ErisX to CFTC: Regulated ETH Futures Would Result in More Robust, Liquid Market

Chicago-based crypto exchange ErisX has filed a comment letter with the United States Commodity Futures Trading Commission (CFTC) in response to the agency’s request for feedback on Ethereum (ETH)’s mechanics and market.

The letter, submitted on Feb. 15, sets forth the exchange’s belief that “the introduction of a regulated futures contract on Ether would have a positive impact on the growth and maturation of the market.”

As reported, ErisX is a reboot of traditional futures market Eris Exchange, and is expected to begin support for spot trading in Bitcoin (BTC), Ethereum and Litecoin (LTC), as well as futures contracts, in the second half of 2019, pending regulatory’ approval.

The letter argues that “listing and trading Ether futures compliantly on CFTC regulated markets is consistent” with the CFTC’s efforts to foster “open, transparent, competitive, and financially sound derivative trading markets [and] to prohibit fraud, manipulation, and abusive practices in connection with derivatives and other products subject to the [Commodity Exchange Act] CEA.”

The CFTC has long determined that Bitcoin is a commodity, given that it aspires to replace sovereign currencies — rather than a security, which would bring it under the Securities and Exchange Commission (SEC)’s charge. After significant debate, Ether too was cleared of a securities classification in June 2018.

In its letter, ErisX outlines the conceptual distinction between Ethereum and its predecessor, noting that “Ethereum built upon some of the architectural principles of Bitcoin to extend [its] functionality of [a] distributed, (crypto-economically) secured, (blockchain-based) record-keeping system to include new computational capabilities for the execution of arbitrary code.”

In its diagnosis of the current state of the Ethereum market, the exchange affirms its view that a lack of regulatory clarity has prevented regulated enterprises from entering the sector, resulting in a preponderance of “unregulated or lightly regulated ‘exchanges’ [and] ‘brokers’ [emerging] to fill the gap, many of them off-shore.” The associated risks — including price volatility and liquidity fluctuations — are therefore:

“Not unique to Ether, but [may be exacerbated by] the current fragmented global market structure of trading platforms and ‘exchanges’ with significantly varying degrees of regulatory oversight and operational transparency and integrity.”

ErisX thus contends that standardized, CFTC-regulated ETH products would draw broader participation from institutional actors and commercial users, resulting in “more robust, liquid, and resilient markets,” better risk management and more efficient, accurate price discovery.

As reported, ErisX has this month appointed three veterans from Barclays, YouYube and the Chicago Board Options Exchange to fill executive roles, having announced the appointment of ConsenSys’ Joseph Lubin to its board of directors in January.

Bear Market? Grayscale Bitcoin Trust Averaged $2 Million Invested Per Week in Q4 2018

Grayscale, the creator of GBTC, had an average of $2 million invested every week during the 4th quarter of 2018. About 66% of all investments came from institutions, while 88% of all Grayscale digital investments were in Bitcoin. Just 12% of investments were directed at other digital assets, leading Grayscale to declare the “return of the Bitcoin Maximalist” in their quarterly report.

Investments across the board were down in 2018 as the bear market took over. Yet, Grayscale had its best year so far, with over $359 million in investments. The Bitcoin Investment Trust’s GBTC product has been running for a few years now. With over $359 million in investments, Grayscale had its best year in 2018

Interestingly, the growth was almost 300% over 2017, the year of the largest Bitcoin bull run in history.

The GBTC product is clearly the most attractive to investors. However, the company believes that other digital assets are going to thrive in the future.

Despite a slowdown in investment across products in the fourth quarter, we continue to see evidence that digital assets are here to stay as a new asset class. Moreover, we believe in a future where multiple digital assets survive, thrive, and complement one another in the digital economy, allowing them to play a diversifying role within investor portfolios.

40% of Investments Were Retirement Accounts in Q4

Roughly 40% of the investments in the fourth quarter were from retirement accounts.

GBTC is one of the many products that could be bought by the Blockchain Opportunities Fund. It was recently more than 50% funded by a single county in Virginia. Two retirement funds in Fairfax County were responsible for $21 million of $40 million total invested into Morgan Creek Digital’s fund.

Sources of investment for GBTC. Source: Bitcoin Investment Trust

When launched years ago, the value of shares in GBTC was meant to represent the value of 0.1BTC. However, this has changed vastly, as evidenced by the actual value of GBTC on the OTC markets.

A recent chart of GBTC on the OTC markets. Notably, the stock no longer represents “0.1 BTC” as originally intended.

GBTC hit an all-time high at the pinnacle of the Bitcoin bull run in 2017. It’s since lost over 75% of its value from that time.

In researching this issue, we found a statement from the Bitcoin Investment Trust:

There can be no assurance that the value of the shares will approximate the value of the Bitcoin held by the Trust and the shares may trade at a substantial premium over or discount to the value of the Trust’s Bitcoin. The Trust may, but will not be required to, seek regulatory approval to operate a redemption program.

GBTC is one way that traditional investors can gain exposure to crypto assets. But an ETF is still in the offing, and when that happens, virtually everyone expects a greatly renewed interest in the crypto markets, which have stagnated some in recent weeks.

Ordinary Stablecoin or XRP Killer? What We Know About JPMorgan Chase’s New Cryptocurrency

On Feb. 14, United States banking behemoth JPMorgan Chase announced its own cryptocurrency. Significantly, it is the first time a major U.S. bank has tapped into digital assets for direct use in business operations.

It is fair to say that move comes unexpectedly for JPMorgan Chase, whose CEO, Jamie Dimon, is famous within the crypto community for his anti-Bitcoin (BTC) remarks. Here are the main outtakes from reports and comments about the new virtual currency, dubbed “JPM Coin.”

JPM Coin aims to increase settlement efficiency, initially within three of its operations

There are three early applications for the JPM Coin, as Umar Farooq, head of the lender’s blockchain projects, told CNBC.

The first one is cross-border payments for large corporate clients, which currently rely on wire transfers provided by networks like SWIFT, meaning that they might take up to several working days to settle. According to Farooq, payments using JPM Coin will be instantly performed at any time of day.

As a result, SWIFT, which currently handles more than half of all high-value, cross-border payments, might be additionally challenged to update its remittance system. The 46-year-old Belgium-based interbank messaging service has already been confronted by Ripple (XRP), whose CEO, Brad Garlinghouse, had recently declared that “what we are doing on a day-to-day basis is in fact taking over SWIFT.” Ripple has reported various advancements on the field of international payments, allegedly saving transaction costs by 40-70 percent with its xRapid platform and adding several major banking institutions to its RippleNet network.  

SWIFT, in turn, has already started researching blockchain as one of the options to achieve quicker payments. Additionally, it has been boosting its Global Payments Innovation (GPI) payments platform — just recently, the banking network launched a proof-of-concept (PoC) of a gateway that would allow blockchain software firm R3 to connect to the GPI.

Secondly, JPM Coin will reportedly be used for securities transactions. In April, the bank tested its Quorum Blockchain platform, along with with the National Bank of Canada and other lending sector participants. The intent was to streamline origination, settlement and interest rate payments, among other financial processes.

Specifically, as Reuters wrote, the trial “mirrored the Canadian bank’s $150 million offering on the same day of a one-year floating-rate Yankee certificate of deposit.” Thus, institutional investors can use the JPM Coin for instant settlements, as opposed to waiting for a wire transfer to come through.

JPMorgan Chase created Quorum in 2016 as part of the Ethereum Enterprise Alliance (EEA), of which it is one of the founding partners. The platforms runs on the Ethereum (ETH) blockchain and is modeled after the Ethereum Go client. It is currently used by pharmaceutical companies Pfizer and Genentech as well as Microsoft Azure, among others. In March, JPMorgan Chase declared that they were considering making Quorum an independent entity as way to attract more partners that could be scared off if they are competitors of the bank.

Finally, the new cryptocurrency might be employed by large corporations including Honeywell International and Facebook, which will reportedly use JPMorgan Chase’s treasury services business to replace the funds they hold in various subsidiaries across the world. According to CNBC, that businesses brought the lender $9 billion in revenue in 2018. Farooq explained in a comment:

“Money sloshes back and forth all over the world in a large enterprise. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.”

The trials for the token are set to start “in a few months.” However, only a small amount of the total funds involved in the three aforementioned areas would involve JPM Coin at first. In total, JPMorgan Chase moves more than $6 trillion across the world on a daily basis, according to CNBC. It is the largest bank in the country.  As Farooq told:

“Pretty much every big corporation is our client, and most of the major banks in the world are too. Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back.”

He also added that, in the future, the lender’s token could be used for payments on internet-connected devices if they are migrates to blockchain. Overall, the JPM representative seemed enthusiastic about the technology’s perspectives at the bank.

“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction.The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”

JPM Coin resembles a stablecoin — which falls in line with a general trend

According to the CNBC report, JPM Coins are pegged to U.S. dollars so that its value stays stable — technically, that makes the new token a stablecoin, at least in its initial form.

Clients will reportedly be issued the coins after depositing dollars at JPMorgan Chase. After the tokens are used for a payment or security purchase on the blockchain, the lender will allegedly destroy them and give clients an equivalent amount of fiat in return.

Overall, stablecoins had a great year in 2018, becoming a growing trend among the market’s most compliance-oriented players. For instance, Goldman Sachs-backed startup Circle launched its USD Coin (USDC) in collaboration with major U.S. crypto exchange Coinbase, and the Winklevoss twins presented their own stablecoin dubbed the Gemini dollar after receiving the regulatory green light from the New York Department of Financial Services (NYDFS).

JPM Coin will run on Quorum, the bank’s private ETH blockchain

According to an FAQ released by JPM on the same day CNBC broke the news, its token will initially be powered by the aforementioned Quorum blockchain (which is permissioned, or, in other words, private), but will also become applicable to “all standard blockchain networks” in the future.

“The JPM Coin will be issued on Quorum Blockchain and subsequently extended to other platforms. JPM Coin will be operable on all standard Blockchain networks,” the guide says.

Based on that, Jerry Brito, executive director at Coin Center, a nonprofit research and advocacy center focused on cryptocurrencies and blockchain, told MarketWatch that JPM merely launched an in-house payments system rather than an actual cryptocurrency:

“There’s a lot of confusion. […] I see folks referring to it as a cryptocurrency. It’s not a cryptocurrency. A cryptocurrency is one that is open and permissionless. If you want to download it, you don’t need permission, you just need some software.”

Further, JPM Coin will eventually expand its role beyond being a stablecoin, as per the FAQ:

“Over time, JPM Coin will be extended to other major currencies. The product and technology capabilities are currency agnostic.”

As for now, the token is designed to be used by JPM’s institutional clients only.

The bank’s CEO, Jamie Dimon, might be anti-Bitcoin, but he is also pro-blockchain

JPMorgan Chase became notorious among cryptocurrency participants in 2017, when its CEO, Jamie Dimon, openly called Bitcoin a “fraud.” In 2018, Dimon reterierted his position by saying that he doesn’t “really give a s—” about Bitcoin.

However, at the 2019 World Economic Forum in Davos, when the JPMorgan Chase CEO was asked if he took any satisfaction when the cryptocurrency plunged last year, he replied negatively and followed with positive comments about the technology that backs it.

Specifically, Dimon noted that he is pro-blockchain, despite the excessive hype around the technology. In his view, blockchain is a better replacement for certain online databases:

“Blockchain is a real technology — it’s just a database we can all access that’s kept up-to-date.”

Indeed, the banking giant has been researching blockchain since 2016, when Quorum’s white paper was first published.

The announcement has received mixed reaction from the community

Changpeng Zhao, the CEO of Binance, greeted the first U.S. banking cryptocurrency, referencing Mahatma Ghandi’s “first they ignore you, then they laugh at you, then they fight you, then you win” alleged quote:

Cointelegraph has reached out to Ripple for an additional comment on the matter. In response, the Ripple team sent the link to the tweet of their CEO Brad Garlinghouse, who, in turn, criticized the concept of bank-issued digital coins (which he calls “bank coins”) and JPM Coin specifically, citing its centralized structure:

Notably, two years ago, Garlinghouse wrote an article in which he argued that such projects — where bank remittances are performed using unique digital tokens — are misguided and would inevitably result in “an even more fragmented currency landscape than what we have today”:

“If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”

However, some community members seem more confident about JPM Coin, suggesting that the new token is capable of achieving widespread use, and hence might overtake Ripple in the future. Multicoin Capital partner Tushar Jain wrote:

Bloomberg business editor Joe Weisenthal expressed a somewhat similar viewpoint:

While it might be too early to tell whether JPM Coin will be transferred to public blockchains and gain wider recognition among crypto market participants, some seem perplexed by its current capabilities. Thus, Nathaniel Popper, author of the book “Digital Gold, a History of Bitcoin,” tweeted:

Analyst Warns S&P 500 Could Struggle to Go Higher After Recovery

Todd Gordon, a long-time stock analyst and the founder of TradingAnalysis.com, is “nervous” about the current state of the S&P 500. The index crashed just before Christmas to below 2350, but has affected a steady recovery in the meantime. By press time it had gained 2% on its numbers 3 months ago.

The index crashed just before Christmas to below 2350, but has affected a steady recovery in the meantime. By press time it had gained 2% on its numbers 3 months ago. A

Gordon tells CNBC in a recent interview:

The 200-day moving average right here — we have tried it once, twice, three, coming back on a fourth time. This is going to be a deadly battleground. I want to short it but I want to be very diligent and get a good price, stop out above 2,900, but again, don’t think is going to be an easy trade. I think we sell off but it’s going to be very volatile for a period while we decide what to do here.

Can We Expect 3,100 in 2019?

His lack of confidence in a short might put some wind in the sails of the longs out there. However, let’s look at a longer track-record for SPX.

If the same trend is repeated from last summer, 3,100 would seem to be the target.

As we can see above, the index has only reached a high of around 2920 over the past year. The current level is also a 2% gain on where it was a year ago. If SPX is in another bull run like it was last summer, new highs could be seen. The gain over the average in the last run was 200 points. Could we thus expect a run to 3,100 before bulls might be considered overconfident?

The value of the SPX is based on the performance of the 505 symbols it represents. While Silicon Valley has been doing well, a lot of other blue chip companies that make the list are posting profits in the single percentage range. The jury is still out on the trade war with China, which will affect companies across the board.

China Policy Will Play Major Role

Therefore, Gordon is right to be “very nervous.” The S&P 500 does poorly when major companies falter, and in terms of profits, 2018 wasn’t impressive for non-technology companies. However, companies like Amazon, Apple, and Alphabet posted respectable revenues which offset the consequential market capitalization punishment suffered by underperformers.

Yet two of the above-mentioned companies rely very much on revenue based on trade with China, revenue which can be negatively disrupted in 2019 by foreign policy decisions.

Another analyst named Erin Gibbs isn’t expecting a slingshot motion on the S&P 500. A portfolio manager for S&P Global, Gibbs projects a little under 5% gains over the course of the year. Barring some surprise movements in the wider economy, this prediction is probably safer to trust. Near-term shorts to the 2650 range might not be out of the question for many traders.

Of course, this column isn’t intended as financial advice. Make your own decisions wisely. If you’re playing the indexes, let’s hope you’re paying attention to macro economic policy, as that will play heavily into the valuation of the companies within.

Major Crypto Brokerage Coinmama Reports 450,000 Users Affected by Data Breach

Israel-based crypto brokerage Coinmama — which allows users to purchase Bitcoin (BTC) and Ethereum (ETH) using a credit card — has suffered a major data breach affecting 450,000 of its users. The incident was disclosed in an official company announcement on Feb. 15.

The breach is reportedly part of a mammoth, multi-platform hack that affected 24 companies and a total of 747 million records — among them gaming, travel booking and streaming sites.

Coinmama says a list of around “450,000 email addresses and hashed passwords” of users who registered on its platform before Aug. 5, 2017 have been posted on a dark web registry:

“As of February 15, 2019, there has been no evidence of this data being used by perpetrators. Given the dated nature of the published data, we have no reason to suspect that any other Coinmama systems are compromised. Coinmama does not store credit card information.”

Aside from immediately notifying users, Coinmama says its response team is requiring all potentially affected users to reset their passwords upon login, as well as monitoring its array of systems for suspicious activity or unauthorized access. The platform says it is working to enhance its safeguards and track any external signals that the compromised data is being used.

Aside from new password requirements for potential victims of the hack, the site requests all users to ensure their passwords are robust and unique, and to avoid opening emails or attachments from unknown senders, or providing any personal data to any third party sites.

Although the data breach impacted not only Coinmama, but a gamut of companies outside the crypto sector, the hack represents the second high-profile system compromise in the industry this year.

On Jan. 15, tens of thousands of Ethereum (ETH) wallets hosted by New Zealand crypto exchange Cryptopia were hacked, leading to losses estimated to be worth up to $23 million — with the breach continuing for a couple of weeks after the incident’s detection.

A recent report from New York-based blockchain intelligence firm Chainalysis estimated that two — likely still active — organized hacker groups have reportedly stolen $1 billion in cryptocurrency, accounting for the majority of funds lost in crypto-related scams.

Norway: Anarcho-Capitalist Smart City Adopts Crypto as Sole Recognized Medium of Exchange

Liberstad — a private, anarcho-capitalist city in Norway — has adopted a cryptocurrency native to its blockchain-powered smart city platform as its official medium of exchange, according to a press release published on Feb. 12.

Founded in 2015, Liberstad is the outcome of the Libertania project, run by the nonprofit Liberstad Drift Association, which aims to create a city-society autonomous from government interference — eschewing taxes in favor of private sector funded services. As reported, the city’s freehold plots were first sold for either Bitcoin (BTC) or Norwegian krone in 2017, with around 100 prospective residents said to have bought into the project by April 2018.

John Toralf Holmesland, head of Liberstad Drift AS, has imputed the project’s inspiration to libertarian ideology and non-agression principles, writing:

“We want a society where people decide over themselves and can live together without government authorities. We want a society without government coercion, blackmail, surveillance or unnecessary violence.”

The nascent city has now adopted the cryptocurrency “City Coin” (CITY), which will be the only medium of exchange in Liberstad’s closed market: national fiat currencies are prohibited.

CITY is interoperable with Liberstad’s blockchain-powered smart city platform, “City Chain,” which allows city inhabitants and entrepreneurs to build and offer services “on a private, internal and voluntary basis” to replace government-run, public provisions.

The press release claims the disintermediated and trustless architecture of blockchain is the “key ingredient for the development and prosperity of sustainable and free city-societies.”

Future residents will reportedly interface with the City Chain platform by means of a municipal app “City Hub”: a dashboard which will allow the community to perform a range of civic functions — including identity management, creating and voting on city-wide initiatives, registering property, contract insurance, and more.

The City Coin uses a proof-of-stake (PoS) consensus algorithm in which block validators are selected based on the number of tokens a given node has staked in their wallet, rewarding stakeholders with tokens in return for securing the network.

As previously reported, Liberstad is one of many prospective smart cities to embrace blockchain worldwide: notably, the United Arab Emirates is actively pursuing the transformation of Dubai into the first blockchain-based smart megapolis by 2020.

In China, a division of e-commerce giant JD.com recently established a Smart City Research Institute to accelerate the development of smart cities with the use of artificial intelligence, big data, and blockchain technologies.

Apple Notes Blockchain Guidelines in Recent SEC Filing

Tech giant Apple has mentioned its work in forming the Blockchain Guidelines of the Responsible Minerals Initiative (RMI) in a filing with the United States Security Exchange Commission (SEC). The document, entitled “Conflict Minerals Report” was published on Feb. 15.

In general, the document pertains to Apple’s business practices and ethics in sourcing minerals for its various consumer electronic devices. Apple states that it is “committed to going beyond the minimum requirements in order to meet and exceed internationally accepted due diligence standards and protect people in its supply chain…”

Last year, Apple came under scrutiny for its plans to source cobalt — a necessary mineral for smartphones — directly from mines in Congo. While Apple is ranked highly among tech companies in terms of human rights abuses in its supply chains, “the bar is low,” according to human rights watchdog Amnesty International.

Per the recent filing, Apple participates in the development of blockchain guidelines for the RMI, which are designed to determine a set of principles, concepts and terms for the deployment of blockchain in mineral supply chain due diligence. The drafting process for the guidelines was initially launched in March 2018.

In addition, the RMI intends to help businesses understand the nature of blockchain technology, its application in the industry, and its potential impact on supply chain actors and local communities.

Established in 2008, Responsible Business Alliance’s Responsible Minerals Initiative is a multi-industry initiative that comprises over 360 companies including Apple, computer hardware manufacturer Acer and American electronics store Best Buy. Members purportedly contribute to the development and improvement of due diligence mechanisms and resources in mineral supply chains.

Companies and public entities around the world have been exploring the use of blockchain technology in their supply chains. Earlier this month, the Food and Drug Administration of the Chinese Chongqing Yuzhong District announced plans to deploy blockchain for strengthening the supervision of food and drug quality assurance.

Last month, IBM partnered with MineHub Technologies to develop blockchain solution to improve supply chain management in the mining and metals industry. The solution targets the inefficiencies of the global market, including excessive paperwork, manual data processing and lack of transparency between supply chain parties.

Report: Global Blockchain in Energy Utilities Market to Grow 60% by 2024

The global blockchain in energy utilities market is expected to grow by 60 percent by 2024, according to a new report from Infoholic Research LLP published on Feb. 15.

Per the report, the global blockchain in energy utilities market was assessed to be $210.4 million in 2018, and is expected to reach $3.4 billion by 2024. Infoholic Research thus predicts the growth at a compound annual growth rate of 59.4 percent during the period from 2018 to 2024.

The report also notes that the key driver of growth in the next five to six years will be sales of distributed energy and peer-to-peer (p2p) electricity. “Due to the increasing automation in energy utilities, organizations are making real-time changes to the infrastructure that will help them to convert into blockchain-powered software and reduce [total cost of operation] TCO,” the report further explains.

To prepare the report, Infoholic Research reportedly analyzed the deployment of blockchain in the energy utilities market on a global scale by components, services, application, and regions. The research firm tracked statistical figures of such regions as North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa, while revenue was mainly generated in North America, Europe, and Asia Pacific.

Blockchain technology has found multiple applications in the energy sector. In January, Spain’s major energy company Iberdrola began using blockchain to track renewable energy. During a pilot program, Iberdrola monitored renewable energy delivered from two wind farms and one power station to bank offices in Basque Country and the city of Cordoba. The test was reportedly a success, and Iberdrola believes that blockchain tech will help issue a guarantee of origin.

That same month, Danish state-owned energy company Energinet announced it would  use IOTA’s Tangle technology in the energy and Internet of Things (IoT) markets. Energinet reportedly looks to create new solutions based on IoT for emerging phenomena, such as green energy and electric vehicles.

Dow Futures, Bitcoin Price Teeter as US Stock Market Digests Trump’s Shutdown Deal

The Dow Jones Industrial Average and broader US stock market teetered on the brink of their previous-day closes heading into the week’s final trading session. Wall Street continued to digest the fallout from Trump’s decision to sign a new spending bill and avoid a second government shutdown – while also declaring a national emergency to siphon funds from other departments to bolster his beloved border wall. Similarly, the bitcoin price traded within a tight window as traders waited with bated breath to see which way the cryptocurrency market would break.

Dow Futures Trade up Ahead of the Opening Bell

As of 9:02 am ET, Dow Jones Industrial Average futures had climbed 94 points or 0.37 percent, implying a jump of 85.61 points at the open. Dow futures implied a flat open for much of the pre-market session but rallied in the hour before the opening bell.

dow jones industrial average futures

Futures tracking the Dow Jones Industrial Average implied a flat open before popping higher.

S&P 500 futures and Nasdaq futures also pointed north, with the two indices implying gains of 9.32 points and 27.58 points, respectively.

On Thursday, historically-weak retail sales data crushed a pre-bell futures rally and threw all three major US stock market indices deep into the red. The Dow fell 103.88 points or 0.41 percent to 24,439.39, while the S&P 500 dipped 7.3 points or 0.27 percent to 2,745.73. The Nasdaq, on the other hand, clawed its way back into neutral territory to close at 7,426.96 with a 0.09 percent gain.

This morning, Wall Street continues to mull the ramifications of a US congressional spending bill that will fund the federal government and avoid a costly second shutdown. Crucially, the White House has indicated that President Donald Trump will sign the bill, even though it only allocates $1.375 billion toward border wall funding, far short of the $5.7 billion he had requested.

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While averting a second shutdown is an unqualified win for the stock market, Trump introduced a degree of uncertainty by indicating that he would also declare a national emergency. The White House says this will allow him to redirect billions of dollars from the Treasury and Defense departments to the border. However, the Trump administration will likely face a pitched legal battle that could extend throughout much of the remainder of his term.

Institutions Heavily Favor Bitcoin

The cryptocurrency market also showed few signs of life heading into the US trading session. In fact, very little has happened at all since Feb. 8 when the bitcoin price made a sudden spike above $3,700.

While bitcoin continues to trade in a tight range, analysts wait for it to make a breakout. The only question is: which way will it move?

bitcoin price

The bitcoin price continues to trade in a tight window below $3,600.

In the meantime, the relative silence in the crypto market gives us a chance to look at some broader industry trends and what they might tell us about the ecosystem’s future landscape.

Writing in daily market commentary, eToro Senior Analyst Mati Greenspan drew attention to an interesting data point from Grayscale’s 2018 report, which the cryptocurrency investment firm published on Thursday.

Specifically, Greenspan noted that the vast majority of Grayscale’s $359.5 million in 2018 inflows piled into Bitcoin rather than the bevy of other cryptocurrencies now available through the firm’s product lineup.

grayscale bitcoin investment trust

Source: Grayscale via Mati Greenspan

Overall, bitcoin retains a 52.7 percent share of the cryptocurrency market cap. However, a staggering 88 percent of all new money entering Grayscale goes to the Bitcoin Investment Trust (OTC:GBTC), which invests directly – and exclusively – in the flagship cryptocurrency.

Given its high investment minimums, Grayscale’s client base is somewhat different than the cryptocurrency market as a whole, which is still dominated by retail buyers. According to the report, 66 percent of all new money came from institutional investors.

Could this be a preview of the direction the cryptocurrency market will take when more institutional investors begin coming on board, or will they end up wading deeper into the altcoin markets as well?

Time will tell, but if Galaxy Digital founder Mike Novogratz is right, we might find out soon.

Featured Image from Shutterstock. Price Charts from TradingView.

Chinese Crypto Miner Predicts That Bitcoin Could Reach $740K

Zhu Fa, co-founder of Poolin, a Chinese-based crypto mining pool, predicted that the Bitcoin (BTC) price could hit 5 million Chinese yuan ($738,000 (USD), crypto news outlet 8BTC reported on Feb.11.

While Zhu noted that “it now feels more like a bear market,” he reportedly predicted that in the next bull run, prices will be 10–20 times higher than previous ones. Zhu also noted that massive prices spikes like the one that resulted in the $20,000 per BTC high in 2017, will not always exist, adding that the next bull run could be the last.  

Predictions from experts in various aspects of the crypto space have ranged from bullish to extremely bearish. During a blockchain event in April 2018, investment tycoon Tim Draper forecasted that by 2022 the price of Bitcoin could reach $250,000.

Earlier this week, Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments, said that the value of most digital tokens “will go to zero.” He added that, “Almost every [initial coin offering] ICO was just an attempt to raise money but there was no use for the underlying token.”

Zhu’s mining pool, Poolin, has 10.45 percent of global network share, according to BTC.com. The current bear market has hit cryptocurrency miners hard. Some mining companies in China have started selling off hardware by the kilogram.   

Earlier today, United Kingdom-based cryptocurrency miner Argo Blockchain announced it was refocusing its business in order to cut costs. Argo is terminating its Mining-as-a-Service (MaaS) operations by April, which purportedly could cut costs by as much as 35 percent.