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Coinbase Gears Up for Biggest-Ever Expansion of Crypto Asset Listings

The popular US cryptocurrency exchange Coinbase teased the internet yesterday by introducing a new policy for listing crypto assets on their exchange… all of which suggests they are looking to expand from their line of assets (currently 5 coins) rather quickly.

The new listing application process now begins with a simple Google Form for token issuers, which will then go through an evaluation process…

Those that meet Coinbase’s criteria may then be listed, however regulatory leeway and local jurisdiction laws will remain at the center of concern for Coinbase.

If history of Coinbase listings give us any indication, we can expect to see several pumps (when coins rapidly shoot up in price) on the horizon.

But this process now raises a lot of unanswered questions regarding topics such as insider trading, their digital asset framework, and what happens if a token holder moves jurisdictions.

 

Mt. Gox Trustee Confirms He Sold Off $230 Million in Cryptocurrency

Nobuaki Kobayashi, known by some as “Tokyo Whale,” has publicly announced he liquidated 24,658 bitcoin (BTC) and 25,331 bitcoin cash (BCH) between March and June. The Mt. Gox Trustee hauled in about $230 million in cash.

This is not the first time Kobayashi had cashed out large amounts of crypto for the victims of Mt. Gox. In December, the trustee sold more than $400 million worth of BTC and BCH. Some accused him of collapsing the markets by selling on spot markets, rather than going through auction or an over-the-counter platform.

A script that monitors the cold wallets associated with Mt. Gox indicates he still controls about $945 million worth of cryptocurrencies. No one knows when another sell off is going to happen… but it’s very likely this will happen again.

 

How Cathie Wood Bought Bitcoin and Ruled the ETF Rankings

Something pretty striking emerges when you sort all of the 1,818 U.S.-listed ETFs by three-year returns: 3 of the top 15 are managed by the same person – Cathie Wood, founder and CEO of ARK Investment Management.

How did Wood rack up those returns? She did it by focusing on stocks of companies involved in disruptive innovation. Also, there was Bitcoin.

Cathie Wood was one of the first ETF managers on Wall Street to take a chance BTC, investing in the cryptocurrency in early 2015 soon after the Mt. Gox scandal.

We applaud Ms. Wood on her confidence to take a chance on crypto assets when nobody else would. At the same time though, we are still questioning her Tesla (TSLA) price target of $4,000 published last month.

 

DEEP DIVE


XRP Battles For The Second Spot On The Crypto Charts

Bitcoin and Ethereum remain at the top of the crypto charts, but this week Ripple’s (XRP) market-cap briefly surpassed Ethereum’s for the No. 2 spot. Not the potential flippening everyone imagined, but interesting nonetheless.

What exactly caused this change is hard to say, but here are the going theories:

  • Theory 1: On Sept. 17, Ripple exec Sagar Sarbhai told CNBC the company’s xRapid system could be part of a live product within the next month or so. This could have possibly triggered some speculative trading.
  • Theory 2: On Sept. 19, Ripple announced that PNC Treasury Management had joined RippleNet, the company’s network of banks and payment providers.
  • Theory 3: Sarbhai also countered concerns that XRP is likely to come under a security classification in the U.S. He pointed to the open-source protocol of the XRP ledger and its independence from the corporation itself.
  • Theory 4: FOMO. With all this other news coming out, people decided to jump on board as XRP was skyrocketing.

One thing is clear: Ripple is enduring one of its best months yet – up nearly 50% in the month of September alone.

How long will it last? We don’t know. But we have found an interesting story circling around concerning one of the co-founders of Ripple, Jed McCaleb. He holds billions of dollars worth of XRP and has been increasingly selling his holdings over the past few weeks. A whale selling at this rate will usually cause downward price pressure in periods of low trading volumes.

 

✍️ Bitcoin Core Developer Joins Forces With Former Morgan Stanley Exec To Warn SEC

A rapid influx of Wall Street and enterprise-level adoption is the catalyst we’ve all been waiting for. But as good as this financialization seems, if it’s not properly overlooked, the entire market may be subject to dangerous cases of price corruption.

For the sake of goodwill, last week a Bitcoin Core developer and other prominent figureheads from the traditional world of finance jointly submitted a letter of warning to the SEC on dangers of commingling and rehypothecation – two words we can expect to see a lot more of as we enter these next phases of adoption.

 

Fresh Data: Bitcoin Investors & Speculators Hold Their Positions Through the Summer

Chainalysis just published its latest Bitcoin money supply report suggesting the market is ripe for transactional growth as an increasing amount of bitcoin is being held by individuals.

To understand this update, let’s take a step back and see what Chainalysis’ data showed through August 2018:

  • Before December’s pricing peak, investors held about 3x more bitcoin than speculators
  • Between December and April, at least $24B worth of bitcoin shifted from the hands of investors to speculators.
  • By April 2018, the amount held by investors — about 6M bitcoin — was much closer to the amount held by short-term speculators, with 5.1M bitcoin
  • This “transfer of wealth” was one potential reason for bitcoin’s rapid price decline

Flash forward to today and the amount of bitcoin held by both speculators and investors has remained stable at around 22% and 30% of available bitcoin respectively.

“In our view, this is a sign of a market less sensitive to hype, where each news item does not have the ability to significantly push bitcoin prices up or down. This suggests that the market will make a major move, for better or worse, only in response to a fundamental change. For example, restrictive regulation, new use cases, or technology improvements could act as catalysts of change.”

 

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REGULATORY FRONT


Crypto Companies Descend on Capitol Hill to Debate Regulation

Nearly 50 representatives from U.S. financial giants and cryptocurrency startups are set to meet with Washington lawmakers this week to talk through the incomplete and murky regulatory landscape of crypto. This roundtable, dubbed “Legislating Certainty for Cryptocurrencies,” will ask industry experts to weigh in on how to police this new asset class.

The meeting, spearheaded by Rep. Warren Davidson, R-Ohio, will cover topics such as private funding disclosures and token issuance laws, as well as discussions about the best way to prevent consumers from fraud.

“Policymakers are trying to foster innovation [and] at the same time protect consumers.”

 

Coinbase Disputes Claims in New York Attorney General’s Exchange Report

Last week we covered a recent report published by the New York Office of the Attorney General, which claimed several cryptocurrency exchanges are vulnerable to market manipulation. The report, as anticipated, drew backlash from industry players…

In a blog post published Thursday, Coinbase’s chief policy officer, Mike Lempres, wrote that the assertions in the report have led to misrepresentation of the exchange’s business in the media.

Kraken’s CEO – never one to shy from controversy – had to give his unfiltered opinion on the matter as well… 😆

 

Three Pro-Cryptocurrency Bills are Being Introduced in Congress

Rep. Tom Emmer announced that he would introduce three bills to help rationalize the regulatory environment for cryptocurrencies.

  1. Resolution Supporting Digital Currencies and Blockchain Technology
    Offers support for the industry and its development in the US. Like the internet, the federal government should provide a light touch and simple legal environment.
  2. Blockchain Regulatory Certainty Act
    Affirms that certain blockchain related entities that never take control of consumer funds do not need to register as a money transmitter. Examples of these entities include “miners” that validate network integrity and multisite providers that provide enhanced asset security to users.
  3. Safe Harbor for Taxpayers with Forked Assets Act
    Taxpayers can only comply with the law when the law is clear. This bill will provide a safe harbor for taxpayers with “forked” digital assets. Further it will restrict fines against individuals that attempt to report these assets until the IRS provides any type of guidance regarding the appropriate means of reporting them.

 

CHART OF THE WEEK


Bitcoin (BTC) is currently in discovery mode. We are currently watching the broadening wedge taking place on both the price action and the RSI. Our guess is that it will hit the top of this wedge one more time around $6800-$6900 before determining it’s next move.

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