January in Review by CEO and COO
The cryptocurrency market downturn that first began in late-2017 when Bitcoin hit nearly $20,000 has persisted to this day, and is showing few signs of changing in the near future. In late December, Bitcoin set 2018 lows at $3,200, from which it has only recovered slightly.
Despite these dreary market conditions, Covesting’s team has continued pushing forward in order to develop and integrate new features into our platform, and to continue improving our platform’s existing infrastructure.
Product Advancements
From a product perspective, we have made significant strides in advancing our platform and implementing the features that we believe will ultimately set our platform above all the others that are currently available to investors.
One great feature we have implemented into our platform is the ability for users to access a fiat-to-crypto gateway as well as an instant fiat-to-crypto exchange. Because of these features, users can now transfer EUR to the platform and buy Bitcoin, which brings Covesting closer to being the most advanced and all-inclusive cryptocurrency platform.
With regards to our highly-anticipated Copy-Trading (CT) feature, although our team is still working to develop the CT mechanism with integrated token functionality, we want to look at the bigger picture while considering the practicality of this feature when the current market conditions are considered.
As originally planned, the CT feature would only allow traders to enter buy positions on the various cryptocurrencies offered on our platform, and would not allow for short-selling — which is the most profitable trading method during a bear market. Because of this, the CT with a buy-only feature would make it very difficult for model managers and traders to make profits, and we don’t want this feature to be profitable exclusively during market uptrends.
With that being said, we believe that Copy-Trading (aka p2p digital asset management) has to be profitable and effective in any market conditions, and allow for participants to earn profits during both growing and falling markets. This means that short selling capabilities must be introduced prior to the CT feature. Our R&D team is working closely with business development to find the best way to implement short-selling capability onto the Covesting platform before we introduce our highly-anticipated Copy-Trading capability.
Token Listing
We have initiated token listing procedures and have began engaging with multiple token projects. Because we are a regulated entity, we have the ability to list projects that we believe will provide investors with an opportunity to see growth and will enhance our community.
We may list our first token project within the next month, but we want to remain careful with providing any updates regarding which tokens we are considering listing. Please stay updated on out various social media platforms for more information regarding new token listings.
Also, as we have discussed in a previously, we will be negotiating listing terms with individual projects in order to have them provide us with a certain amount of their tokens allocated for distribution amongst our community. This will provide a win-win situation for Covesting token (COV) holders and the newly listed project, as it will raise awareness for the project and will increase the incentive for investors to hold COV.
For more information regarding how this feature will work, please visit this Medium post.
Current Situation and Outlook
We have been facing growing competition, and it seems at times that there is a new cryptocurrency exchange popping up every day. The combination of increasing competition and decreasing market demand is making it difficult for us to acquire a large influx of new traders onto our platform, despite the amazing features our platform offers to prospective traders and investors.
One of the highlights of our journey so far was the receipt of our Distributed Ledger Technology License (DLT) from regulatory authorities in Gibraltar. Although we are still extremely proud of this accomplishment, the DLT License does not provide a significant edge right now, as it is still hard for even DLT licensed exchanges to open bank accounts and to start advertising on social media platforms like Facebook, as they don’t engage with any crypto-related companies, regardless of their compliance and licensing.
The poor market conditions are what is driving these hardships that Covesting, and all cryptocurrency companies, are currently enduring, and it does not seem that major governments are feeling pressured to advance any regulatory measures that truly help the industry to become more safe and mainstream.
Although the DLT License is not offering us as much of an edge as we had previously expected it to, we still ardently believe that it will ultimately be a critical component in helping to propel Covesting to the top of the cryptocurrency industry. Being fully licensed and compliant with global regulatory authorities gives peace of mind to all of the investors on our platform, as they can rest assured that their funds are safe and that the exchange’s internal management team is compliant in all of their accounting while being closely monitored by the GFSC.
These features are all great, but even if you build a secure, reliable, and technologically advanced spaceship, there is no guarantee that it will be successful if nobody is interested in going to space in the first place. Currently, we believe that market demand, dynamics, and price action are the various factors that will ultimately dictate the success of the industry as a whole, including the companies whose business models are directly tied to the success of the industry and markets.
Also, due to our current status and long-term mission to be fully compliant, we have to be extremely careful, and at times over-compliant with regulations, which does not allow us to develop and expand our business as aggressively as we would like at times.
ETHLend Situation
Recently, a group of individuals engaged in manipulative actions in an effort to drive down the price of COV by using ETHLend, a popular digital-asset backed loan service. These actions were taken by a small group of nefarious actors in an effort to acquire more COV at a lower cost average by deliberately manipulating its liquidity and trading volume to drive its price down.
We have absolutely zero tolerance for actions like this, and have been working proactively to prevent this type of manipulation from occurring again.
Price manipulation in the cryptocurrency markets is frequent and no cryptocurrency is immune from it, but smaller cryptocurrencies, like COV, are more susceptible to it as they have lower daily trading volume. These actions are not only unethical, but also have direct fiscal damages to traders and investors alike, and can harm entire token communities by creating a sense of uneasiness and fear amidst community members.
This is part of the reason we are steadfast in our belief that widespread regulation is needed in the crypto markets in order to better protect innocent investors, and to help alter the mainstream view that the cryptocurrency markets are rife with instances of fraud and manipulation, which is part of the reason that many traditional investors refuse to enter the crypto markets in its current state.
Telegram Situation
Coordinated FUD (fear, uncertainty, and doubt) can have an extremely negative influence on token prices, and we have been doing our best to protect our token holders from these malicious, and unfounded, attacks on COV. As such, we have been closely monitoring our Telegram channels, and most of the malicious discussions don’t carry any substance and are unimpactful.
Unfortunately, the FUD stemming from the previously discussed ETHLend situation did carry into our official Telegram channels, which is forcing us to make changes regarding how these channels operate.
We have made the decision to convert our official Telegram channel to an announcement channel that will exclusively convey Covesting updates to the channel’s members. We also recommend that our community members monitor our website and social media platforms for the latest announcements and updates.
Moreover, all of our monthly updates (including this one) will now be written by Covesting’s CEO and COO — Dmitrij and Tim — in order to provide readers with the most direct and first hand information.
Cost Optimization
As discussed earlier in this post, it is no secret that 2018 has been an incredibly difficult year for the cryptocurrency markets, and the persisting crypto bear market has now extended into 2019. Because of this, demand for crypto-related products and businesses, like the one we have developed, has dropped significantly and has had major impacts on the industry as a whole.
We do hope that this is simply part of a natural cycle that will reverse in the near future, but in order to continue moving forwards and developing our platform, we have unfortunately been forced by the market conditions to take multiple steps to optimize our costs.
As a result of this cost optimization, we have had to let go of multiple talented, passionate, and loyal employees who have contributed greatly to driving us towards our goals and helping us to fulfil our missions. One of the unfortunate realities of business, and especially those related to nascent markets, is having to let go of great employees when times get tough. But we have adopt to the new reality and be as flexible and efficient as possible at all times.
We want to personally say thank you to all the fantastic employees who are now leaving our team. Without these team members, we wouldn’t have been able to create such a positive and encouraging atmosphere in our community. Each and every one of you have shown us the utmost levels of professionalism, and we sincerely hope that our paths will cross again once the markets come back stronger than ever.
We wish all of our team members the best of luck in their future endeavors; any company would be lucky to have such kind, professional, driven, and talented individuals as members of their team.
Despite the rough markets, we do believe that things will get better as time goes on, and we are continuing to work tirelessly with the same drive and commitment that we always had to fulfil our goal of ushering in a new era of transparency, technology, and professionalism in the cryptocurrency industry.
Thank you all,
Dmitrij and Tim
