Trader View 18 December 2019

After failing to punch through $7600 resistance, Bitcoin has slipped lower to 7 month lows triggered by the string of events communicating uncertainty in regards to China’s stance. Suspect this to be about personal vendetta’s more than anything but if there’s one thing markets don’t like, it’s uncertainty. Micro BT founder Zuoxing Yang, former Bitmain chip architect was arrested for embezzling 100k CNY, Bitmain’s EGM rejects proposal to reinstate Micree Zhan, as they suffer a second setback in an attempt to release the $1mn assets frozen while Wu Jihan assumes control and pushes out with an aggressive finance campaign in an attempt to recoup lost market share.

25K BTC was reportedly cashed out from the multi-billion dollar Chinese scam Plus Token leaving 8700 spread across multiple addresses and lets not forget the VeChain hacker where 1.1bn VET ($5.3mn) went into the abyss. $BTC holding $6500 for now but support not looking too sturdy, at all.

The insto herd we’re all waiting for made a few moves. State Street recently published a survey showing some pretty strong signs that they’re literally sitting on the sidelines, waiting for US regulations. Just six percent of participants still in denial while the rest will either maintain (45%) or increase (38%) their exposure and why wouldn’t you? It is the best performing asset YTD and over the past ten years in existence while also being uncorrelated to traditional assets as it boosts your Sharpe ratio. Whispers of the $22tn custodian jumping into the frey has been around for awhile albeit never confirmed but their tie-up with Gemini Trust pretty much silences the skeptics. Fidelity’s Digital Assets division is also ramping up. Following the green light to entertain digital assets from NYFDS, they are branching out to London as they establish an entity and look to court European money managers and strap on support for Ethereum. The Basel Committee on Banking Supervision (BCBS) has issued a “conservative, prudential treatment framework for crypto assets” (still refusing to recognize as currency) and suspect to see more accommodating narratives from the European Central Bank with a somewhat more plugged in ECB President now at the helm. Ms. Lagarde has already said she wants to stay “ahead of the curve” re: stable coins. Whether CBDCs are crypto…

It seems to have been enough for Bank of International Settlements Agustin Carstens to take the space seriously.

Unfortunate to see one of the OGs that helped blaze the trail in pain but another shoe drops for Circle. Recently, they’ve stopped research publications, sold Poloniex, lost co-CEO Sean Neville, laid off nearly 20% of the remaining workforce and last night, pulled the plug on their OTC desk. Jeremy Allaire reckons it was the lack of US regulatory guidance that broke the camel’s back. It may be that for aspiring crypto-ETF managers the best way around the SECs impenetrable brick wall is to follow NYDIG and stick to BTC futures as it seems to be the only way to get any crypto backed product to the market. Huobi US has also recently pulled the plug in the US asking users to withdraw all funds by end Jan 31st as the SEC looks to go after Credit Suisse & BNY Mellon for merely processing the proceeds that were committed to Telegram (how they differ from the rest of the street is beyond me). Will be interesting to see if superintendent Linda Lacewell’s proposed amendments for the infamous Bitlicense ever materialize.

It’s been six months since FATF published guidance for Virtual Assets (VA) & Virtual Asset Service Providers (VASPs) and it has triggered action from various governments around the world. Börse Stuttgart Stock Exchange (BSDEX) takes the jersey as the first German approved crypto trading venue; Ukrainian government published a final version of the law to implement the guidelines (with help from Binance); Kazakhstan does not recognize cryptocurrencies as fiat and therefore will not be taxing crypto mining outfits, Bank of Korea looks to hire digital currency specialists in suspected CDBD launch preparation; Sweden’s Central Bank Riksbank appoints Accenture to develop an e-krona; Brazil demands her subjects report their crypto holdings and fulfill tax obligations while Xi Jinping reiterates the importance of blockchain technology and demans research to be focused on such projects. He is also keen to collaborate with North Korea if the hermit kingdom opens their market because who cares about unilaterally imposed global (read US) sanctions. Municipalities are doing their part to push the party envelope as Guangzhou leads development of a blockchain-based platform for “public resource transactions.”

Month’s after plastic surgeon BK Kim’s failed hostile bid for Bithumb, he has since been ousted from all arbitrary self-appointed positions at the alleged holding co and is now facing a lawsuit against Winguard Limited. The Hong Kong investment co filed the suit in the Seoul District court alleging they did not receive a refund for the $9mn they committed. The deal is dead as far as I know and they allegedly raised hundreds of millions via Bithumb Coin ($BTHB) and equity stake sales: (ST Blockchain Fund dropped $200mn)… tough to call this the last.

Vitalik’s attempt to calm the nerves by touting the $30mn balance with the foundation has not stopped rival protocols trying to lure talent away from the EVM as Tezos foundation chairman Ryan Jesperson has openly courted those strapped on cash (as has Justin Sun)

Facebook appears to be lobbying hard behind closed doors as they finally get to US Treasury secretary Steven Mnuchin who is “fine if Facebook wants to create a digital currency.” They also quietly removed Libra’s dividend component from the white paper. Problem is Brad Sherman a staunch opposer of crypto was recently appointed chairman of Subcommittee on Investor Protection, Entrepreneurship and Capital Markets and he will not roll over easy.

Bakkt CEO Kelly Loeffler’s appointment as Georgia Senator also ruffled some feathers and caused a surge in trading volume on the day but didn’t last.

ETH just dipped underwater for the year on the latest leg lower.

The Istanbul hard fork was a non-event or so it seemed. Udi Wertheimer pointed out a pretty critical oversight and unless the $ETH devs reinstate “Ice Age,” Expecting to see an attractive entry point in the next few days IF you think they can get Casper (i.e. migrate to PoS) implemented. Case in point: $XTZ is back to testing all-time highs following staking support from some of the major players.

Intel acquired Habana Labs for c.$2bn (post $75mn series B funding led by Intel Capital) “to fuel it’s continued growth.” Intel seems to think they are ahead of the pack in terms of AI ready chip capabilities but can’t help but notice the recent work they’ve done in providing “future ASIC support.”

The Fed is expected to print another $425bn over the next month while the BoJ will be injecting additional $4.7bn — after the $35 trillion created over the past five years — into money markets to ”ease tensions.” They are literally printing away your wealth. It’s nudged Gold to grind higher, hedge your wealth and get involved.

  • Ripple ($XRP) -7.2% reports a 320% increase in on-Demand liquidity (ODL) platform QoQ
  • Brave surpasses 10mn MAU
  • Bank of China issued $2.8bn in bonds for SMEs, first issuance via a blockchain based ledger in China.
  • Binance continues Turkey expansion.
  • Dash ($DASH) -7.2% wallet posts 410% spike for adoption in Venezuela.
  • Streami, parent co of Korean exchange GoPax secures $6.8mn funding led by Yookyung PSG AM.
  • Amun AG receives Swedish FSA approval to launch a “digital asset ETP”
  • Tencent (700 HK) +0.9% to provide infrastructure for China’s National Blockchain Consortium.
  • ING Bank looks to venture into digital assets custody.
  • R3 completes biggest transaction on blockchain involving 340 participants on Corda

May the trend be your friend… Happy Trading!

Common Base CEO, co-founder. the strait jacket has been removed