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Cryptocurrencies On Pace to End the Volatile Week Positive After SEC Announces It is Reviewing Decision to Reject ProShares & Direxion Bitcoin ETFs Proposals

Aug 24, 2018

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Top 5 Cryptocurrencies sorted by 7 Day Price Percent Change

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Name Ticker Price 1H% CHG 24H%CHG 7D%CHG MARKET CAP 24H VOLUME
Bitcoin BTC USD$6602.85 0.81% 1.95% 1.36% USD$113,756,689,725 USD$3,813,570,969
VeChain VET USD$0.01 1.43% -0.89% 0.58% USD$794,187,463 USD$24,643,857
IOTA MIOTA USD$0.51 1.51% 1.59% -0.62% USD$1,424,997,144 USD$28,638,559
Litecoin LTC USD$58.14 3.2% 3.1% -1.49% USD$3,371,413,106 USD$198,664,802
XRP XRP USD$0.32 0.79% -0.18% -2.49% USD$12,703,768,815 USD$233,731,769

Developments in Financial Services

  • In a recently published post, the CEO of Bakkt, the cryptocurrency trading platform backed by Intercontinental Exchange, highlights that the new platform will permit institutional-grade cryptocurrency trading. Kelly Loefler argues that Bakkt will permit “trusted” price discovery with less price manipulation.  
  • Bitcoin jumped 4% overnight after Hong Kong-based cryptocurrency futures exchange BitMEX shut down trading for a few hours for a regular maintenance update. In aggregate, the total market capitalization of call cryptocurrencies jumped USD$12bn in over a hour.  Bitcoin commentators attribute the jump in Bitcoin to the fact that BitMEX permits traders to short Bitcoin on margin.  Some other Bitcoin observers, like Alex Kruger, believe the price behavior of Bitcoin affirms concerns about price manipulation and should lead the SEC to reject the ProShares Bitcoin ETF proposal this week.  Unlike the other Bitcoin ETF proposals, the ProShares Bitcoin ETF propose to own CME and CBOE Bitcoin futures.  
  • Bitmain, the Chinese Bitcoin mining company, announced that it has invested an undisclosed amount in Lambda, a blockchain data storage startup. Bitmain hopes to help Lambda further develop its technology to launch “secure” blockchain-based infrastructure and decentralized applications. The startup, based in Singapore, recently closed a token  private sale round that included investments from FunCity Capital, BlockVC, BlueHill, Zhen Fund, and other well-known institutions.   
  • US cryptocurrency exchange Bittrex is partnering with Rialto Trading, a regulated alternative trading system, to launch blockchain-based securities.  If the regulators approve of the idea, the Bittrrex-Rialto partnership is looking to launch products like issuance advisory service, placement, trading and custody.   
  • Coinsquare, a Canadian cryptocurrency exchange, has announced it is entering the European market. Coinsquare will support trading in Bitcoin, Bitcoin Cash, Ethereum, Litecoin, XRP, Dogecoin, and Dash. In addition, Coinsquare will offer fiat to crypto conversion in all the aforementioned coins. 
  • Dash is seeing wide adoption in Venezuela as hyperinflation is forcing merchants and consumer to adopt different forms of currencies. In comparison to Bitcoin, Dash offers much faster and cheaper transaction times and is currently being used by merchants such as Subway and Calvin Klein in Venezuela.  
  • Dash is seeing wider adoption in emerging markets with its reputation for being regulatory-friendly and privacy features.  In addition to providing startup capital to emerging markets, the Dash project is offering support for entrepreneurs, starting with their first transaction and wallet all the way to launching a dash-oriented business.   
  • Huobi Group, the Singapore-based cyrptocurrency exchange, is launching a new product, Huobi Automated Listing Platform, that will streamline the token listing application process.    
  • Kryptovault, a Norwegian Bitcoin mining firm that previously received bomb threats is now grappling with forced closures by local authorities. Noise pollution complaints now appear to be the greatest threat to the company as local residents are complaining that the noise from the Bitcoin miners is preventing them from sleeping. Local news reports suggest that the complaints are raising questions about whether Kryptovault actually has the right permissions to operate in its current location.  
  • MetLife Asia affiliate LumenLab has successfully tested a blockchain-powered insurance product, Vitana, that offers financial protection to pregnant women with gestational diabetes. Vitana connects customers’ electronic medical records to mobile devices. Policies are issued within minutes and are sent to the mobile phones. Automatic payouts are made should customers receive a diagnosis, without requiring access to customer files.  
  • Fintech startup Revolut is launching a new metal debit card to premium customers in the UK that will allow them to withdraw up to 1% cashback in either fiat or cryptocurrency on transactions outside Europe, or 0.1% of any transaction within Europe. Revolut is a prepaid debit card service that permits UK customers to receive, send, and withdraw money in different currencies at real exchange rates. At the moment, Revolut only supports five cryptocurrencies; Bitcoin, Ethereum, Litecoin, Ripple, and Bitcoin Cash. The company also allows the in-app exchange of 25 fiat currencies and enables travelers to spend a total of 150 fiat currencies abroad without fees.  
  • Ripple Labs is rumored to be thinking of combining  xVia, xCurrent and xRapid Solutions to solidify its market-leading positions in cross-border FX transactions. The solution will be called Convergence and will offer the benefits of speed and security while also keeping fees low.  
  • The SEC has rejected 9 applications for Bitcoin ETFs, including the proposal from ProShares. The agency cited concerns about price manipulation as a reason for the rejection.    
  • The Singapore Stock Exchange is working with the Monetary Authority of Singapore (MAS) to roll-out a blockchain technology that will permit Delivery vs. Payment (DvP) stocks settlement to move to a distributed ledger. The objective of the partnership is to move DvP settlement to blockchain-based smart contracts.  
  • Stockholm IT Ventures AB, a Swedish Block startup, has signed an agreement with Valens Bank to use the BTT Crypto Trading Toolbox for Crypto Fund trading.  The agreement will allow professional traders to actively manage digital assets for customers using AI trading tools 
  • The Swiss Stock Exchange SIX Group formally says that there are no plans to include digital currencies on its digital assets platform. SIX Group is looking to bridge the gap between crowdfunding and ICOs rather than getting involved in cryptocurrency trading.  
  • Union Bank AG, a Liechtenstein bank, is issuing its own security token and native cryptocurrency in hopes of becoming the world's first blockchain investment bank.    
  • UPS has filed another patent with the USPTO which would seek protection for a system which uses blockchain technology to store information like a packages’ destination, actual movement of the package, and transportation plans in a distributed ledger network.   
  • London-based Wirex, a Bitcoin wallet and payment card provider, announces it is the 3rd crypto-enabled company to receive a e-money license from the UK financial regulators.  Wirex can now issue electronic money and provide payment services throughout the EU and European Free Trade Association.  
  • Zhesang Bank, one of the largest privately-owned commercial banks in China, has issued securities worth USD$66mm using blockchain technology. According to CoinDesk, the blockchain platform, called Lianrong, was designed in-house by the bank to allow registered companies to broadcast account receivable assets to potential investors and to further let them settle invoice transactions as peer-to-peer securities.  

Regulatory Enviornment

  • Binance CEO Changpeng Zhao talks about why Bitcoin probably wouldn’t get listed now on Binance during an interview with Bitcoinist. Binance prefers to launch “high quality” coins and wants to have direct contact with creators/founders -- the anonymous, decentralized launch of Bitcoin a decade ago would be a non-starter for the Hong Kong-based exchange.  
  • The Chinese government is banning commercial crypto and blockchain events after pressuring local financial authorities to speed up the development of blockchain technology.  Crypto commentators suggest this is part of a strategy to enable stricter capital controls across the country by making it difficult for local crypto investors to use cryptocurrencies as a vehicle to move funds outside of the country.  
  • An article on this AM discusses the trend where ICOs promise to destroy redeemed tokens, to help boost the value of new cryptocurrencies.  The thinking is pretty simple: after raising capital using token, entrepreneurs may eventually buy back the tokens from investors in the future.  If the tokens are destroyed after being redeemed, the contraction in supply will boost the value of the existing tokens.  This demand/supply dynamic is exciting potential investors in ICOs.  
  • Police in India have arrested the Asia Head of Bitconnect, a now defunct cryptocurrency trading platform. Authorities accuse Bitconnect of being a multi-billion dollar ponzi scam where investors would put capital into a vehicle that would be managed by a trading bot promising yield on their cryptocurrencies.   
  • Several Indian municipal corporations will begin using blockchain technology to issue birth certificates. The local governments will be using a platform developed by Lynked.World to simplify the engagement and identification processes in India by permitting users to maintain control of a digital repository that will be used to verify personal, educational, and professional information through a P2P network.  
  • The commissioner of the Financial Services Agency (FSA) in Japan, the financial regulator in the country, would like to see the cryptocurrency industry to continue to grow but under “appropriate regulation”.  The FSA needs to find a balance between consumer protection and innovation according Toshihide Endo, the commissioner of the FSA.  
  • US cryptocurrency exchange Bittrex is partnering with Rialto Trading, a regulated alternative trading system, to launch blockchain-based securities.  If the regulators approve of the idea, the Bittrrex-Rialto partnership is looking to launch products like issuance advisory service, placement, trading and custody.   
  • Indiegogo, an international crowdfunding firm, will be using real estate backed tokens to raises funds from accredited investors. According to the online webiste The Verge, the  digital token, called Aspen Coin, is registered with the SEC and will be available for purchase with U.S. dollars, as well as major cryptocurrencies Bitcoin (BTC) and Ethereum (ETH).  
  • Seven Stars Cloud Group, Chinese a blockchain and AI technology company, signed an exclusive contract with National Transportation Capacity Ltd (NTS), the largest electric bus operator in China, that will permit them to issue fixed income lease financing-based products.  The arrangement should help Seven Stars raised USD$24bn.  
  • Japanese Financial Giant SBI Holdings is making a new investment in a cryptocurrency exchange that is currency under investigation by the Japanese Financial Services Agency (FSA). The cryptocurrency trading platform, LastRoots, is among the unlicensed cryptocurrency exchanges that are being scrutinized by the FSA following the USD$520mm hack of Coincheck in January 2018.  
  • The Shanghai Stock Exchange (SSE) and Insurance Asset management Association of China have agreed to work together to improve local insurance and pension industries through the use of blockchain technology. SSE, the fourth largest stock exchange in the world, will be partnering with IAMAC, Changjiang Pension Insurance Company, Tokyo Maritime Sunshine, and others.  
  • A group of lawmakers, judges and industry experts in South Korea are forming a new group to discuss legal issues. Blockchain Law Society will hold its founding conference on August 24th where participants will be able to discuss regulatory issues surrounding blockchain.  
  • The Winkelvoss Twins, through their cryptocurrency trading platform Gemini, are partnering with Bittrex and bitFlyer USA to form the Virtual Commodity Association Working Group (VCAWG). The VCAWG will be a self-regulatory organization (SRO) that will try to institute and enforce industry standards for the emerging cryptocurrency industry.

General News

  • The lawsuit against AT&T, about lost cryptocurrency funds, is getting more interesting.  Michel Terpin, the plaintiff in the lawsuit, claims AT&T permitted hackers to get control of his phone via a hacked SIM card.  Terpin claims that AT&T alerted him that his password had been changed remotely 11 times.   AT&T only cut off the hackers’ access to Terpin’s phone AFTER significant funds had been stolen.  
  • A Bitcoinist op-ed suggested that mass adoption of cryptocurrecny and blockchain projects will be driven by console gaming industry.  Since the majority of gaming takes places online, either through P2P networks provided by console manufacturers or through mobile platforms like cellphones or tablets, the gaming ecosystem naturally lends itself to disruption by blockchain.  The writer highlights that the trends in microtransactions lend themselves to cryptocurrecny and blockchain solution(s).    
  • According to cryptocurrency exchange Bitfinex, short orders are nearing all-time highs. At the moment, there are 39,542 short orders outstanding on Bitfinex, the second highest level since April 12, 2018.  
  • After being hacked this past June, South Korean cryptocurrency exchange Bithumb recorded net profit of USD$35mm for C1H2018.  Total revenues were USD$270mm while operating profit was USD$194 in spite of a significant drop in trading volume following the USD$31mm breach in June 2018.  
  • A research report from Sanford Bernstein suggest that Bitmain’s monopolistic position in the bitcoin mining manufacturing industry is deteriorating.  According to the analysis, competitors such as Canann and Ebang International are catching up to Bitmain and cause pricing pressure on Bitmain’s products.  The decline in cryptocurrency market valuations have further put downward pressure on Bitmain profitability and returns on capital.  
  • Bitmain, the world’s large Bitcoin mining manufacturer, is introducing a new 18 terahash water-cooled mining device.  The new rig, called the Antminer S9 Hydro, will have a hashrate of 18TH/s and will consumer ~1,728W.    
  • Chinese regulators issued a warning Friday about business schemes looking to raise funds illegally by claiming to be related to blockchain and/or cryptocurrency projects.  The People’s Bank of China, the Ministry of Public Security, the Banking Regulatory Commission, the General Administration of Market Supervision and the Central Network Information Office issued a joint statement condemning these blockchain projects, notably those that have operations using overseas IP addresses but solicit investment from Chinese residents.  
  • Diar Ltd, a research firm using data from CoinAPI, finds that cyrptocurrency trading volumes are shifting away from US exchanges to foreign exchanges (primarily Asian).  According Diar’s analysis, Coinbase and Bitstamp have seen their total volumes drop 83% and 73% YT 
  • A report from Arizona State University suggested that mining blocks of 896 kB or greater on the Dash network are uneconomical. The analysis was conducted as part of a USD$350k partnership with Dash to determine the scaling challenge and potential opportunities for the Dash blockchain network. The report assumes a transaction fee of  .01 DASH per MB fee density, a mining reward of 1.67 DASH and an economic orphan rate increase of 2.15% per MB. It is feasible for the Dash network to scale to block sizes of 10MB when using the xthin block propagation protocol while it could scale to between 6MB and 8MB block sizes when employing the compact block propagation protocol. The Arizona State researchers recommend that the coded limit on block size not exceed 5MB while limiting the capacity to under 890KB for every block.  
  • Factom, a blockchain technology that supports auditing and securing data records, has filed a blockchain patent for a system enabling document validation on the blockchain.  The system will secure sensitive financial and personal information protected with a hashing algorithm that splits the sensitive information into different shares and then distributes the shares across different blockchains for added security. The data is essentially encrypted and then stored in separate blockchain data vaults, a design that could prove very highly secure if well-implemented.  
  • Katrina Kelly-Pitou, a research associate in the electrical and computer engineering department at the University of Pittsburgh is arguing that environmental concerns about Bitcoin mining is a red herring. The focus on the energy consumption of Bitcoin mining seems to always ignore the use of renewable energy. Kelly-Pitou argues that the debate should be focused on whether the electricity to support bitcoin mining is generated, not the absolute amount of electricity used.  
  • Russian internet security company Kapersky Lab believes North Korean hackers have infiltrated a cryptocurrency exchange with malware for both Windows and macOS.  The report by Kapersky Labs does not name the crypto exchange. 
  • Michael Casey, Chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative, published an op-ed today on CoinDesk that suggests cryptocurrency enthusiasts and evangelists need to get serious about properly educating the general public about blockchain.  Casey argues that rather than debating price fluctuations and valuations in Bitcoin, cryptocurrency market leaders should be engaging with everyday people about the positives of Bitcoin and blockchain.  
  • The fight to keep the USD$200mm Siacoin blockchain platform free of corporate interest is turning into a fight between the Siacoin founders/developers and manufacturers of mining equipment like Bitmain. Siacoin developers have recently suggested upgrades to the existing Siacoin protocol which would disable mining products built by Bitmain.    
  • Tube8, an adult video service and a subsidiary of Pornhub, announces it is partnering with Vice Industry Token (VIT) to pay viewers for interacting with content using VIT tokens.  The goal would be to fully tokenize Tube8’s online platform.   
  • The UK Ministry of Justice is exploring blockchain as a tool to secure digital forms of evidence according to CoinDesk.  The idea, as explained by Deputy Director Balaji Anbil is that blockchain technology can be used to assist in handling digital evidence 
  • UPS has filed another patent with the USPTO which would seek protection for a system which uses blockchain technology to store information like a packages’ destination, actual movement of the package, and transportation plans in a distributed ledger network.   
  • According to Upwork’s quarterly skills report, demand for persons with blockchain skills are now the most sought after in the job marketplace with demand significantly outstripping supply.    
  • The World Bank and Commonwealth Bank of Australia have issued a A$100mm (USD$73.16mm) public bond exclusively on a blockchain network.  
  • Several blockchain-powered news apps have been suspended by WeChat according Lanjinger, a local financial news outlet.  The accounts were purportedly suspended after being suspected of pushing ICO and cryptocurrency “hype” which is in conflict with WeChat’s terms of services. Deepchain, Huobi News, Node Capital-backed Jinse, and CoinDaily are some of the news apps impacted by WeChat’s 
  • The Chinese state-owned news agency, Xinhua, is reporting that Chinese police have arrested 3 people in relation to losses of USD$87mm BTC in relation to hacks targeting corporate and personal networks.   

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

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