Archive January 2019

Saudi Arabia, UAE Aim to Cut Payments Costs With Common Digital Currency

The central banks of Saudi Arabia and the United Arab Emirates (UAE) have jointly launched a digital currency trial. The Saudi Arabian Monetary Authority (SAMA) and the Central Bank of the UAE jointly announcedTuesday that the project is aimed to facilitate blockchain-based financial settlements between the two countries. While the central remittance systems in both countries have “evolved overtime and proved their feasibility,” international remittances have need for improvement, the central banks said. The proof-of-concept trial will examine if the nations can ultimately reduce remittance costs using a common digital currency called Aber.  The study will also look at whether the blockchain system can act as an “additional reserve” for domestic payments. The initial stages of the project will focus on testing the technical aspects, with the digital currency restricted to “limited” banks in each nation. If no technical hurdles are encountered, “economic and legal requirements for future uses will be considered,” according to the two institutions.‏ The news comes over a year after it was reported in December 2017 that the two central banks were planning to trial a new cryptocurrency for cross-border payments. Mubarak Rashid al-Mansouri, the UAE central bank’s governor, said at the time: “This is the first times the monetary authorities of two countries cooperation to use blockchain technology [sic].” Source: www.coindesk.com

Down Again: Bitcoin Is Closing on Key Long-Term Price Support

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  • Bitcoin is again closing on the 200-week moving average, which served as strong support in December. The weekly RSI is more bearish this time round, though, and is reporting undersold conditions.
  • A weekly close below that level could be followed by a slide back to September 2017 lows near $2,970.
  • A failure to push prices below the 200-week SMA support would weaken the bears. A bullish reversal, however, would be confirmed only above $3,658 – the high of gravestone doji carved out Saturday.
Bitcoin (BTC) is on the defensive after a drop to six-week lows and could soon test crucial long-term support below $3,300. The cryptocurrency fell to $3,322 – the lowest level since Dec. 17 earlier today – bolstering the bearish view put forward by Monday’s high-volume range breakdown. Trading volumes jumped to 18-day highs near $7 billion yesterday, according to CoinMarketCap data. The high-volume sell-off has likely opened the doors to re-test of December lows near $3,100. Moreover, the long-term support level put the brakes on a sell-off back in December, and was followed by a corrective bounce to levels above $4,000. A strong bounce from the 200-week SMA line would likely embolden the bulls, but the probability of a bull reversal from that SMA support looks low, according to technical indicators. As of writing, BTC is trading at $3,380 on Bitstamp, representing a 1.5 percent drop on a 24-hour basis.

Weekly chart

As seen above, BTC is again trading within striking distance of the 200-week SMA of $3,298. The support had held ground on a weekly closing basis (Sunday, UTC) in mid-December, possibly because the relative strength index (RSI) was reporting oversold conditions at the time. This time, however, the SMA support could be breached, as the RSI is currently in undersold territory.

Daily chart

The RSI on the daily chart is also biased toward the bears, as opposed to the record oversold conditions seen in November and December. The 5- and 10-day moving averages (MAs) are also trending south, indicating a bearish setup. Hence, a drop to the December low of $3,122 could be on the cards.

4-hour and hourly chart

The RSIs on the 4-hour and hourly charts are reporting oversold conditions below 30.00. Therefore, a convincing break below the 200-week SMA of $3,298 could be preceded by a minor bounce. Disclosure: The author holds no cryptocurrency at the time of writing. Source: www.coindesk.com

Blockchain Browser Brave to Offer Free Access to Premium Cheddar Content

Blockchain-based internet browser Brave has partnered with news website Cheddar to offer free access to its premium content for a limited period. The firms jointly announced Tuesday that Brave browser users will be able to automatically unlock premium content on Cheddar website for the next three months starting today. “Cheddar viewers are obsessed with crypto; we even have a show dedicated to it – The Crypto Craze. The idea of unlocking our premium feeds for Brave users via crypto funding, with no sign-up, seemed like a natural way to engage a passionate community,” said Jon Steinberg, Cheddar’s founder and CEO. Brave, founded in 2015 by Mozilla co-founder Brendan Eich, raised about $35 million under 30 seconds through a sale of its ethereum-based basic attention token (BAT) back in May 2017. Since then, the privacy-focused browser, which claims to have 5.5 million monthly active users currently, has been looking to offer new services. Last April, it partnered with Dow Jones Media Group to experiment with a blockchain content delivery system. Most recently, Brave said that it will begin using blockchain identity startup Civic’s verification services to ensure publishers are paid for their content with its token. BAT was also recently added by crypto exchange Coinbase to its retail and professional trading platforms. Source: www.coindesk.com

Nvidia Says Q4 Crypto Miner Demand Was as Weak as Expected

Nvidia had more disappointing news for investors Monday, but for once the cryptocurrency mining slump was not directly to blame. In updated guidance released Monday, the graphics card manufacturer warned it now expects to report only $2.2 billion of revenue for its fiscal 2019 fourth quarter, which ends Jan. 31, down from a previous estimate of $2.7 billion. The earlier forecast had already factored in a drop in demand for graphics processing units (GPUs) used in crypto mining, Nvidia said, and sales of the extra graphics cards have kept pace with those expectations. “Exiting Q3, we estimated channel inventory would be largely depleted within one to two quarters, or between February and April,”  CEO Jensen Huang wrote in a letter to shareholders. “Our view of that today remains unchanged.” The problem is that economic woes and uncertainty, particularly in China, hurt demand for GPUs among Nvidia’s other customers – gamers and data centers. “Q4 was an extraordinary, unusually turbulent, and disappointing quarter,” Huang wrote. Nvidia will report its full fourth-quarter results on February 14. The company has been warning of a “substantial decline” in revenue from cryptocurrency miners for some time now. Nvidia anticipated bringing in $100 million during the second quarter of fiscal 2019, but only saw $18 million. “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward,” chief financial officer Colette Kress said during an earnings call last summer. Its competitor, AMD, had likewise cautioned that a drop in demand for GPUs by miners would “materially” impact its GPU business. Source: www.coindesk.com

Ex-Starbucks CEO and Presidential Hopeful Howard Schultz Is a Crypto Fan

At least one potential U.S. presidential candidate thinks cryptocurrencies might be widely used in the future. Starbucks chairman emeritus and former CEO Howard Schultz, who announced Sunday that he was considering making a run for the highest office in the U.S., has previously said that he sees cryptocurrencies as a future part of a cashless, digital economy, though he did not see bitcoin as a “legitimate” cryptocurrency. The former CEO of the popular coffee chain discussed cryptocurrencies and blockchain during a quarterly earnings conference call in January 2018, telling investors that while he does not see bitcoin becoming a widely-used currency, he does think the underlying blockchain technology had numerous potential uses, in particular with helping his company transition to new payment models. Schultz went so far at the time as to mention that cryptocurrencies would be incorporated into the company’s long-term digital payments strategy. “I’m talking about … the possibility of what could happen — not in the near term, but in a few years from now — with a consumer application in which there’s trust and legitimacy with regard to a digital currency,” he said, adding:
“I’m not bringing this up because Starbucks is announcing that we are forming a digital currency or we’re investing in this … I’m bringing this up … as we think about the future of our company and the future of consumer behavior.”
More recently, his company appears to have warmed even to bitcoin. As revealed last summer, Starbucks has been working with Intercontinental Exchange, the parent of the New York Stock Exchange, on Bakkt, the upcoming bitcoin futures exchange. The retailer will help develop “practical” applications to convert digital assets into U.S. dollars at the point of sale, the companies said at the time.

Hitting the road

Schultz, who announced he was “considering” a run as an independent centrist candidate on Sunday, has also written a new book, which was released Monday. Without mentioning the book, he said in a video posted Monday that he would soon embark on a “listening and learning” tour of the U.S. “In the next few weeks and few months, I’ll be traveling the country. I’ll be listening, and learning, and meeting many of you,” he said. “I look forward to seeing you and I strongly believe that this is an opportunity in America at a very fragile time, to embrace a better choice, not the status quo which will lead to decline, but a better choice that I think will lead to a season of renewal, leadership that you can trust and once again government that can be working for all the people.” Schultz did not immediately respond to a request for comment. Howard Schultz, left, image via Chairman of the Joint Chiefs of Staff from Washington D.C, United States / Wikimedia Commons Source: www.coindesk.com

4 South Korean Crypto Exchanges Team Up to Tackle Money Laundering

Four major cryptocurrency exchanges in South Korea have partnered on an initiative to combat potential money laundering, as well as schemes that might harm users. Bithumb, Coinone, Korbit, and Upbit jointly announced Friday that they will create a hotline to share real-time wallet information on suspicious crypto trades. They aim to identify trades with suspected links to phishing, predatory lending, pyramid schemes and other illegal activities and share related information via the hotline, the exchanges said. The exchanges will also operate a shared database of suspicious wallet addresses that would, for example, be able to help them identify and halt scammers looking to use different exchanges to move a large quantity of cryptocurrency to the same wallet. The four firms are planning to encourage other crypto exchanges to join the initiative. The news comes a month after CoinDesk Korea organized a forum with the country’s lawmakers on know-your-customer (KYC) and anti-money laundering (AML) initiatives. Seven crypto exchanges at the time signed an agreement to ensure user protection. Back in November, the Korean Bar Association, the body governing South Korean lawyers, called on the government to hasten the introduction of blockchain regulations and “prevent side effects involving cryptocurrencies.” And last June, South Korea’s financial regulator amended the anti-money laundering rules that apply to cryptocurrency exchanges in the country, requiring domestic banks to tighten up monitoring of related bank accounts. Source:  www.coindesk.com

LocalBitcoins Reveals Security Breach With Some Crypto Wallets Affected

Finland-based LocalBitcoins, a peer-to-peer bitcoin trading portal, says it has suffered a hack that affected a small number of users. The firm posted an update on Reddit on Saturday saying that it detected the security breach at around 10:00 UTC the same day, “which was related to a feature powered by a third party software.” As a result, the hacker was able to access some user accounts and make transactions. So far six user accounts are known to have been compromised LocalBitcoins said, adding that it is further investigating the attack to determine the exact number of accounts affected. A Twitter user posted that the LocalBitcoins forum site had apparently been replaced by a fake phishing site that stole users’ two-factor authentication (2FA) details and used them to access their crypto wallets. While this is not yet fully confirmed by LocalBitcoins, it said, “For security reasons, the forum feature has been disabled until further notice.” A Reddit user who said they owned one of the accounts to have been hit in the attack also stated: “I’m afraid to use my 2fa code for the time being until the server is confirmed secure.” “When i first tried to logon with my 2fa code there was an error then when i tried again, my wallet was wiped clean. So these hackers move fast,” they added. LocalBitcoins said “We have taken a number of measures to address this issue and secure the limited number of accounts that might have been at risk.” While the firm had disabled outgoing transactions when the breach was identified, these are now functioning again and user accounts are “currently safe to log in and use,” it said. LocalBitcoins further urged users to enable two-factor authentication on their accounts. Source: www.coindesk.com

Bitcoin Price Looks South After Drop to Six-Week Lows

Bitcoin ended a two-week period of consolidation with a drop to six-week lows earlier today. The leading cryptocurrency by market value fell below $3,470 at 04:45 UTC, confirming a downside break of a triangle pattern. That range breakdown was followed by a quick slide to $3,357 – the lowest level since Dec. 17 – according to Bitstamp data. A prolonged period of consolidation usually yields a big move in the direction of the breakout. For instance, BTC ended a multi-week-long trading range with a move below $6,000 on Nov. 14 and what followed was a violent sell-off to levels below $4,000. However, the duration of the recent consolidation was shorter than the one seen before the big bearish move of Nov. 14. So, the magnitude of any post-breakdown move would likely be smaller too. Nevertheless, the latest range breakdown could at least yield re-test of December lows near $3,100, as the primary trend represented by the downward sloping 10-week moving average (MA) is negative. The bearish case looks even stronger if we take into account the bull failure seen over the weekend. Prices had turned in favor of the bulls with a move to $3,658 on Saturday. That triangle breakout, however, petered out, with prices falling back to $3,500 yesterday. A failed breakout is widely considered a strong bearish signal. Possibly adding extra downward pressure on prices, safe-haven asset gold – which has been inversely correlated with BTC since November – found acceptance above $1,300 on Friday. At the time of writing, BTC is changing hands at $3,430, representing a 3 percent drop on a 24-hour basis.

Daily chart

On the daily chart, BTC charted a bearish gravestone doji on Saturday, meaning the day began with a positive move but ended flat on the day. Adding to the bulls’ woes is the negative follow-through as represented by the drop to six-week lows today. The 14-day relative strength index (RSI) is also reporting a range breakdown below 40.00. So, the path of least resistance looks to be to on the downside, and the bulls will likely feel emboldened only above $3,658 (the high of the gravestone doji).

4-hour chart

As seen in the above chart, BTC’s triangle breakout on Saturday was short-lived and the cryptocurrency has now found acceptance under the lower edge of the triangle. The chart also shows a Bollinger Band breakdown, with a convincing break below the lower band. The RSI, however, is reporting oversold conditions. As a result, BTC may revisit $3,500 before resuming the drop toward the December lows.

Weekly chart

The 10-week MA is still trending south, indicating a bearish setup. There are, however, signs of indecision in the marketplace, as represented by last week’s classic doji candle. Further, a sustained drop in trading volumes likely indicates bearish exhaustion. The outlook, therefore, would turn bullish if BTC ends this week above the doji candle high of $3,658.

View

  • BTC risks falling to the December low of $3,122 in the next few days, having confirmed a range breakdown with a drop to six-week lows today.
  • A downward move could be preceded by a minor bounce to $3,500, as the RSIs on the 4-hour and the hourly chart are reporting oversold conditions.
  • The outlook would turn bullish if the oversold conditions on the 4-hour RSI end up yielding a convincing move above $3,658 (the high of both the gravestone doji and the classic doji).
Disclosure: The author holds no cryptocurrency at the time of writing. Source: www.coindesk.com

Cryptos Would Only Have Value in ‘Dystopian’ Economy: JPMorgan

Investment bank JPMorgan Chase has said that cryptocurrencies would only have value in a dystopian economy. In a recent note to its clients, the firm said that it was skeptical of the value of cryptocurrencies apart from in a “dystopia” where investors have lost confidence in “all major reserve assets (dollar, euro, yen, gold) and in the payments system,” according to a report from Business Insider on Monday. The banking giant further said that, though cryptocurrencies have a low correlation to traditional asset classes such as shares and bonds, they are not the best bet for diversification. “Low correlations have little value if the hedge asset itself is in a bear market.” JPMorgan also reportedly said earlier this week that, with prices so low, bitcoin is worth less than the cost to mine it. Bitcoin and the wider crypto market have spent the last year in a bear market. After reaching a record high of about $20,000 in December 2017, bitcoin is down 83 percent and is currently trading at around $3,420. JPMorgan CEO Jamie Dimon is famously anti-crypto. Back in September 2017, he declared bitcoin a “fraud” and said, “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.” Later in January 2018, Dimon said he regretted calling bitcoin a fraud, yet he remains skeptical on the topic. Most recently, he asked investors to stay alert. “I don’t wanna be the bitcoin spokesman. You know, just beware,” he said. JPMorgan, as an institution, however, believes that cryptocurrencies might one day play a role in the diversification of global equity and bond portfolios, according to a February 2018 research report. Source: www.coindesk.com

XRP Market Cap May Be Overstated by Billions, Messari Report Estimates

A new report from crypto data startup Messari estimates that the true market capitalization and circulating supply of the digital asset XRP is markedly less than what data sources currently present. As depicted on data providers like CoinMarketCap as well as Ripple – the distributed ledger tech company closely linked to the digital asset – XRP’s circulating supply is pegged at roughly 41 billion tokens. But in its report, Messari posits that of that figure, 19.2 billion XRP “may be illiquid or subject to significant selling restrictions” tied to daily trading volume, including “at least 6.7 billion XRP” held by Ripple co-founder Jed McCaleb that are subject to an agreement dating back to 2014. In addition, Messari said that it believes that the circulation figure includes 5.9 billion XRP pledged by Ripple co-founder to a nonprofit entity called RippleWorks, an amount that it contended hasn’t been delivered. As well, Messari identified 2.5 billion XRP held by RippleWorks that are also subject to daily selling restrictions. Further, the report also estimates that as much as 4.1 billion XRP sold via XRP II, Ripple’s money-services business, is also subject to selling restrictions. But Messari notes that “it is impossible to track the magnitude of this illiquidity without direct disclosures from Ripple, so we use a reasonable estimate.” All told, these factors have led to the market cap of XRP being “likely overstated” by more than $6 billion, according to Messari’s reasoning. Further, in its report, Messari estimated that the figure could ultimately be higher, explaining:
“In reality, this estimate may prove to be conservative, as they belie XRP trading volumes which have consistently fallen well below that of EOS and Litecoin, two cryptoassets whose current referenced market caps are a mere 17% and 15% of XRP’s, respectively. In addition, we believe the actual amount of ‘restricted’ XRP in distributions to investors, banking partners, and team member may be significantly higher than our initial estimates reflect.”
The report notes that it sought input from Ripple and RippleWorks before the report’s publication but hadn’t heard from the company, which Messari contended results in questions about how the restrictions work in practice. “Ripple has not shared the methodology or reference exchange data it uses to calculate trading volume for XRP, a critical data point that drives selling restrictions. More than 99% of XRP trading volume appears to come from overseas exchanges, many of which have been suspected of wash trading,” the report states. CoinDesk reached out to Ripple for comment prior to the report’s release but did not hear back by press time. On Thursday, Ripple released its Q4 report, noting that average daily XRP volume was $585.7 million. The firm sold $88.88 million programatically – an increase compared to its third-quarter figure of $65.27 million – and $40.15 million in “institutional direct sales,” representing a decrease from Q3’s $98.06. Source: www.coindesk.com