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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 kept rallying this week, at one point climbing more than 30 percent to $8,388. Altcoins like ETH and BCH also came to life.
Equities fell again this week as trade frictions between Beijing and Washington continued. This contrasts with the gains in virtual currencies, reflecting how investors have gained interest in the crypto space.
Capital flow into the market grew rapidly, which is evident from BitMEX’s daily volume and the record activity in CME’s futures contracts. BTC volume according to CoinMarketCap spiked as well. The buying came amid the Consensus 2019 conference and other Blockchain Week events in New York.
We also saw money shifting from BTC to altcoins. ETH and BCH led the gains, rallying more than 25 percent each. XEM in particular benefited, ripping more than 50 percent after the distributed ledger published details of its version 2.0 upgrade, also known as Catapult.
Will BTC continue its uptrend as longer-term buyers vie with short-term profit takers?
There has been talk that less money will flowing into crypto markets now that the S&P 500 has stabilized. However Coinbase executives at the Consensus conference said they expect more institutional investors to keep putting money to work. The question is whether those longer-term buyers will offset short-term profit takers following the past month’s rally. This could result in more volatility. We could also see activity shift from BTC to altcoins.
On May 14, the U.S. virtual-currency exchange Coinbase announced availability of XRP pairs for New York residents. The company had begun accepting new XRP transactions in February, but restricted residents of New York and the U.K. because of their tighter regulatory standards.
New York is considered the most regulated state for virtual currency in the U.S. Albany’s Department of Financial Services (DFS) requires so-called “bit licenses” for companies transacting virtual currencies in the state. Firms obtaining a license also need to undergo regular inspections.
That, combined with the ongoing XRP litigation, has made exchanges nervous about handling the token. The fact Coinbase is proceeding despite those headwinds could shift sentiment in favor of XRP. After all, New York is at the center of the global economy and financial markets.
On May 10, the NEM Foundation announced plans to work with Hatio Innovations Private Ltd. as the first partner of the NEM SP (Service Provider) Program. The project name is Catapult Mobile Wallet and the owner is NEM Foundation. It aims to develop an easy-to-use, feature-rich wallet that is essential for implementing the improvements of NEM resulting from the Catapult upgrade.
Hatio is owned by BillDesk, a leading payment aggregator in India. Business contents include solution proposal for blockchain technology, trading of digital assets, B2B wallet and customer service. In this project, it was chosen from 12 candidates.
NEM’s catapult was originally scheduled to launch last year. But that’s been delayed because of unclear development progress. NEM reorganized this year and issued a road map for Catapult, including a development system for upgrade implementation. Under such circumstances, in addition to this announcement, updates of “namespace” and “mosaic function” in catapult are announced on May 15. Let’s keep an eye on how development progresses into the third quarter of this year.
Christchurch, New Zealand-based virtual-currency exchange Cryptopia announced on May 15 a halt to trading and the start of bankruptcy proceedings. In Cryptopia, trading was no longer possible several hours before it announced the start of the bankruptcy proceedings.
“Despite the efforts of management to reduce cost and return the business to profitability, it was decided the appointment of liquidators was in the best interests of customers, staff and other stakeholders,” the firm said in a statement. The investigation of stolen assets is expected to take several months, and user anxiety is likely to continue for a while.
Cryptopia stopped trading in mid-January after a $16 million hack. There were some concerns about the situation after a large amount of money was repatriated to an unknown wallet. Was it a so-called exit scam?
Such exchange troubles are frequent, including famous examples like Mt.Gox and Coincheck. At that time, an overheated market cooled down following the incident. This year is different, with BTC continuing to rise amid the Cryptotopia and Binance hacks. One reason is that only a small amount of damage was done. But credit should also be given to improved measures implemented against hacking.
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