By CCN.com: In the past 24 hours, the crypto market has experienced a slight decline in valuation from $124 billion to $119 billion as the Bitcoin price dropped to $3,500.

Previously, traders said that a drop below the $3,500 mark could lead the price of Bitcoin to test key support levels in the low $3,000 region.

Where the Crypto Market is Heading

On Sunday, the crypto market suffered an unforeseen minor correction as crypto assets such as Ethereum, Bitcoin Cash, EOS took pointed losses.

Chart from TradingView

DonAlt, a cryptocurrency trader, said that a short-term fall to the $3,400 mark is a likely move for the dominant cryptocurrency.

He said:

Perfectly responded to the drawn level. $3,500 has acted as support 3 times already if it is hit another time I’d expect it to break. Finally approaching a level ($3,400) that I might trade again. Until then still sitting tight fully hedged.

A continuous drop in the price of Bitcoin to the lower region of the $3,000 region may result in an intensified downward movement for major crypto assets.

On the day, Ethereum, which has fallen below Ripple and has become the third most valuable cryptocurrency in the global market, dropped by more than six percent against the U.S. dollar.

Hsaka, a cryptocurrency technical analyst, said that the three percent drop in the price of Bitcoin could result in a further decline in value but it is unlikely that it would lead the asset to test its 12-month low at $3,122.

“Yesterday’s sell the rally analysis played out like a beauty. Bounced before the $3,430 support level. Took out lows (green dashed) of this consolidation. Neutral here, not shorting into HTF support. Covered my BTC short, holding ADA and BCH,” the analyst said.

Volatility in a Low Price Range

Throughout the past few weeks, analysts in the likes of Willy Woo have predicted the bear market to extend across the first two quarters of 2019.

On January 2, a cryptocurrency researcher with an online alias “The Crypto Dog” said that while the cryptocurrency market is close to bottoming out, in the short-term, the market will not see new highs of significant rallies.

“BTC has mostly bottomed (might even have put the final low in) but we’re not going to see a significant rally or new highs for a while so that’s not much to get excited about. Cheers to a boring 2019,” the researcher said.

Analysts generally believe the cryptocurrency market is en route to seeing a boring year in 2019 in terms of trading activity and volatility. Although the cryptocurrency market has shown a relatively high level of volatility in January, most crypto assets including Bitcoin have remained in a tight price range, unable to break out of key resistance levels or drop below important support levels.

This post credited to CCN. Image source: CCN

LedgerX thinks cryptocurrency traders should be able to assess bitcoin’s volatility. And, taking a leaf out of the stock market’s book, the derivatives trading platform has built an index to track this benchmark.

The company announced Monday that it was launching the LedgerX Volatility Index (LXVX), which will track the expected volatility for bitcoin. The firm will draw data for the index from its regulated bitcoin options, which various institutions have been trading over the past year.

Juthica Chou, LedgerX’s president and chief risk officer, told CoinDesk that the LXVX is similar to the Cboe Volatility Index (VIX), a popular measure of the stock market’s anticipated volatility.

“[A volatility index] tells you the expected certainty that the market is forecasting … That’s what it tells you with respect to any market,” she explained. 

Or, put another way, the LXVX can be described as “a bitcoin fear index,” much like the VIX is referred to as the stock market fear index, she said.

Chou, who previously worked at Goldman Sachs as a volatility trader, said that the VIX was an important benchmark, and its usefulness is why LedgerX decided to build one for bitcoin.

It can allow traders and investors to monitor risk as they manage their businesses, she said.

As an example, she cited bitcoin’s volatility near the end of 2018 compared to the beginning of this year, saying:

“If you look basically since the start of the year, the LXVX is down about 20 percent so it’s down to about 68, and … this is still approximately three times the volatility of the stock market but it’s very telling in the bitcoin space because it shows that there is less of the fear and uncertainty than what existed [in] December.”

At present, the index is not a tradeable product, though building such a product is a goal further down the line. LedgerX’s institutional clients have already been able to track the benchmark for at least a few months, and it is now publicly available through LedgerX’s website.

Thriving in winter

Separately, LedgerX announced it had cleared over $500 million in bitcoin derivatives since its inception in October 2017, across more than 50,000 contracts over “a wide range of strikes,” Chou said, referring to the price at which an option may be exercised.

While other startups in the crypto space have suffered from the prolonged crypto bear market, it has actually been more beneficial for LedgerX, as it leads to greater trading activity.

“We saw, for example, a lot of put options trading in December and the end of November while the broader market was selling off,” she said. “Now that we’re bouncing back, we’re seeing a lot more call options.”

This post credited to Coindesk. Image source: Cryptoninjas

Ireland’s High Court has ruled that 25,000 euro in cryptocurrency held by a man in prison is considered “the proceeds of a crime,” the Irish Times reported on Tuesday, Dec. 18.

The court “broke new legal ground”, the Irish Times states, while considering the case of Neil Mannion — a man reportedly serving a six-and-a-half year prison sentence at Wheatfield Prison in Dublin for drugs offences since 2014.

Mannion had reportedly admitted to selling drugs on the darknet, specifically on Silk Road and Agora. He was jailed at the Dublin Circuit Criminal Court in 2015 after purportedly pleading guilty to charges of possession and intent to distribute various controlled substances.

The Irish Criminal Assets Bureau (CAB) withdrew his Bitcoin (BTC) revenues along with funds from banking accounts and credit cards in proceedings which where purportedly settled in February 2016.

Following further investigation, CAB found an online crypto wallet holding Ethereum (ETH) worth approximately 25,000 euro. Since Ethereum had not “started operating as a trading currency” at the time of the first proceedings, it was not considered in the initial investigation, states the Irish Times.

CAB submitted an application seeking to obtain the Ethereum in July 2016. Mannion opposed the application, reportedly stating that Irish authorities no longer had rights to his computer system or any copies of it, as the investigation had been concluded.

Justice Carmel Stewart ruled that his rights had not been breached. Moreover, she stated that the initial investigation was potentially undermined by the “intricacies of data privacy rights” used by cryptocurrency exchanges. Stewart purportedly noted that, while the details of the investigative process raised serious questions, they did not constitute a breach of Mannion’s constitutional rights.

Irish courts, which are part of a common-law system, observe and are bound by precedents set in higher courts.

In June, the co-founder of Irish BTC broker Eircoin accused the Banking and Payments Federation of Ireland (BPFI) of discriminating against crypto-related accounts. He also claimed that the banks would avoid opening new accounts for crypto businesses, following undisclosed official guidelines not to deal with illegal activities associated with crypto trading.

However, the BPFI, along with other major Irish bank AIB, denied the allegations and stated that they had not discriminated against crypto-related firms.

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Robinhood launched its 3% interest “checking and savings”accounts last week. With 3% well over the average rate offered by conventional banks and some key differentials in the insurance that protects investors in Robinhood’s new products, U.S banking organizations are speaking out.

The new accounts from the trading platform, at first glance, appear to be like conventional savings accounts, with higher returns. However, savings accounts are normally protected by the Federal Deposit Insurance Corporation (FDIC). Robinhood’s accounts are instead protected by the Securities Investor Protection Corporation (SIPC).

Chris Cole, the senior regulatory counsel for the Independent Community Bankers of America (ICBA), told American Bankeryesterday that Robinhood’s use of the terms banking, checking, and saving could be “deceptive.” Cole added:

This is supposed to be a brokerage account, but they’re running around making it look like a banking account.

Unlike FDIC coverage, SIPC coverage only guarantees an account holders balance to the value of their funds on the day of any insolvency. Cole said Robinhood:

Does not sufficiently explain the difference between SIPC protection and FDIC insurance.

Concerns Raised with Regulators

Stephen Harbeck, CEO of the SIPC, has already raised his concerns, telling news outlets he simply had not been consulted, and that he has already filed a complaint with the U.S Securities and Exchange Commission (SEC) over the matter. Harbeck told CNBC:

We want to make sure that investors know there’s some risk there.

Robinhood has yet to respond to the concerns raised. Its website FAQ’s for the new products outlined:

Your cash and securities in Robinhood are protected up to a total of $500,000 by the SIPC, $250,000 of which can be in cash, the rest in securities…Similar to FDIC insurance, SIPC protects cash in your account if the financial firm fails.

Sarah Grano, a spokesperson for the American Bankers Association, appears to also be taking note of this and told American Banker in an email that:

We appreciate any effort by regulators to clarify when deposits are fully insured and when they are not, and the need to respond quickly to misrepresentations.

An attorney, Brian Hester, said Robinhood is at risk of being classed as an “unlicensed banking business” if the new savings products are not viewed as “incidental” to its securities trading business by regulators. Hester explained:

Many state laws will have an exception for a registered broker-dealer to engage in banking activities, but only if it’s incidental to their brokerage business.

Robinhood is a broker-dealer and not a registered conventional bank. As such it hasn’t had to demonstrate the liquidity and risk management processes that regulated banks have to. It also does not have access to FDIC protection for its customers.

This combined with offering a rate far exceeding the average of 0.08% for checking accounts and 0.1% for U.S savings accounts is likely to continue to cause uproar amongst banks, associations, and likely regulators. Any resulting action by the U.S SEC or the SIPC could impact both the new products and Robinhood’s existing trading business.

This post credited to ccn Featured image from Shutterstock. Sarah Grano headshot from LinkedIn.

In order to curb the use of cryptocurrencies for malicious activities such as money laundering and the funding of terrorism, the central bank of Netherlands, De Nederlandsche Bank (DNB), has decided that it would be issuing licenses to cryptocurrency service providers.

‘Know Your Customers,’ Says Dutch Central Bank to Crypto Businesses

On December 11, a major Dutch news outlet, DeTelegraaf, reported that the Dutch Central Bank is concerned about the wrong use of cryptocurrencies and, hence, has decided that crypto-service providers and business will soon have to obtain a license to continue its operations in the country.

The report also stated that in order to obtain the license, the service providers will have to keep complete details of their customers and report any unusual transaction that they feel could be suspicious in nature.

While the complete regulatory framework around cryptocurrency is still unknown, the following move by the Dutch Central Bank is extremely positive. This move would not just regulate the cryptocurrencies, but will also help in keeping it clean from all wrongdoing.

With this announcement, the Netherlands finds itself on the list of countries that are “against anonymous cryptos.” A similar set of rules introduced in Japan in April this year asked cryptocurrency exchanges to report suspicious or dubious transactions that were carried out by their customers. The regulations have helped Japanese regulators clean up the industry resulting in a significant rise in a number of reported transactions over the last six months.

Prior to this move, the Dutch regulator has had a mixed review about cryptocurrencies. In August 2018, an executive at the Dutch Central Bank announced that the Central Bank doesn’t recognize cryptocurrencies as “real money,” but doesn’t plan to ban them, either.

Changing Environment in Europe for Cryptocurrencies

The crypto market in Europe has remained small due to regulatory hurdles and uncertainty. But, the environment seems to be changing as a lot of countries in Europe are individually making attempts to make cryptocurrency mainstream. Apart from the Netherlands, Spain’s ruling party has also announced that it would be introducing a draft bill to regulate both blockchain and cryptocurrencies.

Several other countries in the European Union have also acted positively towards cryptocurrencies. While Switzerland gave the world the first multi-exchange traded product and opened doors for institutions to invest in cryptos, Germany’s second-largest stock exchange, Boerse Stuttgart Group, also announced that it was ready to launch a cryptocurrency platform in the first half of 2019.

A lot of countries have yet to contribute their share. But this is a good start, and Europe looks poised to take advantage of the potential of blockchain and cryptocurrencies.

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The European Parliament issued a new resolution on “Blockchain: a forward-looking trade policy.” Released on Thursday, the resolution details support for blockchain technology and a digital trade strategy.

The report’s analysis is centered on global trade based on an estimated $18 trillion (16 trillion euro) supply-chain sector. Research shows that the “high transactional costs and burdensome paperwork lead to a complexity of processes and systems susceptible to error.”

Blockchain strategies are able to reduce errors and lower costs by producing verifiable and transparent ledgers that enable parties to track logistics, trace shipments, reduce costs and harvest other key data.

Highlights from the report

Blockchain pilots

Blockchain pilots are proliferating around the world.

“There are at least 202 government blockchain initiatives in 45 countries around the world and economies in regions of Asia-Pacific, the Americas and the Middle East, in particular, are investing in blockchain technologies for trade.”

Supply chain

Businesses can move shipments faster, cheaper and and more efficiently, using blockchain tech, which can also expedite customs.

“[The EU trade policy] considers that blockchain could enable customs authorities to automatically obtain the required information for a customs declaration, reduce the need for manual verification and paper trails, and provide a precise update on the status and characteristics of goods entering the EU to all relevant parties simultaneously, thereby improving track-and-trace capabilities and transparency.”

“Believes that the adoption of blockchain technologies throughout the supply chain can increase the efficiency, speed and volume of global trade by limiting the costs associated with international transactions and assisting business to identify new trading partners, and can lead to increased consumer protection and confidence in digital trade.”

Cross border data flows 

Data flows on blockchains are a new paradigm.

“Underlines that blockchain represents a new paradigm of data storage and management that is capable of decentralising forms of human interaction, markets, banking and international trade; emphasises that the rise of blockchain presents both opportunities and challenges in terms of data protection, transparency and financial crime, as the data is immutable once it has been input and is shared with all participating parties, which also ensures its security and integrity; requests that everything possible be done, including at national level, to guarantee the non-falsifiable and immutable character of the technology and to ensure that the fundamental right to data protection is not put at risk.”

“Reiterates its call for provisions allowing for the full functioning of the digital ecosystem and for the promotion of cross-border data flows in free trade agreements.”

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Personal data

Future blockchains should protect personal data and make it fully anonymous.

“Underlines that future blockchain applications should implement mechanisms that protect personal data and the privacy of users and ensure that data can be fully anonymous; calls on the Commission and the Member States to fund research, in particular academic research, and innovation on new blockchain technologies that are compatible with the GDPR and based on the principle of data protection by design, such as zk-SNARK (zero-knowledge succinct non-interactive arguments of knowledge).” 

Small and medium-sized enterprises (SMEs)

While blockchain can bring economic opportunities to SMEs, the report notes that smart contracts need further development.

“Highlights the benefits blockchain could bring to SMEs by allowing peer-to-peer communication, collaboration tools and secure payments, increasing the ease of doing business and reducing the risk of non-payment and legal procedure costs of contract fulfilment through the use of smart contracts; recognises the need to ensure that the development of blockchain in international trade includes SMEs; highlights that, at the moment, smart contracts may not be sufficiently mature to be considered legally enforceable within any sectoral regulation and further assessment of risks is needed.”

Conclusion

While addressing key concerns such as anti-money laundering, tax evasion, data protection and organized crime, the EU can position itself as a leader in blockchain and international trade.

“Reminds the Commission that the EU has an opportunity to become a leading actor in the field of blockchain and international trade, and that it should be an influential actor in shaping its development globally, together with international partners.”

You can check out the full report here.

 

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Crypto exchange Gemini has just launched a mobile wallet for its users.

Gemini CEO and co-founder Tyler Winklevoss wrote in a Medium post on Tuesday that the new app allows customers to buy or sell cryptocurrencies, view market prices, see their own portfolio values and set price alerts, among other features geared toward traders.

The exchange is working to “build the future of money” through its licensed exchange and regulated custodian, Winklevoss wrote, ensuring that customers can entrust their holdings to a compliant platform.

“A trusted and regulated platform, however, is just the beginning. The future of money is both digital and mobile, and now Gemini is too with the launch of the Gemini Mobile App,” he added.

As such, the app features Gemini’s institutional-grade security, while remaining easy to use, he claimed.

Among the offerings is Gemini’s basket, dubbed the Cryptoverse, which allows customers to simultaneously purchase all of the coins currently offered by the exchange – bitcoin, ether, bitcoin cash, zcash and litecoin – at once.

The coins are weighted by market capitalization, according to the post.

Gemini added bitcoin cash just days ago, after securing approval from the New York Department of Financial Services.

“We spent the last three years building the world’s most trusted cryptocurrency platform and today we are excited to extend it into your hands and allow you to engage with cryptocurrency wherever you are and whenever you want,” Winklevoss wrote Tuesday.

This post credited to coindesk Image Credit: Piotr Swat / Shutterstock.com

Crypto industry investor Anthony Pompliano says Bitcoin (BTC) will likely fall to 85 percent below its all-time-highs – around $3,000. Pompliano gave his forecast during an interview on CNBC’s Squawk Box Nov. 26.

The partner at crypto investment firm Morgan Creek Digital Assets argued that while “Bitcoin was overvalued in Dec. 2017” – with selling pressure this year subsequently driving its price downwards – there are several important factors related to the asset’s long-term value that are important to remember:

“First, [Bitcoin] is the most secure transaction settlement layer in the world, so it’s got to be worth something […] it’s the best performing asset class over the past ten years – it’s outperformed S&P, DOW, NASDAQ, etc. during the longest bull run. It experienced two 85 percent drops during that time, but [it’s] still up over 400 percent in the last two years.”

Third, he added, all of Bitcoin’s price action in past years has been driven by retail investors – ahead of any meaningful involvement from major institutional players such as those now poised to enter the crypto space next year. Big players include Fidelity and New York Stock Exchange (NYSEoperator Intercontinental Exchange (ICE).

Pompliano argued that the recent “wash-out” on the crypto markets is a barometer of retail investor patterns; throughout its retail-driven history in 2017, the cryptocurrency traded as a “highly volatile speculative asset.” By contrast, he continued, more recent institutional involvement is primarily conducted via less transparent over-the-counter (OTC) trades, where trends are not immediately apparent and harder to gain insight into.

Pompliano was lastly asked about dwindling profit margins for cryptocurrency miners as the asset’s value tumbles. He conceded that outside of regions with abundant low cost power, such as China – where he claimed miners can mint Bitcoin for as little as $2,000-2,500 – we are seeing a similar “wash out” of miners in areas where electricity costs push expenses closer to $6,000 or $6,500. These latter, he said, “are underwater now.”

As previously reported, Morgan Creek Digital assets is backed by the institutional investment house Morgan Creek Capital, which has $1.5 billion in assets under management. The firm launched a Digital Asset Index Fund in late August, which gives accredited investors indirect exposure to Bitcoin, Ethereum and eight other large market cap assets, although not pre-mined cryptos such as Ripple (XRP) and Stellar (XLM).

Speaking yesterday, Vinny Lingham, CEO of identity management startup Civicpredicted Bitcoin will trade range-bound between $3,000 and $5,000 for at least three to six months; if the coin fails to then break higher, it could lose the $3,000 support as well.

Bitcoin is currently trading at $3,730 by press time, down just over 6 percent over the past 24 hours.

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Coinbase Wallet, provided by major U.S. crypto exchange Coinbase, has launched support for Ethereum Classic (ETC), according to an official company blog postNov. 27.

Ethereum Classic is the result of a hard fork in 2016, arising out of differences into how to respond to the high-profile DAO hack of the Ethereum (ETH) blockchain.

Today’s blog post outlines that the Coinbase Wallet app should update over the “next few days,” after which users will be able to view, send and receive ETC to their addresses. Fo existing Coinbase Wallet users, their ETC address will be identical to their current ETH address.

In addition to ETC, Coinbase Wallet supports storage, sending and receiving of ETH and “100,000+ ERC20 tokens.”

As previously reported, Coinbase first announced it would be listing Ethereum Classic on its trading platform in June, leading to a sharp spike in the asset’s value. After the listing went live in early August, ETC was also incorporated into the Coinbase Index Fund.

Also in August, crypto exchange and wallet service Bittrex added a U.S. dollar-ETC trading pair, the same month as crypto trading app Robinhood announced its own support for the asset.

At press time, ETC is ranked 17th largest crypto by market cap, and is trading at $4.30, down almost 8 percent on the day, according to CoinMarketCap.

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Michael Moro, the CEO of cryptocurrency trading companies Genesis Trading and Genesis Capital Trading, said that the Bitcoin (BTC) price could bottom at $3,000 in an interview with CNBC Nov. 23.

Speaking on CNBC’s “Squawk Box,” Moro suggested that the leading cryptocurrency will lose another 30 percent before bottoming at $3,000. Moro said, “You really won’t find [the floor] until you kind of hit the 3K-flat level.”

Moro addressed small resistance levels, saying that he does not think the BTC price can stabilize in “the mid-3s,” also noting that the $4,000 level was tested twice in the previous days.

The crypto trader said that long-term investors are more poised to handle BTC’s slump and wait until the price rebounds, while at the same time advising not to buy the cryptocurrency at the dip:

“This is about the fifth or sixth 75 percent-plus drawdown that we’ve seen in the 10-year history of Bitcoin. And so if you have that [long-term] lens, I don’t believe institutional investors really ultimately care where the price of Bitcoin ends in 2018, simply because they’re looking at things three to five years out.”

When asked about what the low price of Bitcoin could mean for miners, Moro suggested that the cost to mine one Bitcoin will go down because “the hash rate has dropped.”

The recent cryptocurrency market decline has resulted in a similar drop in mining profitability and forced Chinese operators to sell their mining devices at a loss. Some mining machines are being sold on the second-hand market for merely 5 percent of their original value.

Bitcoin’s price has kept falling, along with the rest of the crypto market, since the hard fork network upgrade of Bitcoin Cash (BCH) that took place Nov. 15.

Earlier this week, Lou Kerner, a partner at venture capital firm CryptoOracle, compared the current slump in crypto prices to the dotcom burst in the early 2000s. Kerner stated that strong coins should be viewed like the big companies that came out of the dotcom bubble, like Amazon.

Moreover, the venture capitalist said that Bitcoin is “the greatest store of value ever created,” and will surpass gold over time. When asked what could be behind the recent slump, Kerner argued that “crypto has been so weak because [for] most of it there is no underlying value outside of confidence.”

 

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