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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. Due to the difference in time zone, we’re able to share Friday’s report today.
BTC fell rapidly this week and found a solid bottom. However few buyers stepped in and market prices remained heavy. There were concerns about North Korea possibly stealing virtual currency through cyber attacks. Attention also focused on Invesco’s block chain ETF launching on the London Stock Exchange. Still these had little impact on BTC.
The real action this week was rallies in altcoins like Stellar (XLM) and Lisk (LSK), but that hasn’t been enough to lift the broader market.
Will BTC’s range-bound drift continue? Although prices haven’t changed much since the start of 2019, volumes have almost doubled. Neither bulls nor bears have been able to take control, and the long-short ratio is balanced. Given the neutral backdrop, it won’t be easy to see movement unless large holders increase their trading or something major occurs globally.
We continue to watch $3,950 as the top of the current range and $3,675 as the bottom.
On March 8, the Japan Virtual Currency Business Association (JCBA) announced recommendations on new ICO regulation.
One topic is the arrangement of issues for expansion of virtual currency that can be handled domestically. It also looks to clarify regulatory targets of the Financial Instruments and Exchange Law and the Fund Settlement Act, along with policies on security and utility tokens.
The document looks into the handling of stable coins, another recent subject of discussion. It stated they should be treated the same as other virtual currencies.
JCBA wants a flexible framework based on appropriate regulations in order to spread initial coin offerings (ICO) as a means of financing. So, the recommendations called for the partial exclusion of regulations and the need for mitigation measures.
Based on the contents of the “Study Group Report on Virtual Currency Exchange Business etc.” announced recently, the FSA will establish its policy on virtual currency regulation. Are palliative measures in sight, such as those claimed by the JCBA?
On March 9, the anonymous currency Monero (XMR) implemented the CNv4 hard fork.
The update first improved the proof-of-work-based hashing algorithm Cryptonight R and made it more robust for application-specific integrated circuits. As a result, ASIC miners are eliminated, and there is a case where the hash rate may drop significantly after hard forking.
Measures were also taken against the “big bang” attack, which increases the block size capacity. It uses a large number of transactions to overload the network. Developers addressed this problem with changes to the block-size algorithm.
Furthermore, the addition of a function to automatically add a dummy transaction ID to a block makes it difficult to identify the actual transaction from the outside. The anonymity of the transaction has been improved, as well.
In addition, a partial change of the monetary format in the anonymous transaction RingCT was performed.
With the hard fork, miners are being asked to update their software. It remains to be seen how far the reduced hash rate will recover.
On March 11, hardware-wallet manufacturer Ledger claimed on its blog of a potential vulnerability in rival Trezor’s products. The post said products can be forged, the side-channel attack can guess the PIN code and data in flash memory can be physically hacked.
The next day, Trezor explicitly refuted the claim. It said no such attacks can be launched remotely without direct theft, and are of little importance to hardware-wallet users. In the blog, according to Binance’s research on virtual currency threats at the end of last year, 66% of respondents consider remote attacks a major problem. Meanwhile, only 6 percent encounter physical attacks.
Trezor added a word of appreciation to Ledger and expressed a desire to work together to make safe and user-friendly products. Both are major manufacturers of hardware wallets for cryptocurrencies.
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