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Heavy unwind continues across cryptocurrencies

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Cryptocurrency markets dived following the South Korean currency exchange hack, which has revived concerns on security. BTC/USDT dived below 6500 and the MACD turned negative indicating that the downside move could gain further momentum. Key mid-term support is eyed at 6000, if broken should increase the bears’ appetite for a further decline toward 5000. Resistance is eyed at 7375/7450 area, including the 38.2% retracement on May – June decline, the 200-dma and last week’s resistance.

ETH/USDT slipped below the 500-support on the back of the broad-based sell-off in cryptocurrency markets. Decent sell orders are sitting at 500, adding an additional downside pressure to the market. Recovery attempts remain weak; buyers are no where to be found below 550 (weekly pivot).

Despite poor sentiment, Ether is doing well from a fundamental point of view. Ether’s market volume is expanding steadily. Lately, the number of Ethers in circulation surpassed 100 million coins.

Bitcoin Cash has also been hit by a wave of sell-off, after the S. Korean crypto-exchange hack weigh on the sector-appetite. BCH/USDT slipped below the 1000 level. The fading positive momentum hints at a building case for a further decline toward the 800 level. The key resistance to the actual bearish trend stands at 1190 , the 38.2% retracement on May – June decline and the 50-dma. Intermediate resistance is eyed at 1005, weekly pivot.

Fundamentally, Bitcoin Cash’s larger capacity crunch is expected to bring the network close to Visa and MasterCard scale, according to developer Amaury Séchet. Bitcoin Cash holds ground near the 200-dma against Bitcoin.

LTC/USDT trades with limited enthusiasm, with 100-support out of the way following the broad-based sell-off across the crypto-markets. The weekly pivot has retreated from 113 to 110. Relatively low volatility has prevented Litecoin from breaking important technical levels over the weekend, but the breach of the 100-support could increase the volatility in the coming days.

Does Swiss Sovereign Money initiative weigh on the sentiment?

The Swiss initiative to give the Swiss National Bank (SNB) the authority to be the sole money creator has been rejected with 75% on Sunday.

Although the Swiss vote did not target the cryptocurrencies, there are speculations that the sharp rejection of the Sovereign Money initiative may have explained a part of the debasement across the cryptomarkets during the weekend, as there is one important parallel between the sovereign money initiative and the creation of central bank cryptocurrencies: the reserve ratio.

In fact, the early examination of the possibility for using the blockchain technology for national cryptocurrencies showed that the latter would probably lead to a 100% reserve system, where every unit of cryptocurrency would be backed by the central bank reserves.

The rationale behind the 100% reserve requirement is that, assuming that the cryptocurrency holdings are remunerated with the same rate than the central bank reserves, users would be tempted to hold risk-free, interest-rate-bearing central bank coins instead of deposits with the commercial banks.

Consequently, in a monetary system including a national cryptocurrency, the central bank reserves would represent the entire monetary volume available in the market. This would make the central bank the sole creator of sovereign money, as opposition to the actual system where commercial banks create money by lending most of the available volume to other institutions and users, while keeping only the minimum reserve ratio on their balance sheets.

So, the fact that Switzerland, which has a long banking history and has been home to many innovations in cryptocurrencies, is not ready to change its monetary system in favour of a configuration that could eventually be compatible with the use of official cryptocurrencies, may have deteriorated the sentiment across the market.

Bitcoin traded below 6800 versus the US dollar, while Ethereum tested the $500-support.

Dont be confused: Switzerland hasn’t voted against cryptocurrencies

Although the markets settled parallels between the Swiss initiative and the cryptocurrencies, Swiss citizens have not rejected the idea of using cryptocurrencies. They rejected the idea of a system, where 100% of the monetary volume would be backed by the central bank reserves, because it would have put too much pressure on the central bank, compromise the independency between the monetary and fiscal policies and lead the country to a period of economic uncertainty by adopting a model which is not in line with the rest of the world.

We also remind that there are important differences in terms of functionalities between hypothetical national cryptocurrencies and the existing cryptocurrencies.

It is important to highlight that trading of non-sovereign cryptocurrencies do not interfere with the monetary policy mechanism. At least, not more than the traditional asset classes. In this sense, the cryptocurrencies should be considered as traditional financial instruments such as stocks, and not be confounded with the sovereign money.

Hence, the result of the Swiss vote should not be perceived as a direct negative reaction to the use of cryptocurrencies.

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Australians Can Pay Utility Bills With Bitcoin (BTC)

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Bitcoin (BTC)–In terms of adoption for cryptocurrency, being able to pay for real world goods and services with the digital currency has long been viewed as the gold standard. The bear market of 2018 has led to a shift in focus away from the fundamentals of crypto and the usability of blockchain transactions in favor of wild price speculation. However, an Australian-based partnership is attempting to provide a solution for customers looking to pay their utility bills with cryptocurrency.

Cryptocurrency exchange Cointree announced a joint-venture with billing platform Gobbill to give Australian customers the opportunity to pay their utility bills with cryptocurrency. The goal of the union is to provide a solution for automated billing via crypto, with Gobbill functioning as the intermediary in the exchange, taking user funds in crypto and making the payment in fiat.

Using the Cointree wallet, users of the cryptocurrency exchange will be able to convert stored coins automatically into utility bill payments, giving customers the opportunity to pay in BTC, XRP, and nearly 40 other currencies. While Australian utility companies will not be accepting crypto directly for payment (the exchange involves a conversion to fiat), it does represent a way for Australian crypto users to get around having to cash out of their denomination on exchanges to free up funds for utility payment. The service is being aimed at small businesses and average investors, with the co-founder and CEO of Gobbill, Shendon Ewans, expounding upon the planned form of payment,

“We anticipate a surge in the number of customers who would like to pay their bills in crypto in the coming years. Our partnership with Cointree will cater to this market and ensure Gobbill continues to remain ahead of the curve when it comes to allowing our users to pay their bills automatically, while knowing they’re protected from fraud and scams.”

According to Ewans, Gobbill views this partnership with Cointree as getting ahead of the curve, a refrain we have heard several times from tangential businesses attempting to capitalize on cryptocurrency. By offering a service that automatically takes payments in cryptocurrency, Gobbill is exposing itself to the growing, and vocal, userbase of cryptocurrency, in addition to paving a future for their company that involves a takeoff in the digital currencies.

Cointree also sees partnerships for bill payments and automatic drafting as a way to increase their customer base, with efforts already enacted for several years on the front of crypto-to-bill payment. Jess Rendon, operations manager of Cointree, reported that the company has processed $100 million in bills paid in 2017,

“Last year alone we had about AU$100 million of bills paid and saw ten times growth in this payment feature.

CCN reports that paying bills with cryptocurrency has seen an explosion in Australia over the last several years, having grown by 3300% in a three-year period. While the system devised by Gobbill is still a step removed from utility companies accepting Bitcoin and altcoins directly, it does provide another avenue for investors looking to use their coins outside of exchange speculation.

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Bakkt CEO: ‘With Our Solution, the Buying and Selling of Bitcoin Is Fully Collateralized or Pre-Funded’

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On Monday (20 August 2018), Bakkt, the new company announced by Intercontinental Exchange (ICE) on 3 August 2018, declared that with its solution, “the buying and selling of bitcoin is fully collateralized or pre-funded.”

ICE’s press release mentioned that Bakkt would be offering a one-day phsyically-delivered Bitcoin futures product:

“As an initial component of the Bakkt offering, Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies.”

This is how Bakkt announced today’s news on Twitter:

Kelly Loeffler, the CEO of Bakkt, provided more details in a post on Bakkt’s Medium blog.

Loeffler started by saying that to achieve a “trusted infrastructure for trading, storing and spending digital currencies”, Bakkt would need to provide:

  • “a consistent regulatory construct”;
  • “transparent, efficient price discovery”; and
  • “an institutional quality pre- and post-trade infrastructure”

She then moved to the “meat” of Bakkt’s announcement:

“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset.”

She noted that this provided support for market integrity and differentiated them from other exchanges which “allow for margin, leverage and cash settlement.” She went on to say that once you take into account the fact that Bakkt also provides “a secure, regulated warehouse solution”, it was easy to see how this infrastructure could “help more institutions and consumers participate in the asset class.”

For many crypto traders/investors and analysts, what Bakkt announced today sounded great. However, not everyone was equally excited.

Caitlin Long, 22-year Wall Street veteran (including over eight years at U.S. investment bank Morgan Stanley) who has been active in Bitcoin since 2012, expressed her concern about “financialization” (i.e. when an asset class becomes investable by large institutional investors) of cryptocurrencies, and especially her worries about “leverage-based financialization” (which arises “either from the issuance of more assets out of thin air to dilute existing holders, or from the creation of more claims to the asset than there are assets”) in an article for Forbes published on 31 July 2018.

Upon hearing Bakkt’s announcement earlier today, she sent out the following tweets to explain that although the confirmation that Bakkt’s daily Bitcoin contract would not be traded on margin, use leverage, or serve to create a paper claim on a real asset” was a good thing, she still had a few reservations:

 

 

 

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Biometric Cryptocurrency Card Protects Bitcoin with Fingerprints

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Unikeys has officially announced its UKey cryptocurrency card.

In form, it’s shaped like any other regular payment card. But it’s designed to host multiple popular cryptocurrencies including Bitcoin, Bitcoin Cash, Ether, and Litecoin. What’s more, it features an embedded fingerprint sensor. Once a user’s fingerprint data has been registered and stored in the card’s Secure Element, the card is then able to biometrically authenticate the user for each transaction, ensuring a high level of security.

The biometric component is the product of a collaboration between Unikeys and Hong Kong-based MeReal Biometrics, which obtained its fingerprint sensor technology from Sweden’s Fingerprint Cards. Fingerprint Cards has been very busy in recent months seeking to secure a leading position in the biometric cards market as major financial services brands like Visa and Mastercard prepare for mass commercialization of this kind of technology; Unikeys, for its part, is ahead of the curve.

Of course, a key to success for the latter company will be establishing merchant support for its card’s cryptocurrency payments, and as RFID Journal reports, Unikeys is currently in talks with “several companies” concerning this issue. Unikeys’ CEO says the company is also planning to launch a pilot for its solution in Hong Kong, though details about the project are forthcoming.

Biometric Cryptocurrency Card Protects Bitcoin with Fingerprints

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