Crypto Hits Lows Then Carney Blows
Ok CryptoCorner fans let’s get down to business and lead off with the settlements which took all the Crypto’s we follow to new weekly low settles for 2018, except for Litecoin:
The big loser on the week was NEO down some 25.5% with Monero and Zcash close behind. Bitcoin held up quite well but it too lost 9.2%. Ripple hit new lows to 70 cents and we warned of the usefulness of this pseudo-crypto and the adoption by mainstream banking sectors will most likely work against its adoption as a decentralized crypto currency, which it is not.
As far as our CryptoCorner Index it settled the week at $3301.35 -$353.43, losing 9.7% to put in a new 2018 low as well:
So, with all that negativity over the weekend we had some positive developments from comments coming out of the G20 overlords meeting. Reuters reported that BOE Mark Carney, who is also head of the FSB (Financial Stability Board) told members of the G20 that “crypto assets do not pose risks” to the world’s economy. In a letter to the G20 the rationale for his position was that they are just a small portion relative to the entire financial system. Carney’s statement did cause Bitcoin to rise about $1k off its lows. There are some major speculations circling as to the continued sell off and relative shallow bounce, ranging from continued Mt.Gox selling, to IRS related selling, to further SEC crackdowns on ICO’s, but all of the above are very real possibilities. One thing I want to mention concerns the continued selloff in Ethereum. Not sure if this is just a side effect of the utility that the Ethereum platform provides, but it concerns ICOs. In a pre ICO stage a startup blockchain will take in Ethereum and replace it with their own token once their token sale is complete, meaning that the original holder of Ethereum, is sending to the ICO firm their Ethereum and in return will receive the firms own token after the ICO. I believe the firm that is receiving the Ethereum tokens is causing the price to fall as it liquidates to capitalize their firm upon launching and monetizing after the ICO is complete. I am not sure if the firms that are doing these ICO’s liquidate the Ethereum in any rational manner or if they just sell it at once, but it would seem logical that firms convert funds as quick as possible and monetize their operation as quick as possible. So, it is my theory that ICOs will continue to advance and pressure Ethereum down at certain given points in time. No, I am not saying that the price shouldn’t rebound, but I am just stating a potential selling source that may remain constant at certain points in time. In other news this week, Northern Trust and PwC have partnered up to offer real time equity audits via Blockchain. Taken directly from their statement released on the 19th“The solution developed by Northern Trust is based on the open source Linux Foundation Hyperledger Fabric. Northern Trust is also using the IBM Blockchain Platform on the IBM Cloud to develop and run the network with hardware assisted cryptography and key management to enhance the safety and scalability of these transactions.” Reuters reported on the 14th that UK based Coinfloor is planning to launch a physically settled bitcoin futures product. They are going to launch a futures exchange for digital assets that will include the first physically delivered bitcoin futures contracts. Chicago based DRW is among Coinfloor’s investors and was found in 2013. Winklevoss twins of the Gemini exchange announced they have submitted a proposal to create a Virtual Commodity Association. This would be a self-regulatory organization in charge of policing digital currency markets and custodians. SROs are just a further advancement in the Blockchain and Crypto ecosystem and users should welcome such action and not look at it from a constraining point of view. Bloomberg reported that CEO Changpeng Zhao of Binance is planning to launch a decentralized exchange in the next few months. Binance, which is the largest cryptocurrency exchange by trading volume is developing a public blockchain for the transfer and trading of digital assets. Zhao specifically stated that “Binance Chain (the decentralized exchange) will be attractive for those who value anonymity and security more than speed and liquidity.” We welcome this development and feel that this may be a gamechanger and are excited at the prospects to come. In other news, Porsche is getting into the blockchain space via possible applications such as opening and locking car doors, better data collection to improve safety capabilities of autonomous driving and other future prospective applications. We know that blockchain will grow pervasive throughout most industries and autos is certainly going to see benefits in the future from this technology, that we are certain. Also heard last week, was hedge fund billionaire Alan Howard, co-founder of Brevan Howard said he has made personal sizeable investments in Cryptocurrency over the last year. If Brevan Howard is also participating in the trading of Bitcoin and other crypto’s we can rest assure they are utilizing HFT and Blackbox models to move these markets, competing alongside some of the other notable hedge fund and HFT trading groups. Ok let’s get to the tech charts and see if we can muster a bounce in the crypto space this week:Bitcoin is up first, and we talked about the importance of the $7200 area, which has held and has now rallied nicely:
Ethereum has taken a beating but finding footing here:
Monero broke $196 but back above now, so short term bullish:
NEO broke down to the $50 area but is now back above the important $67 level:
Ok that’s it, we recently put together an analysis of VINchain an upcoming ICO and if anyone is interested in reading the analysis shoot us an email and we can send that out, VINchain is set to change the data collection model on used cars and that just seems to be the beginning. We hope you enjoyed this week’s CryptoCorner, we look forward to continuing the ever expanding blockchain and cryptocurrency world. We strive to not waste your time and rather point out things that we deem important in the continually evolving space and we hope that point stands out. We understand the plethora of updates that exist and we are glad you have chosen to stick with us. Please forward this to your family, your friends and have them sign up for the letter and please go read our other weekly global macro letter that is updated each week at our blog www.econemotions.comand don’t forget to hit the subscribe button! Cheers!
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