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Summer of Crypto

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Satoshi&Co Daily Crypto Newsletter

June 20 · Issue #198 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as our recently-launched podcast series with leading crypto industry participants at our newly-launched website

Taking a quick break from the Libra series to provide some trading market updates as we see BTC flirting with some 14-month highs. Today’s edition is brought to you in collaboration with some top global market traders. We have been getting requests from a few folks to mix up our regular programming with more actionable stuff directly related to the markets so we will likely be trying out a couple of different formats over the next few days until something sticks.
BTC/USD has been extremely correlated to offshore Chinese Yuan in the past 3 months. Trade tariff issues and an oncoming capital flight is making locals somewhat nervous. Add to that social issues being imported from Hong Kong (protests on extradition) and China has some issues to deal with. The Yuan cannot afford too much strength either therefore it’s a fine line to keep it weak while not letting it crash. In this global game of who blinks first, looks like the Fed has decided to stop the rate hikes as well. All of this points to a global macro currency issue moving from simmer to bubbling more.
Source: Adamant Capital
Source: Adamant Capital
BTC is pretty much poised to do well in such an environment. USDC issuance against Yuan in the OTC market is increasing and stablecoins may be the first line of capital flight. Watch carefully for increase in issuance of Tether, USDC and TUSD, the largest stablecoins.
Taking a look at some fundamental factors for BTC, let’s look at the following:
1.    Network Value: NVT is pointing to elevated but absorbing recent gains.
Source: Willywoocharts
Source: Willywoocharts
2.  Near term volatility hit a local high at 5% a day (nearly an annualized volatility of 100%, rule of thumb is daily move X Square root of time (365), so nearly 100% a year. Volatility retreats usually signify a range bound environment in the near term thereby lending credence to consolidation. 
3. Hash rate is at local highs, as are transactions. Avg fee is however still dropping, which is very healthy for near term price support and consolidation.
4. Top 100 addresses as a % of total coins hit a low on May16, 2019 and has been solidly trending higher showing the whale accumulation. On a yearly basis this % is still very low. Significant upside exists in this. Nov 2018 was at 19%, current low was at 15.26%, and the present share is 15.7%. The Nov pullback had a big impact as whales seem to have dumped. That number is slowly increasing but the current price highs are higher than Nov 2018. This is a positive as shows broad adoption has increased however if the whales were to return, the upside can be significant.
5. Bid/ Ask sums for BTC: The Asks have finally gone higher than the bids for the first time since Dec 2017. Market microstructure is showing a distinct preference for the upside.
6. Futures prices are in steep contango across derivatives exchanges and perp longs are in positive funding territory (i.e. you pay to be long)
All of this convinces us short term pullbacks are to be bought anywhere with 5% of current prices.
Meanwhile in Crypto Wonderland....
“Facebook’s Libra Could Be Banned In India”
Libra, the cryptocurrency to be unveiled by Facebook next year, will not be available in India, according to a person directly in the know, as current regulations do not permit the use of the banking network for blockchain currency transactions. The company on Tuesday announced plans for the launch of the cryptocurrency by wholly-owned eponymous subsidiary Calibra in 2020. The social network has partnered with 28 organisations — including Visa, Mastercard, PayU and Uber — that will accept the virtual currency, which will be available on WhatsApp and Facebook Messenger. It expects to have 100 members when it is launched.
“Roll Raises $1.7 Million in Seed Capital”
Social currency startup Roll has raised a $1.7 million seed round to help content creators monetize relationships with their fans. Roll’s seed round was led by Arthur Hayes, the CEO of BitMEX. Other investors include Gary Vaynerchuk, Techstars Ventures, Hustle Fund and Techstars NYC. Vaynerchuk is a digital media and marketing entrepreneur who has also made a number of early investments in major companies, such as Snap, Twitter and Venmo. In crypto, Vaynerchuk previously invested in Coinbase.
“CME Open Interest For Bitcoin Futures Reach All-time High”
The Chicago Mercantile Exchange (CME) Group has released data showing that open interest in Bitcoin futures is rising. According to CME, bitcoin (BTC) open interest spiked on June 17 with an all-time high of 5,311 contracts totalling 26,555 BTC, or approximately $246 million at press time. Futures are standardized contracts that bind a party to buying or selling some asset at a predetermined date. Notably, the CME group also remarked in the Twitter post that BTC futures appears to be gaining popularity with institutional investors.
“Japanese Messaging App To Launch A Crypto Exchange”
Line Corp., Japan’s largest messaging app, is close to getting a license to launch a cryptocurrency exchange in its home nation, according to people familiar with the matter. Japan’s Financial Services Agency could issue the license as early as this month, with exchange operations starting a few weeks after that, said the people, asking not to be identified discussing private matters. The service, which will be called BitMax, will allow Line’s 80 million users in Japan to buy and sell cryptocurrencies including Bitcoin and Line’s own token Link, one of the people said.
Tweet of the Day
Dan Hedl
There will only be 21 million Bitcoins.

What happens when 7.52 billion people realize that?
Today's Top Reads / Podcasts
Overnight Performance of Top 10 Currencies
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