CryptoAM: Clear Crypto, Filipino Regulations, and Bank Difficulties

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Happy Thursday people, we’re coming on the weekend. Have any fun plans? If not feel free to spam my twitter feed.


3 things you need to know:

One: SBI invests in Clear Markets. Japanese financial services giant, SBI, acquired a 12% stake in the US digital markets architect, Clear Markets, in an attempt to launch a crypto derivatives trading platform aimed at attracting institutional investors.

  • Institutions on the (h)edge: The establishment of a derivatives trading platform would provide institutional investors with the ability to hedge their spot crypto holdings. Recently, institutions have showed strong interest in entering the crypto markets, but many have said that the lack of derivatives is a big reason they haven’t made investments yet. Hopefully, the platform will bring more big fish to the pond and create plenty of additional liquidity.

  • SBI is the real deal: The firm has led investments in other crypto exchange platforms, such as bitFlyer and Kraken, and has plenty of experience in this space. They have the competencies to execute their plans, but we will have to wait and see if everything will fall into place…

  • Read more…

Two: The Philippines is close to introducing new regulations. Securities mania - the draft rules introduced by the country’s securities regulatory agency stated that all tokens issued in ICOs are securities unless they can prove otherwise.

  • So much for utility: This means that even true utilities tokens will be automatically classified as securities until proven otherwise. This isn’t as bad as it seems; the regulatory agency is willing to allow non-security tokens to be issued, as long as there is a strong and reasonable argument in support. This seems like a play to protect unsophisticated investors from being burned, not an attempt to stifle innovation and growth, which is encouraging coming from a historically strict country when it comes to regulation.

  • One of many: Many other countries across the world are also exploring cryptocurrency regulation in an attempt to create frameworks and guidelines for companies to issue tokens in a compliant way. Usually, the smaller countries tend towards friendlier regulation in an attempt to capture market share, and the larger more established countries are slower to move. Since crypto has no borders we’ve been seeing a lot of pressure being put on the slow movers, as companies move around countries with ease.

  • Read more…

Three: The crypto bank freeze continues. After failing to renew a banking contract, Bithumb will no longer be issuing new virtual accounts on its exchange platform. Bithumb is a big player in the South Korean digital asset market, holding 33% of the domestic market share. Bithumb’s temporary halt follows South Korea’s recent ban on anonymous trading through anonymous virtual accounts in January 2018.

  • Money Quote: “We have decided not to renew the contract because Bithumb still has problems in protecting consumers and information and preventing money laundering.” - Nonghyup Bank

  • Banks & Crypto: This is a just another occurrence of the common “bank stops serving crypto company”. Starting with Wells Fargo & Bitfinex last year, there has been a cascade of banks pulling out of the crypto businesses. Traditional institutions find cryptocurrency and blockchain companies too risky to work with, causing a huge shortage of bank accounts for crypto companies. The difficulty in obtaining traditional financial services has certainly hampered the growth of this industry, but has led to booming business for crypto-specific banks such as Metropolitan or Silvergate.

  • Read more…


Also in the news:


What I’m reading today:

Is Making Fake 24/H Trading Volumes The Best Marketing Strategy for Crypto Exchanges?

You may noticed recently that some somewhat unheard of exchanges have been breaking into the top ten exchanges by volume. These exchanges include BitForex, FCoin, and CoinEx. Who are these exchanges and how have they come to drive so much volume so quickly? Well the answer is, nobody really know who they are, and most of their volume is fake. Lets take a look at data.

  • BitForex has had $698 million in volume in the last 24 hours. That makes it the seventh largest exchange by volume, ahead of Bitfinex, Bithumb, Kraken, and Bittrex.

  • If we look at BitForex’s website traffic we see that the number of unique visitors to their site was 68k. Kraken’s number of unique visitors was 1.02 million.

  • 29% of BitForex’s traffic comes from CoinMarketCap referrals.

  • BitForex has 7.5k followers whereas Kraken has 319k followers.

  • BitForex and Kucoin both have around 40k Telegram members, but Kucoin’s message velocity is nearly 5 times higher.

  • If you look at BTC/USDT volume per user, BitForex has around $13,000 in volume per user, over double HuobiPro’s $6,000/user and over fifteen times more than Binance’s $860/user.

Fake volume will certainly draw attention to your exchange, but it will be nearly impossible to cover the fact that the volume is fake. This is why sites like CoinMarketCap will display information about exchanges like BitForex but do not count their volume towards global volume metrics.


Around the corner:


Market Outlook:

Quick Take

We have a simple and clear chart today. We’re trading between support at 7480 and resistance at 7685 (seen more clearly on a 4hr chart). The first one to have a 4hr close below that level will decide the path forward.

I’m leaning towards a bounce off of 7480 with a retest of 7685. We’ve tested both bounds, and I believe we will make another attempt to test before we see a breakthrough. If we rejected the 7685 level again, we’re likely going to trend down and test the 7.2k weak support level.

One thing to keep in mind is that we’ve established a new local top at 8.5k, and the markets are not of bullish nature until that level is taken out.

Daily Chart

Fear & Greed

F&G indicates that we are approaching oversold territory.

Here’s a reminder of what these criteria mean

Overall Picture

We’re looking towards the August 10th ETF decision by the SEC for some hope. The markets are pricing in the lower ETF expectations as a dose of reality has begun to hit investors, and people who longed the rumors begin to take profit at these higher levels.

One thing to keep in mind is that we gapped from 7.2k straight to 8.5k over a couple of days, so there should be plenty of buy support in that range. The fact we are witnessing a breakdown tells me that a significant amount of buyers have left the crypto markets over the past 3 days, which does not bode well for further price action.

Avi Felman@AviFelman

Bitcoin retesting 7k rn. Long-term support @ $194. stay woke pic.twitter.com/jZEwD3jzOL

May 28, 2018


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