Cryptocurrency News Now!: Overstock's Share Price Soars Driven By Its Crypto Exchange's Valuation

Friday, August 10, 2018

Overstock's Share Price Soars Driven By Its Crypto Exchange's Valuation

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MARKET

COIN	PRICE	24H

BTC	$6,277.008428	-3.67%

ETH	$354.621936	-3.39%

XRP	$0.33375	-4.55%

BCH	$583.539274	-5.12%

EOS	$5.503422	-7.09%

*Information as of 9:30 AM EST

REGULATION

Overstock's Share Price Soars Driven By Its Crypto Exchange's Valuation

tZERO

tZero is a subsidiary of the e-commerce site Overstock and a cryptocurrency exchange that has plans to bring "efficiency and transparency" to capital markets
A partnership with BOX digital markets could allow tZero to be the first regulated security token exchange

STO

tZero held a security token offering (STO) that came to a close this past week
The company was hoping to raise $250 million dollars but ended receiving much, much more

GSR CAPITAL

On Thursday, as a part of Overstock.com releasing its second quarter results, an announcement was made that a Hong Kong-based equity firm has invested $400 million in Overstock and tZero
GSR will be acquiring:
- $270 million in tZero equity, valuing the exchange at $1.5 billion
- $104 million in Overstock shares
- $30 million in tZero security tokens

OSTK PRICE SOARS

Overstock may provide investors with the greatest exposure to the cryptocurrency market out of any publicly listed company
Because the company is so involved with cryptocurrency, institutional investors who may not be allowed to invest directly in cryptocurrencies may settle for Overstock as an indirect investment in cryptocurrency
As a result of the tZero valuation, OSTK shares soared more than 15% after hours at the time of this writing

ANALYSIS

The Quest to Finding Exchanges Reporting Fake Trading Volume

CER DIGS DEEP

CryptoExchangeRanks (CER), a platform used to rank crypto exchanges, is investigating exchanges that are suspicious of forging trading volume
To do so, it is pulling the reported volumes from CoinMarketCap and then using other tools to analyze estimated unique users to determine whether or not the volume is fake

EXPOSED

In July, CER first exposed the crypto exchange BitForex in July after uncovering that the estimated total trade volume per user (TTVPU) is $12,824, almost 15 times the TTVPU of leading crypto exchange Binance
Now, in August, CER exposed BigONE after analyzing chart volume and finding a 6,300,000% volume increase from 401 BTC to 126,000 BTC in just three days (June 20th - June 23rd)

MARKETING THROUGH VOLUME

Prior to CoinMarketCap adjusting how they account for exchange volume, BitForex and BigOne gladly sat next to credible exchanges like Binance
Because of this, CoinMarketCap was driving heavy referral traffic to exchanges with fake volume with BitForex generating up to 29% of its traffic from CoinMarketCap alone in July
CryptoExchangeRanks noted that because of this finding, it makes sense why an exchange wouldn't spend money on building community and paying for advertising when it can fake volumes for free

FIGHTING THE PROBLEM

CoinMarketCap has acknowledged this issue and even now split their exchange listings by adjusted volume and reported volume
In reported volume, BitForex still sits on top of the list with 4 times the amount of volume as Binance
However, for adjusted volume, BitForex has fallen to rank #60 and is only credited with a trading volume of $12 million

In conclusion, fake volume exchanges is a problem that the crypto community must be aware of so investors and traders can avoid fraudulent exchanges.

RESEARCH

New Research Suggests Every Investor Should Hold 6% of Their Portfolio in Crypto

EVERYONE

A new working paper written by Aleh Tsyvinski and Yukin Liu for the National Bureau of Economic Research suggests that every person should hold some amount of cryptocurrency in their financial portfolio
The researchers analyzed the Sharpe ratio, which measures return and risk, of Bitcoin, Ethereum, and Ripple and compared them to traditional investments and came to the conclusion that it is optimal for your portfolio to contain 6% crypto
Nonetheless, the researchers did recognize that many are wary of cryptocurrencies so they recommended trying 4% but emphasized that it should at the very least be 1%
The potential for enormous return outweighs the risk of investing in volatile cryptocurrencies and is a good way to diversify away from a highly correlated market

DESIRED INVESTMENT

This new research is just further proof backing investors decision to use cryptocurrencies as an investment
A survey coming out of Korea in March found that 23% of Koreans in their 20s are investing in crypto
A June survey conducted by a German bank indicated that 30% of respondents see crypto as a desirable investment
Outside of retail investors, institutional firms are also slowly entering the game for the exposure to the uncorrelated asset

NEWS

Hedge Fund CEO Pleads for Investors to Stop 'Overreacting' About Bitcoin Price Movements

PANTERA CAPITAL

Pantera Capital is a San Francisco based hedge fund that is focused exclusively on blockchain technologies
Currently, the CEO, Dan Moorehead, noted in an interview that they are long on 90% of their portfolio, and a short 10% of their portfolio

STOP OVERREACTING

Moorehead appeared on CNBC recently to discuss cryptocurrencies and said that people selling into this bear market need to stop overreacting

The CEO plead to investors:

"The main thing to remember is that bitcoin is very early-stage venture, but has real-time price feed — and that's a unique thing. People get excited about the price and overreact."

PATIENCE

In addition to not overreacting, Moorehead told investors hoping for a Bitcoin ETF to stay patient:

"I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years. The ETF rejection is the same story we've had for five years. The SEC has been very cautious with an ETF."

MORE BREWING

'Game Over': Wall Street Analyst Says Bitcoin Must Not Breech Year-To-Date Support
Grayscale Investments Reveals $90M Bet on Ethereum Classic (ETC)
Attacker Installs Crypto Mining Malware on Over 170,000 Devices

COIN OF THE DAY

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