Doing the crypto hokey cokey

by Gary McFarlane from interactive investor |

Serena Williams, Disney and Samsung are into crypto. India wants out. Our award-winning writer reports.

It's a similar story to last week with bitcoin but more so. Volatility is increasing as the leading digital currency fails again to hold on to progress. 

This week bitcoin managed to trade above $5,600, but, as happened last week with the rejection at $5,400, the pull back from the bullish foray was powerful. 

Bitcoin's first drop this week, on 24 April, saw the cryptocurrency give up gains at $5,627, with an intraday relapse to $5,416. That was followed two days later with a further retrace, from $5,484 to as low as $5,133.

But amidst the noise the digital currency is trading higher today than it was this time seven days ago, at $5,131 on Bitstamp. Data provider coinmarketcap is showing a price $100 or more higher than seen on Bitstamp and Coinbase. 

The so-called golden cross, which sees the 50-day simple moving average (MA) move above the 200-day MA, was taken as a bullish sign by many commentators, although it has coincided with the latest rejection of a move above $5,200.

Chart: 1-day candles on the BTC/USD chart 

Source: TradingView   Past performance is not a guide to future performance

India crypto ban story sends market into spin

The sharp fall overnight, which at one stage saw the bitcoin price drop 6% may have been encouraged by the news out of India indicating that the government intends to introduce an outright ban on cryptocurrencies. 

A report in the Economic Times said a number of government departments were determined to introduce a total ban on the "sale, purchase and issuance of all types of cryptocurrency", quoting an unnamed official. 

According to the same report, there is impatience at the delay in "taking action against cryptocurrency", citing the "urgent need to introduce a ban".

India's government and financial regulators have been notably hostile to crypto, with banks urged not to allow their customers to get involved in crypto ordering them be close crypto-related accounts.

The Reserve Bank of India, the country's central bank, has banned all crypto services but cryptocurrency exchanges have challenged that decision in the Supreme Court, where a hearing and ruling has been delayed six times, with the most recent one pushing the case back until July.

Although the crypto market is tiny, the Indian authorities worry that allowing crypto to be used in payments will undermine the rupee and make avoiding government oversight of financial tractions easier in a country famed for bureaucratic overreach.

Altcoins hammered

In a reprise of trading behaviour seen in the headier days of the bull market, the see-saw relationship between bitcoin and altcoins (all other coins bar bitcoin) was reasserting itself.

Before the sharp reversal overnight, bitcoin had been sucking the air out of the altcoin markets, with many top cryptoassets trading down around 8%. That turns out to have been a prelude to bitcoin's latest pull back.

Nevertheless, the latest price action appears to confirms solid support around $5,200, as posited last week. 

Bitcoin is still 0.56% higher than a week ago, but it is a different story for altcoins. 

Ethereum is down 10% at $155, Ripple's XRP 12% lower at 0.29, EOS off 15% at $4.65. The worst performer among the top altcoins is Tezos, 19% lower at $1.11.

Still smelling of roses despite the carnage all about, is Binance Coin (BNB), 3.3% the better at $23. 

BNB is the coin of the Binance exchange, which this week launched a decentralised exchange built on top of its new blockchain network, the mainnet of which went live this week, ahead of schedule. 

Binance has in many ways been leading the market higher as it climbs up the market capitalisation rankings, now placed at number seven, according to coinmarketcap. It is 40% higher this month alone.

Another standout coin is the Basic Attention Token (BAT), 68% higher in the past month and up 3.7% this week after its blockchain-infused Brave browser turned on its ad viewing tech that pays users for seeing adverts.

Disney buying crypto exchanges?

According to The Korea Herald, South Korea's NXC is selling its holding in the Bitstamp and Korbit exchanges via the sale of the 47%-owned Nexon. Disney (NYSE:DIS) is thought to be the bidder looking to acquire 98% of Nexon, South Korea’s number one game developer.

Bitstamp is the oldest crypto exchange still in existence, originally based in Slovenia.

Last week Bitstamp became one of a small band of exchanges to have been granted a BitLicense by New York State. 

Korbit has lost $40 million in the past 12 months.

Consolidation and restructuring in the exchange space has accelerated as a result of the bear market that has seen trading revenue plummet.

South Korea's Bithumb exchange has shed $180 million year to date while US exchange Coinbase shuttered its Chicago office this week. 

Coinbase closes Chicago office, Serena invests

It was revealed this week that tennis star Serena Williams has invested in Coinbase via her venture firm, Serena Ventures.

Serena Ventures is invested in 30 companies with a combined market capitalisation of $120 billion. Coinbase is valued at $8 billion, after raising $300 million in its Series E funding round in October last year.

Filed accounts at the UK’s Companies House reveals that Coinbase UK made a profit of €6.6 million in 2018, a 153% improvement on the previous year. Revenue came in at €153 million, a 20.4% increase on the previous year but nevertheless a slowdown in the growth rates previously achieved.

Coinbase had said it expected total worldwide company revenue for 2018 to come in at $1.3 billion.

The company launched a Visa debit card earlier this month for its UK customers, allowing them to make indirect purchases with their crypto by spending fiat using the card, which leads to a corresponding debiting of the crypto account.

Samsung Coin

Other news out of Korea sees Samsung joining the crypto fray.

CoinDesk Korea spoke to a company source that said it was working on a private blockchain, but "it could also be a public blockchain in the future, but I think it will be hybrid".

"The market expects Samsung Coin to come out, but the direction has not yet been decided," said the anonymous Samsung source.

Samsung has set up a mobile payments system called Samsung Pay and has integrated crypto storage into its flagship Galaxy S10 smartphone.

IMF and World Bank build 'Learning Coin', to explore blockchain tech

The International Monetary Fund (IMF) and the World Bank are exploring distributed ledger technology and have developed a coin - called Learning Coin - to achieve this.

The permissioned (i.e. private) blockchain is only available to staff at the two organisations and has no monetary value.

The IMF released a statement on the project, which in part read: "The development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it."

"This is forcing central banks, regulators and financial institutions to recognize a growing knowledge gap between the legislators, policymakers, economists and the technology. This project begins to bridge that gap and form a strong knowledge base of the technology among IMF and World Bank staff."

Wirex card gets into stablecoins with Stellar's help 

UK crypto wallet and payments start-up Wirex is launching 26 stablecoins in a tie-up with crypto project Stellar (XLM). Customers will be able to spend the stablecoins using their Wirex Visa card. 

Stablecoins have grown in popularity as a way of mitigating volatility risk by pegging the value of the crypto to another asset, typically a fiat currency. 

Wirex claims its fiat-backed stablecoins are the first to be issued by an FCA-regulated fiat and crypto payments company.

Social trading platform eToro last week issued a family of stablecoins for its new crypto exchange eToroX.

"Joining forces with Stellar makes perfect sense for us," said Pavel Mateev, Wirex co-founder in a press statement. “Both companies share a greater goal – encouraging the mass adoption of digital currencies and transforming the way people make payments. We are thrilled to add XLM to the Wirex platform and even more excited to release our industry-first Wirex stablecoins."

As part of the partnership Stellar’s native token XLM will be launching on the Wirex platform. 

"Stablecoins have the potential to transform the payments space," said Jed McCaleb, Stellar cofounder. “We’re excited to be working with Wirex to launch its first stablecoins to help make money more fluid and open to everyone."

The stablecoin feature should encourage merchants to accept purchases with the Wirex card as they will not need to worry about converting back to fiat to avoid exchange rate risk.

Nasdaq, TD Ameritrade testing bitcoin and Litecoin trading

If the reports of Twitter user Cryptopolis, a quantitative analyst at StrongMarket.com according to his/her profile, are to be believed, Nasdaq and TD Ameritrade are together testing bitcoin trading. 

"BREAKING: BTC is now being traded on the Nasdaq! I bought one BTC through my TDAmeritrade account! According to the chart it started trading April 10, 2019!! Other digital assets are soon to follow!!," said the tweet.

The same person reached out to TD Ameritrade support, which explained that the trade was not real and had taken place on its Paper Trading platform.

Charlie Lee, the inventor of Litecoin, separately confirmed that Nasdaq and TD Ameritrade were also testing Litecoin trading. 

Nasdaq, the tech-focused US exchange, is now the second-largest in the world while TD Ameritrade is one of the US's "big four" brokerages, alongside Charles Schwab, Fidelity and E*Trade.

Clem Chambers says bitcoin upends thermodynamics of money and power

Interactive investor spoke to Clem Chambers, chief executive of Online Blockchain (LSE:OBC), on 4 April, a few days after bitcoin began its recent rally. 

Chambers is also the chief executive of ADVFN (LSE:AFN), which he co-founded in 1999, and a Forbes contributor and influential commentator on crypto.

You can listen to the full podcast here

Chambers begins by providing an update on how Online Blockchain is performing. 

The AIM-listed Online Blockchain has new products coming to market. He's excited about FreeLoadr, which enables gamers to donate some of their computing power to mining to earn points that can then be redeemed at the FreeLoadr store for games (0:56).  

Since this interview was filmed FreeLoadr has become available in invite-only beta.

AKJ Crypto's Mitra says it’s time to get off zero

ii also interviewed Neal Mitra, chief executive of AKJ Crypto. Parent company AK Jensen provides services to traditional hedge funds and its subsidiary is doing something similar for crypto hedge funds and sophisticated and high net worth investors.

Although crypto hedge funds have been suffering with the rest of the crypto market, even before the market arrived at or near the bottom, Mitra said interest has remained firm.

“The rate of customer acquisition has been quite exciting for us,” Mitra revealed.

As far as it goes for institutional investors “getting off zero” in terms of asset allocation, they will be increasingly “hard-pressed to argue against that”, with the current climate “ripe for institutions”.

See the full interview here.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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