be better than 2018, which is a pretty low bar.CR: In terms of what?BK: As an investor, my number one concern is price. I look at the price and I say that we've seen three or four of these kind of boom-and-bust cycles in Bitcoin. If you look at the most recent two or so, we're following roughly the same path as we’ve had, which means we're somewhere closer to the end. We might have another dip lower — it wouldn't surprise me at all.CR: Lower that $3,000? BK: Sure.It wouldn't surprise me if it [Bitcoin’s price] went to $1,500.CR: And you feel it's going to be short term?BK: I think very short term. And I think we're coming to an end. Here's the thing, the sellers that we've seen recently are almost forced sellers. Some CEOs had to raise cash because they say they “can't hold it in crypto all the time.” These are signs of the end. I don't know if it [the end of the cycle] is here or it's a little bit lower, but those are the signs of the end.In 2019, if I'm looking at it, the focus will be on the currency — Bitcoin, Litecoin, some of those — because we have quite a bit of geopolitical tension in the world.CR: And you feel it is contributing to the price?BK: Yes. We're starting to see some global macro players use Bitcoin as an alternative to their gold position or as a way to hedge against fiat currency fluctuations and volatility.CR: Using Bitcoin instead of gold?BK: Yeah.CR: But is it stable enough?BK: No (laughs).But they're not looking for stability, right? They're looking for a safe haven that's uncorrelated to every other asset. So, for an investor and a speculator, the stability is actually not what you want.You want that volatility because you're trying to get good returns. You're trying to get something that's uncorrelated to everything else. And that persists through 2019, and it starts to get to be more of a quote-unquote mainstream asset within the investment community.One of the most anticipated events in the crypto industry is the approval of a Bitcoin ETF, which hasn’t happened yet, despite the numerous attempts. Last year alone, companies and institutions like the NYSE, VanEck, SolidX, Proshares and internet entrepreneurs the Winklevoss brothers (whose first attempt in 2017 failed) all filed with the United States Securities and Exchange Commision (SEC), but were rejected or are awaiting a decision.The most recent development on the matter is the SEC’s review of a NYSE Arca’s Bitcoin ETF rule change proposal on Feb. 11. The proposal suggests “to list and trade shares of the Bitwise Bitcoin ETF Trust under NYSE Arca Rule 8.201-E.” This might end up being positive for the market, given the latest statement from SEC Commissioner Robert J. Jackson Jr. Speaking to Washington D.C.-based publication Roll Call on Feb. 6, he said, “Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so.”CR: One more very important question for you — will there be an ETF in 2019?BK: No shot.CR: I’m going to put that in the headline! “No shot for an ETF in 2019,” says Brian Kelly.BK: That’s fine! I would bet against it. I don't think it’s going to happen this year. There's too much unresolved that is going to take longer than a year to resolve and before the SEC gets comfortable with what's going on.CR: What kind of time frame are we talking about?BK: I think 2020 is a very good shot.CR: Sounds promising! But major companies, like ShapeShift and Consensys had to lay off a lot of employees recently. What does this indicate? BK: This is a part of the maturation process. We all got caught up in the big bubble. That being said, this is just a very natural part of the process. There are, unfortunately, some very good people that had to be laid off just because of market circumstances.It doesn't feel great right now, but it will make the industry stronger.CR: From the trading point of view, what are the major signs or indicators of bullish and bearish markets?BK: You look at the bottoms and the tops.I can remember in November and December — and even frankly in January, a year ago — I was getting phone calls daily like “How can I get into your fund?” “I need to get into that.” And we [at BKCM LLC] do a monthly entry and it's not something that you get into every day.That was happening at the peak. At the bottom, the phone does not ring. It's the exact opposite. The euphoria that we saw last year is a mirror image of the pessimism we're seeing now. And so, what you want to look for at bottoms are extreme pessimism.CR: Are you’re talking about technical analysis? BK: Sentiment, really.CR: And what about fundamental analysis? How does it look for the crypto industry? BK: It's interesting! We have a proprietary model that gives the fair value for people.Right now Bitcoin is about 50 percent undervalued.So, you could have a significant upside. That being said, we've seen that a couple of times in the last year. We saw that in April of 2018 — a huge run in Bitcoin.And that's what I'm talking about sentiment. So, the sentiment in the market has pushed the price of Bitcoin well below what you would consider a fair value — or at least, what I would consider fair. And that's another sign that we're near a bottom.CR: How does analyzing crypto markets differ from analyzing traditional financial markets? BK: Sentiment wise, no difference. Human beings are human beings. Fear and greed, booms and busts. In terms of how people trade markets, how people react to price movements — also no difference.But on the fundamental side, there is a very big difference. It's probably closer to foreign currency analysis, where you analyze supply and demand, and what's going to affect the supply and demand factors.In the traditional currency world, supply and demand might be impacted by central banks. In the crypto world, the supply-demand being impacted by the miner-supply versus the investor-demand at this point in time. So, it's a little different.There's a big learning curve to getting into analyzing cryptocurrencies. It's not like if you were analyzing airlines or the auto industry and you could immediately jump over and apply the same tools — these are very different tools.CR: And how did you start in the financial world?BK: I started as one of those annoying cold callers back in the 1990s. And I'd describe it as the best job on the worst job I've ever had in my life.CR: Can you elaborate?BK: It was the worst job because every day I would come into the office. I worked at Lehman Brothers [Eds: Lehman Brothers was the fourth-largest investment bank and global financial services firm in the United States. In September 2008, it filed for bankruptcy, which, many believed, started a global economic crisis]. They would hand me a stack of 700 phone numbers — I was supposed to dial two phones at once. My only job was — I wasn't allowed to pick stocks or anything like that — to connect the person on the other end with the broker.I did that all day long as a summer internship, and then I did it a little bit after I graduated. But despite it being mind-numbingly boring, it taught me a lot about sales and human interaction. It didn't teach me too much about the stock market. But it did give me a really good foundation in how people think about the stock market and investing. That's where I started.Then, I was an equity sales trader. Then, I started a company called MKM Partners, which is an institutional broker dealer. After that, I started a global macro fund, trading foreign currency — and that got me into the Bitcoin world.CR: How many times were you right in your analysis or predictions?BK: Generally speaking, if I'm right slightly more than 50 percent of the time, I consider that good. On a longer-term basis, trading-wise, I'm generally right about 60 percent of the time — there's some good periods and some bad periods. But it's important for people to understand that...It doesn't matter how many times you're right and how many times you're wrong; it matters how much you make when you're right and how much you lose when you're wrong.You have to have that ratio right. You could be right only 30 percent of the time and still make a lot of money as long as you make three times more on your right predictions as you do on your losses.CR: You’ve mentioned that you started at Lehman Brothers. Can I ask you how many years ago it was?BK: In 1991 — 28 years ago. Long time!CR: So, 17 years before the 2008 financial crisis, right? Did you see any signs of it coming?BK: I wish I could say I saw that. I knew something was wrong, but I can’t say that I predicted that.CR: Have you seen any indicators of the real estate bubble [Eds: the housing and credit bubble most analysts call the reason for the 2008 financial crisis] back then?BK: Without question — the real estate looked like a bubble! Not too dissimilar from what we saw with the crypto ICOs bubble. So yes, you could see the signs of trouble. The problem with seeing them is that it’s very hard to predict when they're going to end.CR: And the real consequences, probably.BK: Yeah, the real cost. For me, in 2007, when Bear Stearns [Eds: the now defunct New York-based investment bank, securities trading and brokerage firm] got bailed out by the Federal Reserve, that was the first signal for me that something was very, very wrong.CR: Is it at all possible to predict the next financial crisis? There are a lot of headlines about the looming recession and upcoming financial crisis. Should we prepare ourselves for the worst?BK: I can almost guarantee you we'll head to another recession. There's never been a period of time where we don't have a recession — it's just the business cycle. You know the Federal Reserve sometimes thinks that they can short-circuit the business cycle. But eventually, you will have another recession.CR: It's just the way the market works, right?BK: Yes, but this one is going be a little different than the other ones we've had.CR: How so?Because what we've done lately is taken all the risk off of the private balance sheets and put them onto the government balance sheets. And so that's a very different scenario. And that's very positive for crypto. If you think about what backs a fiat currency — [it’s the] full faith and credit of the government.If the government debts are to a point where they can't pay it, then the credit of the government is in question. You may want to look for an alternative type of currency. And so I don't know when we're going to have that [recession] — in 2016, I thought that was going to be the beginning of it.CR: Do you see the signs of the start of the recession right now?BK: There are some signs.CR: Not major, I assume?BK: There are some signs — but no, not major. My hesitation is that I still think the Federal Reserve has some leverage to pull, before we go into a full-blown recession. So, I think there’s still time — and I don't know if it's going to be a year or three years — where the Federal Reserve will be trying a bunch of things to make sure we don't go into recession, and that could prolong this period.CR: And it really does look positive for the crypto industry!BK: Absolutely! I mean, you know, call me an optimist, but this looks very positive.Even though there are signs of the bottom — when everybody says it's going away — that's what I love to hear.If everybody agrees that crypto is going away — that's the time I want to buy.I don't think crypto is going away. In fact, I see it becoming much more of a mainstream asset. I think the next two years could see Bitcoin — and I what I would call the other currencies, probably five or six of kind of “pure currencies” — I think you could see those play a major role in investors portfolio over the next two years.Cointelegraph editorial team thanks Brian Kelly and the Crypto Finance Conference for the interview. […]