Robinhood Receives BitLicense to Operate in New York and Binance Launches Crypto-to-crypto OTC Trading Desk
Robinhood announced that it is on its way to New York after its application for a BitLicense was approved. Cryptocurrency exchange Binance has launched a crypto-to-crypto Over-the-counter (OTC) trading desk for institutional investors. Analysts at JP Morgan Chase claim that the price of Bitcoin could nosedive to $1,200. The analysts also said that cryptocurrencies have no value, echoing what their CEO Jamie Dimon has similarly said in the past. Data shows that Bitcoin volatility is on the decline.
Bitcoin has had a tight week that forced it to trade in the $3,500 – $3,650 range. The U.S Securities and Exchange Commission announced on Jan. 23 that CBOE had withdrawn its application for a Bitcoin exchange-traded fund (ETF) supported by Van Eck and SolidX mainly due to the U.S government shutdown impasse.
For now, it seems that the news has not impacted the prices of digital assets.
Bitcoin is trading slightly at $3,606 to mark a 0.75 percent gain in the last 24 hours. Ripple and Ethereum have also registered minor gains of 0.86 percent and 0.3 percent respectively while Bitcoin Cash is down 1.7 percent.
Stellar and Bitcoin SV are both down less than 1 percent. Litecoin and Tron are up 2.94 percent and 1.61 percent respectively while EOS and Tether are up less than 1 percent.
The top 100 represent a mixed board but the majority of them are in the green.
Binance launches crypto-to-crypto Over-the-counter (OTC) trading
The world’s largest cryptocurrency exchange by trading volume Binance announced on Jan. 23 the launch of a crypto-to-crypto Over-the-counter (OTC) trading desk. The trading desk allows the exchange’s clients to trade larger amounts of the many cryptocurrencies listed on the platform. Binance has more than 80 cryptocurrencies listed on its platform. The users’ Binance accounts will be used to settle the transactions.
Binance claims that their crypto OTC trading desk gives Binancians (Binance users) advantages to their trades. Users are able to quickly trade large quantities of digital assets in a single trade. At the same time, users can save time by clearing their trades at one price.
The exchange claims that the trades are private because the order books will not be touched. Users can also enjoy direct settlement into their Binance accounts with their OTC trades as there is no need to go through several wallet addresses.
Crypto OTC is made better with Binance because they “have a broad and diverse client base as an effective distribution platform.”
According to the announcement, two conditions need to be met for users to have to use the OTC trading desk. The OTC trading desk is for Binance Level 2 verified accounts and each trade requires a minimum of 20 BTC.
Bitcoin’s volatility is on the decline in its 10-year history
Bitcoin has often faced criticism from many fronts such as poor user experience that still rocks wallets and its volatility that has given naysayers such as Nouriel Roubini the platform to criticize the popular digital asset. Despite its 10-year history, there are many who believe that Bitcoin will never go mainstream because of volatility.
However, an emerging trend may disappoint them. The history of digital assets is showing a decline in price volatility.
The past events of November last year caused mass hysteria when the price of Bitcoin fell by 43.5 percent in a space of 11 days. This was a severe sudden drop caused mainly by the contentious Bitcoin Cash hard fork.
According to LongHash, price crash peaked at 7.71 percent in 2017 but in 2013, the crash saw a peak of 12.57 percent. Based on this and other data, it is possible that 2019 may be a boring year as little price movement is expected.
There are several times when Bitcoin has proven to be more stable than gold and this suddenly stopped after the November crash.
Robinhood Crypto on its way to New York
Robinhood, initially a free stock market trading app that gatecrashed the crypto sector last year announced on Jan. 24 that it has been granted a virtual currency license better known as BitLicense and a money transmitter license in the U.S state of New York.
The development allows New York residents to invest in cryptocurrencies on the Robinhood platform. However, New Yorkers have to wait for months before the platform is ready. In a tweet, Robinhood said, “Expect us to roll out crypto there over the coming months.”
“Today, Robinhood Crypto received a virtual currency license, also known as the BitLicense, and a money transmitter license in New York. This will allow New Yorkers to invest in cryptocurrencies on the Robinhood platform, and marks another important step towards our mission of democratizing the financial system,” read the announcement.
The Robinhood trading platform allows users to invest in seven cryptocurrencies including Bitcoin and Ether at zero commission fee.
Robinhood reiterated that it is ready to work with regulators to ensure compliance with industry requirements as it introduces new financial products. The platform, which is already active in over 30 states promised to roll out its services to more states in the future.
JP Morgan’s CEO not celebrating Bitcoin’s nosedive
The Bitcoin bubble continues to burst but the CEO of JP Morgan Chase Jamie Dimon is not celebrating at all.
Dimon is one of the first and loudest Wall Street executives to openly speak against cryptocurrencies, calling it a fraud. He warned that investors “who are stupid enough to buy it” would bear the brutality of the bubble.
It seems that his words have come true but he is not amused by it.
Speaking to CNBC in Switzerland at the ongoing World Economic Forum, Dimon said he did not take any satisfaction in the nosedive.
Dimon, just like the majority of key figures who have criticized Bitcoin, is still advocating for blockchain technology. He believes that it is a better replacement for some online databases.
“Blockchain is a real technology — it’s just a database we can all access that’s kept up-to-date,” said Dimon on CNBC’s Squawk Box.
JP Morgan and other tech giants that include Amazon, Facebook, and IBM are exploring or using blockchain technology.
Bitcoin reached a high of $20,000 in late December 2017 but has since failed to stage a comeback and has had a fair share of price swings.
JP Morgan: Cryptocurrency value is unproven
Analysts at one of America’s largest investment bank JP Morgan Chase have claimed that cryptocurrencies are unproven and the technology that underpins them, blockchain will not offer banks anything tangible in the next three to five years, reported Reuters on Jan. 24.
These comments cement what Bitcoin critics have been saying for a long time. JP Morgan said it was skeptical about the value of cryptocurrencies, and added that it only makes sense in a dystopian future where investors have lost faith in gold, fiat currencies such as the dollar, and the global payments system.
“Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging,” read part of its report on blockchain and cryptocurrencies.
The report further claimed that Bitcoin which has been trading in the $3,500 to $3,700 region for a while could fall below $1,200 if the bear market continues.
However, the financial institution struck the same chord with its CEO Jamie Dimon when it expressed optimism about blockchain technology. Dimon has previously stated that “Blockchain is real, it’s technology, but Bitcoin is not the same as a fiat currency.”
Crypto service provider Xapo moves base to Switzerland due to favorable regulatory conditions
While many politicians, billionaires, and financiers have touched down in Switzerland to attend the annual World Economic Forum (WEF) meeting, Bitcoin service provider Xapo is rounding up its operations in Hong Kong in preparation to move to Switzerland due to its favorable regulatory conditions.
The development will see non-United State bitcoin wallet customer services being moved from their current operational base in Hong Kong to Switzerland while traditional cash accounts will be handled by the London office.
The firm is incorporated in Hong Kong but its CEO, Ted Rogers says this status can change anytime. Speaking to Swissinfo in Zurich, Rogers praised Switzerland’s regulatory environment.
“It’s a reality of this industry that you have to be agile and react to regulatory changes all the time. Swiss regulators are smart, interested and sophisticated in dealing with the financial markets,” said Rogers.
Rogers believes that Switzerland is the best place to set up a blockchain or cryptocurrency company.
“Nothing has changed my belief that Switzerland is the right place for a blockchain or crypto project. It’s everything that the US was designed to be, but actually lives up to it,” he said.
Overstock’s tZERO security token trading platform for accredited investors goes live
Overstock’s much-anticipated platform for trading security tokens tZERO officially went live on Jan. 24, said the company in a press release. The new platform allows accredited investors to trade tZERO security tokens amongst themselves “through a digital securities brokerage account at Dinosaur Financial Group, LLC, which will act as the introducing broker-dealer.”
Patrick M. Byrne, the founder, CEO, and executive chairman of tZERO’s parent company Overstock said, “A new efficient and transparent path for capital formation via blockchain is now a reality, but those who have followed our journey know that today’s announcement is just one more step down a path.”
He added that “tZERO is working toward a world where security tokens revolutionize traditional capital markets, and companies achieve trust through cryptographically-protected algorithms rather than through rent-seeking middlemen.”
tZERO raised $134 in a highly publicized security token offering (STO) backed by more than 1,000 investors in August last year.
Elliot Grossman, Senior Vice President at Dinosaur Financial Group said the new platform represents a step forward in improving transactional transparency.
“We are impressed with what tZERO has achieved and we are looking forward to being a part of the blockchain revolution. We see this as a truly evolutionary step toward improving transactional transparency for investors while providing an efficient and secure alternative to over-the-counter trading or a listing on one of the legacy stock exchanges for companies seeking to raise capital,” said Grossman.
Ripple release its 2018 Q4 report
Ripple, the U.S based company behind XRP, the second most valuable digital asset by market cap released its Q4 report for 2018 on Jan. 24.
In Q4 last year, the company programmatically sold XRP worth $88.88 million or 0.16 percent of the total XRP volume traded globally in the same period. A subsidiary of Ripple, XRP II, LLC sold $40.15 million worth of XRP to institutions.
This brings the amount of XRP sold to a total of $129.03 million in Q4 2018. The firm sold $535.56 in XRP in the whole of last year.
Ripple token was listed by more than 30 new exchanges in Q4 last year bringing the total of exchanges listing XRP to over a hundred.
“There were also nine exchanges that listed XRP as a base pair against at least one other digital asset. Binance, the world’s largest digital asset exchange, listed XRP as a base against both TRON (TRX) and Zcoin (XZC),” said the report.
The report further highlighted the media’s attention shifted to stablecoins – digital assets pegged to real-world assets such as fiat currencies. The report warned that while stablecoins are an interesting technology and worth exploring, the industry needs to be careful when dealing with coins backed by a single entity.
“Stablecoins can introduce counterparty risk and trust back into the system and have the potential to undermine the entire thesis behind blockchains and digital assets,” added the report.
The market continued to mature in Q4 last year as enforcement actions against questionable crypto projects increased. The report reckons that the increased scrutiny will weed out experiments and scams. This will open the doors for real projects to thrive.