CryptoAM: Tokenizing Everything, Crypto Crackdowns, and Irans Hail Mary

Monday, August 27th

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3 things you need to know:

One: Singapore stock exchange turns to blockchain for settlements. The Singapore Exchange (SGX) has announced that it will partner with the central bank to develop a blockchain platform for securities settlements. I feel like we’ve heard this one before…

  • Efficiency: The project will build upon the blockchain that the government built in its attempt to tokenize its fiat currency. Using smart contracts, Singapore plans to automate its DvP (delivery vs. payment) system in order to enhance efficiencies and cut costs. The system will allow corporates and financial institutions to simultaneously exchange and settle tokenized currencies and tokenized securities.

  • Tokenize the world: The introduction of blockchain technology to exchanges could lead to a quicker tokenization of existing securities, such as equities, bonds, and loans. On the flip side it could also lead to an increase in security tokens issuance, as an infrastructure for tokenized settlements would be in place.

  • One thing can’t be debated: theres a lot of -zationing happening in crypto….

  • Follow the leader: This move comes on the back of Australia’s announcement that the ASX will replace its current settlement system with a blockchain powered one. As more major countries begin to adopt blockchain for securities settlement, other countries will learn from them and begin to install similar systems into their exchanges.

  • Read more…

Two: Chinese tech giant, Baidu, imposes fresh anti-crypto measures. Baidu has closed two crypto-related chat forums in response to Beijing’s toughened stance on the space.

  • Join the club: Tencent and Alibaba have announced their own bans on crypto trading, with Alibaba promising to restrict or permanently ban any accounts it finds taking part in crypto trading.

  • Will markets react? In the past, negative news from China, the country from which the second highest amount of trading volume originates, has caused volatility and softness in the crypto markets. Recently, the market has shrugged off negative sentiment from China. When bad news fails to perturb a market, it may be a sign of a market bottoming. For you traders out there — note how little the market has moved in response to an ETF denial and China crackdown.

  • Left behind: With several other countries introducing crypto-positive measures, China will have to figure things out, lest it risk being left behind by competitors.

  • All about control: After talking to a few of my sources in China, the conclusion is clear. Blockchain, not Bitcoin. The Chinese government is directing companies to stop enabling the growth of cryptocurrencies, as they are scared of capital flight. Historically China has been able to control all the money that comes in and out of the country. Cryptocurrencies have made it more difficult to enforce capital controls, which is the bulk of the reason we’re witnessing such a big crackdown.

  • Read more…

Three: Iran reveals national cryptocurrency plans in response to U.S. sanctions. Iran’s future cryptocurrency will be backed by the Rial, and it will be built on Hyperledger Fabric technology.

  • Follow the Maduro: This announcement comes on after Venezuela, under Maduro’s leadership, introduced the Petro to avoid sanctions and raise capital. It is an consequence of the crypto boom that certain countries will be able to circumvent sanctions.

  • Centralized: The digital Rial will be controlled by the central bank, is unminable, and will have its transactions recorded on a private, permissioned blockchain. It is clear that Iran is issuing this digital currency for the main purpose of avoiding sanctions, rather than for the merits of blockchain, decentralization, and transparency. But then again, did anyone think that Hassan Rouhini was a Bitcoin maximalist?

  • A safeguard against the state: Iranians have spent $2.5bn to purchase crypto assets and avoid state-sponsored restrictions. While the digital Rial will serve as a tool for the Iranian government, disgruntled Iranian citizens have used cryptocurrencies as a tool to hedge themselves from the spiraling Rial.

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Also in the news:

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Market Outlook:

Quick Take

BTC has held above 6.7k, and is showing indication of a large move coming soon. I’m expecting a strong test of the 6.8k soon. A break of 6.8k likely sends us up to the 7.2k level.

The bearish case is a break below 6.6k, which is less likely than a test of 6.8k. A break below 6.6k would likely lead to a retest of the 6.3k level.

Daily Chart

Overall Picture

The market has returned to semi-bullish nature, with the Bitmex futures gap closing to it’s lowest spread in weeks. Alt coins are gaining on BTC as well, which is to be expected as BTC consolidates sideways and upwards.

The general rule is that alts lose vs. Bitcoin when Bitcoin makes violent swings, and gain against Bitcoin when there is consolidation and slight upwards movement (like the past week).

In anticipation of an alt-run, I’m slowly moving my stack (which was all BTC/USD) back into choice alts nows that were massively oversold and prime for a solid run. I’m ignoring fundamentals in a small portion of my stack (~2-3%) and moving them into alts that generally over-perform during brief runs such as TRON.

Around the corner:

What I’m reading today:

Is the Key to Beating the Market Written in the Stars?

Here’s an profile Bloomberg just ran on a trader that uses astrology to time the markets.

This isn’t normally the type of article we feature (usually we try to force you to learn things), but who wants to read anything serious on a Monday?

An introduction:

But here’s the thing about AFund: The A stands for “Astrologers.” It’s run by an antic, charming 70-year-old named Henry Weingarten who says he gleans insight from charting the movements of celestial bodies. Today’s event isn’t technically about astrology, but like everything in the universe, it probably is. “Sixty to 70 percent of what I do is in the natural resource space,” Weingarten tells me after lunch at the club, holding a glass of red wine. “I think it’s because I’m a Leo. And effectively, as a Leo, I have an affinity for gold.”

Oh, and this one.

The trader, who asked that his name not be used for fear of being shamed, cites Einstein to point out the universe is just a pattern of energy, and thus obviously shaped by the movements of large heavenly masses. How could markets not be affected by the sun, moon, and planets?

You know you’re about to hear some interesting stuff when someone asks to be anonymous out of shame for what’s coming.

Needless to say, I will be incorporating astrology into all market outlooks from here on out. For those unaware, Jupiter is in the fifteenth house today, meaning Nano is going to pump another 100% (note: this is definitely not financial advice)

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