The Stock Market on a High as Trade Tensions Thaw and John McAfee Suggests the End of the Crypto Bear Market
The U.S. equity markets are on a roar by several measures. The markets’ closing on Feb. 22 marked the best start to a year since 1987 for the Industrial Average and the S&P 500 index. The Dow has enjoyed gains in eight consecutive weeks, something last seen in 1964 when it clocked 11 consecutive weekly gains. The Nasdaq Composite index has gained more than 13 percent in the last 36 trading days, a feat last reached in 2012. Despite these impressive records, investors aren’t exactly impressed with the ascension.
“The risky asset rebound does not necessarily mean investors are less concerned about the downside, and evidence abounds of the level of concern,” said Bank of America Merrill Lynch analysts in a research report dated Feb. 22.
Wall Street off to a good start (for the week) as trade tensions thaw
Wall Street is off to a good weekly start mostly due to thawing trade tension between two of the biggest economies in the world – the U.S. and China. The Dow is up 175 points or 0.7 percent, the S&P 500 climbed 0.6 percent and the Nasdaq surged 0.9 percent. The latest developments are mainly due to America’s president Donald Trump’s decision to backtrack on increasing tariffs on Chinese goods. Investors are obviously relieved that the two countries have made enough progress in their talks to avoid tariff increases on March. 1. China’s Shanghai Composite also responded well to the good news as it surged 5.6 percent, its biggest rally in a single day since July 2015. Kit Juckes, macro strategist at Societe Generale informed clients that the trade progress is the kind of news the market wants to hear.
“Was the postponement a big surprise? Not really, but it’s news the market wants to hear,” wrote Juckes.
The start of a bull run is here, says John McAfee
John McAfee is one of the most (if not the only) eccentric figures in the crypto space. He is known for doing the most absurd of things but his intelligence cannot be ignored either. McAfee believes that the crypto winter may be slowly coming to an end despite weekend reversal of gains made in the past week. He tweeted that the next bull run will not come on a straight line but will swing up and down on its way to the top.
“When a Bull Run starts, it doesn’t just go in a straight line to the moon. It sputters and spurts – like starting an engine that hasn’t been run for a while. We’re seeing this now. Ignore daily fluctuations. Watch the week by week trends. It’s here,” tweeted McAfee.
Weekend bloodbath sheds $11 billion from the crypto market
It was a red day (Sunday) for the crypto industry after $11 billion was wiped away from the market in a matter of minutes during the weekend. The runup to the plunge came at the back of an impressive short-term rally last week that saw the price of Bitcoin surge from around $3,600 to over $4,100. On Feb. 24, the entire market lost more than approximately $11 billion in minutes. The market cap peaked at $143 million on the same day but is now down to $128 billion. At the time of writing, Bitcoin and the majority of altcoins are in the red. Bitcoin has lost more than 8 percent of its value and is now trading at $3,824. Ethereum, Ripple, EOS, Litecoin, Bitcoin Cash, and Stellar are digital assets in the top 10 list that have declined 10 percent or more. More cryptos are down by double-digit figures as the market surrenders the gains of the previous week. Some analysts argue that Bitcoin’s failure to break the $4,200 mark may have led altcoins to retrace. In an interview with CCN, DonAlt, a technical analyst said, “I’d argue the main reason why this happened was due to the entire crypto sphere getting overly excited into technical (Weekly & daily) resistance combined with the fact that there’ll probably be a lot of ‘sell the news’ coming the closer we get to the ETH fork.”
Liechtenstein’s Frick Bank launches crypto trading platform for institutions
Liechtenstein-based Bank Frick announced on Feb. 20 that it is launching a new crypto trading platform geared for institutional investors.
“Bank Frick is continuing to build on its pioneering role in the area of blockchain banking by establishing The DLT Markets AG (DLT Markets),” reads the announcement.
The new subsidiary of the bank will give institutions access to multi-exchange trading digital assets. DLT Markets is developing a globally-positioned and unique platform that marries the regulatory security of mainstream securities business with the benefits of digital assets. This allows investors to trade digital tokens in a regulated environment.
“We are creating a unique market offering for institutional investors in the area of the new digital token asset class. With our fully regulated platform, we are driving professionalism with regard to the trading of digital tokens and cryptocurrencies,” said DLT Markets CEO Roger Wurzel, who previously served in other roles at Bank Frick and spent more than 20 years at Deutsche Bank AG dealing with equities and derivative trading.
This is not the first the bank has been involved in the crypto space. The family-run bank recently launched Distributed Ventures AG, a subsidiary dealing with promoting and giving financial assistance to fintech and blockchain startups.
Cryptocurrency exchange Coinbin files for bankruptcy due to employee embezzlement
Another cryptocurrency exchange, another hullabaloo over funds and employee. South Korean crypto exchange Coinbin has filed for bankruptcy and now owes users almost $26 million, reported Business Korea. Coinbin CEO Park Chan-kyu confirmed the bankruptcy to local media, stating that, “We are preparing to file for bankruptcy due to a rise in debt following an employee’s embezzlement.” The exchange has halted digital currency and cash withdrawals from the platform. Settlements in cash and cryptocurrency will follow bankruptcy procedures. Coinbin took charge of Youbit exchange after it was hacked in December last year, lost 4,000 Bitcoins, and declared bankruptcy. Park said that the former CEO of Youbit, identified as Lee, who was now serving in management in charge of digital assets at Coinbin, embezzled company funds. Lee claims to have appropriated private keys of Bitcoin wallets and lost keys for a wallet with 100 ETH. However, Park refutes that it was a mistake and says it was an intentional act because Lee is an expert in cryptocurrencies. The latest bankruptcy comes at a time when the industry is still trying to come to terms with Canada’s QuadrigaCX shutdown.
U.S. Government returns 27 BTC to Bitfinex exchange
Bitfinex announced on Feb. 25 that 27.66270285 Bitcoins unlawfully taken from the cryptocurrency exchange in a security breach in August 2016 have been returned by the U.S. government. The exchange has collaborated with international law enforcement agencies in an effort to help with investigations. Bitfinex was informed in November last year that the U.S. government had received Bitcoins believed to be proceeds from the 2016 security breach. The 27 BTC received by the exchange will be converted to USD and used to pay back affected token holders.
“Over two years following the hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government. It gives us great pleasure to be able to reimburse our traders that were loyal to us and believed in us at a very difficult time,” said Bitfinex chief financial officer Giancarlo Devasini.
Not all affected token holders will be compensated as only a fraction of what was hacked has ben returned. In total, 120,000 BTC were stolen in the hack.
Cryptopia exchange not ready to resume services until the balances are secure
New Zealand hacked cryptocurrency exchange Cryptopia is not ready to resume trading until it has fully identified the losses and secures the remaining balance. This is at least according to a message sent on Discord channel by the exchange’s employee on Feb. 24.
“While the Police statement (sic) that they are no longer constraining our return to operations and trading, it would be extremely reckless for us to do this until we can fully identify the losses and ensure that the balance is absolutely secure,” reads the statement on Discord.
The exchange was initially hacked on Jan. 15 and the security breach went unnoticed for two weeks. The authorities who are investigating the matter and tracking down the stolen digital assets have allowed the exchange to renew its activities.
Tron’s February hard fork will add institutional-grade features
Blockchain development platform Tron will hard fork at the end of this month. The upgrades to the network will feature a host of features that will make Tron more competitive, announced Tron CEO Justin Sun on Twitter. Tron, which has positioned itself as a direct competitor of Ethereum for launching token, is making great strides to appeal to institutions.
“TRON will launch 3.5 hard fork upgrade on 2/28. New Features: 1. multi-sig and acct [mng], institution ready 2. Dynamic energy adjustment to real-time network performance 3. 50% up performance & res usage 4. Better VM safety, events server for Dapps. Go,” tweeted Tron.
The blockchain protocol has gone on an expansion mission and acquired BitTorrent last year. However, Tron and Sun have been criticized for publicly condemning Ethereum. Ethereum’s highly anticipated Constantinople hard fork upgrade is expected to take place this month.
Unrepented Warren Buffett says Bitcoin is delusional and appeals to charlatans
Warren Buffett strikes again. The billionaire investor and CEO of Berkshire Hathaway attacked Bitcoin again when he appeared on CNBC’s “Squawk Box” on Feb. 25. He claimed that Bitcoin has not unique value and is nothing more than a delusion. He expressed his sympathy to investors who bought the digital currency with the hope that “it would change their lives.” Bitcoin has lost a lion’s share of its value ever since it reached nearly $20,000 in December 2017. While others may have lost as a result of the ongoing bear market, those who bought digital assets before the bear run are still smiling all the way to the bank (or crypto exchanges). Buffett claims that the digital asset attracts charlatans.
“If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street there’s huge money,” explained the investor who comes from old money.
Buffett pointed out in the interview that blockchain, the technology that underpins cryptocurrencies has potential. Buffett still maintains his long-time skepticism of Bitcoin. In May last year, the 88-year old investor with a net worth of almost $85 billion called Bitcoin “rat poison squared.” Buffett, who frequently compares Bitcoin to tulips is one of the many notable business leaders, fund managers, and economists who don’t see value in digital assets.
Huobi Australia shuts down operations after 8 months
The bear market has yet again claimed another victim in the form of Huobi Australia. The cryptocurrency exchange announced on Feb. 25 on social media that it is shutting down its operations due to poor market conditions. The Australian branch will move all the operations to Huobi Global headquarters.
“Please be informed that due to poor market conditions and associated recent staff redundancies here at Huobi Australia, all operations, including the management of our platform, social media channels, and customer support will be managed by our team at Huobi Global headquarters starting 26th February 2019,” read the company’s statement.
The statement further added that the firm will not be exploring adding a fiat-on-ramp but will stick to its current coin-to-coin format. Huobi’s Australian office was established eight months ago.
Fetch.AI token sale raises more than $6 million in 10 seconds
Binance Launchpad’s second token sale, Fetch.AI (FET) has proven that investor appetite for utility tokens is still high. Fetch.AI sold more than 69 million tokens in a matter of seconds. Binance CEO Changpeng Zhao (CZ) tweeted that the token sale was over in 10 seconds and took 10 minutes to process the orders.
“It was over in about 10 seconds. The queue was totally packed within seconds. The processing is just draining the queue slowly. Congrats to Fetch.AI” tweeted CZ.
CZ elaborated that 24,000 people pre-signed to participate, 19,860 people submitted bids, and only 2,758 people got a piece. The price of each individual token was approximately $0.08 and the purchases of the tokens were conducted using Binance coin (BNB) only. Approximately 11 percent of the total token supply was sold during the sold-out ICO. In total, more than $6 million was raised during the token sale. It seems that Binance Launchpad has breathed new life in the ICO market. Last month, BitTorrent’s ICO raised about $7 million in its sold-out ICO on the Binance Launchpad. Binance plans to use the launchpad to hold at least one token sale per month. It remains to be seen if the euphoria continues.