| June 7, 2018 | Read in Browser |
 QUOTE OF THE DAY  |
| "Sometimes buying early on the way down looks like being wrong, but it isn't." - Seth Klarman |
Happy Thursday! If you love reading Blockchain Brew, be sure to share it with your friends, colleagues, mom, dog, whoever! Cryptocurrency holders comprise less than 1% of the world's population. If you're here, you're here early. But we can't grow without educating the other 99% and lowering the barriers to entry.
We challenge you today to share or forward this email to one person who you think would be interested in learning more about the industry.
Cheers,
Blockchain Brew Team
| MARKETS |
| COIN | PRICE | 24H |
| | ||
| BTC | $7,718.63 | +1.09% |
| | ||
| ETH | $609.948 | +0.19% |
| | ||
| XRP | $0.683885 | +1.44% |
| | ||
| BCH | $1,152.75 | +0.56% |
| | ||
| EOS | $13.9114 | -1.24% |
| | ||
*Information as of 9:30 AM EST
| EXCHANGE |
Stars are Aligning for Coinbase Expansion Strategy as it Acquires Keystone Capital
SEEKING NEW MARKETS
- Coinbase, one of the most important services in the cryptocurrency industry, has been widely expanding into new markets as the growth in the U.S. retail sector slows
- With Bitcoin dropping almost 60% since the start of the year, retail investors seem hesitant to jump into the cryptocurrency environment
- To combat this, Coinbase has been focused on entering other markets such as the introduction of Coinbase Japan earlier this week, however, they are also on the forefront of welcoming institutional investors into the space
KEYSTONE CAPITAL
- Coinbase has been working to legitimize the cryptocurrency space by bringing it's products to Wall Street, however, licences and regulations have held it back
- Yesterday, Coinbase announced that they will be acquiring Keystone Capital Corp, a california-based financial-services firm
- Many dismiss most parts of the acquisition as insignificant except for one part: the licences
- Keystone Capital is a Finra-registered broker-dealer, has licences to act as a registered investment advisor, and can even run an alternative trading system (ATS)
INSTITUTIONAL RACE
- With over 200 crypto exchanges offering the same coins as Coinbase and more, the retail sector has become too crowded for significant growth to occur
- Instead, the company has focused on welcoming institutional money as the race to Wall Street heats up
- Just yesterday, VanEck and SolidX, two private firms, filed with the Securities and Exchange Commission for a Bitcoin exchange-traded fund
- In addition, Circle, Coinbase's native U.S. competitor, is working to obtain its banking license
IN A NUTSHELL
- Coinbase's acquisition of Keystone Capital uniquely positions them to jump over regulatory hurdles much faster to gain access to institutional money
- However, it won't happen quickly because after receiving approval to operate under Keystone Capital's licenses, President Asiff Hirji believes it will take a few months to integrate their services
| REGULATION |
Bitcoin is not a Security but Most ICOs Probably Are, Says SEC Chairman
SECURITY OR NOT
- The biggest unknown in regards to cryptocurrency regulation right now in the United States is if they should be classified as a security
- The Securities and Exchange Commission uses the Howey Test to determine if a financial instrument should be classified as a security
- By the Howey Test, a financial instrument is a security if "a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party"
SEC CHAIRMAN SPEAKS
- McAfee claims that his presidential campaign will be good for crypto and bring exposure to the space
- His Twitter following seem to agree with him and even have gone far enough to begin brainstorming campaign slogans, like “McAfee 2020 For A Secure Future”
SELF FUNDED
- On Wednesday, SEC chairman Jay Clayton appeared on CNBC to discuss cryptocurrencies and regulation Clayton praised blockchain technologies saying it has “incredible promise”, this is not the first time the SEC has publicly praised blockchain
- The SEC chairman specifically talked about Bitcoin and as it is a replacement for a sovereign currency, should not be classified as a security
Clayton made his point by saying:
“Replace the dollar, the yen, the euro with Bitcoin. That type of currency is not a security.”
- However, his remarks were not all that clear for other cryptocurrencies
- He did not specifically mention any altcoins but coins that act as digital assets will most likely be considered securities
Clayton describes digital assets:
“Where I give you my money and you go off and make a venture […] and in return for me giving you my money, you say, ‘You know what, I’m going to give you a return.’ That is a security, and we regulate that. We regulate the offering of that security, and we regulate the trading of that security.”
TAKEAWAY
- This is great news for Bitcoin, a security classification would bring much more regulation to the cryptocurrency that would hold it back
- It is still unclear how the SEC will classify ETH, but if they decide to classify it as a security, it may be catastrophic to the crypto market
| EXCHANGE |
Huobi Allocates $166 Million to Development if its Own Blockchain Protocol
HUOBI
- Huobi is a cryptocurrency exchange that was founded in 2013 and is headquartered in Singapore
- It is ranked as the third largest exchange by daily volume, trading around $1.3 billion each day
- In addition to its headquarters in Singapore, Huobi also has offices in Hong Kong, Korea, Japan and the United States
HUOBI CHAIN PROJECT
- On Wednesday Huobi announced that they are allocating 30 million Huobi Tokens (worth about $166 million) to the development of its own open source blockchain protocol
- The protocol will be built by developers outside of the company who will receive Huobi Token rewards for their contribution
- Huobi plans for the blockchain to handle ICO fundraising and voting for new tokens to be added to the exchanges
- This project is expected to take a year and a half to complete
A director from Huobi, Chen Guang talked about a balance between centralization and decentralization:
"We want this to be a social experiment. The future is not likely to be entirely decentralized. As such it's important to find the equilibrium that balances the two polars, which is the ultimate goal of this exploration."
| RESEARCH |
Bithumb Survey Shows 40% of Investors Have Intentions for the Long Term
INVESTMENT INTENT
- A survey released today by Bithumb, a popular crypto exchange in South Korea, shows that out of 2,507 respondents, 42.8% said they invest in cryptocurrencies as part of their long-term asset management
- On the flipside, those looking to invest for short-term gains only comprised 27.1% of the participants
- Lastly, 13.1% responded that they only bet their money on cryptocurrencies to get a feel for the financial market
SOUTH KOREAN REGULATION
- The survey also included a set of questions pertaining to the occurrence of South Korean regulation and these numbers are a little more surprising
- Regarding the possibility of South Korea imposing capital gains tax on digital currency, 44.1% said they would reduce their investment and 13.1% said they would pull their money out of the market entirely
- Though 39.5% expressed that they would retain their investments even if a tax was imposed, only a mere 4.4% said they would invest more fiat currency into the market
KEY POINT
- Though a small sample of the total crypto-invested population of South Korea, the survey shows the negative sentitment from the crypto community regarding South Korean taxes
| TODAY IN CRYPTO |
BitShares (BTS)
Feature Release (non-hard fork): Three-week sprints Core Release (Hard Fork): Twice annually: first Thursday of June & December
Lisk (LSK)
"On June 7, Lisk Mentor Matthew and Lisk USA will host Miami’s third Lisk meetup."
Bitcoin Private (BTCP)
Bitcoin Private meetup in Melbourn from 18:00 - 20:00.
Bitcoin Private (BTCP)
Bitcoin Private meetup in Rotterdam from 17:00 - 21:00 (CEST).
Zilliqa (ZIL)
ZIL deposits on Zebpay starting on 7th June. Trading begins at 1 pm IST on 7th June.
Stellar (XLM)
Sean Bennett from Stronghold, will come all the way from Christchurch and will take you on a brief journey through the technology.
Today in Crypto is powered by coinmarketcal.com
| MORE BREWING |
- Software Giant SAP Launches Blockchain-as-a-Service Platform
- Stock Analytics Firm Lowers BTC Year-End Price Prediction by Nearly 17%
- Thailand Trials Central Bank Digital Currency for Interbank Settlement
| COIN OF THE DAY |
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| Dock (DOCK) |
|---|
| Dock is a decentralized data exchange protocol that lets people connect their profiles, reputations and experiences across the web with privacy and security. |
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