Latest from the Quantamize Blog

Cryptos dift lower this week as ICOs withdraw record amounts of ETH in December

Dec 28, 2018


Top 5 Cryptocurrencies sorted by 7 Day Price Percent Change

On Mobile/Tablet scroll to the right

Name Ticker Price 1H %Chg 24H %Chg 7D %Chg Market Cap Volume
IOTA MIOTA USD$0.36 4.59% 7.37% 6.55% USD$989,158,383 USD$14,663,716
Litecoin LTC USD$31.97 5.29% 7.21% 0.84% USD$1,910,764,751 USD$458,649,470
Monero XMR USD$49.83 2.9% 5.67% -5.75% USD$831,028,546 USD$20,573,304
Ethereum ETH USD$132.09 7.94% 5.56% 16.85% USD$13,745,726,401 USD$2,975,348,304
Bitcoin Cash BCH USD$171.04 9.87% 4.69% -12.68% USD$2,999,273,097 USD$453,052,764

Developments in Financial Services

  • A currently ongoing hack against cryptocurrency wallet Electrum has reportedly resulted in nearly 250 Bitcoin (BTC), worth roughly USD$937,000, stolen from users’ wallets. Electrum confirmed the ongoing hack, which is using a phishing technique, in a post on GitHub. The hacker allegedly set up multiple servers that send an official-looking message telling users to update their Electrum Wallets through a malicious URL if users transact with those servers -- the hacker then empties the victim’s wallet. 
  • A governmental committee in India is reportedly set to suggest that cryptocurrencies be legalized in the country, although with, “strong,” rules, according to news outlet New Indian Express. An anonymous senior official who allegedly sat in on the committee meetings told the newspaper that, “We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on.” 
  • Arthur Hayes, CEO of BitMEX, said in an interview with Cointelegraph Japan that Initial Coin Offerings (ICOs) will return within the next, “18 months,” and that Ethereum (ETH) will, “rebound aggressively,” as a result. “The use case for Ether is primarily ICOs. That market is dead right now,” said Hayes, adding that, “Once there are new issues, then Ether will rebound aggressively. When the ICO market returns, Ether will quickly test USD$200. The timing of the ICO rebirth is 12 to 18 months out.” In discussing his reasoning for a return of the ICO market, Hayes said, “Security tokens and stablecoins will prove attractive sirens for investors in 2019. While their fundamental raison d’etre is flawed, investors in this time of pain will latch onto anything they believe will be their ticket to easy riches.” 
  • Bank of America has filed a patent application that outlines the use of blockchain technology in handling portions of the multinational investment bank’s cash handling devices. The patent, titled, “Banking Systems Controlled by Data Bearing Records,” mentions blockchain technology 58 times in discussing how it could improve traditional deposit and withdrawal systems. The patent specifically discusses the use of blockchain technology in ATM services, explaining that, “Blockchain technology may be used by automated teller machine to accelerate transaction speed and/or facilitate other types of transactions in addition to ATM transactions like cash withdrawals and deposits, such as gift registry transactions.”   
  • Binance, the world’s largest cryptocurrency exchange, announced the launch of two new trading pairs against Ripple (XRP) in a blog post Monday. Binance will begin offering the TRX/XRP (TRON) and XZC/XRP (Zcoin) trading pairs, marking the first time that Binance will use XRP as a base currency. On the news, XRP jumped up to 24% to trading at a high of USD$0.44/token. 
  • Henri Arslanian, PricewaterhouseCoopers’ (PwC) fintech and crypto lead for China & Hong Kong appeared on Bloomberg TV’s, “Daybreak: Australia,” and discussed that 2019 will be a strong year for the broad crypto market. In an interview, Arslanian discussed that, “In 2018, we saw a lot of the big players entering the space. In 2019, I expect even more players to enter into the sector as well, especially in different ways. Some of them may decide to launch their solutions, others may look to partner with crypto firms, and others might look to invest in crypto companies.”   
  • Huobi, the third-largest cryptocurrency exchange in the world by daily trading volume, has added support to altcoin EOS (EOS) on its derivative market, according to an official press release today. Huobi users will now be able to enter both long and short positions on EOS with a capability to leverage positions up to 20x. Huobi’s decision to add EOS support on its derivatives market comes as part of, “ongoing efforts to address customer demand.” 
  • The launch of Bakkt, a cryptocurrency exchange venture headed by the Intercontinental Exchange, may be delayed once again after the company set a January 24th, 2019 launch date just weeks ago, according to a report by CoinDesk. As Bakkt intends to offer Bitcoin (BTC) futures trading and custody services, the platform may be forced to delay its launch once again because it does not have the necessary approvals from the US Commodity Futures Trading Commission (CFTC).   
  • The National Bank of Kuwait (NBK) is launching a cross-border blockchain remittance platform based on RippleNet, according to an official announcement Thursday. The NBK, which is the largest financial institution in Kuwait with USD$86.3bn of assets under management, will launch NBK Direct Remit in order to increase efficiencies for international transactions. NBK Deputy CEO of group operations and technology, Dimitrios Kokosioulis, explained the financial institution’s reasoning for joining RippleNet by citing an ability for customers to, “make money transfers within seconds,” and at, “any time of the day.”  
  • The South China Morning Post (SCMP) is reporting that cryptocurrency mining giant Bitmain and notable cryptocurrency exchange Huobi have confirmed plans to lay off staff after the 2018 crypto bear market. The report quotes Bitmain saying that the company will undergo, “some adjustments to our staff this year,” adding that, “A part of building a sustainable business is having to really focus on things that are core to that mission and not things that are auxiliary. As we move into the new year, we will continue to double down on hiring the best talent from a diverse range of backgrounds.” Huobi also confirmed the plans to lay off staff while stressing that the company continues to onboard staff, “for its core business and emerging markets.”  



Regulatory Environment

  • Although US regulators have filed over 90 fraud cases relating to the cryptocurrency industry over the last 2 years, the Wall Street Journal (WSJ) reports that only USD$36mm has been recovered for victims. The WSJ notes in its report that the US Securities and Exchange Commission (SEC) has ramped up its efforts in 2018 to pursue crypto fraud cases; last month alone, the US SEC filed five individual cases, more than the four total cases filed in the entire year of 2017. 
  • Bithumb, a notable South Korean cryptocurrency exchange, has won a lawsuit involving an investor’s USD$355,000 loss in an alleged hack, according to local newspaper The Korea Economic Daily. Within hours of making a deposit, South Korean civil servant Ahn Park alleged that an unidentified hacker compromised his account and exchanged its fiat for Ethereum (ETH). In explaining his ruling in favor of Bithumb, the South Korean judge presiding over the case said that, “In general, virtual currencies cannot be used to buy goods and it is difficult to guarantee their exchange for cash because their value is very volatile. Cryptocurrencies are mainly used for speculative means, and it is not reasonable to apply South Korea’s Economic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of the Financial Services Commission.” 
  • Mark Karpeles, the former CEO of defunct cryptocurrency exchange Mt. Gox, professed his innocence during the final argument of his trial. In a Tokyo court on Thursday, Karpeles assured that he treated money that was allegedly embezzled from Mt. Gox, “as a loan from the company,” that he would settle later. Karpeles has been charged with the embezzlement of roughly 340mm yen (USD$3mm) and manipulating the exchange’s financial statements to artificially inflate cash balances. 
  • Members of US Congress introduced a bill last week to combat Iran’s efforts to develop its own cryptocurrency in order to avoid sanctions. Introduced by Wisconsin Representative Mike Gallagher, the, “Blocking Iran Illicit Finance Act,” calls for sanctions against those who knowingly provide funding, services, or, “technological support, used in connection with the development of Iranian digital currency.” 
  • Mizuho Financial Group, a Japanese based bank holding company, is planning to introduce a digital currency for use in remittances and payments in March, according to local news outlet Nikkei. The digital currency will reportedly offer fees to retail shops that are significantly lower than those charged for credit card usage. The report details that Muzuho has already brought, “about 60 regional banks on board,” to promote the new digital currency. Eventually, regional banks will be able to provide services for this digital currency under a single, common name, although the infrastructure has yet to be set up yet.  



General News

  • A survey conducted by Indian telecommunications giant Tata Communications finds that 44% of institutions have begun to adopt blockchain technology. The survey also notes that a growing skill gap is becoming a barrier to blockchain technology, artificial intelligence (AI), and Internet of Things (IoT) adoption. The report by Tata details, “This disparity highlights that directors and business unit heads must get better at informing the CEO of any challenges they are facing when rolling out new technologies such as IoT and AI.”  
  • A Taiwanese man has been arrested after allegedly mining millions of dollars-worth of cryptocurrencies using stolen power, according to a report by news outlet EBC Dongsen News. The report details that the individual in question sole electricity worth over NT$100mm (USD$3.25mm) from various business premises in order to mine Bitcoin (BTC) and Ethereum (ETH). The report also quotes Deputy Head of the fourth brigade of Taiwan’s Criminal Investigation Bureau, Wang Zhicheng, who said, “The group recruited electricians who managed to break into the sealed meters in order to add in private lines to use electricity for free before that usage reaches the meters.” 
  • A USD$4bn lawsuit against Craig Wright, a prominent crypto industry member and currency Chief Scientist of nChain, will move forward after a United States court rejected repeated requests for dismissal from Wright. The lawsuit pertains to the alleged theft of Bitcoin (BTC) from the estate of deceased cryptocurrency developer David Kleiman. The case originally came to courts in February when Kleiman’s family claimed Wright stole as much as 1.1mm BTC after Kleiman passed away.   
  • A Wall Street Journal (WSJ) report finds that more than 15% of cryptocurrency project that raised funds through Initial Coin Offerings (ICOs) have serious red flags. The WSJ investigation analyzed 3,300 cryptocurrency offerings and ICOs that launched in 2017 or 2018 -- 513 of these projects contained red flags, including plagiarism, misrepresented identities of the project’s founders, and/or a promise of unrealistic returns.   
  • Anthony Pompliano, Founder of Morgan Creek Digital Assets, told CNBC today that Bitcoin (BTC) has, “lower to go,” despite its price rebound above USD$4,000 last week. “Short-term, I actually think we have lower to go,” Pompliano told CNBC after accurately predicting a plunge of BTC to USD$3,000 in November. Additionally, Pompliano denied in the interview assertions that the price movement of BTC is correlated with traditional and/or FAANG (Facebook, Apple, Amazon, Netflix, and Google) stocks. 
  • Bitmain, a Chinese cryptocurrency mining giant, has allegedly fired its entire staff of Bitcoin Cash (BCH) developers according to early reports. The alleged layoffs will target up to half of BItmain’s 2,500-person workforce. This news comes after Bitmain announced the closure of its blockchain development lab in Israel earlier this month, citing low crypto prices.   
  • China’s latest release of its state-sponsored rankings of major cryptocurrencies ranks Bitcoin (BTC) 18th and awards the #1 position to domestic blockchain platform EOS (EOS). As per a press release on Friday, China’s Center for Information and Industry Development (CCID) ranked 24 major cryptocurrencies based on basis tech, applicability, and creativity. In the state-sponsored report’s June rankings, EOS also held the top position.   
  • GMO Internet Group, a Japanese Internet giant, is ceasing its Bitcoin mining hardware operations after an abysmal 4Q2018, according to a disclosure by the company. GMO recorded an, “extraordinary loss,” in 4Q2018 while explaining that it will, “no longer develop, manufacture, and sell,” crypto mining hardware. GMO added in its public statement that, “After taking into consideration changes in the current business environment, the Company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.”   
  • Joseph Lubin, co-founder of Ethereum (ETH), announced on his Twitter that he is, “calling the cryptobottom of 2018,” on Friday. In his tweets, Lubin discussed an, “epic amount of fear, uncertainty, and doubt,” from industry media and social commentators that has driven crypto prices to bottom. Lubin concluded by saying that, “The sky is not falling. From my perspective, the future looks very bright. Peeking into 2019, if you could see the landscape through my eyes, you’d have to wear shades.” 
  • LocalBitcoins weekly trading volume through the Venezuelan Bolivar reached an all-time high for the week ending 12/22/2018, marking the fifth week in a row that the metric reached a record high. For the week ending 12/22/2018, 1,974 Bitcoin (BTC) were traded through the Venezuelan Bolivar, up 11% from last week’s total of 1,743 BTC. This news comes as the Venezuelan Bolivar nears an inflation rate of 1,000,000% for 2018. LocalBitcoins is a startup based in Finland that facilitates over-the-counter trading of local currency for BTC.   
  • Projects that conducted their Initial Coin Offerings (ICOs) on the Ethereum Blockchain have rapidly liquidated their treasury holdings in November and December 2018, according to data from Diar.  In November, ICO projects withdrew 290,1000 Ethereum (ETH) from their treasury accounts, the largest amount in any month of 2018 at the time -- so far in December, ICOs have withdrawn a massive 423,800 ETH from their treasuries, on pace to double last month’s total.   
  • Researchers attending the 35C3 Refreshing Memories conference showed that they were able to hack the Trezor One, Ledger Nano S, and Ledger Blue hardware wallets on Thursday. Hardware designer and security researcher Dmitry Nedospasov, software developer Thomas Roth, and security researcher Josh Datko made up the research team behind the project, dubbed, “”. The research team was able to successfully extract the private key from the Trezor One hardware wallet; the exploit only works, however, if the user did not set a passphrase for the hardware wallet.  
  • The 2018 McAfee Labs Threat Report released in December finds that cryptocurrency mining malware activity increased roughly 4,000% over the last 12 months. According to the report, crypto malware activity spiked from 4Q2017 through 1Q2018 before cooling in 2Q2018 and jumping again in 3Q2018. The report details further that criminals leveraging crypto malware have targeted those who use, “routers or IoT devices such as IP cameras or video recorders as crypto miners,” because of their lack of security.   
  • The Litecoin Foundation announced that it will sponsor an Ultimate Fighting Championship (UFC) event in a post on Wednesday. In its statement, the Litecoin Foundation announced that it has become the, “Official Cryptocurrency Partner,) of the UFC light heavyweight title fight between professionals Jon Jones and Alexander Gustafsson. The Litecoin Foundation discussed that the sponsorship is a part of its plan to expand adoption of cryptocurrencies, writing, “With brands and institutions continuing to push into cryptocurrency and blockchain, this is yet another signal of technology moving closer towards the mainstream.”  
  • The third annual Stanford Blockchain Conference will focus on security and systemic risk and take place from January 30th to February 1st, according to a post by organizers. The annual three-day event will feature presentations and discussions on a variety of technical topics with participation from both Stanford faculty and notable firms like Blockstream, ConsenSys, and Polychain Capital. According to the post by organizers, the conference, “will explore the use of formal methods, empirical analysis, and risk modeling to better understand security and systemic risk in blockchain protocols.” 
  • The United Nations Office on Drugs and Crime (UNODC) is set to partner with, a blockchain-based telemedicine and telepsychology firm, to offer basic healthcare services for free in Eastern Africa. The partnership will see roll out its healthcare platforms to the Eastern Africa market by 2Q2019, according to an official letter. Currently, offers its platforms in 20 different countries while 130,000 users have used its telemedicine service and nearly 70,000 users have used its, “Emotions,” telepsychology platform.   
  • The United States Department of Defense is considering the use of blockchain technology in disaster relief operations, according to a press release by the government organization. Earlier this month, a presentation by the Defense Logistics Agency Troop Support’s Continuous Process Improvement (CPI) also highlighted blockchain technology as a way to help emergency responses.  “We think there’s a lot of potential,” said CPI management analyst Elijah Londo on blockchain technology.  Blockchain technology would replace aspects of current systems, specifically targeting logistics relied on my multiple centralized entities. 

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