Daily Archives: January 1, 2019

BitcoinNews.com Daily Podcast 31 December 2018: How Will Bakkt Impact Bitcoin Market?

BitcoinNews.com Daily News Podcast

Listen to the 31 December 2018 BitcoinNews.com Daily Podcast below.

On this edition of the BitcoinNews.com Daily Podcast, we discuss the crypto market situation as 2018 ends. Crypto is stable to slightly down, while stocks are up on the last trading day of the year. Bakkt has received a USD 182 million investment, and we discuss the potential interactions between Bakkt physical Bitcoin futures and CME cash-settled Bitcoin futures.

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Iran Reinforces Its Stance Against Telegram Crypto

Iran Reinforces its Stance Against Telegram Crypto

The Iranian government has reinforced its position on the ban of Telegram messaging app in a recent post by the Tehran Times yesterday.

According to the news outlet, the Secretary of Criminal Content Definition Task Force Javad Javidnia said: “One of the most important factors in banning Telegram was a sense of serious economic threat from its activities.”

The authorities have also issued warning against those with intent to support the native cryptocurrency of the app Gram, saying that “any cooperation with Telegram messaging app to launch Gram, the messaging app’s cryptocurrency, in Iran constitutes an action against national security and will be dealt with as a disruption to the national economy.”

The Iranian government has been hostile towards the Telegram messaging app since the political rouse in December 2017.  It was also reported that head of Iran’s High Council for Cyberspace Hassan Firouzabadi, wrote in an op-ed that it was not in Iran’s interest to continue allowing access to Telegram inside the country. The government decided to ban its use or association with its tokens in the region since early 2018.

Telegram is well known for its high-end encryption model as well as for being the go-to app for crypto-related community building. It was involved in a seed funding round where it raised USD 1.7 billion, notably one of the most successful crowdfunding in 2018.

Iran had criticized the Telegram ICO giving the impression that it “undermined the national currency.” However, in a recent development, the Iranian government was in the process of developing its own cryptocurrency in an attempt to undermine the sanctions being imposed by the US which is currently taking a toll on the economy.

Iran is not the only one against the messaging platform. The Russian government has also made attempts to ban the messaging app when it refused to hand over its encryption keys. Efforts to that end have proven to be unsuccessful so far.

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Analysts See 2019 as the Year of Institutional Crypto Investment

A number of investment funds and cryptocurrency firms are lauding 2019 as the year of institutional investor, 24 hrs before its arrival.

Many see large scale investment being re-examined in 2019 after being scared off by Bitcoin’s December dip. Wall Street notably stood back from the brink prior to the end of the year with Goldman Sachs’ much-publicized plans to open a crypto trading desk called “top-of-the-market-hype thinking” by one New York executive.

Nasdaq is already supporting crypto exchanges and the company is certainly not new to cryptocurrency’s underlying technology, blockchain. Apart from its long-term relationship with blockchain startup, Chain, it has recently announced a collaboration with cryptocurrency exchange Gemini.

Downunder, Henrik Andersson, chief investment officer of Apollo Capital Fund is upbeat on the prospect: “During the coming year we will see a gradual adoption from institutions,” he said, adding “We have the first US university endowments investing in funds” referring to major universities’ announcements that they were to invest in cryptocurrencies.

Harvard University, the Massachusetts Institute of Technology (MIT), Stanford University, Dartmouth College, and the University of North Carolina (UNC), have all made investments from their endowments into at least one crypto fund in 2018.

Another Australian, Every Capital’s director Tom Surman believes that the institutional phase has already begun, adding, “Massive retail offerings and institutional investors are probably the only groups that can meaningfully move the needle on the crypto market cap from here on.”

“The fact that David Swensen [Yale’s chief investment officer] put an investment into bitcoin — with his reputation on the line, his endowment on the line — tells you something…Some of the smartest people in the investing world think it’s a store of value,” said Mike Novogratz, who had been talking up the industry for much of 2018.

Around the world, national banking institutions continue to dabble with the crypto adoption, mainly as a step towards side-stepping internal financial complexities caused by sanctions or recession, but most banks are reticent to commit to launching cryptocurrencies of their own.  Most prefer to watch and wait.

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Bakkt Announces $182.5 Million Funding Round, Launch Set for Early 2019

Bakkt Announces 2.5 Million Funding Round, Launch Set for Early 2019

In a blog post yesterday, institutional grade digital asset platform Bakkt announced the successful first seed funding round of USD 182 million.

According to the blog post, fourteen investors and partners were listed to have participated in this round, out of which 12 of them had raised the sum. Big players in the traditional finance and fintech industry were mentioned, to include Intercontinental Exchange, Goldfinch Partners, Boston Consulting Group, Microsoft’s Venture Capital arm and Pantera Capital.

The Bakkt project has for the latter part of 2018 been touted as the platform to finally make way for mainstream institutional investors to get into the cryptocurrency game. The blog reads: “Our work today is centered on driving institutional access for digital assets, along with merchant and consumer uses.” The project also revealed that they have expanded the vision to drive mainstream cryptocurrency adoption for the everyday user by extending their partnership to companies like Starbucks.

The announcement also included a current status of the project such as “working closely with the Commodity Futures Trading Commission for the better part of 2018” in order to obtain “regulatory approval for physically delivered and warehoused bitcoin.” They have also “filed applications and the timing for approval is now based on the regulatory review process.”

Another relevant angle the project will tackle while working through the 2019 objectives will also include a focus on “opportunities to provide new infrastructure, including the industry’s first institutional grade regulated exchange, clearing and warehousing services for physical delivery and storage,” reads the blog post.

The project has delayed its launch twice in a row as another official publication reveals that the updated launch timeline which was set for 24 January 2019 will be amended and set for early 2019, in line with CFTC’s process and timeline.

The blog post also revealed as many would agree, that 2018 was indeed an active year for cryptocurrency with Bitcoin at the center stage as volatility index peaked, as well as a notable increase in investment from venture capitals in distributed ledger technology and digital assets.

Many analysts and cryptocurrency enthusiasts have opined that the coming of the Bakkt will play a crucial role in restoring the market from the year-long bearish trend.

 

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UK’s FCA Continues Clampdown on Unauthorized Exchanges

FCA, UK, exchanges

The UK financial regulator, the Financial Conduct Authority (FCA), is continuing its probe into the activities of unauthorized cryptocurrency firms.

According to information received to a freedom of information request by The Sunday Telegraph, the FCA had opened inquiries into as many as 67 cryptocurrency related inquiries since the middle of November. 49 of these inquiries are now closed, with 39 consumer alerts being issued to companies operating without authorization. The other 10 have received warnings.

Currently, 18 cryptocurrency related lines of inquiry are still under review following the FCA’s statement cautioning the public earlier this year that cryptocurrency CFDs such as the popular options offered by eToro, were “extremely high-risk, speculative products”. Companies dealing in cryptocurrency related investments in the UK still require rubber-stamping by the FCA before a license to operate is issued.

The FCA has declined to comment on the investigation into the remaining 18 cases. The UK regulator has already revealed its intention to be tough on the cryptocurrency market since digital money is a part of the financial market and subject to the same level of scrutiny. There is already a discussion on banning specific crypto financial instruments, such as Bitcoin futures.

FCA’s executive director of strategy and competition Christopher Woolard cited “integrity issues” as a reason for also considering placing a ban on cryptocurrency derivatives in an event in London on the 20th of November.

The focus, according to Woolard, would be on what the FCA has called “cryptocurrency contracts-for-difference (CFDs)” which would likely cover “options, futures and transferable securities,” with concerns that “retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues”.

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BitcoinNews.com Daily Market Analysis: New Year’s Eve Edition

BitcoinNews.com Daily Market Analysis: New Years Eve Addition

2018 in Hindsight: Do Not Forget Where the Cryptocurrency Market Was When 2017 Began

This is the last day of cryptocurrency trading for 2018, and it has been a wild year, with Bitcoin dropping from over  USD 20,000 on 17 December 2017 to less than USD 4,000 today. The other major cryptocurrencies, like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Dash, Monero (XMR), and Dogecoin (DOGE) have followed Bitcoin into the bear market. Further, increasing Securities and Exchange Commission (SEC) enforcement has made initial coin offerings (ICOs) effectively illegal in the United States, which has brought the ICO market and the numerous cryptocurrencies involved to a standstill. The total cryptocurrency market cap has declined from USD 830 billion to USD 127 billion during 2018, an 85% crash.

That being said, the price of Bitcoin on New Year’s 2017 was less than USD 1,000, and the total cryptocurrency market cap was merely USD 18 billion. The Bitcoin and cryptocurrency markets have more wealth and value than 2 years ago, on the order of hundreds of percent, and people lose sight of this fact because of the severity of the 2018 bear market. Aside from increased cryptocurrency prices and market caps, there are many more blockchain and cryptocurrency companies than 2 years ago. In reality, the cryptocurrency market is looking better than ever despite the overall negative sentiment in the public and mainstream media.

Bitcoin Outlook for January 2019

The price of Bitcoin has been showing weakness in the last days of December 2018, with numerous ‘red candles’ on the Bitcoinwisdom.com 2-hour chart, which are large sell orders dumping at price lower. The biggest event at the end of December was the Chicago Mercantile Exchange (CME) Bitcoin futures expiration on 28 December. The price of Bitcoin crashed from USD 3,750 to USD 3,550 right before the expiration, likely the result of ‘banging the close’. Essentially, when Bitcoin futures traders on CME take out a short position for the month, it is common for them to manipulate the market lower right before the contract expires to increase their short profits, and this is called banging the close. A strong correlation between Bitcoin’s market behavior and the CME futures expirations has been noted throughout 2018.

Generally, during the first week of a futures trading month, the reaction of Bitcoin’s price is a good indication if the market will go up (long) or down (short) during the contract period. The red candles during the first several days since the contract expiration are not a good sign, but it is too early to tell if CME Bitcoin futures traders have collectively decided to go long or short.

The stock market may play an active role in determining Bitcoin’s fate during January. Bitcoin was created in 2009, and the stock market has been consistently in a bull market until the last few months of 2018, with the Dow Jones Industrial Average (DJIA) declining about 4,000 points since October.

It has long been theorized that Bitcoin can be used as a safe haven asset if the stock market ever entered a bear market, since Bitcoin is independent of the stock market. However, Bitcoin has been an unneeded safe haven for its entire existence, since stocks were performing strongly from 2009 through October 2018.

It will be important to watch the stock market over the next week. If the stock market goes down further and solidifies fears of a bear market, then Bitcoin should experience upward pressure. This could lead to CME Bitcoin futures traders taking up long positions for the month. If the stock market recovers during the next week, then that could lead to CME Bitcoin futures traders taking up short positions for January.

Ethereum Constantinople Fork Approaching

As for the rest of the cryptocurrency market, major cryptocurrencies including XRP, Ethereum, Bitcoin Cash, EOS, Stellar, Litecoin, Monero, and Dash are down 2-3% today. The stock markets just opened and the DJIA is up 200 points as of this writing. If today’s stock rally strengthens, the losses on the crypto market could intensify.

Ethereum is currently at USD 137 with a market cap of USD 14.3 billion. Ethereum will be having a fork in the middle of January, code-named Constantinople, and this should be the driving factor for the Ethereum market. A conflict could break out between Ethereum miners and Ethereum developers, since block rewards will be slashed from 3 Ether to 2 Ether, and ASIC mining will possibly be blocked. Ethereum miners have already been struggling during 2018 due to the decline in Ethereum’s price from USD 1,400 to lower than USD 100 during part of December. This slashing of the block reward could be the nail in the coffin for many Ethereum miners. A blockchain split that results in a new version of Ethereum that is favorable for miners is possible.

Despite the potential contention, it is possible that Ethereum’s price will rise relative to other cryptocurrencies pre-fork, due to excitement about the new features coming to Ethereum and the lowering of the inflation rate. This sort of price rise was observed before the Bitcoin Cash fork, despite it being obvious that a major conflict would break out when the fork finally came. Therefore, perhaps Ethereum will rally during the first half of January, but it also depends on the overall crypto market situation. If the crypto market continues to be bearish, then an Ethereum speculative rally could be negated. If the crypto market moves into a strong rally due to falling stocks and CME Bitcoin futures traders taking up long positions, then the Ethereum rally could be amplified.

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BitcoinNews.com Daily Podcast 30 December 2018: Crypto Market Showing Some Weakness As December Ends

Listen to the 30 December 2018 BitcoinNews.com Daily Podcast below.

On this edition of the BitcoinNews.com Daily Podcast, we discuss how the stock market is beginning to have a bigger correlation with the crypto market. That being said, the crypto market is showing some weakness as December ends, and it is uncertain which way the market will move during the beginning of 2019.

Follow the Bitcoin News Daily Podcast on AnchoriTunesSpotifyGoogle PodcastsStitcherRadio PublicPocket CastsOvercastCastbox, and Breaker. We broadcast a new episode every day, covering the most important topics in the crypto, Bitcoin, and blockchain world!

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