Commentary
Digital Assets ended the week little changed after giving up a mid week high of +14%. Volumes fell to US$77B, down about -6% from the previous week. Breadth was negative with only 47 of the top 200 coins and tokens ending the week higher. Modest gains in BTC +4% were offset by declines elsewhere. Smaller coins and tokens were the hardest hit with utility tokens -14% and IEOs -13% amongst the week’s worst performers.
News sentiment continued to weaken this week with only 64% of BTC articles positive and 51% of Alt Coin articles positive. Headlines this continued to be regulatory focused with Libra again garnering a lot of criticism from global regulators and policy makers. Top stories this week included: 1. Trump tweeting criticism about Digital Assets and Libra, 2. Singapore’s stock exchange backing an ETH STO platform, 3. Reports that the PBoC may accelerate digital currency plans, 4. Regulators in the US, India and Europe issuing warnings on Libra, 5. Metropolitan Commercial Bank looking to close Tether bank accounts and 6. A $35M hack at Japan’s BitPoint.
Looking into next week, we expect consolidation to continue with down side support remaining around the $10,500 range. Given the recent touch on a Mayer Multiple of 2.5 a deeper correction to the $8,000 or $9,000 level is also possible (but not likely). The major theme of this week was cointued BTC dominance which grew to a 2 year high of > 65% this week. ETH has been one of the most noteworthy victims of BTC outperformance, falling below the 0.025 ETH:BTC level for the first time since 1Q17. This break does not look good from a charting perspective. However, given that ETH and BTC are the only digital assets that the SEC has guided are decentralized enough to not be considered securities, it is likely an eventual target of institutional inflows. The market will likely need to see more clarity on ETH 2.0 scaling plans, though, before it can begin to close the gap with BTC.
News
- Donald Trump tweets criticism about BTC, Cryptocurrency and Libra
– Suggested that Facebook will be subject to all existing banking regulation
– Talked about dominance of the USD - Singapore’s stock exchange backs ETH security token platform
– Will acquire 10–30% of listing companies in SPVs and tokenize them
– Participation, while limited in Singapore to accredited investors, is open to global investors who pass KYC requirements
– Looks like tokenized shares will be held with a custodian - PBoC: China may accelerate digital currency plans to counter Libra
“If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” - PBoC said to have processed $4.36B in FX transactions on blockchain
– The platform is supported at 483 branches of 28 banks in Shenzhen
– PBoC says the technology avoids slow paper trails between departments - Global LocalBitcoins volume hits highest level since Nov 2018
– Global weekly bitcoin trading volume hit $65.6 million last week
– Venezuela and Argentina both set YTD weekly volume highs - Japan’s BitPoint hacked for US$35M
– Bitpoint halted all services including trading, deposit and withdrawals
– Japanese exchanges seem to get hacked a lot - Facebook’s Libra plan reportedly draws ECB warning on regulation
– Expect Libra to find significant resistance in EU as economic risks grow - Indian authorities concerned over Facebook’s Libra
– Facebook has not applied for approval with the Reserve Bank of India
– India is the largest remittance-receiving country in the world
– Last year remittances totaled $79B - Fortress offers to buy Mt Gox BTC claims at $900
– The value of the claims at the time of insolvency was $451
– Purchase could be made in BTC or fiat, offer stands until July 31 - Greyscale’s GBTC restarts private placement to accredited investors
– Grayscale’s Bitcoin Trust has nearly $2.66B in AUM - Singapore wants to drop VAT for transacting in cryptocurrencies
– Takes effect Jan 1 2020 - Bitfinex to use 27% of Tokinex (IEO platform) revenue to burn LEO tokens
– Follows news last week of an earlier than expected payback of Bitfinex’s US$100M USDT loan. LEO’s burn rate can be tracked here - TRON gets caught up in ‘Wave Field Supper Community’ Ponzi scheme
– Leveraged the TRON brand with a Chinese name similar to TORN
– Unaffiliated with the TRON project, but looks to have cost investors $30M - Bitstamp launches LN node to drive Lightning adoption
– Exchanges offer the unique ability to act as hubs for 100,000s of users - Crypto lending firm to accept Telegram tokens as collateral
– TON is not expected to go live until 3Q19 - Electrum wallet is adding support for Bitcoin’s Lightning Network
– Similar to Bitstamp’s adoption. Creates another major hub. - BoJ concerned by adoption of crypto assets by financial institutions
– Name a central banker supportive of decentralized digital assets… - Tone Vays: Many BTC miners will call it quits post May 2020 halvening
– Mining hasn’t been a hobby insustry for many years already
– Tone is probably correct, it’s really about economy of scale now
– The ability to source and secure low cost power purchase agreements
– As well as to develop and run efficient technology - Former Bitmain CEO opens new Singapore based crypto startup
– The company will be called Matrixport — unclear exactly what it will do - Fed Chairman Jay Powell testifies on Libra before House
– Powell says the bank is in favor of “responsible innovation”
– Has fears over money laundering and privacy concerns - Metropolitan Commercial Bank wants to close USDT accounts
– Follows an NY Attorney General filing that shows Tether maintained accounts with the bank (and also Signature Bank) - Crypto custodian Anchorage raises $40M
– Round led by Visa, Andreessen Horowitz and Blockchain Capital - Gemini eyes membership in Libra Association
– Gemini may consider joining the Libra Association - Goldman Sachs set to go deeper in Digital Asset space
– Goldman Sachs has launched a new digital asset team
– Job posting says aims to go “further than ever before” with digital assets
MaiCoin Media
- MaiCoin Podcast #2 — Justin Sun, founder of TRON and CEO of BitTorrent
– Justin joins us at MaiCoin HQ to talk about his background, his plan of attack for the Buffett lunch, the future of BTT, Libra vs WeChat Pay, Chinese regulatory attitudes and much more.
Charts
Chart 1. Weekly price vs volume
Chart 2. Weekly price change
Chart 3. Major thematics
Chart 4. Monthly average daily volume as % of historic high
Chart 5. MTD average daily volume
Chart 6. Price 50 day z score
– Declines in XRP, EOS, BCH, BNB and ETC starting to get to the bottom end of their historic range
