Steep declines hit the crypto market over the weekend, as rumours of further Chinese crypto crackdowns surfaced.
Following on from the Initial Coin Offering (ICO) bans, more news emerged that the Chinese government had ordered a shut-down of the country’s entire exchange eco system.
OKCoin and Huobi are two of the biggest exchanges in the world and both are in China.
Chinese news site Caixin, was the writer of the story. Though they cited ‘un-named sources’, the newspaper claimed the decision had been made and disseminated to the relevant exchanges.
Yet in the wake of that story, exchanges in China stated they haven’t received any notices from the Chinese government, casting doubt on the whole Caixin report.
True or not, the crypto market reacted badly to this second wave of bad Chinese news, in just one week.
Bitcoin fell to AU$5,178, Ether prices fell more than 10% and the total cryptocurrency market fell as low as US$140 billion. Just a month ago, it was over US$170 billion.
Here’s the round up, all in Australian Dollars…
Bitcoin: $5,130, -2.73%
Ethereum: $364, -2.14%
Ripple: $0.265, +1.58%
Bitcoin Cash: $688.90, -4.93%
Dash: $395.44, -1.241%
Bitcoin Pauses As Market Waits
The weekend falls have eased off today and it will be interesting to see if the ‘buy on the dip’ investors come in now, or if we see further falls resume.
Regulatory uncertainty is nothing new in cryptocurrencies, but the increase in investment flows has finally made governments more serious about how they will tackle it all.
As the leader of the pack, bitcoin’s price moves will most probably dictate the direction of the whole crypto market.
Bitcoin Cash Price Remains in Holding Pattern
After all the hype, the angst and the internal wrangling, bitcoin cash is turning out to be a pretty boring crypto, price wise.
For the past two weeks, it has stayed in a narrow band of roughly 10%-15% of the value of bitcoin (BTC).
What can be said about bitcoin cash (BCH) though, is that the transactional fees (the money to send BCH to another wallet) are fairly cheap at the moment compared to bitcoin (BTC).
As of right now the average transaction fee, according to bitinfocharts.com, on BCH is about US15 cents compared to BTC which is at US$3.
This certainly gives BCH a massive cost advantage over BTC as a means of exchange currently. Though this may change over time of course.
Ethereum (ETH) Plan Next Big Upgrade
Ethereum (ETH) announced plans to roll out the third phase of its four-step roadmap soon.
Named ‘Metropolis’, the upgrade seeks to make ethereum ‘faster, lighter and more secure.’
Though it’s not without risks as ethereum developer Vlad Zamfir, tweeted recently:
‘Ethereum isn’t scalable or safe. It’s an immature experimental technology…’
A timely reminder for investors in the cryptocurrency market, that this isn’t all going to happen overnight. And there are very real risks to be aware of.
Ripple Gets Sued
On Friday, R3, a consortium of more than 80 financial institutions across the world, sued its partner Ripple (XRP) over an options contract to buy more than $1 billion worth of XRP.
The same day, Ripple countersued.
R3 says in its lawsuit that the companies entered into an agreement, part of which gave R3 the option to purchase 5 billion XRP at an exercise price of $0.0085 between then and September 2019.
After soaring more than 3,000% this year, XRP now trades at more than $0.20, making the options worth more than $1 billion.
In its suit, Ripple claims that R3 misled Ripple into entering into partnership agreements, in which Ripple would benefit from R3’s banking partnerships. While R3 would gain not only from the options, but also a share of 15% of the revenue Ripple received from any bank participating in their commercial partnership.
It alleges that after signing, R3 instead focused its efforts on fundraising.
The whole episode highlights the fact that Ripple is more like a corporation, perhaps than any other cryptocurrency investment.
With interest growing around the world, there has never been a better time to learn more about cryptocurrency’s incredible potential. But there’s some very real risks for investors. Don’t invest until you’ve read Sam Volkering’s latest special report here
Editor, Money Morning