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Don’t call it a comeback, but this week crypto analytics website CoinSchedule revealed that ICOs are still a big deal -- not 2018 big, 2017 big. Their data indicates that in January $291.6 million was raised via ICOs, substantially less than early 2018. But that’s up from January 2017 when ICOs raised about $80 million.
The data also shows at least 63 ICOs are active, and a further 18 are upcoming. Also this week, Maduro gets desperate, the Quadriga debacle continues, Fundstrat’s 2019 crypto outlook and the crypto community turn to derivatives to survive the crypto winter. Ladies and gentlemen, I'm Molly Jane and this is your Hodler's Digest.
Let's have a look at the latest market updates. In an unprecedented move for a major bank, JPMorgan Chase is launching its own crypto. The “JPM Coin,” will aim to increase settlement efficiency initially in three areas. The JPM Coin will help to speed up international settlements by major corporations, which currently take longer on SWIFT.
In addition, treasury services and securities transactions stand to benefit if applications for JPMorgan expand. Only the bank's big institutional clients who have passed regulatory checks will be able to use the fixed value token backed by the bank. JPMorgan plans to roll out their nascent crypto out gradually, a tiny fraction of funds involved in the three areas would involve JPM Coin initially.
This is a surprising move to say the least. Last year Jamie Dimon was infamous in the crypto community for calling Bitcoin a fraud. In a segment for CNBC, host Andrew Ross Sorkin questioned whether other cryptos would survive if the JPM was successful. Does this validate the world of other cryptocurrencies like Bitcoin and give them more value over time.
Or does this eventually crowd out the need and even the value proposition of a Bitcoin and therefore lower its value. He skipped the part about why Satoshi created Bitcoin in the first place, largely as a response to the 2008 financial crisis, of which JPMorgan played no small part. This is hardly surprising from a man, who during occupy wall street, was fielding calls from bank executives who were growing increasingly worried about the protests.
Major crypto exchange Coinbase is about to launch a new feature for its software wallet. Users will be able to back up their private keys on cloud storage platforms such as Google Drive and iCloud. This backup feature is designed to provide customers an alternative way to access funds in case their private keys get lost or stolen.
According to the announcement, private keys will be encrypted and stored on a cloud platform which will be accessible only with the wallet’s password. According to the announcement, neither Coinbase nor the cloud service provider will have access to customers’ funds, as the user is the only one to have the password to access them.
Unlike other centralized exchanges, which are in full control of customers’ funds, Coinbase fully aligns with the decentralized nature of cryptocurrency by allowing customers to store their funds in a decentralized wallet. That also comes at the price of a higher responsibility for users, who are the sole custodians of their private keys.
The backup feature was met with a fair share of criticism on social media, as many users pointed out that cloud services are unsuitable for storing private keys as they proved to be vulnerable to hack and security breaches. Among the critics of Coinbase’ cloud backup feature is Kraken CEO Jesse Powell.
He wrote: Cloud storage, while convenient, is constantly compromised, especially with all the SIM porting. 99% chance the people who would unwittingly use this do not have passwords strong enough to withstand professional cracking. Powell’s words are remindful of the 2014 Great Fappening, when a group of hackers sneaked into Hollywood iCloud accounts, leading to the biggest leak of celebrity nudes in history.
2019 will bring some joy to the crypto world, according to Fundstrat Global Advisor, a US-based financial advisory firm. In the recently published 2019 Outlook, Fundstrat’s researchers said that--while it is still to early to talk about mass adoption--a significant increase in crypto prices is expected for 2019.
As Fundstrat’s head analyst Tom Lee posted on Twitter, nine main factors will make Bitcoin rise again. First of all, the expected weakening of the U.S. dollar will have a positive influence on BTC prices. Researchers also expect an increase of institutional money coming into crypto, attracted by the development of investment vehicles and custody solutions in the space.
On the blockchain side, the progress of scalability solutions will also have the effect of boosting investors’ confidence. However, some obstacles will be still there. For instance, the U.S. SEC’s hesitant approach towards crypto regulation is still playing a major role in slowing down the market recovery.
We talked to Tom Lee and asked him to give us more details on the report. There's regulated infrastructure that's really being developed and I think the most important ones are the launch of Bakkt which is gonna be sometime in 2019. We are starting to see chunks of new institutional money come in and this is primarily through the endowments and pensions.
We estimate that there probably are six endowments that have already invested in crypto out of a huge universe. You know, there's hundreds of endowments, but also it looks like we got the first pension funds too. One of the things that's kind of promising in 2019 is that Bitcoin is probably going to improve technically, because Bitcoin is now below its 200 Day.
But by August it looks like Bitcoin is likely to cross back above its 200 Day. And that's the opposite of 2018 where bitcoin fell below its 200 Day and then spent most of the year below 200 Day. The strange case of the Canadian crypto exchange QuadrigaCX and its locked cold wallets continues. This week it was revealed that the exchange supposedly transferred nearly $500K in BTC to its cold wallets...
by accident. The mishap apparently occurred earlier this month, adding further complications to the fate of the already embattled exchange. Founder of QuadrigaCX Gerald Cotten died last year in India from complications to Crohn's disease; he was the only one to have access to cold wallet keys that held $145 million in crypto.
Suspicions were raised when his death was reported an entire month after it happened, not to mention the fact that he filed a will just 12 days prior to his death. As this story has unfolded, numerous internet sleuths have been busy. One analyst has found five addresses apparently associated with QuadrigaCX.
Transactions sent to the addresses are about the same amount of Bitcoin Quadriga inadvertently sent to locked cold wallets. The analyst posted on Reddit, writing that he found that the BTC that came either directly from a QCX wallet or one transfer removed. The redditor went on to express the limitations of their research: “At this point, due to plausible deniability and lack of transparency, we have reached the extent of what we (non-law enforcement) can 100% know for now.” He went on to say: “With minimal understanding of the BTC blockchain though, there are some big leads we can follow but can only speculate on.” Recently Ernst & Young was appointed as an independent third party.
The big four audit company is monitoring the proceedings in a creditor protection case. They released a report with an update detailing the inadvertent transfer of 103 BTC to cold wallets and the ongoing efforts to retrieve funds. Ernst & Young secured various Quadriga electronic devices owned or used by Cotten including four laptops, four cell phones and three fully encrypted USB keys.
The devices are believed to be in a safety deposit box rented by Ernst & Young. Venezuela’s crypto regulator SUNACRIP set forth regulation, apparently already in effect, regarding the ‘requirements and procedures for the sending and receiving of remittances in crypto assets’. There is a monthly limit and SUNACRIP can take up to 15% commission on transfers.
The minimum fee for a transaction in crypto is about 28¢. Despite widespread derision from ordinary Venezuelans as well as internationally, regulators also felt the need to set a monthly limit on the Petro; 10 Petros a month, which comes to around $600. 50 Petros or around $3,000 is the absolute limit, according to the regulator.
As we mentioned last week, trading volumes on peer to peer platform LocalBitcoins surged to an all-time high in the country. Hyperinflation, economic and political turmoil led Venezuelans trading nearly $7 million a week. This new taxation is yet another typically ill-thought-out project from the corrupt regime that brought you the Petro.
For instance, in 2013, Maduro allegedly took a $35 million bribe from a Brazilian construction company. But one man who pays some of his business taxes in crypto back in the U.S. is Overstock CEO, Patrick M. Byrne. He recently proposed blockchain could make government “superefficient and incapable of being bribed.” However, Byrnes’ use of language when talking about Venezuela somewhat hints of a coup.
In an interview to Marketwatch he said: “We could step into Venezuela with six laptops and create not only a functioning society but arguably one with the most advanced government systems in the world. We could bring them a central bank on the laptop.” Let’s hope his libertarian instincts keep him on the path of straight and decentralized.
If you are alone on Valentine’s Day, you might be looking out the window, asking yourself questions like, ‘Is she really going out with him?’ The same question could be asked about JPMorgan and crypto. So is this an unholy union fraught with betrayal and deceit, or will it be a love story for the ages?
Let us know in the comments. And as always remember to like, subscribe and hodl.
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