CryptoAM: ETF Delays, Accreditation for Everyone, and Google's Blockchain

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First day of all green in a while. Rejoice!

3 things you need to know:

One: SEC Delays any decision on Direxion’s five Bitcoin ETFs until September. Unlike the SolidX ETF proposal, Direxion’s proposals have received a grand total of two comments.

  • “The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, ... designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.”

  • Takeaway: Delaying the proposal is a good sign. It means that the SEC is seriously considering the initiative, and wants to dedicate more time to a consideration. If there was a zero percent chance of passing, there would be no delay — the SEC would just say no. Serious considering of a Bitcoin ETF is underway, and the possibility of passing an ETF is likely driving this rally.

  • Read more…

Two: The U.S. Chamber Of Commerce makes recommendations to SEC and CFTC. Notably, the Chamber of Commerce stated, “we urge the SEC to expand the definition of accredited investor to include those with experience or educational backgrounds that demonstrate subject matter expertise to broaden smaller-dollar, main street investments.” This would mean that investors would not need to meet the minimum $200k/year income or over $1m in net worth to invest in ICOs. Instead they could pass a test to become eligible for investment.

  • My thoughts: The reality is, there are many investors who meet the current criteria for being an accredited investor but are no more qualified to invest in ICOs than the average Joe throwing a couple Eth at a project. I think it would be great idea for anyone investing in crypto, accredited or not, to take a test before starting to invest.

  • Read more…

Three: Google will start offering blockchain solutions on its cloud platform. In partnership with companies Digital Asset and BlockApps, Google Cloud Platform users will be able to explore various blockchain solution. Later on in the year GCP will also offer an open source Hyperledger implementation.

  • Testing phase: The company specified that later on this year, customers will be able to try out open-source integrations for Hyperledger Fabric and Ethereum (ETH) protocols in the GCP Marketplace service.

  • Late to the party?: Google is the latest tech giant to join Microsoft, IBM, and Amazon in offering Blockchain solutions.

  • Read more…

Also in the news:

What I’m reading today:

Decentralized Exchanges Aren’t Living Up to Their Name

Centralized exchanges require customers to trust a third party with any funds they wish to trade. Decentralized exchanges take the third party trust out of the equation by using smart contracts to keep your funds secure. With exchange hacks being as prevalent as they are, you would think the DEXs should be quite popular. The reality is that so far, they have yet to gain mainstream (crypto) adoption.

During a two week period, IDEX (the largest DEX by volume) facilitated 69,339 trades between 12,400 traders. During that same two week period, no other DEX alone facilitated more than 1/7 the number of trades as IDEX. During a two day period, Bitfinex facilitated 92,024 trades.

Liquidity is one of the main reasons that average users would not want to use a DEX. Market buying and market selling on a DEX can easily move coins with a shallow order book. For anyone making a substantial purchase, if the coin is listed on a CEX, it wouldn’t make much sense to use a DEX, economically speaking.

Settlement time is another reason that effects the liquidity on DEXs. Whereas on a CEX trades are processed in the blink of an eye, DEXs are limited by the speed of the blockchain they are built on.

The relative lack of activity on decentralized exchanges compared to their centralized counterparts hasn’t curbed the efforts of large players to create their own decentralized platforms. Coinbase recently acquired Paradex, Binance is building it’s own DEX, and Huobi wants to build a DAO on top of its own, yet to be created, Huobi Chain.

Around the corner:

Market Outlook:

Quick Take

BTC has continued to read CryptoAM.

Broke 7.8k like predicted…and we rocketed up to touch 8.4k. BTC is now consolidating around 8.2k. There was immense profit taking around the 8.4k level (BTC-USD longs dropped off a cliff) but the price was only pushed down 2.5%, telling me we are still bullish.

My short term target is another push to 8.5k. Over the next few days, I expect retracment towards 8.1k or sideways trading. I would be surprised if there were any violent downwards moves.

These past few days of price action have made me a BTC bull. A run past 8.5k would lead to possible retest of the 9.8k level, which is my longer term prediction (by mid August). I’m expecting forward price momentum as long as we stay above 7.8k.

If we break down past 7.8k in the next few days we will likely to trend back down towards 6.8k.

I’m buying alts again.

Daily Chart

We haven’t seen buy volume or price action like this since April.

Fear & Greed

We still haven’t entered overbought areas :)

Here’s a reminder of what these criteria mean

Additional fun: An EMA indicator

This EMA indicator we’ve developed has been quite good at predicting overpriced BTC — anywhere over the yellow line means likely overpriced. Right now it looks like we’ve still got some room to run.

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