Daily Market Update - August 14, 2020

$BTC 24 Hour High $11,845.63 $BTC 24 Hour Low $11,216.87 $BTC +1%

Total Market Cap $368.8 BN (+3.60%)

24 Hour Volume $117.1 BN (+13.36%)

Notable Movers Reserve Rights (RSR(+33.12%)

BTC Dominance 58.9% (-1.01%)

The Digital Assets Ecosystem is Becoming More Robust

Lately, there has been a substantial uptick in the number of blockchain service providers.  One of the most notable examples of this is the largest bank in South Korea, KB Kookmin Bank. According to an article by Joshua Stoner of securities.io, because this is the largest bank in South Korea, “moves made by a bank of this stature are followed closely by many”.  For KB Kookmin Bank’s piece, they are developing custodian services with a group of companies.  The goal here is to not just support cryptocurrency exchanges, but provide services supporting the exchange of digital securities as well.

BitOoda, a FINRA (Financial Industry Regulatory Authority) member and US Securities and Exchange Commission registered broker-dealer is launching a division that will be a private placement agent and will broker secondary-market transactions for SAFTs (Simple Agreements for Future Tokens).  This is a powerful development, as “BitOoda’s SAFT brokerage division gives the U.S. digital asset ecosystem its first financial services firm for secondary-market SAFT trading that is fully compliant with securities regulations.” Not only does this provide much needed services to a rather nascent sector, it provides regulatory clarity, meaning less risk when trading digital assets, which in turn, as we covered in one of our recent newsletters, paves the way for institutional adoption.

In Other News Of Regulatory Clarity…

The United States’s OCC  (Office of the Comptroller of the Currency) set the framework for companies to deal in digital assets on a national scale, a broad defining and easing of digital asset transactions throughout the US. Essentially, OCC has formally recognized “the role of banks in providing digital currency custody”.  Going further, “the OCC said ‘providing cryptocurrency custody services, including holding the unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities.’”  This is an important and consequential note for the OCC to make, as it provides stability to digital asset trading by allowing established institutions to regulate them.  

Institutional Adoption of Bitcoin

Wider adoption of the cryptocurrency comes as Microstrategy, a business intelligence firm, has “[poured] all $250 million of its planned inflation-hedging funds into the digital currency.”  This is rather substantial, as Microstrategy is a company valued at around $1.2 billion. CEO Michael J. Saylor said, in a statement to NASDAQ, that, among other reasons why Bitcoin will have “more long-term appreciation potential than holding cash”, the crypto has a strong ecosystem to back its use.  If the above news is a question as to whether the filling in of the digital asset ecosystem is convincing companies to invest heavily in digital assets, this can certainly serve as an answer.

The Upshot:

  • Regulatory clarity is making strong gains as government integrated, large financial entities such as the KB Kookmin Bank and BitOoda offer digital asset trading services.

  • The US has had a particularly strong declaration handed down by the OCC, recognizing banks as digital asset custody providers; another win in the realm of regulatory clarity.

  • Bitcoin saw a large vote of institutional confidence from Microstrategy, a company valued at $1.2 billion, as it turned all of its inflation-hedging funds into the cryptocurrency.

  • Bulls are back in charge with all the top 10 large-cap coins in the green, digital asset market cap up 2.43% to 371B overnight with $ETH surging $28 to reject 430 resistance and declined to be range bound between 416-425 with trading volumes decreasing after the push. 

  • All the on-chain activity from the sheer amount of $ETH and DeFi-related volume being pushed through the ERC-20 chain, gas fees are now at all time highs for the past two days. Trading currently at neutral RSI levels 

  • $BTC physical volumes up 4% to 27B as it maintains around 11,745 after rejecting 11,850 in the evening American trading session. 11k is the new 10k perhaps with it maintaining above 11,000 levels for 12 days straight, breaking its most recent streak between July 3-13 2019 for 10 days. The next target is to last 60 days which $BTC traded above this level during the initial mainstream “adoption”. 

  • Support levels currently at 11,685, if it breaks this, the next support drops down to 11,490. 

  • Trading on upper Bollinger bands and trading 60$ above its 10 day SMA.  RSI indicators showing overbought levels but will need move volume to push past DeFi hype and challenge 12,000. 

Alts and DeFi watch:

  • $ALGO saw a 50% increase over the past couple of days and reached 0.70 before rejecting and correcting down to 0.64 levels. Currently trading at slightly overbought levels and upper Bollinger bands. 

  • $LINK trading at 17 after two consecutive strong performing days pushed it 30% from 12.50 during Wednesday. Trading at extremely overbought RSI levels and performing 26% above its 10 day SMA. $LINK critics of the coin being overvalued when $LINK pushed from at 3->10 levels have been silenced as month to date up 118% with the token up $9. 

  • $XTZ dropping for two consecutive days, down from 4.5 highs to 4.09 currently at slightly oversold levels and bottom half of Bollinger bands, 10c above its 10d SMA and +43% above its 100D  SMA (2.84)

China Trial Expands 

Beijing has announced plans to test its digital yuan in more cities. The ramped-up trials for the central bank digital currency, known officially as DCEP, suggest it might be ready to come out. In other news, the U.S. has finally joined the bandwagon of countries testing a CBDC — with the Fed embarking on experiments with the Boston Fed and MIT.

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Ripple Row 

Ripple’s CEO Brad Garlinghouse has denied FT’s report that the company is shifting its focus away from providing cross-border payments for banks. On Twitter, he insisted the company has  "absolutely no plans to ‘reset’ our strategy." The FT reported that Ripple, the creator of XRP, was planning to diversify by offering a payment services platform for financial institutions and everyday consumers.

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BitMEX Changes

BitMEX has announced that ID checks are becoming compulsory for all its customers. The crypto derivatives exchange is launching a user verification program on Aug. 28. Users will have six months to provide their real-world identity. The company says the Know Your Customer checks should only take five minutes to complete, and a trading competition is being launched for verified customers.

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Doctor Who Goes Crypto!

BBC Studios has teamed up with a mobile game publisher to develop a digital trading card game on the Ethereum blockchain for Doctor Who. The hit sci-fi show has a cult following worldwide. Fans will be able to collect and trade digital versions of their favorite characters and battle friends, with trading cards turned into nonfungible tokens.

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