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

• Bitcoin (BTC) dropped on the week amid ongoing criticism of Facebook’s (FB) Libra Project.
• The U.S House of Representatives held a hearing on Libra.
• BTC dropped below though $8,000 before rebounding. Its range remains between roughly $7,500 and $8,800.

Market Trends this Week

The recent downtrend in BTC intensified as negative publicity swirled around the Libra project. Relative strength in Bitcoin Cash (BCH) offered some temporary relief to BTC, but eventually prices succumbed to the negativity. Much of the drop seemed to result from U.S. lawmakers criticizing Libra in Congressional hearings. BTC was down about 5 percent on the week before rebounding into positive territory this morning.

There were also concerns about Alphabet’s (GOOGL) claims to “quantum supremacy.” GOOGL said its new “Sycamore” processor completed a calculation in 200 seconds that would have taken the world’s most advanced supercomputer 10,000 years. That creates longer-term worries about computers cracking the blockchain.

This Week’s Topics

• Ford Motor (F) launches a blockchain-powered test for energy-efficient vehicles. (10/18)
• Switzerland’s largest bank, UBS (UBS), launches We.Trade blockchain for trade finance. (10/18)
• Bermuda now accepts virtual currency for paying taxes. (10/18)
• Bank of Japan (BOJ) announces that it has no plans to create a digital currency. (10/18)
• BTC miners discuss whether the next half life will start another bull market as it has in the past. (10/24)
• Nayuta Wallet for Android and iOS released. (10/19)
• Members of the G20 point out serious risks while talking about Libra for the first time. (10/19)
• Peter Thiel and others invest in virtual-currency mining powered by wind. (10/19)
• HTC launches a cheaper version of its blockchain-friendly smartphone. (10/20)
• International Business Machines (IBM) looks to leverage food safety with a new blockchain partnership. (10/20)
• FB executives say that the company plans to roll out stablecoins rather than synthetic currency. (10/20)
• Fidelity seeks to broaden virtual-currency services. (10/21)
• Bank of England (BOE) Deputy Governor Dave Ramsden says the central bank should put thought into digital currency and innovation. (10/21)
• In a recent report, G7 countries and the Bank for International Settlements (BIS) said cryptocurrencies have “so far failed to provide a reliable and attractive means of payment or store of value.” (10/21)
• French Finance Minister Bruno Le Maire voiced concern about Libra, saying that it infringes on state sovereignty. (10/21)
• Including BTC and altcoins, 3,000 types of virtual coins have now been issued. (10/21)
• After speaking to lawmakers, FB CEO Mark Zuckerberg says he will support Libra postponement until resolution of their concerns. (10/22)
• Bitcoin.com has bought a Japanese blockchain-development company (10/22)
• FATF, a global intergovernmental organization, says stablecoins create risk of money laundering and terrorist financing. (10/23)
• Japan’s first game using blockchain technology is released. (10/23)
• Cryptolinks.com’s new functionality automatically receives data from several exchanges and wallets in real time to monitor a portfolio of crypto assets. (10/23)
• The head FB’s Libra project warns that without a digital-currency system, the U.S. will struggle to implement sanctions on the rest of the world. (10/23)
• U.S. Representative Sylvia Garcia (D-TX) submits a bill in Congress to treat stablecoins as securities. (10/22)
• The U.S. Treasury Department says it will observe the Libra project. (10/24)
• FB’s Zuckerberg says the social-media giant would leave the Libra Association if other members move forward without regulatory approval. (10/24)
• BTC hits a five-month low amid Congressional hearings. (10/24)

Next Week’s Market Forecast

Following this week’s decline, investors remained wary of more negative information about Libra and potential regulatory risk. Investors have recently favored equities as earnings season begins and U.S. non-farm payrolls approach on November 1. The cryptocurrency market currently remains in bear territory.

With key support tested, the possibility of further downside cannot be ignored. On the other hand, new institutions continue to enter the market, lending some credence to the bull thesis.

Investors should watch $8,800 as potential resistance on BTC and $7,500 as support.

Next Week’s Topics

• 10/28-29: Litecoin Summit in Las Vegas
• 10/28-11/3: SF Blockchain Week 2019 in San Francisco
• 10/29-31: World Crypto & Blockchain Conference 2019 in Las Vegas