Weekly Report: Bitcoin ETF, Mining Competition, Zaif Hack, Binance Domination

Cryptocurrency performance

The total cryptocurrency market rose by almost 8%, and the overall volume spiked by 33% over the past 7-days. Mining competition has stepped up with announcements from Bitmain, Bitfury and a host of other cutting edge mining companies. Asian exchanges dominated headlines; Zaif exchange suffered a $60 million hack and Binance opened beta for its Singapore exchange and announced plans to open 5 - 10 crypto to fiat exchanges by this time next year. The SEC has delayed the Bitcoin ETF yet again whilst the New York Attorney general published a damming 42-page report on crypto exchanges.

Cryptocurrency top gainers

Cryptocurrency worst performers

Cryptocurrencies performed strongly last week, with some of them seeing a dramatic rallies. A short-term flippening between Ethereum and Ripple occurred, when XRP overtook ETH as the second largest cryptocurrency. Market leader Bitcoin gained 2.3%, Ethereum 7.3%, XRP 100%, EOS 7.7%. Best performers among the top-40 crypto were Ripple (100%), Stellar (30%), Cardano (26%) and Siacoin (21%)

Cryptocurrency Market News

175% Ripple spike

A series of positive news stories surrounding the XRP token in September created a pleasant environment which led to this week’s significant price move, where XRP spiked from $0.28 to almost $0.77 in just 5 days, which represents a 175% gain. The accumulation of news started with the payment provider TransferGo’s announcement that it will use Ripple technology in India; then the company managed to settle a dispute with the R3 consortium over an XRP purchase option, and after that, Japan-based financial firm SBI Holdings announced a launch of the payment app MoneyTap, powered by Ripple technology; following on from that , American bank PNC has joined the number of financial institutions using Ripple’s xCurrent product and more recently, news of plans of launching xRapid with partners such as Santander, American Express or Western Union. The price of XRP has cooled off by 26% already as it’s currently sitting at $0.57, according to Coinmarketcap.

Bancor migrates from Ethereum to EOS blockchain

Decentralized token exchange Bancor is reportedly expanding to EOS blockchain via a new cross-chain project called BancorX, which will allow its users to trade between EOS based tokens and Ethereum based tokens. The main reasons behind this move are, according to Bancor, faster transactions, zero fees and an elimination of “front-running risk” (prioritization of transactions which pay a higher fee). Bancor is already operating within the EOS ecosystem as it is one of the 21 block producers.

Binance opening fiat-crypto exchange in Singapore

Founder of the world’s largest crypto exchange Binance, Changing Zhao, reveals his plans to launch 5 to 10 fiat-to-crypto trading services, ideally two per continent. The plans are in accordance with current efforts to open a fiat-crypto platform In Singapore. Zhao further added that Binance will continue to cooperate with relatively smaller countries (after previous experience with Malta), as these countries tend to respond in a more efficient way and “they do appreciate the investment you are bringing into to the local economy”.

Fidelity planning to launch crypto product before the end of 2018

Institutional interest in crypto space keeps growing on a weekly basis; recently, one of the world’s biggest asset managers Fidelity Investments ($2.5 trillion AUM), has joined “the club” as it’s developing a new suite of crypto/blockchain-focused products. According to the firm’s CEO, Abigail Johnson, “We’ve got a few things underway, a few things that are partially done but also kind of on the shelf because it’s not really the right time. We hope to have some things to announce by the end of the year”.

Another crypto exchange hacked for $60 million

Japan-based licensed crypto exchange Zaif has lost roughly $60 million in Bitcoin, Bitcoin Cash and other digital assets. Zaif representatives assured all affected investors, they will be reimbursed in cryptocurrencies. In order to cover the loss, Zaif has sold a $45 million stake to Tokyo-based market research firm Fisco. After Coincheck’s $520 million theft in January, this is the second hack which has happened on Japanese soil this year. Prior to the Zaif hack, the Japanese Financial Services Agency (FSA) will strengthen the crypto department where already 160 firms are waiting for an FSA license to operate as regulated digital assets exchanges.

Major bug in Bitcoin caught before being exploited

The bug CVE-2018-17144, originally introduced in March 2017 as a part of Bitcoin Core 0.14.0 improvement, has been found by Bitcoin Cash developer. As disclosed in an official report, the bug would have node fails which reject a block containing a transaction that spends the same coin multiple times, thus allowing network double spending, and furthermore an attacker could use the flaw to create new Bitcoins. Fortunately the bug was quickly repaired and Bitcoin core developers released a new minor release 0.16.3 and urged the network participants (miners) to upgrade to this release.

New Miners introduced by Bitmain and Bitfury

Two of the largest securers of the Bitcoin network Bitmain and Bitfury have announced a new application-specific integrated circuit (ASIC) processors which will offer better hashing power and lower energy consumption over older models.

Cryptocurrency Regulatory News

New York Attorney General’s extensive Exchange market report

The NY Attorney General (NYAG) has published a 42-page report on crypto trading platforms, based on a questionnaire, which was sent to 13 crypto exchanges earlier in April. The letter has been in sent in order to find out how exchanges are dealing with procedures and practices such as trading policies, internal controls, AML surveillance, protection against trading manipulation, and so on. The report reveals that many respondents are vulnerable to manipulation and possible violation of state law. Attorney General Barbara Underwood has also summarized some of the key takeaways via twitter. Not all of the exchanges have participated in the survey, among those who refused are Binance, Kraken, Huobi and gate.io.

SEC again delays decision on VanEck-SolidX ETF and has requested further comments

After the first delayed decision on the VanEck-SolidX proposal on Bitcoin ETF, the SEC has begun proceedings for Bitcoin ETF approval. The SEC is demanding more output from the wider public, according to SEC Secretary Brent Fields, "Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change”. As we already stated in our August edition, under existing regulations, the SEC could potentially delay a final decision until February 27th. If you are interested in this, cryptocurrency advocate Jake Chervinsky has summed this up extremely well in his twitter thread.

U.S. congressman announced 3 blockchain-focused bills

U.S. representative for Minnesota’s 6th district Tom Emmers has announced 3 bills to aid blockchain development, as he stated that, "the United States should prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead on innovation and further growth”. The first bill "expresses support for the industry and its development" within the U.S. by advocating for "a light touch, consistent and simple legal environment."The second bill would ensure cryptocurrency miners do not need to register as money transmitters, as they "never take control of consumer funds."This legislation would also include multisignature wallet providers.The final bill would create a "safe harbor" for taxpayers who have any cryptocurrencies resulting from a network hard fork. The bill would prevent the Internal Revenue Service (IRS) from levying any fines against taxpayers who try to report gains from these tokens, at least until the IRS provides clear guidance on how taxpayers can report such gains.