Commentary
Digital Assets ended the week up 6% for a total market cap just north of US$230B. Trading remained active this week, +5% from the previous week for a daily average of US$80B. Breadth remained positive with 60% of the top 200 coins and tokens ending the week higher.
BTC continued to do most of the heavy lifting adding ~US$5B to this week’s total $14B market cap increase. BTC gains were supported by BCH, BSV and BNB which added an additional US$2.5B to this week’s gain.
IEOs, Exchange Tokens and BSV were the focus of this week’s trading. IEOs were up a median +30% on very active trading. Matic led gains, ending the week +124% and hitting an intraweek trading high of ~US$700M (~ 11x its US$63M market cap!). IEO gains helped support gains in Exchange Tokens with BNB and HT (Huobi Token) both up ~ 20%. BSV pumped ~ 60% following news that Craig Wright had filed copyright registrations for the Bitcoin White Paper.
News flow was a mixed bag this week. Top stories included: 1. Bitfinex launching an IEO platform, 2. EOS’ parent company Block.one announcing a 10% share buyback, 3. A new round of Craig Wright patent/copyright shenanigans, 4. Kraken announcing another raise, 5. AT&T accepting crypto payments and 6. the SEC pushing back another ETF application.
After a week of consolidation, it looks as if both BTC (chart 8) and the broader market could be building into a bullish flag formation. A bullish flag formation is a graphical representation of increasingly positive sentiment. It’s also a pattern that was repeated several times throughout the 2H17 bull run. A bullish flag is characterized by a near vertical rally (end of April to early May), a consolidation period with higher lows (as bulls buy every dip) and, eventually, a break higher. The breakout from a flag often results in a powerful move higher, which is generally equal to the ‘flag pole’ established in the preceding vertical rally. For BTC this could mean an eventual break out to > US$11,000. For the space as a whole this may mean a test of the US$350B market cap range.
Thoughts
- 60 Minutes introduces Bitcoin to boomers
– This is a rare bit of positive media coverage for Bitcoin
– At the moment it’s estimated that ~60% of BTC users are < 34 years old
– Older, mainstream investors, who control the bulk of investable assets globally still have relatively little exposure to Bitcoin and digital assets
– In the US the 55–64 age bracket has an average net worth of > US$800k vs just under $75k for the under 35 age bracket
News
- Bitfinex launches IEO platform
– The new platform will be called Tokinex
– Will enable qualified customers to access pre-vetted token projects - US SEC postpones VanEck BTC ETF approval … again …
– VanEck has been seeking SEC approval since August of 2017
– In June of 2018 VanEck teamed up with SolidX
– SolidX have been applying for SEC approval since July of 2016
– The new deadline for a VanEck/SolidX ETF decision is August 19 - Kraken launches €9M fund raise
– Offering preferred shares to accedited investors
– Total raise is equivalent to US$10M, 0.255% stake = US$4B valuation
– 780 employees, FY2018 revenue = $155M, OPM = 56%
– Seems like a bizarre raise with no clear explanation given for use of funds
– $10M seems like a meaningless amount for a company of this scale - Craig Wright fills out copyright application for BTC white paper
– Ridiculous. CSW appears to have spent $35 to fill out an application
– Given that BSV now only trades on a handful of exchanges, price is very sensitive to attempts at manipulation - Bank of Russia says ‘nyet!’ to crypto, but likes gold backed digital assets
– Will consider a gold-backed digital asset for international settlements
– Remains opposed to truly decentralised crypto assets. - US copyright office says it does not recognize Craig Wright as Satoshi
– Follows misleading articles from Craig Wright’s camp citing otherwise - FINRA approves the Grayscale Ethereum Trust for retail investors
– AUM in the trust is currently small at only US$12.5M
– Major step forward for mainstream investors access to crypto exposure - “ETF store” tells Bloomberg 90% of millennials say Bitcoin > Gold
– ETF store is an independent investment advisor
“When we talk to our younger clients — we have a core gold allocation in our portfolios, and they’ll ask about that and say, ‘What about crypto?’ And if you talk to, primarily millennials, and ask them which they prefer, bitcoin or gold, it’s a landslide. It’s not even close, it’s like 90% prefer bitcoin.” - AT&T Teams With BitPay to Accept Bill Payments in Crypto
– Usage is increasing with many retailers and tax authorities - Binance CEO CZ is suing VC giant Sequoia for reputational damages
– In Dec 2017, Sequoia accused Binance breaching exclusivity agreements
– Froze Binance’s ability to raise funds in their Series A raise
– Last year a tribunal dismissed Sequoia’s claims
– Sequoia was forced to cover Binance’s legal costs (close to US$800k) - Circle releases another USDC attestation report
– 293,184,174 USDC issued vs $293,351,374 in reserves - Peter Thiel backed Block.one pays out 6,567% return
– Block.one is the company behind 2017 $4B EOS raise
– Has $2.2B in fiat assets and $500M in crypto (including 140k BTC)
– Company conducting a buyback that will return 6,657% to early investors - Square Crypto close to making first hire
– Square is a sister company of Twitter & shares the same CEO, Jack Dorsey
– Square announced plans to hire dedicated engineers for crypto initiatives
“we are building open source projects that will make mass adoption not just possible but inevitable. Our goal isn’t to make money, but improve it” - Bitfinex attorney: Tether invested in instruments outside of cash
– This appears to be misreported
– Tether’s BTC holdings are said to have been < 1BTC
– Held to facilitate transactions on the Omni network - Circle cuts 10% of headcount on restrictive US regulatory climate
– Circle’s investment in Poloniex doesn’t look to be working out as planned
– Poloniex was at one time one of the main alt coin exchanges
– Circle’s headcount cuts come after reports that they’ve had to geofence American users from certain assets on Poloniex due to regulatory concerns - Bitfinex implements standard 0.1% withdrawal rate for all verified users
– Looks like an effort to win clients back after a very rocky couple of weeks - WhatsApp users can now send BTC and LTC with Lite.Im add in
– WhatsApp has 1.5B users worldwide
– Last year the same company announced a similar feature for Messanger - Bitfinex launches LEO on EOS and ETH
– Unique for a project / asset to launch on two separate chains
– Provides access to both communities and also greater number of DEXs - Report: 60% of all BTC haven’t moved in past 12 months
– This article looks to have gone from Polish to English in Google Translate
– Some interesting stats if you can ignore the grammar, though…
732,982 addresses with > 1BTC balance, top 100 addresses (exchanges?) seeing inflows - US Presidential candidate Andrew Yang calls for new crypto regs
– Andrew Yang 楊安澤 is a Taiwanese American entrepreneur
– Wants to promote innovation and growth with clear guidelines - Brave Browser said to be planing $30–50M raise at $133M valuation
– Brave raised US$30M in less than a minute during its 2017 ICO - Facebook forms Libra Networks — a Switzerland based payments company
– Thought to be part of FB’s crypto efforts
Charts
Chart 1. Weekly price vs volume
Chart 2. Weekly price change
Chart 3. Major thematics
Chart 4. Monthly average daily volume as % of this historic high
Chart 5. MTD average daily volume as % of this historic high
Chart 6. Price 50 day z sore
Chart 7. BTC vs other digital assets, 1 month % change
Chart 8. BTC, Bullish Flag?
