What Happpened In The Crypto Markets This Week?

Bitcoin Talk and Cryptocurrencies Bitcoin Discussion
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The Good

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended October 19 was Simmitri, up 618.84 percent.
  • According to Seeking Alpha, Goldman Sachs is partnering with Galaxy Digital Ventures on a $15 million funding round for cryptocurrency custodian BitGo, which provides services for more than 75 coins and has over $2 billion in assets. A Goldman Sachs spokesperson said “We believe that a custody offering is a logical precursor to digital asset market making.” This investment might be viewed as a signal that the major bank could be looking into offering its own such service.
  • Bitcoin saw a jump up at the start of the week as concerns over Tether’s backing by the U.S. dollar were put in question, reports Bloomberg, sparking a move into alternative digital currencies. As Tether broke its “historically tight link” with the greenback, bitcoin moved up as much as 8.9 percent to $6,769 on Monday.
  • In a Bloomberg TV interview this week, Michael Novogratz, a prominent cryptocurrency investor and CEO and founder of Galaxy Digital, said he doesn’t expect the price of bitcoin “breaking $10,000 by the end of the year” and that “everything takes a little longer than you hoped it would.” However, Novogratz predicts that in the first two quarters of next year institutional investors will start to invest more in cryptocurrencies, which should lead to a rally and see new highs.

The Bad

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week ended October 19 was YoloCash, down 58.76 percent.
  • On Monday, the stablecoin known as Tether, which is the most popular dollar-linked cryptocurrency, experienced an exodus, reports Bloomberg. The coin slid below $1 over traders questioning its peg to the U.S. currency, along with renewed “speculation over the financial health and banking relationships of Bitfinex, a crypto exchange that shares a CEO with Tether’s issuer,” the article continues. Tether touched 85 cents on U.S.-based Kraken on Monday.
  • An initial test of the Ethereum-development system software upgrade, Constantinople, failed to deliver expected results on Saturday, reports CoinDesk. The upgrade is meant to introduce five new improvements and alter the economics of the blockchain, but it might be delayed from its scheduled November release. Griff Green, founder of blockchain-based nonprofit Giveth, said that he expects it “to get delayed to 2019” because “the blockchain doesn’t take holidays, but developers do.”

HODL

  • Fidelity Investments announced Monday a new and separate company called Fidelity Digital Asset Services, reports CNBC. The new firm will be in charge of handling custody for cryptocurrencies like bitcoin and will execute trades on multiple exchanges for investors, the article reads, including hedge funds and family offices. “Our goal is to make digitally native assets, such as bitcoin, more accessible to investors,” Fidelity Investments Chairman and CEO Abigail Johnson says.
  • Arya Bolurfrushan, a former Goldman Sachs employee, has announced his startup, Accrete Capital Technologies, which will sell stake in itself via digital tokens and then invest those funds in “stocks, bonds, private equity, real estate and venture capital” according to Bloomberg. Using “a mishmash of Wall Street and crypto strategies,” Accrete hopes to find a middle ground between expensive asset managers and volatile cryptocurrencies. Although Bolurfrushan does not have experience in creating digital currencies, he does have a team of Goldman Sachs alumni behind him.
  • According to CME Group, bitcoin futures trading saw a 41 percent increase in the third quarter, with an average daily volume of 5,053 contracts, up from 3,577 in the second quarter. Open interest, which is the total number of unsettled contracts held by those trading in the market, also grew to 2,873 contracts, up from 1,523 in the second quarter of this year.

SODL

  • Regulators’ crackdowns on cryptocurrency businesses in India are forcing startups to experiment with stablecoins and ATMs to be able to receive fiat deposits from customers. One such company, Unocoin, told CoinDesk that it hasn’t been able to transact through regular banking channels with its 1.3 million customers for several months after the Reserve Bank of India prohibited banks from working with crypto or crypto companies in April. “The crypto community is suffering from this ban as there have been instances where the bank accounts of individuals have been closed who were found to be dealing in cryptocurrencies, ” said Kashif Raza, co-founder of Indian regulatory news startup Crypto Kanoon.
  • According to a newly released report from cybersecurity company Malwarebytes Lab, cryptocurrency mining malware fell 26 percent for businesses in the third quarter compared to the second quarter; however, the group detected an 88 percent increase of crypto ransomware incidents. Cryptojacking also fell in the past quarter, but it continued to be a serious issue with several large attacks such as the MikroTik routers in Brazil, writes Cryptovest.
  • Eighty-five percent of crypto assets allow development teams to alter their platforms, according to a report published this week by CryptoCompare, a cryptocurrency tracking resource. The report was created by reviewing crypto and blockchain projects with experts detecting a tendency toward centralization set by utility tokens that are running on controlled servers, writes CoinTelegraph. The report also revealed that 55 percent of existing crypto assets are actually centralized, while only 16 percent of all existing assets are considered to be a fully decentralized ecosystem.
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The Good

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended October 26 was Happycoin, up 364.40 percent.
  • Banks have an enormous opportunity to restore trust by leveraging the technology underpinning cryptocurrencies,” reads an article in MarketWatch this week. That opportunity is blockchain technology – a digital leger in which transactions are recorded in order and publicly, making the data nearly impossible to manipulate. According to the article, if Wall Street wants to regain the trust of Americans, leveraging this technology is the first step to help them do so. This is a promising look at what is missing from our modern banking system.
  • Coinbase customers outside of New York can now buy and sell a U.S.-dollar-backed stablecoin, USDC, according to CoinDesk. This fully collateralized token claims to be “easier to program with, to send quickly, to use in dapps, and to store locally than traditional bank account-based dollars,” making it “an important step towards a more open financial system.”

The Bad

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week ended October 26 was Smart Application Chain, down 38.59 percent.
  • Harish BV, co-founder of Unocoin, was arrested for allegedly setting up an unregistered bitcoin ATM in Bangalore, according to The Times of India. The Central Crime Branch (CCB) told press that the ATM in question didn’t have “permission from the state government and is dealing in cryptocurrency outside the remit of the law.” Unocoin’s other co-founder, Sathvik Viswanath, was adamant that while cryptos are “not legal tender in India,” they are not illegal, meaning “you bear the risk of your investment and there is no regulation in the industry.”
  • Smaller cryptocurrencies are at risk of a “51% attack,” wherein “a miner takes over more than half of a cryptocurrency’s mining power, which then allows them to erase a past transaction and replace it with another transaction” according to CoinDesk. College freshman and cryptocurrency enthusiast “geocold51” livestreamed an attempted 51% attack on Bitcoin Private, which held a $47 million market cap at the time, to demonstrate this flaw in the system publicly. He estimates it would cost a malicious hacker only $200 to make a profit this way

HODL

  • Bitcoin is going through a “serious quiet spell,” writes Bloomberg. The cryptocurrency is seeing fewer major price swings, with only a single day of movement of 5 percent or more so far in October, the article continues, compared to nine in January and February. According to Bloomberg Intelligence analyst Mike McGlone, low volatility is “a sign of speculation leaving the market and eventually a bottoming process.”
  • The Capital Markets and Technology Association (CMTA) published new anti-money-laundering (AML) standards in the hopes of encouraging further adoption of distributed ledger technology (DLT) and digital assets within the financial markets. The Switzerland-based non-profit stated their standards “clarify […] measures to be taken in order to comply with the Swiss regulations against money laundering and the financing of terrorism.” Although the standards do not have any formal standing yet, CMTA was clear these “represent a consensus” between experts on what should be considered best practices in this growing, digital space.”
  • Mallow, a program for cross-chain transactions between bitcoin and Ethereum, launched this week, making it the first federated blockchain built using the Open Federated Gateway Protocol (OFGP). Developed by iBitcome and DEx.top, OFGP allows for trades between separate cryptocurrencies via a token called WBCH. As OFGP is an open-source protocol, competitors to Mallow could appear soon to create competition for the program and choices for crypto-users.

SODL

  • During its pre- IPO funding round, Bitmain Technologies solicited investors with pitch desks that falsely suggested the company had received funding from Digital Sky Technologies Global and GIC Private Limited, according to a CoinDesk investigation. Whether or not legal action will be taken remains to be seen.
  • Following a ten-month investigation, an Australian woman was arrested this week for stealing 100,000 XRP, reports ZDNet. The victim’s email was hacked in January, allowing the unnamed woman to access their digital wallet. “An email account is more valuable than people realise,” said Arthur Katsogiannis, Cybercrime Squad Commander at New South Wales Police Force. “Scammers are increasingly targeting emails as they link the individual to financial accounts and other personal information.” Ripple was trading around $3.50 at the time of the theft, but has since dropped to only $0.45 at the time of writing.
  • Plans to launch Royal Mint Gold (RMG) tokens have been put on hold after the U.K. Royal Mint and the CME Group’s partnership fell through, reports Reuters. Initially, RMG was meant to be issued in fall of 2017, making this the second time plans have been postponed. “Sadly, due to market conditions this [launch] did not prove possible at this time,” says a Royal Mint spokesperson, “but we will revisit this if and when market conditions are right.”
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The Good

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended November 2 was Coupecoin, up 539.29 percent.
  • Coinbase’s projected revenue for 2018 is at $1.3 billion, Bloomberg reports, citing internal documents of the company. Despite a general decline in the digital currency space, the largest U.S. cryptocurrency exchange was also valued at $8 billion this month, quintupling its worth since early 2017.
  • Morgan Stanley acknowledged that bitcoin and altcoins have been a “new institutional investment class” since 2017 in a new report titled “Bitcoin Decrypted: A Brief Teach-In and Implications.” The document goes on to frame the decentralized technology in a positive light.

The Bad

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week ended November 2 was BitWhite, down 35.38 percent.
  • Coincheck, a Japanese crypto exchange, experienced a 66 percent decrease in revenue during the third quarter of 2018, according to Monex Group. The exchange underwent major updates following the theft of $532 million worth of NEM in January. “Since service suspension in January 2018, Coincheck only allowed existing customers to sell their cryptocurrency,” says a report from Monex Group, resulting in a segment loss of around $5.3 million.
  • At the New York Times Dealbook Conference, CEO Larry Fink stated that BlackRock has no intention of launching an exchange traded fund (ETF) for cryptocurrencies. For his position to change, bitcoin would “ultimately have to be backed by a government” as he believes “the world doesn’t need [digital currency as] a store of wealth unless you need that store of wealth for things you should not be doing.” Despite his lack of support for cryptocurrencies, Fink did state that he is a “huge believer in blockchain.”

HODL

  • During the ASEAN Energy Business Forum in Singapore, SP Group announced its blockchain-powered renewable energy certificate (REC) marketplace. RECs provide documentation that a set amount of energy has been produced via solar batteries. Cleantech Solar Asia, LYS Energy Solutions and Katoen Natie Singapore will reportedly join the marketplace, according to CoinTelegraph.
  • The Economic Development and Trade Ministry of Ukraine announced it is taking the first steps toward legalizing cryptocurrencies by creating “understandable conditions for conducting activities in the field of virtual assets and virtual currencies,” according to Ukrinform. The proposed plan will be implemented in two stages, which should be completed in 2021.
  • Russian diamond mining firm Alrosa has joined Tracr, a diamond supply blockchain by De Beers, according to Mining Weekly. These digital certificates aim to set customers at ease regarding “conflict diamonds,” also known as “blood diamonds,” by increasing transparency from mine to retail. Together, Alrosa and De Beers produce half the world’s supply of diamonds.

SODL

  • Climate change scientists expressed mounting concern about bitcoin’s carbon footprint in a publication on Nature.com. The report posits that, if bitcoin is adopted at a rate equivalent to “the slowest broadly adopted technologies,” it could “cross the 2 degrees Celsius threshold within 22 years.” At the highest potential rate of adoption, that threshold could be crossed within 11 years. Scientists have abstained from making predictions about the future of the cryptocurrency itself, stating simply that “electricity de-carbonization could help to mitigate Bitcoin’s carbon footprint — but only where the cost of electricity from renewable sources is cheaper than fossil fuels.”
  • Canadian crypto-exchange MapleChange was allegedly hacked, resulting in the loss of an undetermined amount of bitcoin and the company tweeting they had “no more funds” with which to pay investors. When the company’s Twitter profile disappeared, some media outlets began reporting this event as an exit scam, rather than a hacking. The page has since been restored and MapleChange denies the allegations of a scam.
  • South Korea’s National Intelligence Service (NIS) reported that North Korea is responsible for the continued hacking of South Korean computers. Hackers have been installing malware which uses the afflicted computers to mine cryptocurrency and transfer it to Kim Il Sung University in Pyongyang, North Korea. The NIS believes the crypto-jacking is a way for the economically weaker country to generate cash flow.
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Nice topic. Hope you keep it going.

From today’s headlines… not so good.

In a nutshell:

  • Bitcoin fell more than 7 percent Wednesday after a relatively calm few months.
  • The cryptocurrency dropped to $5,640.36, hitting a new low for the year.
  • Ethereum and XRP, the second and third largest cryptocurrencies behind bitcoin, dropped 13 percent and 15 percent respectively.

Or, time to buy in low before the craziness of year-end. ETF maybe on the horizon. Flip a coin.