Monex Crypto Market Weekly: March 29

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This post is a translation of the weekly cryptocurrency analysis by Crypto Lab, a wholly owned subsidiary of Monex Group (Tokyo, Japan). Monex is the parent of TradeStation Group.

Summary

  • Bitcoin (BTC) started the week soft amid worries about the global economy. But then buyers appeared and erased most of the decline.
  • Huobi Token (HT) fluctuated before and after its token sale, but is little changed on the week.
  • Binance (BNB) continues its uptrend and reached a record high against BTC.
  • Buyers may remain active next week if BTC remains above $3,980.

Market Trends This Week

Concerns of a possible global recession have increased after the U.S. Federal Reserve shifted to dovish monetary policy. That triggered a risk-off move to safe-haven assets, impacting stocks, the Japanese yen (@JY) and cryptocurrencies. Still, the selling pressure was limited.

Sentiment in the digital-token market also saw little impact from a hacker attack on the DragonEX exchange.

The highlighted Hoobi Token (HT) was active into its token sale before stabilizing.

BNB continued its upward trend and hit new highs against BTC. There was also news about changes in its token-sale method and tie-ups with other companies.

Bitcoin (BTCUSD), with hourly candles.

Bitcoin (BTCUSD), with hourly candles.

Topics of the Week

  • OKEx announces the launch plan of its own blockchain known as OKChain. (3/22)
  • SBI establishes SBI Mining Chip to develop semiconductors for crypto mining. (3/22)
  • Linh Thanh Group and KRONN Ventures AG sign a Memorandum of Understanding to establish a virtual-currency exchange in Vietnam. (3/22)
  • Amazon.com’s (AMZN) Twitch removes virtual-currency payment options. (3/23)
  • Singapore’s DragonEX virtual-currency exchange reports hacking damage. (3/24)
  • BNB changes the token sale method in Launchpad from first-come-first-served to lottery. (3/25)
  • Japan’s Financial Services Agency (FSA) approves Rakuten Wallet and Dialet as a virtual-currency exchange company. (3/25)
  • TaoTao starts pre-registration, and plans to provide virtual-currency trading service in mid-May. (3/25)
  • Money Partners plans subsidiary to operate virtual-currency exchange business. (3/25)
  • MoneyPartners forms a business alliance with Daiwa Securities in the blockchain market. (3/25)
  • Rakuten wallet announces grant of Bitcoin SV in Japanese yen. (3/25)
  • It’s announced that the top of the Bitcoin cash (BCH) development team will leave Bitcoin Unlimited. (3/25)
  • Bitmain reports new CEO appointment and Hong Kong IPO failure on blog (3/26)
  • BNB partners with US risk-management firm IdentityMind. (3/26)
  • Token sales of TOP begin on Huobi Prime. (3/26)
  • CoinMarketCap overhauls reporting amid potentially false bogus volume data. (3/26)
  • LVMH prepares block chain launch for proof of product authenticity. (3/26)
  • Liquor merchant Ailsa Bay uses blockchain whiskey from production to point of sale. (3/26)
  • The Yokohama District Court acquitted the defendant in the Coinhive case. (3/27)
  • New York’s State Department of Financial Services (DFS) grants a BitLicense to Tagomi. (3/27)
  • Monex Group announces management changes for Coincheck starting in April. (3/27)
  • Finatext renews virtual currency application “Bittoko!” (3/28)
  • SBI announces that MoneyTap has accepted funding from 13 regional banks.(3/28)
  • The Indian Ministry of Commerce and Industry (MCI) released a test version of a blockchain-based coffee trading app. (3/28)
  • Prosecutors decided not to appeal a Tokyo court’s acquittal of Mark Karpeles, former chief of Mt. Gox Co. (3/28)

Market Forecast for Next Week

Attention will focus on whether BTC can break through $3,980.

Depending on the behavior of equity markets next week, the entire virtual-currency market has potential downside risk. However, that risk is probably limited because a strong base has formed.

There are still lots of corporate events in the blockchain industry. This week brought the approval of new exchange registrations by the FSA, the pre-registration of Yahoo-backed exchange TaoTao and the establishment of a virtual currency-related subsidiary of Money Partners Group. Growth continues to occur in Japan. If enthusiasm widens, it may lift the price for cryptocurrencies more broadly.

Next Week’s Topics

  • 4/2-3: Future Blockchain Summit in Dubai.

Industry related trends

Regulatory Trend: FSA Approves Registration of Two New Virtual Currency Exchanges

On March 25, Japan’s Financial Services Agency (FSA) approved Rakuten Wallet Co. and DeCurret Co. as new virtual-currency exchange companies.

Rakuten Wallet changed its name from Everybody’s Bitcoin last month. DeCurret was established in January 2018 by large Japanese companies including Nomura and Mitsubishi UFJ. It’s also noteworthy that the Suica transit card is considering a service allowing it to be charged with virtual currency.

Japan’s FSA has emphasized the full-fledged examination of exchange traders since it published the study group’s report on virtual-currency exchanges in late 2018. The government’s regulatory policy on virtual currency also became clearer after the cabinet revised virtual currency rules this month. We’ll probably see more exchanges approved in coming months.

Individual Company Trend #1: CoinMarketCap Responds to BTC False-Data Suspicions

CoinMarketCap, which provides data such as market capitalization and turnover of a virtual currency, tweeted about potentially fake trading volumes on March 26. It’s responded to user feedback by implementing new volume metrics.

Suspicions of bogus data in BTC stemmed from a survey by virtual-currency asset manager company Bitwise for the U.S. Securities and Exchange Commission. The report claimed that about 95 percent of unregulated virtual-currency trading volume is inflated or false, implying the market’s smaller than thought.

Singapore’s CoinBene was also viewed as a potentially suspicious exchange. However, it’s currently suspended for maintenance-deposit and withdrawal services. It’s also suspected of being vulnerable to hacking attacks.

Industry insiders have debated the reliability CoinMarketCap’s data for some time. Many exchanges use automated trading programs (bots) to maintain trading volume. But how does CoinMarketCap maintain the soundness of data in the future? This conversation isn’t going away.

Individual Company Trend #2: Money Partners to Establish a Virtual Currency Exchange

On March 25, Japanese foreign-exchange trading firm Money Partners Group announced plans to establish a virtual-currency exchange as a wholly owned subsidiary. Operations will start in early May.

The company also announced an alliance with securities giant Daiwa to strengthen its presence in the blockchain market.

As an exchange company registered with FSA, Money Partners previously sought to provide virtual-currency payment services with multi-currency prepaid cards but the service wasn’t launched. Now that rules have been made more clear, including approval of self-regulatory organizations in Japan, the group has returned to the virtual-currency exchange business.

Money Partners President Taizen Okuyama is also chairman of the Japan Virtual Currency Exchange Association (JVCEA), an industry self-regulatory organization. Given his familiarity with industry regulatory trends, it will likely be a matter of time before the FSA approves the company’s new subsidiary for trading. Money Partners’ activities in cryptocurrency markets will probably get a lot of attention moving forward.

Column: Attention Shifts from Novelty to Excellence

When I was a child, I often envied friends who had the latest plaything. Everyone would gather around him or her with a sense of jealousy.

But then as the other children got their hands on the toy, its novelty faded. Each classmate was able to compete and excel on their own. Pretty soon kids talked about who was the best at the game, and they forgot about who had it first.

This also applies in business: Early pioneers inevitably grab attention first. But, then as numbers increase, attention shifts to the most successful individuals and firms. Blockchain is no exception to this law of nature.

Previously, simply uttering the word “bitcoin” would impress your listeners. Now that so many talented professionals have entered the field, the prominence of early adopters is quickly fading. They certainly have some knowledge the industry, but without significant achievements they’re getting less important.

This is especially true you consider large companies now in the space. Gone are the days when a firm could get in the news simply by demonstrating the potential of blockchain technology. These days, technology giants like Rakuten and Yahoo are active. You also have big financials like SBI, Money Partners and Megabank. Each of these firms are competing to be No. 1 in the space.

For a long time, we’ve just looked at the surface of blockchain. Now’s the time to focus on results. There was a lot of industry news from large domestic companies this week. Going forward, we’ll start to see the real champions and leaders emerge.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.