Bitcoin remained buoyant for most of the third quarter but September saw the price tumbling below $8000, triggering the fear amongst the community of another downward spiral. Amongst the string of theories surfacing to decode the fall, most convincing one is monthly future contract expiry on CME. Since the contract on CME is cash-settled, price manipulation in the spot market cannot be ruled out. Year to date Bitcoin still remains in bullish territory, roughly 130% up from the year start.
As we head into the fourth quarter, the question over it repeating history cannot be ruled out. A look at the historic price trend of the largest cryptocurrency by market capitalisation suggests that the fourth quarter of every year has been the most fruitful one. Based on the successive Q4’s dating from 2012, Bitcoin has generated negative returns only twice out of eight times. Improving fundamentals such as hash power at an all-time high with nearly half- a million ASICS going online, a record number of Bitcoin ATMs and number of stores accepting Bitcoin is also adding to the bullish tone.
The obvious concerns around the volatile nature of Bitcoin have clenched the hands of retail investors. Despite the range-bound price movement on the back of dropping volatility there are signs that show more maturity in the market (retail investors are focussing on the macro trends). New products such as Bitcoin futures and ETFs and approvals related to these have taken a back seat in the investors’ mind. Rather, they seem to be more focussed on how regulations are shaping up across the globe.
Bitcoin future data on renowned exchanges such as CME reiterate the growing interest of the institutional investors. In the third quarter, the number of Bitcoin contracts reached record 26,491 traded contracts with a notional value of around $1.7 billion. Sighting the rising interest of the investors in Bitcoin derivatives, CME has requested CFTC to approve doubling the monthly Bitcoin open position limit to 10k BTC.
Q3 2019 Regulatory Updates
A seemingly mature approach by the countries towards regulating the cryptocurrency has been witnessed in mid-2019. While some like New Zealand took the less travelled road by legalising payment of salaries in Cryptocurrencies, Australia also progressed on the regulation front. Iran took a less conventional approach in encouraging the Bitcoin mining industry by announcing a tax break. Portugal released the statement saying that Bitcoin buy and sell is completely tax-free. France also joined the bandwagon of Crypto liberals by announcing no tax on Crypto to Crypto trades. Switzerland, on the other hand, has set a new milestone in issuing banking and securities’ dealer license to two pure-play blockchain service providers. Both SEBA Crypto AG and Sygnum AG can now offer service for professional and institutional crypto clients.
FATF came up with the final set of regulations disappointing the community by proposing strict norms such as Travel Rule. The new set of rules are in addition to the already existing rules proposed by FATF in October 2018. Among other things, the new FATF guidelines laid thrust on exchanges disclosing all sensitive trader information such as IP addresses, browsing histories, ID numbers and so on. The undercurrent message which FATF wanted to convey is that Governments are no way losing their power to people, at least not without a fight.
Now, in order to keep afloat, the exchanges are rushing to comply with the new FATF rules. As a result, OKEx’s Korean Unit delisted all five privacy coins including Monero, DASH, zCash, Superbitcoin and Horizon. Before this, U.K. based Crypto exchange CEX also announced that it will delist all the privacy coins to comply with the FATF standards. Upbit is the latest one to abandon the privacy coins to be in line with the FATF guidelines.
Bitcoin ETF Update
Exchange-traded funds are old news now with folks not concerned with the approval or rejection any more. The indifference towards these instruments could have been the outcome of the long battle between the companies proposing ETFs and SEC in the United States. It all started in 2013 with the Winklevoss brothers proposing the first ETF which was rejected by the SEC in July 2018. Now, there are a
couple of more interested parties such as Bitwise and Wilshare Phoenix who are awaiting the approval from SEC. The Securities exchange commission has now started taking the comments on Wilshare Phoenix ETF proposal before the final deadline in the middle of October
In all these years, the concerns of SEC remains the same — Price manipulation and safe custody. However, a lot of efforts have been made over the past couple of years to allay the concerns.
2019 has been a remarkable year for the Cryptocurrency space with some of the biggest companies in the world making their debut in the space. Here are the notable ones :
- Walmart — The retail giant announced in August that it has filed a patent with the United States Trademark and Patent Office for a blockchain-based coin.
- Facebook — Libra from Facebook remained flavour of the quarter with the social networking giant releasing the white paper and inviting a host of concerns from all sides of the world. While most of the Governments are not sure how this will work, France and Germany have announced an outright ban on Libra.
- Rakuten — Japan’s retail giant officially launched Cryptocurrency exchange with the support for three coins as of now.
- Atletico de Madrid — Spanish football club Atletico de Madrid launched its own blockchain-based Fan token in partnership with Chilliz.
- Manchester City — The English football club entered into Partnership with South Korea sports service developer superbloke.
- Wells Fargo — The bank announced that they would launch their cryptocurrency by 2020 for the internal settlements.
- Apple — The iPhone maker confirmed keeping a close watch on Cryptocurrency with the vice president at Apple Pay stating that cryptos are interesting.
- Samsung — The Korean Smartphone giant will reportedly release a Crypto-friendly version of Galaxy Note 10 smartphone which would have pre-installed cryptocurrency wallet.
- LG Electronics — If industry insiders are to be believed then, LG electronics could launch a cryptocurrency enabled smartphone soon.
- Banks — Some of the biggest names such as Westpac, ANZ, Silvergate, Metropolis and Signature extended their support to the cryptocurrency community.
- Retailers — Farmarket, a pharmacy chain in Venezuela accepts cryptocurrencies through the payment provider Xpay.Farmarket’s pharmacy franchise has 22 stores located across the country and machines will allow people to purchase goods and medicine with cryptocurrencies like BCH, DASH, DAI, and BTC. Alchemy Launched Bitcoin Payment Solution called the Alchemy Hybrid Payment Solution. It allows merchants in Asian and Middle Eastern markets easily accept bitcoin and more than 30 altcoins including ether and litecoin. Crypto payments on the platform will be settled in the local fiat currency through the popular fiat wallets in Asia such as Alipay, WeChat Pay, and LinePay to mention a few.
Capital Raised Report
Funds raised through IEOs
Funds raised through ICOs
Daily Active Users
State of Defi
By Total Value Locked
By Total ETH locked
Total value locked in Defi in terms of USD is at $577.2 million.
Best and Worst Performers
Least performing Cryptos
By Github Activity
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