Market Insights

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. 

Summary

• Blockchain assets rallied in the last week as trade disputes between the U.S. and China hammered risk assets like stocks and oil. That pushed Bitcoin (BTC) above $12,000 and generated a 14 percent weekly gain.
• Litecoin (LTC) had its second halving, producing a short-lived price spike.
• The buying trend is expected to continue next week even if BTC’s gains slow. The next main resistance level is around $12,250 and support is $11,000.

Market Trends This Week

A flight to safety in equity markets drew capital to cryptocurrencies.

The U.S. Federal Reserve cut interest rates last week, making it the latest of several central banks around the world to relax monetary policy. Worries about global growth added to the risk-off tone in stocks and energy. BTC, along with government bonds and gold, benefited from those fears. At one moment that pushed BTC’s above $12,000.

This Week’s Topics

• BlockBase, DiGITAL ARTISAN, and MiraCreative issue secondary creation rights for 3D data using blockchain. (8/2)
• Cryptocurrency asset manager Grayscale outsources asset custody to Coinbase Custody. (8/2)
• LTC has its second halving, or half life. That’s when mining profitability is reduced to maintain scarcity. LTC’s previous halving was four years ago. (8/5)
• BITPoint announces a policy to partially resume service after a hacking attack last month. (8/5)
• Facebook (FB) hires Washington lobbyist Susan Zook to promote Project Libra. (8/5)
• International Business Machines (IBM) announces the blockchain network “Trust Your Supplier” to improve supply-chain management. (8/5)
• BTC regains $11,000 for the first time since the first half of July. (8/5)
• Coindesk reports that Mastercard (MA) is seeking blockchain engineers, apparently to develop crypto-wallet products. (8/5)
• Reuters, citing confidential United Nations documents, reported that North Korea has stolen about $2 billion from banks and cryptocurrency exchanges. Proceeds were used to fund its weapons program. (8/5)
• Coinbase considers listing eight more cryptocurrencies including Algorand (ALGO) and Cosmos (ATOM). (8/5)
• HashPort Accelerator announces a strategic partnership with IOS Foundation, Enjin and Tezos. (8/7)
• South Korea’s Financial Intelligence Unit reportedly plans to regulate crypto-trading platforms directly. (8/7)
• NEO and Techfund, both based in Japan, launch a partnership to increase blockchain-based business sales. (8/8)
• AccelMark launches an open beta test of its “Contract Servant” gaming card. (8/8)

Next Week’s Market Forecast

While the pace of gains is slowing, BTC’s seems likely to continue its upward trajectory.

Several reasons explain why investors are starting to view cryptocurrencies as safe havens. One is the ongoing development of the industry as more established financial institutions join the market. Firms are also bouncing back more quickly from hacking attacks, as demonstrated by BITPoint’s recovery plan.

Government officials have reduced criticism of FB’s Project Libra. That quieter backdrop gave the bears fewer reasons to unload cyptos.

Still, the market will probably be affected by global conditions. Further upside in equities could potentially diminish interest in assets like BTC for the time being.

Next Week’s Topics

• 8/12-14: Futurist Conference in Toronto