CryptoAM: Pump & Dumps, ETC Stays Strong, and a German ICE

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I called in sick to work on the day of the Bitcoin/Bitcoin cash fork so I could pay attention when it all went down. I also consistently use 100x leverage on Bitmex after nights of drinking… LMK the dumbest thing you’ve done because of crypto. Best story wins my love and gratitude, and a feature as the headline for tomorrows CryptoAM.

3 things you need to know:

One: Pump & dump schemes have generated at least $825M in trading volume over the past year. Despite an SEC bounty of up to $1M if you blow the whistle on P&D groups, the schemes do not seem to be dying down.

  • “Cryptocurrency exchanges are unregulated markets, so the kind of market manipulation banned on, say, the New York Stock Exchange can essentially be carried out with impunity,” said Ben Yates, a cryptocurrency lawyer at London-based RPC.

  • Really though? What Ben Yates is trying to say is that the government hasn’t sanctioned any of these groups yet. If you think there won’t be any retroactive actions taken, you’re going to be in for a rough time. Governments and regulators move slowly, and are likely building their cases as we speak. The wild west days of the cryptocurrency markets will slowly come to a close over the next 3-5 years as governments move in to stop abuse.

    It “incentivizes the poor followers to keep buying until the [target] price is reached, which it often never does,” said Taylor Caudle, who participated in a January operation at Big Pump after following the group’s earlier efforts. “I instantly lost $5,000 in about 30 seconds.”

    Mr. Caudle maxed out a credit card to participate.

    “Needless to say I felt extremely angry, and voiced my findings” on Discord, he said in an email, “which were of course met with nothing but ‘Too slow bro,’ and ‘Lol sucks 2 b u’ comments.”

    Yep, regulators are totally going to let this continue.

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Two: Ethereum Classic to be listed on Coinbase within the next few days. Final testing is expected to conclude on Tuesday, at which point ETC deposits will become available. After that, trading will open within 24-48 hours.

  • Bullish?: ETC is up nearly 4% in the last 24 hours. Watching how the price reacts to being listed on Coinbase may provide insight as to future price behavior of assets that Coinbase is considering listing. I’m paying attention closely. ETC has been relatively resistant to market movements…

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Three: The second largest German stock exchange is jumping head first into crypto. Boerse Stuttgart is developing an ICO platform, trading platform, a crypto trading app, and crypto custody services. The app is called Bison and is intended to function like Robinhood. Additionally, all tokens listed through its ICO platform will automatically be able to trade on its platform.

  • Last Call: With the ICE announcement last Friday and now this, it is very clear that institutional money is here, and more is coming. Sure, in the short run, the markets seem gloomy, but if you take a step back and evaluate the overall picture, now is a great time to get in (in my humble opinion, not financial advice).

  • Read more…

Also in the news:

What I’m reading today:

What Will It Take to Get the Bitcoin ETF Approved?

There are currently twelve Bitcoin ETFs being considered by the SEC, and one general crypto ETF.

Of the twelve, the most promising ETF is the physically backed CBOE x VanEck which has an August 10, 2018 application deadline. However, many worry this may be denied since last week the Winklevii ETF was not approved.

We have previously talked about the top 5 worries that the SEC had when it comes to the introduction of an ETF. Valuation, custody, liquidity, manipulation and arbitrage.

While there has been substantial progress on the other four issues, it seems the new applications are not adequately addressing the major problem of Bitcoin manipulation.

The arguments made by the SEC for denying the Winklevii ETF centered around the manipulation of markets.

“[The application] asserts that intrinsic properties of bitcoin and bitcoin markets, including the Gemini Exchange, provide resistance to manipulation. But BZX has failed to carry its burden to demonstrate that its assertion is correct.” – Securities and Exchange Commission

Moving forward, applications supporting strong arguments that Bitcoin manipulation will not materially affect investors have the greatest chance of approval. Therefore, CBOE and Van Eck structured their application to prevent such concerns of manipulation. Historically, the SEC has delayed these applications and the August 9th deadline may be postponed, affording more time to alleviate the worry of manipulation.

Personally, I do not believe that the SEC will be approving an ETF any soon…

Around the corner:

Market Outlook:

Quick Take

Things are looking down. We had an indecision candle yesterday, and continued the fall downwards. The key level to watch for is 6880, and a break below would likely send us down to the 6620 level.

Sell pressure has not abated, and people are still taking profits at this level after many went long at the 5.8k level. I’m expecting further breakdown if we continue to trade sideways. Only a daily close above 7080 would indicate another potential run.

Daily Chart

Fear & Greed

This is the most fearful we’ve been all year.

Here’s a reminder of what these criteria mean

Overall Picture

Without a strong catalyst it’s unlikely we will break the local top pattern. This type of breakdown indicates the likelihood of printing a lower - low of around 5.5k is in play. If we fall below the 6.6k level, I’ll be exiting a healthy portion from the market and looking to re-enter below 6k.

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