Just one day after scaling its 50-day moving average for the first time since May, bitcoin gained early Tuesday as the world’s largest cryptocurrency hopes to extend its recent rally in the face of another potential scandal.
Last night, Spotlite USA—the tech firm behind Kodak’s KODK crypto mining project—confirmed its bitcoin operation had collapsed, shortly after it faced tough public backlash and was blocked by the U.S. Security and Exchange Commission.
The drama started earlier this year, when a Kodak-branded bitcoin miner was displayed at Kodak’s official booth at the CES technology show in Las Vegas. Spotlite said that it planned to rent the high-end computers—reportedly dubbed “Kodak Kashminers”—to prospective miners. The rentals were to cost $3,400 for a two-year period.
However, this week’s news makes it seem like the Kodak Kashminer was more of a pipe dream—or scam—than was previously advertised. Kodak told the BBC that the device was never officially licensed, and critics claimed that Spotlite’s promised returns of $375 per month would be impossible.
The plug has officially been pulled on the Kodak Kashminer, casting an even darker cloud on Kodak’s once-bright hopes to incorporate cryptocurrency and blockchain technology into its business.
In January, Kodak announced plans for an initial coin offering via the KodakOne platform, which it said would allow people to license their photographs and search the internet for unauthorized usage. But just one day for the launch of the coin, Kodak delayed the ICO and said it needed to evaluate the status of prospective investors.
Nevertheless, this new public crypto-related scandal has not put a dent in the rising price of bitcoin or other major digital coins. According to CoinMarketCap.com, bitcoin has added more than 4.5% over the past seven days, and nine out of the ten-largest cryptos are in the green within that time period.
Part of this week’s rebound was inspired by news that investment giant BlackRock BLK has established a working group to study cryptocurrencies and blockchain technology.
BlackRock CEO Larry Fink confirmed the rumors in an interview with Reuters, saying that, although his asset management company has yet to see “huge demand for cryptocurrencies,” the firm is currently a “big student of blockchain.”
Interest from traditional investors might not be picking up at a rapid pace, but efforts by firms like BlackRock to better understand these virtual assets suggests that cryptos could eventually find a home in the global asset management community.
Meanwhile, bitcoin analysts have begun calling for a bottom for the top cryptocurrency after 2018’s sharp losses.
“The price is trading at $6715 and year to date it is down nearly 53.07%. However, I do think that the tide is about to turn for bitcoin and it won’t be long before we see a major move,” wrote Think Markets U.K. analyst Naeem Aslam, via MarketWatch.
“The evidence is in the hash rate which is consistently increasing, meaning, that miners are still very busy, and they hold the view that the price is going to rise.”
Renewed bullishness in the cryptocurrency market could spell good news for the “proxy stocks” which exploded in popularity late last year as investors scrambled for ways to gain crypto exposure in their regular portfolios.
Of these, companies like Longfin Corp. LFIN and Riot Blockchain RIOT—which saw their share prices skyrocket after adding blockchain to otherwise-unrelated business models—have faced significant skepticism from both regulators and the general public. LFIN and RIOT have added 5.3% and 1.5%, respectively, over the past five days as cryptos have rallied.
Overstock.com OSTK, an e-commerce company which has developed cryptocurrency and blockchain projects recently, has gained nearly 4% over the last week. In that time, the Bitcoin Investment Trust GBTC has surged more than 10.5%.
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