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This post is a translation of the weekly cryptocurrency analysis by Crypto Lab, a wholly owned subsidiary of Monex Group (Tokyo, Japan). Monex is the parent of TradeStation Group.
BTC rallied at the beginning of the week and reached $4,016. Under some scenarios, it may have downside risk on profit-taking.
Cboe announced last week it will temporarily stop offering BTC futures trading. However, the impact on prices may be limited because its volumes are smaller than CME’s contract.
The third edition of Binance’s (BNB) token sale was also held. BNB didn’t rise sharply and there was no impact on the cryptocurrency market price as a whole.
The reason for BCH’s rally is unclear, but it apparently results from speculative trading.
This week, Coincheck announced the grant of BitcoinSV (BSV), which arose from BCH’s hard fork last November. The transaction was denominated in Japanese yen.
Is the buying opportunity above $4,000?
BTC has pushed higher, led by alt-coin gains, since February. Next week, Binance will be followed by Huobi’s first token sale. Attention will focus the price of the Huobi Token (HT), which has risen significantly since this week’s announcement. Depending on the situation, there is also a possibility that BTC will begin a more steady appreciation. Also noteworthy are price movements around the last trading day of CME futures. At present, shorts are dominant in CME, and it is possible that covering of bearish positions will increase buying pressure.
If BTC can break $4,000, the next level to watch is roughly $4,180.
Nikkei reported on March 15 that the Japanese cabinet decided to amend the Financial Settlement Law and the Financial Instruments and Exchange Law. It will incorporate measures to strengthen virtual-currency regulations.
This revised proposal follows recommendations from a study group on virtual-currency exchanges held by the Financial Services Agency last year. Key points included the application of the MFI, the application of the ICO with strong investment, and the renaming from “virtual currency” to “cryptographic assets”.
After the scheduled implementation date of April 2020, even if a vendor was already registered as an exchange business, it will have to register under the Gold and Commercial Law to continue margin trading.
In addition, the revised proposal set a deadline for registration examination under the Gold and Commercial Law. Companies that can not formally obtain registration approval 18 months after enforcement will be unable to provide services.
The revision effectively provides legal clarification of Japan’s virtual-currency regulation. While this will force industry players to respond, it will also probably draw more established firms into the industry. We’ll probably see more companies entering and exiting the market by the deadline for registration examination in September 2021.
On March 20, Lightning Labs released the alpha version of “Lightning Loop” on GitHub. The company is developing technology for LightningNetwork (LN) to improve BTC’s scalability.
In the current LN, the limit capacity of each channel depends on the deposit amount when the channel is opened. Users must reopen the channel to conduct transactions exceeding the capacity. The new Lightning Loop program solves the problem.
The alpha version implements a Loop Out function, letting users increase reception capacity by offloading LN funds while the channel is open. As a next step, Lightning Labs plans to release the opposite, a Loop In feature. That will let the LN be refilled while keeping the channel open.
With the development of Lightning Loop, users will no longer have to open and close channels in line with their trading capacity, and significant improvements in network efficiency can be expected. That will lead to the practical application of LN.
On March 20, China’s leading virtual-currency exchange hub Huobi Global announced that it will officially launch its funding platform “Huobi Prime” on March 26.
Huobi Prime will support projects according to the its SMART-Chain 2.0 evaluation model. Although the details of SMART-Chain 2.0 are unclear, it’s reportedly an evaluation algorithm built after hundreds of project surveys by the same group. Ultimately, the goal is to help promote the industry’s ecosystem.
The first currency listed on the Huobi Prime is TOP Network’s TOP token. It’s designed to reduce costs and promote the interface of communication applications such as messages, calls, streaming, VPN and storage. According to press reports, token sales are divided into three stages, each with a fixed price limit to reduce volatility. Users can purchase TOPs with the Huobi Token (HT).
Just as Binance’s token sales have boomed recently, large exchange-led token sales are highly credit-secured and easy for users to buy. Will the first Huobi Prime scheduled for next week be successful?
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