As cryptocurrency and blockchain continue to attract new investment, more institutional capital and regulatory oversight pervade the global markets. In light of recent developments, cryptocurrency prices are showing signs of gaining positive momentum. At press time, 94 of the top 100 cryptocurrencies are in the green.
Bitcoin, currently ranked #1 by market cap, is up 5.11% over the past 24 hours. BTC has a market cap of $115.08B with a 24 hour volume of $4.94B.
Chart by CryptoCompare
Noah Smith, an Assistant Professor of finance at Stony Brook University and an op-ed contributor at Bloomberg, crafted a compelling forecast for Bitcoin’s future. Mr. Smith presents three possible outcomes for Bitcoin’s adoption and proliferation: Bitcoin Triumph, Bitcoin as Gold, or Bitcoin Bust.
His argument is simple. Like gold, Bitcoin is a finite resource. Only 21 million Bitcoin will ever be produced, so it’s a deflationary asset that benefits from relative scarcity.
Moreover, Bitcoin is an asset with a high expected return, and these assets tend to be more volatile.
Most importantly, Bitcoin is becoming increasingly integrated into the financial system. Bitcoin futures are already available at CME, Cboe, and Goldman Sachs, and rumors of an impending Bitcoin ETF are picking up steam. Therefore, Mr. Smith writes,
“So my prediction is that Bitcoin will stick around, experiencing repeated bubbles and busts, but slowly gaining in value. That is why I personally still own some Bitcoin.”
Despite Bitcoin’s 2018 price slump, the dominant cryptocurrency’s hash rate continues to surge at an astonishing pace. Although the value of Bitcoin has decreased by 53% since January 1st, 2018, the hash rate increased 155% in the same time period – growing from 15.04 Eh/s to 38.43 Eh/s.
The continued growth in hash power demonstrates a strong, continued belief in Bitcoin by miners worldwide and may foreshadow a hidden bullish trend.
There are two possible explanations for Bitcoin’s rising hash rate: increase in Bitcoin’s value and the upcoming “halvening.”
At Bitcoin’s peak, a single block was worth almost a quarter million dollars and miners may view the current market as a way to accumulate more Bitcoin at lower prices.
The upcoming Bitcoin “halvening,” estimated to occur around May 25, 2020, will decrease the block reward from 12.5 BTC per block to 6.25 per block – meaning miners may be trying to accumulate as much Bitcoin possible before difficulty further increases and rewards decrease.
The price of BTC at the time of the last two halvenings was $660 and $12 in 2016 and 2012, respectively.
On June 26, 2018, the SEC received an application from CBOE Futures Exchange to launch the world’s first Bitcoin ETF.
One of the first to launch Bitcoin futures, CBOE Global Markets has partnered with Van Eyck Investment and SolidX to introduce a Bitcoin ETF to global markets.
The CBOE proposal outlines offering clients the buying and selling of SolidX shares, which are currently valued at approximately 25 bitcoin.
If approved, accredited investors will be able to trade a Bitcoin ETF in the form of baskets of 5 SolidX shares (~100 bitcoin) on the CBOE exchange:
“The Trust will issue and redeem “Baskets”, each equal to a block of 5 Shares, only to “Authorized Participants.” The size of a Basket is subject to change.”
Whether this application will align with the SEC’s proposal to alleviate ETF processes and make its way to global markets is yet to be revealed. If approved, Bitcoin ETFs could be available for trading in the first quarter of 2019.
EOS, currently ranked #5 by market cap, is up 7.81% over the past 24 hours. EOS has a market cap of $7.12B with a 24 hour volume of $771.94M.
Chart by CryptoCompare
In early July, local publications reported that the South Korean government finalized plans to legitimize the cryptocurrency exchange market and the blockchain sector with a newly created regulatory framework.
The government of South Korea will separate blockchain-related products, base layers, and dAapps from cryptocurrency exchanges. Moving forward, upon the imposition of a new cryptocurrency and blockchain legislation, startups operating within the blockchain sector of South Korea will fall under one of the nine categories created by the government.
Local analysts expect the optimistic legislation and the surprising decision of the government of South Korea to regulate and legitimize both the cryptocurrency and blockchain sector to fuel the growth of dApps, base blockchain protocols, cryptocurrency exchanges, and the global cryptocurrency industry as a whole.
The imposition of the revised blockchain legislation by the government of South Korea may coincide with the government’s reverse ban of domestic initial coin offerings (ICOs), which will likely lead multi-billion dollar conglomerates like Kakao and Bithumb to reconsider their initial plans to engage in token sales targeting investors in South Korea.
Several block producers of the recently-launched EOS temporarily crashed after running into a RAM-related limitation. The network’s integrity remains unaffected, according to EOS New York.
Sounding the alarm on July 7, 2018, top block producer EOS New York took to Twitter to explain the issue. While withholding the identities of the affected parties, the self-funded producer disclaimed their involvement in the error:
Some Block Producers crashed when RAM usage on EOS exceeded 1GB tonight. Either they only had 1GB or they did not configure their node to properly set it at 64GB. This is a violation of the regproducer agreement. EOS New York produced on schedule. We are still confirming details.
— EOS New York (@eosnewyork) July 8, 2018
According to EOS New York, the issue occurred when the platform’s net RAM consumption exceeded 1GB — temporarily disabling a number of unnamed block producers.
Theoretically, EOS block producers can support up to 64GB of RAM capacity collectively.
While this particular incident may have been more bureaucratic than technical in nature, RAM appears to have become a nagging concern for EOS — as an increasingly sparse resource that is integral to the platform’s expansion.
XRP, currently ranked #3 by market cap, is up 6.46% over the past 24 hours. XRP has a market cap of $18.62B with a 24 hour volume of $307.26M.
Chart by CryptoCompare
On June 27, Ripple Labs Inc. and CEO Brad Garlinghouse received signed court documents by the California Superior Court on allegations of illegally profiting from price increases catalyzed by Ripple promotions. Private investor and California resident, David Oconer is the primary plaintiff in the case.
Still not technically classified a security, Ripple has now faced three lawsuits regarding securities law violations by private investors. The court document specifies Ripple’s public announcement to place 55 billion XRP in escrow which subsequently led to a 1,159% price increase the next quarter.
— Ripple (@Ripple) December 8, 2017
The December escrow announcement was meant to ensure Ripple investors that its central control over the token supply would not be abused for price manipulation purposes. However, the suit issued against Ripple alleges that gradual sell-offs to larger investors from the Ripple escrow account were conducted throughout the second quarter of 2018.
In conjunction with publicized promotions of new exchange listings, Ripple is alleged to have deliberately used its control over the XRP supply to strategically drive prices higher.
In response, Ripple has employed former SEC chair and Andrew Ceresney to lead its legal defense.
This case may set a pivotal precedent for cryptocurrency industry regulation in the U.S and it remains to be seen exactly how it will play out from here.
Bitcoin Cash, currently ranked #4 by market cap, is up 8.54% over the past 24 hours. BCH has a market cap of $13.63B with a 24 hour volume of $567.54M.
Chart by CryptoCompare
The stress test was first announced on June 22, 2018, when Bitpico announced the launch of an attack that would leverage thousands of attack nodes over the course of 6 weeks, stating that 85% of all Bitcoin Cash nodes are located within two data centers:
The #bcash $bch @bitcoin attack has been started; it will continue to run as we work to amplify it over the coming months. We expect to have 5000 Bcash attack nodes in roughly 6 weeks and then we will multi-fork the chain. @rogerkver will now cry 😭. #hacking #skills #security pic.twitter.com/dR8ksy6Lz8
— ɃitPico (@bitPico) June 22, 2018
Evidence purportedly captured by the Bitpico stress test demonstrated that 98% of all show nodes currently sit on the “same server rack,” which could potentially leave the Bitcoin Cash network highly susceptible to security threats or seizure.
While the Bitpico stress test may claim that 49% of all Bitcoin Cash nodes are operating on Alibaba facilities, conflicting statistics published by BCHNodes show a fairly even spread between the US and China-based nodes.
Bitpico, however, remains unconvinced.
There are currently 2086* nodes running on the Bitcoin Cash network.
(duplicate or non-listening nodes exluded)https://t.co/hWD64mW9Km
— █▒ Peter_Mueller (@pmullr) July 10, 2018
Alfa-Bank and Sberbank — two of Russia’s largest players in the banking market — are currently in the testing phase of cryptocurrency-based investment options geared toward its retail investors, local Russian news Kommersant reported back on June 15th.
The two banks will be testing several products of private banking on the Bank of Russia regulatory “sandbox” platform.
The Russian Central Bank’s piloting process usually takes no more than 45 days, yet the group expects this pilot to come to completion in about two weeks’ time.
With that said, digital assets may be available to Russian retail investors banking with Sberbank and Alfa-bank shortly.
Anna Ivanchuk, Deputy Head of Sberbank Private Banking said:
“We want to offer our clients a completely transparent version of the entrance to digital assets that fully meets the regulatory requirements that will allow them to invest in an interesting product in Russia.”
The assets offered on the platform will take the form of six cryptocurrencies — Bitcoin(BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). Not all the digital assets offered were named, but the news report states that the digital assets chosen, account for “75% of the capitalization of all digital assets in the world.”
Cardano, currently ranked #8 by market cap, is up 6.04% over the past 24 hours. ADA has a market cap of $3.95B with a 24 hour volume of $104.09M.
Chart by CryptoCompare
Making the declaration in a recent “surprise” AMA (“ask me anything”) on his Youtube channel, Hoskinson further asserted that he has, in fact, never held any ETH — despite being one of the original founding members of Ethereum. He stated:
“I do not own any Ether. I have zero Ether. Historical fact — I’ve never actually owned any Ether my entire life. I was entitled to 293 thousand Ether — I didn’t take it. I told them: give it to someone else.”
Hoskinson did not detail his reasoning for denying the sum, yet one might point to the developer’s contentious exit from the Ethereum team.
After a creative disagreement with Vitalik Buterin — who conceptualized the smart contract platform in 2013 — Hoskinson departed in June 2014.
Speaking of his exit, Hoskinson told Forbes:
“At the time I was pretty pissed off, Ether went up [to a market cap of] $120 billion, so what the hell do I know?”
Hoskinson’s feelings of stagnation would appear to have been fleeting, however. In 2015, the Colorado-born entrepreneur and mathematician teamed up with former Ethereumcolleague Jeremy Wood to found prominent blockchain firm IOHK — the creators of Cardano.
In an announcement July 13, 2018, Coinbase unveiled the possibility of listing new coins on its exchange, including Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX). Noticeably absent from the list is XRP.
Today we are announcing that we’re exploring the addition of the following assets to Coinbase: Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC) and 0x (ZRX). https://t.co/qoECyR0V1f
— Coinbase (@coinbase) July 13, 2018
In an effort to ensure transparency, Coinbase announced:
“We are making this announcement internally at Coinbase and to the public at the same time to remain transparent with our customers about support for future assets.”
One can only speculate that Coinbase is making an effort to avoid further allegations of insider trading.
Coinbase noted that these assets will need further exploratory work, and their future listings are not guaranteed. It is also possible users will only be able to buy and sell, without being able to send or receive tokens using a local wallet.
More information regarding the announcement, including a helpful Q&A, can be found on the official blog post.