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Global Markets Volatility Weighing Down on BTC

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Satoshi&Co Daily Crypto Newsletter

August 20 · Issue #222 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as short (but great) conversations with leading crypto industry participants at our newly-launched website

And so we are back after a short summer hiatus, that took us, by way of bustling Bangalore to sunny Singapore right on the equator. Asia is clearly the heart of crypto, in a way that USA (and NYC specifically) is still very much at the centre of modern global finance. The crypto winter has surely had an impact, but if the turnout at ETHGlobal’s recent Bangalore edition of EthIndia was anything to go by, there is increasing interest in all things crypto and blockchain on the ground across Asia, which regulators would do well to take note, especially in a week in which India’s Supreme Court is hearing arguments from the RBI as well as from the crypto community.
Last week, Bitcoin experienced its worst week so far in 2019 as the prices fell by about 20%. A stark rise in geopolitical tensions fueled by civil outrage in HK and the continuing US-China trade conflicts have spiked up volatility in markets across the board, resulting in an inverted yield curve - a traditional harbinger for an economic recession in the short-term. Bitcoin is not yet immune to rising volatility in global markets and prices have retracted sharply as investors abandon risky asset classes in a global risk-off trade. We have already seen this happen in a few instances in the past when a sharp increase in the VIX last November drove down BTC prices from a stable level of $6k to new yearly lows for 2018. With the next big bullish driver - mining reward halvening - still some time away, we expect BTC prices to closely mirror the global macro in the short-term.   
Besides the popular theory around the macro headwinds, an alternative one for the fall in BTC prices is the furious selling of BTC on exchanges by an alleged Ponzi scam in China. Dovey Wan in her tweetstorm delved in to the 200k BTC PlusToken exit scam that is finding its way to Chinese exchanges, resulting in a sharp drop in BTC’s price. If the allegations are true, the sheer quantity of BTC that is being sold on exchanges could be the primary cause of the price decline the past week. 
Meanwhile in Crypto Wonderland....
“Crypto Payment App Launches Libra Killer”
Cryptocurrency payment app Metal has launched as a full version in what creators say will dominate the market over Facebook’s Libra. Metal functions as a P2P payment app, and now supports various tokens including Bitcoin (BTC) and Ether (ETH). Previously, the only payment option supported by the app was its own in-house token, Metal (MTL). This week further saw news that major cryptocurrency exchange Binance was preparing Venus, another crypto-focused competitor for Libra.
“South Korean Exchange Bites The Dust”
South Korea’s Prixbit cryptocurrency exchange has officially closed down. In a website post dated Aug. 9 and entitled ‘Prixbitend,’ the exchange declared it would cease operations. The move was subsequently reported by local press. The exchange said it had worked hard to deal with hacking, money laundering and voice phishing. It promised to return all deposits for people who had provided customer information to allow for return. For other tokens still on deposit, the site encouraged the owners to register for a refund as soon as possible.
“NYS Supreme Court Rules Against Bitfinex”
The New York State Supreme Court has decided that it has jurisdiction to rule over the case between the New York Attorney General (NYAG) and iFinex, the parent company of cryptocurrency exchange Bitfinex. The decision now allows the NYAG to continue its investigation and demands the company to produce documents at the request of the law enforcement agency, according to a filing. iFinex previously appealed to the court to halt the NYAG investigation over its alleged commingling of funds to cover up an $850 million loss, among other issues. In response, the NYAG argued that it was too early for the court to address jurisdictional questions during an ongoing investigation.
“Rakuten Announces The Launch of Its Crypto Exchange”
Rakuten, the “Amazon of Japan,” announced the launch of its new crypto exchange platform Monday, August 19, offering spot trading of crypto assets via a dedicated smartphone app. The e-commerce giant has been crypto-friendly for a while now, experimenting and investing in crypto payment systems since at least 2014, but with the launch of the wallet exchange service, Rakuten Bank users are now able to buy, sell, and exchange BTC, BCH, and ETH, as well as utilize fiat off-ramps to personal bank accounts. Other formidable forces in e-commerce are working hard to jump on board the crypto train as well.
Crypto Twitter Pick
I’ve been increasingly giving up convenience for privacy:

- Replaced Google search
- Don’t use Chrome anymore
- Have burner phones
- Turned location off for 99% apps
- Apps isolated over multiple devices

This will be a long journey. What are your best practices for privacy?
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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This newsletter does not constitute an offering of securities in any jurisdiction. The contents of this note should not be construed as investment advice or as a recommendation to purchase securities. This note is intended for the consumption of the recipient alone and not for public distribution. Please consult a certified financial advisor or other appropriate practitioner as may be appropriate as per your jurisdiction.
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