CryptoAM: Blockchain Bonds, Unhackable Wallets, and Wyring Stable Coins

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Thrashed. Pummeled. Battered. Crushed. Flogged. Walloped. Cudgeled. All accurate descriptions for the state of the market this morning.

3 things you need to know:

One: The Commonwealth Bank of Australia is getting ready to issue the first blockchain bond. The Kangaroo bond will be called “bond-i”. The bond will be issued on a permissioned Ethereum based blockchain operated by the World Bank and CBA.

  • “...the bond will be the first in the world to be created, allocated, transferred, and managed with blockchain technology.”

  • Testing: This will be a great case study for financial institutions to see if blockchain can live up to the hype. If this issuance results in significant cost savings, I would expect the number of securities issued on a blockchain to increase rapidly..and soon.

  • Adoption is coming: For those who don’t know, the World Bank has an entire team dedicated to figuring out blockchain tech. Both the World Bank and IMF are beginning to recognize the importance of blockchain and cryptocurrencies, with both issuing a stream of positive research reports over the past year.

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Two: Unhackable Bitfi Wallet Hacked Again. The hardware wallet that John McAfee has touted as “unhackable” has been compromised again. This time someone was able to send the private key to a third party program and send signed transactions. This follows an incident where 15-year old Saleem Rashid was able to install Doom on the device.

  • PWND: At Blackhat USA, one of the largest hacking conferences, Bitfi won a “Pwnie” award for “Lamest Vendor Response” after how they handled the hacking incidents.

  • McAfee Effect: It seems as if everything McAfee is involved with has some scummy or scammy aspect to it. If you haven’t been living under a rock for the last year, you would be wise to sidestep any project this dude gets involved with.

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Three: MakerDAO partners with Wyre to offer easy fiat on ramp for purchasing DAI. DAI, which is the first stable coin to be created on the Ethereum network, will now be able to be purchased by businesses using fiat in over thirty countries. This service is being offered through Wyre, one of the largest blockchain money transfer services. This will allow for fast and easy transfer of funds across borders.

  • Global reach: Stable coins are often thought of as ways of hedging risk in volatile markets or offering easier entrances and exits into positions. Another great use for stable coins is for fast transfer of funds by businesses. Especially for cross-border payments, stable coins offer a great alternative to traditional methods of sending international payments. Stablecoins have traditionally lacked an easy fiat on/off ramp, so building solid infrastructure for ease of use could lead to massive adoption — very quickly.

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Also in the news:

Want to stay up to date on news even after CryptoAM? Check out Cryptocurrencynewsfeed, a curated (and incredibly fast) crypto news source that has become invaluable for helping us make event-based trades.*

Market Outlook:

Quick Take

BTC continues to break down, as it recently tested a key support at 5880. Sentiment in the market right now is negative, and we are recording lower local lows

BTC bounced off of 5880 on weak volume and failed to gain ground beyond the mid 6100 area. It’s more probable than not that we will to retest the support at 5880, and any break down beyond that level is likely to lead a fall to the 5600 area as panic sellers flood the market.

The bull case is a reversal to the 6.3k resistance after some sideways trading, which seems more unlikely than a continued breakdown. I’ve reduced my exposure to the market and am patiently waiting for decisive action before making more trades.

Daily Chart

High volume dump through previous resistance. Sticking to my call of 5.8k again soon.

Fear & Greed

A lot more long positions have opened up following tumbling prices. Speculation is very low as people pull money out of alts and into BTC. Stay away from alts!

Here’s a reminder of what these criteria mean

Around the corner:

What I’m reading today:

The Mystery Behind Tether, the Crypto World’s Digital Dollar

Another day, another story about Tether. There’s always a nice amount of FUD surrounding Tether, and the Wall Street Journal has decided to jump on the bandwagon of Tether questioning.

“A fast-growing digital currency that claims to be backed by U.S. dollars has become a cornerstone of the volatile cryptocurrency market. The problem: There isn’t hard evidence the cash supporting it exists.”


  • Tether is the most popular stable coin, pegged to the U.S. dollar through physical dollar reserves in a bank account – one dollar for every unit of tether. The only problem is, that account has never been audited, so no one truly knows whether the underlying fiat reserves that Tether claims to exist on a 1:1 ratio are legitimate

  • Friedman LLP was hired to perform an audit last year, but they were released before they produced a final report. Rather than produce an audit, the company hired a law firm to issue a report saying that it ‘believed’ that Tether had full dollar backing, but to be clear this was not an official audit…

  • Tether has $3bn in daily transaction volume, the second most liquid token behind bitcoin, and supports an ecosystem of businesses and traders who use tether as a substitute for a traditional bank or to park their assets in a risk-off environment.

  • If confidence in Tether faltered, all of these market participants relying on the stable coin would be totally screwed.

Hot take: Bitfinex is tied to Tether — if one fails the other will too.

There is zero incentive for Bitfinex to allow Tether to go under, and they have more than enough capital to back up the $2B marketcap of Tether. The next time someone tries to spook you with Tether, just keep walking. Another day, another mainstream article FUDing crypto.

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