Around The Block 7/19

We are halfway through July, and markets are down across the board. So far bitcoin’s price has dropped about 1.01% since the month began, and it’s currently trading around $10,340. Altcoins continue to be down, with ether and litecoin down about 25% and 24%, respectively. In other news, interest in Libra has grown as the Calibra CEO met with lawmakers. We get into it all, the good and the bad, in this edition of Around the Block.

MAJOR NEWS OF THE WEEK

1. CTFC to Investigate Trading Platform BitMEX

The U.S. Commodity Futures Trading Commision (CFTC) is allegedly probing possible regulatory breaches by crypto derivatives trading platform BitMEX. The allegations reportedly concern the fact that BitMEX has allowed U.S. based traders on their platform, even though they are not registered with the CFTC.

2. Tether Inadvertently Creates $5 Billion Worth of Tokens

The issuer of Tether admitted to accidentally creating an extra 5 billion U.S. Dollars worth of the USDT currency. The error occurred during a transaction with Poloniex — an exchange — while certain coins were being transferred between blockchains. The error has since been rectified in a process known as “burning”.

3. Coinbase Releases Tools Divulging Moves of Top Trader

Coinbase has released new online trading platform functionality aimed at enabling retail investors to make more informed trading decisions by sharing what the top traders are doing. The information will be an aggregation of trading decision taken by the top 10% of asset holders on the platform, excluding institutional investors. The goal is to help attract new customers into trading on Coinbase’s platform, and to foster a more diverse exchange.

4. The Business of Market Manipulation

A Russian college student, Alexey Andryunin, has created a business to manipulate the trading activity of smaller altcoins. Imaginary volume is created by having bots imitate normal market behavior and trade amongst themselves, simulating an active market. This artificial boost in volume allows the coins to receive a high rank on sites like coinmarketcap.com. Andryunin understands that as cryptocurrency regulations become more stringent, businesses like his will gradually cease to exist.

5. China’s Growing Interest in Libra

According to Google Trends, China has the most search engine interest in Libra, the cryptocurrency backed by a consortium led by Facebook. This information is corroborated by Libra’s increased popularity on Sina Weibo, the biggest social media platform in China. As a response to Libra, development is currently underway in China for a country-wide digital currency.

6. Lawmakers Hold Hearings on Libra

Government officials met with Facebook’s lead blockchain developer and CEO of Calibra, David Marcus, to address potential concerns regarding Libra. Marcus has promised to take the time to make sure the development process satisfies everyone, and that an understanding regarding privacy has been reached. However, no solid commitments have been made to halt progress on Libra’s development.

THIS WEEK IN BITCOIN

Bitcoin volatility has steadily been climbing since the beginning of April, when the current rally kicked off, and is now above 100% — the highest since February 2017. In addition to indicating more investor interest in the cryptocurrency, potential volatility sources include the prominence of Libra in the news cycle and random events like the mistaken USDT creation.

Research by Blockforce Capital

Can’t wait ’til next week?

Feel free to reach out to us anytime. We are always here to help you learn about, and navigate, the exciting cryptocurrency landscape.

Blockforce Capital does not recommend that the information presented herein serve as the basis of any investment decision. The information is given in summary form and does not purport to be complete. The sole purpose of this material is to inform, and in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or services, or to attract any funds or deposits.

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Financial innovation at the intersection of capital markets, technology, and digital assets.