It’s been another good week for bitcoin (BTC), with the price now trading at 13-month highs, with a $10,000 price not too far off it would seem.
Bitcoin at time of writing is priced at $9,185 according to data site cryptocompare, and there are plenty of signs from the past week’s news that the party is only just getting started.
A caveat to that comes from analyst Simon Peters today who is holding to the line that a correction may be imminent: “We’re due a significant correction still and prices could fall back to as low as $6,500 before the next major rise.”
Factors affecting the bitcoin price progress this week can be filed under three headings: Geo-politics, Facebook and Binance.
Attacks on oil tankers in the Strait of Hormuz, through which a quarter of world oil supply flows, and the associated possibility of war between Iran and the US certainly concentrated the minds of those who see bitcoin as a haven play.
Also, ongoing China-US trade tensions and the protests in Hong Kong may have helped bitcoin to catch a bid.
Binance and Bittrex react to US regulation chill
Turning to Binance, the exchange announced last week that it was blocking access to its services for US residents.
The world’s largest crypto exchange is building a new venue specifically for US customers and has teamed up with a FinCEN[US Treasury department bureau, the Financial Crimes Enforcement Network]-registered partner.
With the US the main centre for crypto trading, Binance may have forced selling of altcoin, with bitcoin the chief main beneficiary as it is on the other side of the equation for Binance’s crypto trading pairs.
Bittrex deciding to prevent customers from trading certain tokens as it seeks to guard against the US Securities and Exchange Commission clamping down on tokens that raised funds in ICOs, as seen in the current court case against Kin, is a sign of the more challenging regulatory landscape in the US.
Binance’s actions are for the same regulatory reasons.
Despite a growing chorus from the industry about the lack of clarity from the SEC and the possible chilling effect of the Kin case, it could be that the US is merely ahead of the curve.
The G20’s Financial Action Task Force (FATF) it emerged last week is set this Friday to finalise recommendations for “virtual asset service providers”. That could see crypto exchanges forced to report the identity of all parties to transactions and require other onerous compliance processes.
Bitcoin (BTC) “supply shock” coming
With the Litecoin (LTC) halving still impacting the price of that asset (currently trading at $135), managing partner at StillMark Capital, Alyse Killeen, made waves this past week with her contention that the bitcoin market is set for its own “supply shock”, as demand increases and supply tightens.
Among the factors boosting demand is the improved on-ramps for institutions looking to buy bitcoin.
Bakkt testing bitcoin futures next month
An example of that was an update from Bakkt, the crypto platform from Intercontinental Exchange. It revealed in a Medium blog post that it will start “user acceptance testing” for its bitcoin futures product on 22 July.
For those that don’t know, the Bakkt futures product differs from its CME counterpart in that it will be physically settled as opposed to cash-settled. That means real bitcoins will be bought and sold, which could have a much bigger impact on the spot price.
The CBOE derivatives exchange, the first issuer of bitcoin futures, is closing its bitcoin futures operation this month.
Bitcoin futures price impact greater than thought says JPMorgan
Although the impact of the current futures market was seen by some as playing a part in triggering the start of the bear market in December 2017, others have said its impact has been minimal, given its small size compared to the reported volumes on crypto exchanges.
However, a report last week from JPMorgan drew attention to the exaggerated volumes on reported crypto exchanges, which implies that the overall market weight of the BTC futures market is much greater than hitherto acknowledged.
The report in part reads: “The overstatement of trading volumes by cryptocurrency exchanges, and by implication the understatement of the importance of listed futures, suggests that market structure has likely changed considerably since the previous spike in Bitcoin prices in end-2017 with a greater influence from institutional investors.”
Facebook Libra / GlobalCoin effect; Roubini says it’s not crypto
The other factor driving the bitcoin price, and therefore the rest of the market, was the anticipation around the publication this Tuesday (18 June) of the whitepaper for the GlobalCoin stablecoin at the centre of the Facebook-initiated Libra Association.
Well-connected crypto website The Block juiced that excitement when it unveiled three days ago a full list of Libra’s inaugural partners. The list is impressive, as one would expect for a Facebook-inspired project.
Some of the partners were already known such as Mastercard and Visa but others were not.
Crypto custody pioneer Xapo is in there, as are eBay, Stripe, Lyft, Vodafone, Booking Holdings and Spotify. There are also non-profits such as Mercy Corps on board.
In addition, we now know that Facebook is not looking to “disrupt” the existing financial services industry, according to internal documents.
Each partner has ponied up $10 million to join the Libra Association, with some of them presumably set to be running network nodes.
Notably absent from the list are of course banks and money transfer firms such as Western Union.
Economist Nouriel Roubini, aka Dr Doom, said in an interview with crypto news site CoinDesk that GlobalCoin is not a crypto. In typically caustic language he remarked:
“It has nothing to do with blockchain. Fully private, controlled, centralised, verified and authorised by a small number of permissioned nodes. So what is crypto or blockchain about it? None.”
Altcoin top movers: ZEC, BSV, NEO, QTUM, XMR, ZIL, EOS, ETH
Top movers among top altcoins this week were Zcash (ZEC) up 23% to $98.6, Bitcoin SV (BSV), 19.83% higher on $225, NEO 17% the better trading at $14.3, Qtum (QTUM) (recently delisted by Bittrex) up 15% to $3.67, privacy coin Monero (XMR) priced at $98.4 for a 14.5% increase, with Zilliqa (ZIL), EOS and Ethereum (ETH) all around 13% improved.
Ethereum to follow Litecoin higher?
Ethereum could be about to do a Litecoin (up 350% this year), and start to accelerate higher. On 12 June one popular trader, known as Credible Crypto on Twitter, seemed to think so:
“There is a good chance we reject at $270 and come down for last buy the dip op. HODL’ers need not worry about their holdings, traders may want to consider taking some off the table soon if they need to free up some ammo to buy this potential dip,”
— Credible Crypto (@CredibleCrypto) June 12, 2019
Warren Buffett lunch – Charlie Lee is Justin Sun’s first of seven guests
Tron’s Justin Sun is not the only crypto royalty meeting up with Warren Buffett for a power lunch.
Sun is allowed to invite guests to join him at the lunch and the first up is Charlie Lee, the inventor of Litecoin.
Sun is known for his marketing savvy and this first pick is a clever move on his part as Lee is seen as the sort of level-headed fellow that might be able to impress upon “doubting Warren” the worth of crypto.
The Tron chief executive paid $4.7 million for his Buffett lunch and the publicity he has garnered for his project and crypto in general is arguably worth much more than that. The winner of the lunch auction is allowed to bring along seven guest.
Who’s going to be next on the guest list. Let us know in the comments below?
John McAfee, self-styled outlaw of the crypto world (and maybe in real life – joke) launched a crypto exchange this past week.
Called McAfeeMagic, or just Magic, the exchange’s selling point is the ability to trade at multiple exchanges through the portal that it offers.
Supported exchanges include Binance, Poloniex, Kraken and Huobi.
In a move that echoes the famous copy trading feature, there is a “shadow trading” feature in which users can auto-follow the trades of pros, ranked by their trading success.
This latest announcement from McAfee follows news a couple of weeks back that he is launching a token called McAfee Freedom Coin later this year.
Coinbase Visa debit cards, Spectrum protocol, HAYVN in-principal approval
Other industry news saw Coinbase rollout its crypto-backed Visa debit card launch to six more European nations: Spain, Germany, France, Italy, Ireland, and the Netherlands.
The card was first issued in the UK in April and lets users instantly turn their crypto balance into fiat currency to buy goods and services
Crypto company BHB Network has launched open source project Spectrum, a protocol for creating tokens through the Lightning Network second layer on the bitcoin network.
Supporters of the effort include Fulgur Ventures and Chainside, as the projects seeks to replicate the success of the ERC-20 token standard on the Ethereum blockchain.
In the Middle East, the HAYVN platform aimed at high net worth individuals, family offices and institutions, providing over-the-counter, custody and research services, has received in-principal approval from the Financial Services Regulatory Authority (“FSRA”), the financial regulator of the Abu Dhabi Global Market.
Ahmed Ismail, HAYVN co-founder along with Christopher Flinos, commenting on the news said: “The Gulf is renowned as a centre of finance and innovation, so we are delighted to be one step closer to operating in the region. HAYVN seeks to recalibrate the standards of digital currencies and demands a higher standard for investors; today’s approval is a vital step forward in achieving this.”
Gary McFarlane is the cryptocurrency analyst at interactive investor and his contributions are made in a personal capacity and are not investment advice