In its latest report titled, “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures,” European Central Bank (ECB) takes on cryptocurrencies.
To start with, ECB points out that Bitcoin is the leader of the pack when it comes to market capitalization, user base, and popularity. It further mentions that despite losing its market share, it has recovered and currently stands at 54 percent.
Great to see @ecb come out with a clear POV on crypto assets – notably, that XRP is recognized as one of the most important in terms of usage, market cap and business model diversity. https://t.co/KeSiYFqy53
— Brad Garlinghouse (@bgarlinghouse) May 21, 2019
Regarding the development, the key findings have been:
- Financial investment vehicles like trusts, Exchange Traded Notes (ETNs) and Contracts for Difference (CFDs) have started to offer exposure to crypto-assets to European clients that are mainly found in the household sector with key markets in Belgium, Italy, and Germany in Q3, 2018.
- Price growth of crypto-assets surpassed that of historical bubbles viz. Dot-com bubble, South sea bubble, Mississippi, and Tulip mania before the crash in early 2018.
- An important share of bitcoin’s trading volume, an average of 10% of the total, is settled in euro.
- The top 1,000 addresses (0.0018% of all active addresses) represent around 36% of all bitcoin holdings and the top 10,000 holds 58%, reports ECB in its report
- Developments and activities like Bitcoin futures contracts and financial investment vehicles that track crypto-assets, may increase links to the traditional financial sector and the real economy.
- Banks do not seem to have systemically-relevant holdings of crypto-assets while hedge funds and asset managers showing strong interest.
- Initial coin offerings (ICOs), a largely unregulated way to raise capital collected about €19 billion in 2018.
Implications for Monetary Policy
- At the current stage, crypto-assets do not fulfill the functions of money, and neither do they entail a tangible impact on the real economy nor have significant implications for monetary policy.
- Since the size of the sector remains small and linkages to the wider financial system – let alone the real economy – remain limited, crypto-asset related developments have no direct implications for monetary policy at the present stage. At the same time, the dynamic nature of crypto assets, including the development of stablecoins, warrants continuous monitoring.
- Clarifying the accounting treatment of crypto-assets could lead to a more conducive environment for such investments being created.
“Regulation of crypto-asset gatekeepers could have an unintended impact on the market,” cautions ECB.It further states that still ECB continues to monitor the crypto-assets, and further raise awareness while developing preparedness for any adverse scenarios that too in cooperation with other relevant authorities.
[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.
Fidelity Adds XRP to List of Supported Cryptos for Charitable Donations
Fidelity Charitable has added XRP to its list of assets, allowing donors to make contributions using the world’s third-largest cryptocurrency.
According to the announcement,
“The addition of Ripple expands the existing array of assets, including bitcoin, that donors can contribute into their donor-advised funds to fuel their philanthropy.”
Cryptocurrency donations give people a way to increase their charitable giving since gifts are exempt from paying capital gains taxes. Instead, the 501(c)(3) charity receives the full value of a donor’s contribution.
Crypto Donations to Fidelity Charitable
In the example above there are three key assumptions.
- Assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%. This does not take into account state or local taxes, if any.
- Amount of the proposed donation is the fair market value of the appreciated property held more than one year that donor considers, as determined by a qualified appraisal.
- Assumes a contribution of 100 bitcoin. Alex’s tax basis is assumed to be $100/bitcoin. If Alex sold 100 bitcoin for $250,000, he would have $240,000 in capital gains and would pay $57,120 in tax.
The organization says there’s also another upside to making donations using cryptocurrencies such as Bitcoin and XRP to Fidelity Charitable, which has a donor-advised fund program: participants can recommend how the contribution is invested and potentially grow it tax-free.
The organization has helped donors support more than 278,000 nonprofit organizations with more than $35 billion in grants. It hit a milestone last year with $1 billion in contributions from complex assets such as private stock, limited partnership interest, real estate and cryptocurrency.
The addition of XRP rounds out the organization’s support for the world’s top five cryptocurrencies: Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC).
Ethereum co-founder Vitalik Buterin: Blockchain “is much bigger than just Bitcoin”
- People need to know that blockchain has transformed from being “just about Bitcoin.”
- Governments do have a regulatory role in the industry.
Vitalik Buterin is popular for the creation of Bitcoin’s competitor Ethereum. The “skinny visionary” was a speaker at the Blockchain Futurist Conference. However, he was also interviewed by the Star where he shared a lot about the blockchain and the journey in the cryptocurrency field.
According to Buterin, people need to know that blockchain has transformed from being “just about Bitcoin.” He says that blockchain is much bigger than Bitcoin and can take “a lot of different versions.”
“For bitcoin, the idea is that you have decentralized cryptocurrency running on blockchain and protected from corporate and state control that’s not going to deflate on you and it’s not going to get confiscated. The blockchain is just a tool to make that specific thing possible.”
While comparing the above Bitcoin scenario to Ethereum, Buterin added:
“That’s the bitcoin side. For Ethereum what we care about is taking the blockchain technology behind bitcoin that makes decentralized cryptocurrency possible and making it more general purpose so that other things can be decentralized in the same way.”
Buterin also clarified that governments do have a regulatory role in the industry. However, there is a lot that needs to be done to understand initial coin offerings (ICOs) when it comes to securities categorization. “The regulators are definitely grappling. They are undecided in many ways,” Buterin said. The founder also shared his opinion on how to improve scalability which will help speed up adoption.
“The main problem with the current blockchain is this idea that every computer has to verify every transaction. If we can move to networks where every computer on average verifies only a small portion of transactions then it can be done better.”
Bitcoin, Ether, and XRP Weekly Market Update August 19, 2019
The total crypto market cap lost $25.8 billion of its value during the last seven days and now stands at $271.5 billion. The top 10 currencies are all in red for the same time frame with Litecoin (LTC) and EOS (EOS) being the worst performers with 15.1 and 12.3 percent of loses respectively. By the time of writing bitcoin (BTC) is trading at $10,684 while ether (ETH) stands at $200, and Ripple’s XRP climbed up to $0.286.
Bitcoin climbed up to $11,535 on Sunday, August 11 and closed the previous seven-day period with 4.1 percent of price increase.
After failing to regain $12,000 during the weekend, the BTC/USD pair gave up some of its recent gains and fell back down to $11,392 on the start of the new week. It was trading as low as $11,123 on the Bitstamp daily chart or right at the breakpoint of the uptrend channel we created on our last reports.
On Tuesday, August 13, the most popular cryptocurrency decreased to $10,861 after losing 4.6 percent. The majority of the crypto analysts agreed that a breach below the mid-$10k levels would leave the door open for further loses and a drop below the mentioned psychological level in the short-term.
On August 14, bitcoin formed its third consecutive red candle and lost the stunning 8 percent closing at $10,023.
The trading session on Thursday, August 15, saw the coin breaking its losing streak to climb up to $10,296 after trading as low as $9,470 during intraday. As predict, bull traders found support at both $9,400 and $10,000 levels.
On the last day of the workweek, the BTC/USD pair was once again engaged in a high volatility session during which it was moving in the $10,560 -$9,740 zone before closing at $10,360.
The weekend of August 17-18 came with another test of the $10k line on Saturday as bears were still not eager to ease the pressure. Bitcoin closed with a loss to $10,202, still defending the 5 figure price.
On Sunday, August 18 the coin moved North to $10,324 loosing 10.4 percent for the week.
The biggest news this week is without a doubt Bakkt announcing its official launch date. The institutional digital assets trading and custody platform, which is a subsidiary of the Intercontinental Exchange (ICE) announced on August 16 it will start offering bitcoin futures and warehouse services on September 23.
The company received the required approvals from the U.S. Commodity Futures Trading Commission (CFTC) and the New York State Department of Financial Services to provide physically-delivered daily and monthly bitcoin futures contracts. The new product will be traded on the ICE Futures U.S. exchange.
The Ethereum Project token ETH added 5.6 percent to its value on Sunday, August 11 and closed the previous seven days at $216 or 4 percent down for the period.
ETH, which was caught in the $230-$200 zone since July 14, started to move downwards since the last time it was rejected at $230 on August 8. It opened the new week on August 12 with a drop to $211, which was followed by another loosing session, this time to $208 on Tuesday, August 13.
The ETH/USD pair fell off a cliff on August 14 and lost 11 percent to close at $185. The ether moved South of the $200 support, eyeing the levels around $180.
On Thursday, August 15, the coin made a slight comeback and closed with a green candle to $188 but only after touching $173 during intraday. The last time ETH visited these levels was in May 2019. Buyers did not allow further decline and successfully regained their positions later in the day.
The ETH/USD pair lost $3 on Friday, August 16 and once more it was briefly trading below the critical support of $180.
We saw the coin remaining relatively flat on Saturday, August 17 and on the last day of the week It gained 4.8 percent to close at $194. The Ether was 9.8 percent down for the seven-day period.
The Ripple company token XRP regained its position above $0.30 on Sunday, August 11 and closed the day at $0.303 with a 5 percent of weekly loss.
The coin opened the new trading period with a move to the above-mentioned support on Monday, August 12. It fell as low as $0.291 on the next day, August 13 and even though it managed to erase some of the day trading losses, the XRP/USD pair closed with a loss to $0.297.
On August 14, the “ripple” experienced its worst day since June 27 and lost 11.7 percent, dropping to $0.262. The coin visited levels not seen since September 2018 as bulls were already turning to $0.26 as their next stronghold.
The XRP visited $0.225 during the trading session on August 15, still, it managed to recover and closed the day at $0.263.
The workweek ended with another red candle to $0.26.
During the weekend, the ripple token attempted a comeback by first climbing up to $0.265 on Saturday and then to $0.282 on Sunday. It was down 6 percent for the week.
Altcoin of the Week
Our Altcoin of the week is HyperCash (HC). The open-source platform, which is designed to intermediate between the blockchain and non-blockchain environments, gained 46.6 percent for the last seven days and moved to #47 place on CoinGecko’s top 100 list. The coin is currently trading at $3.23 with a total market capitalization of approximately $143 million.
The project consists of two separate blockchains – HyperCash (HC), which is the main chain and HyperExchange (HX) – a fork, built to facilitate communication between different blockchains and non-blockchains. It is V Label Project on the Binance Info page. The latest project update was published on August 16 providing detailed status of the current technical work on the ecosystem.
In the early hours of trading on August 19, the HC/BTC pair is trading at $0.0003064 on Binance.