OSL Trader View — 19 June 2019
$BTC has traded above 12-month highs for six days and counting following the brief stint end-May. In this +27.8% move from MTD lows,
we also hit a milestone in terms of number of BTC wallets in use as per Coinmetrics which sees the number of active Bitcoin addresses topping one million.
The catalyst? Binance. Plethora of research out there attempting to give you a list of tokens Americans will no longer have any access to as they decide to close access to Americans. Flight to safety. Existing (American) users do not have clarity as to what the fate of their alt-coin holdings will be, so they are bringing it home.
And after weeks of chatter, Facebook lifted the veil on their crypto project a.k.a. Libra . A stable coin backed by “a basket of bank deposits and short-term government securities in currencies from stable and reputable central banks.”
With 27 mainstream partners on board, the Libra Association will be offering a stable coin backed by this basket of stability to their 2.4 billion users. If Facebook was a country, they would be the most populated by a mile.
Western Union felt the pain. Third worst performer in the SPX overnight -2.4% on 2.5x 3mo ADV.
Well done Jeremy Allaire. You dodged a bullet.
Check out the confirmed players in the Libra Association.
Established players, willing to pay an eye-watering $10mn to run their nodes. There will be a separate coin in which these players will have a stake in rewarding their commitments with the interest on the reserve assets after cost.
Facebook also assures a Chinese wall will be in place to segregate social & financial data of their users…. We’ve seen this movie before.
Users will be directed to authorized resellers who will be the only entities cleared to create (or burn) Libra.
The Geneva-based not-for-profit organization assures you that while to start, Facebook will hold the reigns however, this will definitely not be the case in the long-term. If all goes as planned, this will be a council represented by one hundred entities. Never mind the UN. Look at EOSs and see how well that’s been going.
Having said, there is always a silver lining and in this case, it is the sheer size of Facebook’s distribution network. Whether you like it or not, they will be able to provide 2.4bn users with a crypto wallet. How many times have you been asked to help set one up by an acquaintance? The reality is crypto is still a $284bn niche asset. That is circa 1/2 the market cap of Facebook. Assuming just 50% of their users decide to give it a go, we’ll have 1.2bn new crypto wallets created, a 1200x increase from the recent high count.
Libra will also get the message across that there is literally nothing they can do to turn this ship around. Good luck FATF.
Additionally, incumbents can now take a breather having that cross-hair on their backs redirected. They now have a scapegoat to go after to blame involvement with terrorists, money launderers and scam artists. We are already seeing the knives being sharpened.
Rep Maxine Waters, chairwoman of the US House of Representative’ Financial Services Committee wants Zuckerberg to hold his horses. Surprisingly even France is clamping down.
French Finance Minister Le Marie has said Libra “can’t… and must not happen.”
Bitmex open interest has ticked back up to a seven month high. Dare I say, $10k is just around the corner?
May the trend be your friend… Happy trading!