Cryptocurrency News Now!

Monday, July 8, 2019

High-speed trading

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FAST TRADES: Crypto exchanges are getting into the high-frequency trading (HFT) business by offering colocation services. Huobi, based out of Singapore, and ErisX, based in Chicago, are two firms that have begun offering colocation, a practice in which a client’s server is located either physically next to the exchange’s, or in the same cloud environment. The proximity allows for investors to execute trades more quickly than others, sometimes as much as 100 times faster. While this practice provides certain traders an edge over the broader market, it is also thought that high-frequency trades can lead to greater market volatility. In the traditional securities market, many U.S. securities saw their prices rapidly fall and recover within minutes, in the “Flash Crash of May 6, 2010” as a result of HFT. Full story

TAX CUT? The Singaporean government’s taxation agency is proposing to remove goods and services tax (GST) from cryptocurrency transactions that function, or are aimed to function, as a medium of exchange. On Friday, the Inland Revenue Authority of Singapore (IRAS) published an e-Tax draft guide for treatment on what it calls the “Digital Payment Tokens,” seeking to exempt any entity dealing with such digital assets from GST liabilities. Notably, the agency specified that stablecoins, a type of cryptocurrency designed to have a value pegged to an asset such as a fiat currency, may not qualify to be GST exempt. Full story

TARGETING TRILLIONS: Brian McNulty, a former R3 managing director, has emerged from the bushes with a blockchain project to streamline the $100 trillion fund management industry. Revealed exclusively to CoinDesk, FundAdminChain (FAC) also boasts R3 CEO David Rutter as an advisor, as well BNP Paribas veterans. Built on R3’s Corda platform, FAC aims to bring the distributors, transfer agents, custodians and other intermediaries involved in the buying and selling of units in a fund onto a distributed ledger. The blockchain is targeting transfer agencies and messaging, to begin with, and then aims to build out into asset services. Full story

EASY LIKE COINBASE? ShapeShift’s new one-stop shop for non-custodial crypto management is launching out of private beta today. The new platform wants to rival custodians like Coinbase for ease-of-use, all while giving users full control of their private keys. “Largely this came from my dissatisfaction with the reality that most of the large companies are custodial,” ShapeShift founder and CEO Erik Voorhees told CoinDesk in an interview. “It offers many services that a company like Coinbase would provide but on ShapeShift it’s done in a much more secure and self-sovereign way.” The new platform – which requires a connected hardware wallet – allows users to buy, sell, trade and track multiple cryptocurrencies in a single place, with over 50 digital assets supported. Full story

‘WAKE-UP CALL’: The European Central Bank (ECB) wants regulators to kick into a higher gear when it comes to developing rules for big tech firms moving into finance, such as Facebook and its Libra cryptocurrency project. According to a report from Bloomberg, ECB Executive Board member Benoit Coeure said on Sunday: “It’s out of the question to allow them to develop in a regulatory void for their financial service activities, because it’s just too dangerous. We have to move more quickly than we’ve been able to do up until now.” Full story

DIGITAL RACE: Also in response to competition from Facebook's Libra cryptocurrency, an official at China's central bank said the institution may hasten development of its own digital cash. Speaking at an event at Peking University, Wang Xin, head of the research bureau at the People's Bank of China (PBoC), said if Libra becomes widely used for international payments and effectively acts like money, "would it ... accordingly have a large influence on monetary policy, financial stability and the international monetary system?" This risk means that the PBoC is looking at the situation with “high attention,” and could ramp up development of its own digital currency, he said. “We had an early start … but lots of work is needed to consolidate our lead,” according to Wang. Full story

RANGE BREAKOUT: Bitcoin has ended the weekend's range-bound trading with a $500 jump to $11,900 in the European trading hours. The range breakout is backed by an uptick in buy volumes and further gains to key resistance at $12,061 could be seen. Traders, however, should note that longer-duration charts are reporting overbought conditions and a low-volume break above $12,061 could end up a bull trap. Full story

SUSTAINABLE FOOD: Using a blockchain ledger to store data can help the sustainable farming movement, suggests a piece by New Zealand's University of Canterbury in phys.org. Associate professor Michaela Balzarova believes that blockchain tools can eliminate intermediaries when it comes to collecting and storing information about where food items originate and how they’re transported. “We need to focus models on how we can feed everyone on a fair basis, improving comfort and standard of living for everyone on this planet ... We need to encourage users to take ownership of data stored on their behalf and blockchain enables this,” she said in the piece.

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The probability of bitcoin above $20k 😎

July 8, 2019	View in browser

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Good morning! Thanks for reading. If you enjoy our newsletter, please share us with a friend and tell them they can subscribe here.

Today's top reads

Bitcoin price probability
The battle of "exchange effects"
Tether stands ground
The holiday pump

This week's poll: Does bitcoin make up more than 50% of your portfolio?
Click to answer:
Yes!
No way!

Market update

COIN	PRICE	7-DAY
BTC	$11,884.16	+ 11.25%
ETH	$308.16	+ 6.03%
XRP	$0.404	- 0.21%
LTC	$120.39	- 0.57%
BCH	$413.19	+ 1.81%

1. Bitcoin price probability

Options traders are painting a picture. While the derivatives market is still relatively underdeveloped compared to the rest of the cryptosphere, it's picking back up. Since February, the market has consistently set new highs for volume each month as traders get more aggressive.

In exchanges' eyes, it's a bullish sign. Last month, LedgerX, a New York-based crypto derivatives exchange, saw an unidentified trader purchase $4,500 worth of call options that bet on bitcoin's price rising to more than $50,000 within the year.

Josiah Hernandez of Satoshi Capital explained the phenomenon to the Wall Street Journal:

"When you get these bull markets, people get a little excited and they start making more and more aggressive trading decisions."

So here's the market's price prediction: According to skew, a crypto market analytics platform, bitcoin options traders see a 15% chance that bitcoin's price will be higher than $20,000 by the end of the year, 10% by the end of September, and less than 2% by the end of July.

But confidence can change quickly. Back in April, skew published the same option-price probability chart and only 11% of traders saw bitcoin above $10,000 by the end of September vs. the 59% of traders now.

The bottom line: The options market might provide a solid benchmark for trader's views, but just like the spot market, it can turn on a dime. However, with 15% of traders betting on bitcoin rising more than 77% in six months, you can't help but see the bullish sentiment.

2. The battle of "exchange effects"

It's back. According to a report published last week by Decrypt, the "Coinbase Effect" - or rather, the U.S. exchange's impact on price after listing, is happening again. The most recent winner, Chainlink (LINK), an altcoin ranked #17 in the world by market cap, jumped from $2.20 to a peak of $4.36 in just 2 days after its listing announcement.

But why does Coinbase have a strong influence? And how does the world's largest exchange by volume, Binance, stack up against the San Francisco-based exchange?

Well, here's the impact each exchange on the last five coins just two days after listing:

Binance		Coinbase
DOGE	+ 12.7%	LINK	+ 72.4%
ALGO	- 15.9%	EOS	- 0.12%
FTM	+ 46.2%	REP	+ 12.8%
TFUEL	- 12.5%	XLM	+ 3.13%
ATOM	- 10.8%	XRP	+ 1.09%
Average	+ 3.94%	Average	+ 17.86%

Although each individual listing effect seems to be largely based on how well the market is performing (like ZEC and BAT's negative reaction after listing Coinbase during the 2018 crypto winter), it's clear that Coinbase has a much greater impact. This is likely because Coinbase's massive 15 million-userbase largely caters to U.S. retail investors - a crypto-hungry and relatively wealthy area of the world.

The takeaway: While Coinbase listings certainly impact projects more than Binance, it's a gamble as a trade. Either way, according to the last 5 listings, you're looking at a positive return on average for both.

3. Tether stands ground

If you've got beef with Tether (USDT), we're sorry, nothing has changed. Even with the consistent criticisms that rock the stablecoin off of its 1:1 USD peg every now and then, it still reigns king.

Per Messari's Stablecoin Index, USDT accounts for more than 98% of the total stablecoin trading volume. More than that, USDT has regained its 80% dominance even after leading exchanges have made explicit actions to onboard adoption for USDC, TUSD, PAX, and GUSD.

The question is: If USDT is back to dominating the stablecoin market, how much of an influence will it have on bitcoin's price? Just last week $100 million USDT was printed on the ethereum blockchain to bring the total circulating amount to $3.78 billion. Could this printing be pumping the price?

Jesse Powell, CEO of the Kraken exchange, shared his take in an interview with TD Ameritrade:

"I don't have inside knowledge of what's happening at Tether, but I can tell you that, historically, when you've seen growth in the supply of Tether, we've seen growth in the supply of U.S. dollars coming onto Kraken. And other exchanges would report the same."

In the end: USDT's growth metrics compared against its peers undoubtedly shows demand for the stablecoin. Whether or not USDT printing has had a significant impact on bitcoin's price this run, or vice versa, still remains unknown.

4. The holiday pump

Holidays are good at two things:

Bringing family together
Boosting the crypto market

The reason behind #2? FOMO. Apparently, your Uncle John asking "Do you own any bitcoin?" can be a powerful question - and one that moves markets significantly if we are already in the midst of a bull market.

Research from SFOX explained that back in 2017, the hefty gains started just before Thanksgiving and only amplified leading up until Christmas. The same could be said for the duration of China's Spring Festival in 2019.

It's not just prices though. Besides gains timed just right, Google also saw strong spikes for search queries containing "bitcoin" near those same holidays - suggesting family members are talking about it.

Looking ahead: As we roll towards the end of 2019 with bullish tones, we should be conscious about the home stretch and its FOMO potential.

5. You should also know

BitMEX, an exchange known for leverage, has tallied more than $1 trillion in volume in the past year.
CME bitcion futures had record activity in June as they pushed for a 30% increase in sign-ups.
Bitcoin's hash rate just hit an all-time high of 74.5 million tera hashes per second.

6. Nope to BSV

From last week's poll, 75% of respondents claimed that they don't support Bitcoin SV (BSV).

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