Part two of our four-part review of crypto in 2019 looks back at April-June, which saw Bitcoin go on an unexpected bull run, China suggest banning Bitcoin mining (again), and Facebook launch a little thing called Libra.
You can check out part one of our 2019 review here, and look out for parts three and four later in the week.
Bitcoin’s Big Move
The second quarter of 2019 started with a jolt – a 22% jump in the Bitcoin price from $4,170 to $5,080. The huge move caught almost everyone by surprise, but much better was to come over the next three months as Bitcoin would confound all predictions and go on another of its memorable runs.
This electric start to the quarter was tempered somewhat by the news that South Korean exchange Bithumb had been hacked for $18.5 million worth of EOS, with “internal embezzlement” suspected, as well as the usual terrible April Fools attempts, which included Wakanda, the fictional city from the film Black Panther, declaring Bitcoin as its national reserve currency.
We confirm that Wakanda has been purchasing $BTC from us since mid-2018. Kudos to King T’Challa for taking the lead in embracing the power or blockchain. WAKANDA FOREVER!#aprilfools #endgame #bitcoin #blockchain #crypto https://t.co/HgYcBfDAHJ
— OKEx (@OKEx) April 1, 2019
Mainstream Media Laps up China ‘Bitcoin Mining Ban’
If Bitcoin grabbed some relatively positive headlines with its $900 mega pump, mainstream media reverted to type just a week later when Bitcoin mining was placed on a list of industrial processes that the Chinese government was considering banning.
This was like catnip to the major outlets, who took the opportunity to decry Bitcoin’s carbon footprint as well as its anti-establishment credentials, ignoring the fact that nothing had been set in stone and China regularly made a habit of ‘banning’ Bitcoin in some way and failing to execute it. Sure enough, six months later Bitcoin mining was removed from the same list, which met with the anticipated silence from the same media outlets that celebrated its imminent demise.
April was also the month that saw BSV declare a civil war on the crypto community at large, with Craig Wright’s desire to sue anyone who claimed he wasn’t Bitcoin’s creator Satoshi Nakamoto resulting in the BSV token being delisted from Binance, Shapeshift, and Kraken. A lawsuit with a Twitter user known as Hodlonaut was mooted, while one was actually lodged against What Bitcoin Did host Peter McCormack, which is due to be heard in London in 2020.
Bitcoin Ignores Binance Hack Worries
May began with what many in the community had been waiting for for some time – a Binance hack. The exchange, considered the best and safest in the industry by many in the space, saw 7,000 BTC, worth $42 million at the time, taken from the exchange’s hot wallet through a “very advanced, persistent attack”.
The entire episode was handled adroitly by Binance CEO Changpeng Zhao and amazingly the event practically faded from collective memories, helped by Cryptopia, which had been hacked in January, finally throwing in the towel and entering liquidation, leaving users with coins on the platform facing an uncertain future in terms of return of funds.
The Binance hack didn’t affect the Bitcoin price in May, which picked up where it had left off in April and continued its surprise ascent, rising by $3,000 in the month to end at $8,300, an almost unimaginable valuation given the fact that it had been loitering around the $4,000 just weeks earlier. Suddenly talk of $10,000 and an imminent alt season was back on the agenda as those left in the space came out of hibernation.
Binance was back in the news in June when it announced that it was taking the bold move of removing US users from its platform due to its interpretation of ever-strengthening regulations in the country. While the crypto community was busy kicking off, Binance announced just hours later that a new Binance US platform would soon launch to replace it, albeit with a much reduced token list.
Crypto regulations made the headlines in both mainstream media and the crypto world in June when the Financial Action Task Force on Money Laundering (FATF) announced tough new rules governing all entities that dealt with cryptocurrency, including ascertaining identities of senders and recipients of crypto on their platforms
This ruling caused an outpouring of concern by exchanges who would suddenly have to work out how on earth to implement the new rules and also for users who were concerned that they would no longer remain anonymous…which was kind of the point.
Facebook’s Big Move
The big news during this period however, the really big news, the news that made every major and minor news outlet in the world to clear their front page, was Facebook’s announcement that they were going to launch their own cryptocurrency – Libra. Not only would this be a cryptocurrency to be used on the social media platform, it would be the biggest challenge to the fiat currency system ever seen. At least, that was the plan.
Governments were suitably aghast at the idea that any company, let alone one with such a shocking privacy record, would be allowed to launch and operate their own global currency, and through national media outlets ripped Facebook’s plans apart so comprehensively that it made Bitcoin and all other cryptocurrencies look like harmless Monopoly money in comparison.
Facebook wheeled out Zuckerberg and David Marcus, the project leader, to try and defend it, but the pasting continued throughout the year, leading to big name Libra Association partners abandoning the project later in the year. Many governments stated that there was no way in hell that they will allow Libra to operate in their country, leaving very future of the project in the balance ahead of its supposed 2020 launch.
Bitcoin’s Bull Run Tops Out
How did Bitcoin react to the suggestion that Facebook wanted to replace it? It soared to an incredible $13,900 on the back of…well…any of a hundred reasons given by various sources.
The mainstream media, in their infinite wisdom, somehow connected the Libra announcement to the event, while others credited stockpiling due to the heightening China/US trade war. Others however were more circumspect, claiming that it was all the work of Wall St manipulators. Whatever the reason, it was a welcome break for those who had bought and held at similar prices a year and a half prior.
Crypto’s Happy Time
Overall, crypto ended the second quarter of the year on something of a high. The tough FATF regulations had been quickly forgotten in favour of Bitcoin’s monumental move, which ignited all sorts of talk about all time highs leading into the 2020 halving, while Libra’s arrival was acting as a lightning rod for crypto criticism.
Talk of alt season was back in vogue, with everyone confident that it was on the cards once Bitcoin settled down, whenever that would be. However, as we will find out in part three of our crypto 2019 review, a BTC-dumping Chinese Ponzi scheme and miner capitulation would have something to say about that.