CryptoAM: Margin trading, Crypto Czars, and Blockchain(!)

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Good morning people! It’s like the markets are now in a never ending cycle. I swear I’ve seen this before…


3 things you need to know:

One: The Korean police say people have to stop margin trading crypto. Following a 10-month investigation by it’s cybercrime unit, a South Korean police department is recommending prosecution of Coinone (a Korean exchange) for allowing people to margin trade.

  • “Margin trading is similar to credit (borrowed) trading on stock markets,” “but it was based on gambling because it did no have permission from the authorities.” 

  • Somewhere, Arthur Hayes sheds a tear. Coinone only allowed up to 4x leverage, but they still got in trouble. They have also been allowing margin trading since late 2016, and are only getting penalized for it now. The attention that crypto got late last year has been both a blessing and a curse for the markets.

  • My thoughts: This is just another data point. We’re seeing exchanges like Coinbase, Poloniex and Gemini move away from the traditional, non-compliant model that most exchanges operated under. It is clear that non-compliance will be met with force from authorities, and it’s a risk to keep in mind when trading on the Binance’s of the world.

  • Other things: If you want to start margin trading in defiance, I suggest Bitmex. I also suggest not margin trading unless you’re very confident in your current trading strategies.

Two: SEC Crypto Czar thinks regulation can be programmed into the blockchain. Valerie Szczepanik, the SEC’s newly appointed, “senior adviser for digital assets and innovation,” believes that regulations that govern how tokenized securities can be traded and who they can be sold to, could be programmed into the blockchain.

  • It’s not rocket science: This is completely within the realm of possibility. In fact, I believe this might be the simplest way to enforce regulations. As long as the smart contracts are written well, there should be no way to subvert the system.

  • Bae: Valerie Szczepanik is off to a great start in her new role. She is showing that the government can actually be competent and forward thinking towards DLT. I think she just may be worth her salt!

  • Read more…

Three: Another day, another company moving into blockchain. Today’s winner is SAP, who just launched a Blockchain-as-a-Service platform, dedicated to helping corporations develop blockchain applications.

  • Blockchain. Blockchain, blockchain. Everyone gets a blockchain! So many tech giants are entering this space of “providing blockchain solutions”. The real question is who is providing the problems? Who are they working with? A lot of announcements like this are usually fluff, but it’s always great to see adoption.

  • Read more…


Also in the news:


What I’m reading today:

IYKYK. We’ll be back with more readings next week.


Around the corner:


Market Outlook:

Bitcoin has been boring. We haven’t got any confirmation of trend either way, but that rejection of the 20D EMA (Which is 7.8k) that I worried about ended up happening, and we broke the uptrend. Looking to the 7.4k level to tell me what’s happening. If we break below that level, I see us going down to 7k again.

I’d go ahead and look at some alts for you, but it’s dangerous to trade alts when BTC is primed for a big move.

Something interesting to consider: Speculation is incredibly low even though BTC dominance is also very low at about 38%. This is telling me that BTC losing dominance is no fluke, and that this may be the new state of the market. The next alt run will have a lot of room for appreciation.

Here’s a reminder on what these criteria mean

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