Crypto Currencies: The seed of the equivalent benefit

Fundamental Analysis:

Bitcoins or cryptocurrencies, also known as digital currencies belong to an asset class of their own which makes it more interesting for Investors to place money on. Contrasting gold, of which we have a long history of how it behaves in each circumstance, cryptocurrencies are not so familiar and have a mysticism as to how they operate and what drives their prices. However, Bitcoin’s common ground with metals is that they are mined like gold or silver. At the moment, approximately 16.95 million are held, bought or sold in the market, leaving potential miners with a little less than 4 million bitcoins waiting to be discovered.

Users are now getting more and more familiar with block-chain where all transaction history of bitcoins is stored and it allows two party’s to make an exchange without a third person physical or not interfering . Furthermore, bloc-kchain permits financial institutions to verify transactions. On the other hand, on a recent review by Bank of International Settlements which seemingly does not encourage crypto-currency investors, has put pressure and questioned bloc-kchain as a solution to security matters. The bank has referred to blockchain as a poor efficiency and huge energy consuming technology which cannot control the crypto-currency markets tendencies towards criminal activities or its significant price volatility.

People are seen to be losing their faith and patience with the crypto market. The fact that the instruments remain unregulated, provokes the worsening of the situation and is confirmed in its diminishing price value. It was noted in a report that some new introduced companies are working with the Securities and Exchange Commission in order to be able to provide protection to the customers on Crypto activities. An example of the pre-mentioned protections is carrying out know-your-customer procedures and guiding funds to particular exchanges at customers’ requests. This is exactly what the crypto-market is starving for as it will place reliability and more control on the investor side. Initially, this could hurt prices of Crypto even further, but eventually will restore stability and true valuation of the digital market.

On a bigger scale of financial institutions, it was brought to our attention from various reports that Coinbase is also making moves to improve the crypto industry. They practically provide a crypto-vault that protect user’s coins, though charge a pretty penny for this service. This service, requires for 10 M USD and over deposits and they charge a 100 K entry fee for setup purposes. We share the opinion that costs will eventually drop when more people are familiar with the service.

Furthermore, Coinbase is very serious about safekeeping customer’s funds in respect of Crypto’s and expects to win approval soon to provide services for clients requiring a so-called qualified custodian that meets tough U.S. standards for guarding assets. Despite of which company has taken these steps, they are a very positive advancement for the future and could be portrayed like the first steps on the moon.

The past months have been very punishing for the crypto-market, keeping in mind 10 days ago a Korean firm was cyber attacked and lost 30 M USD worth of Crypto’s. Eventually crypto-holders came to grips of the risk of their funds invested and cut their positions with the total crypto-market valuation losing approx. 50 B in total value.  However, the positive first steps of employing security measures have been mentioned above and could be the positive news the market has been awaiting. For the long run in our opinion, the seed to prosperity and investment reliability has been planted and when enacted could move in a fast pace all over the investment world.


Technical Analysis:

Bitcoin, is very close and could break our resistance level at $6,700 and may bounce higher to our $7,120 resistance level

However, Bitcoin moved in a sideways manner in the latest sessions between the $6,700 resistance level and the $6,100 Support level. The $6,700 resistance level is stronger than expected and should the bulls take over the market it may breach it and extend further to $7,120 resistance level. This movement could be a trend breaker should the break of the pre-mentioned resistance level be clear.

On the other hand this wave is also capable of travelling from the $6,100 Support level and at its full capacity, it may extend to $5,700 Support barrier.

Crypto market in pursuit of security and reliability

Fundamental Analysis:

Bitcoin along with other crypto-currencies is going through a very strained period as it seems. As the time progresses more and more issues are looking to bring out the negative side of the digital market instead of embracing it.

The latest negative news, are coming from the Asian continent and more directly the South Korean crypto exchange Coinrail was undergone a cyberattack during the past weekend. In a more simple tone, a digital robbery was confirmed by Coinrail as well as an amount around $30 million worth of lesser-known cryptocurrencies. This negative event, digs deeper in investors’ fears dealing with the digital market reliability and it repels the smooth operation these exchanges boast about, leaving them vulnerable to further harmful publicity. Even though insurance could come into play and should be enacted as this is not the first time cyber-attacks have taken place, the issue still remains unresolved and more work has to be put in the industry to protect investors and companies .

The abovementioned event, hurt Bitcoins price which followed with a steep drop dragging along its path other crypto’s like Ripple, Ethereum, and Litecoin. The drop acted like a blow to the head for investors which chose to cut their crypto holding, erasing almost $50 billion from the market since Friday.

In the US, Government investigators requested complete trading data from various bitcoin exchanges in order to form a complete investigation regarding crypto price manipulation. Bitcoin futures were made available for trading on CME Group Inc, some 6 months ago and this investigation was put in place in order to check if the prices of those instruments represent a fair and true value. CME Group Inc offered these crypto futures from prices received from four bitcoin exchanges Bitstamp, Coinbase, itBit and Kraken. Some of the pre mentioned exchanges refused to give the data requested, however later followed up and made the data available when limits to the request were set and smaller volume of data was asked for. CME’s regulator, the Commodity Futures Trading Commission was not satisfied as no agreement is in place to be able to retrieve this kind of data from price providers, when needed.

On another front, Apple Inc. has legally prohibited users of iPhones and iPads from mining digital currency on their devices. The company publicly noted that cryptocurrencies processing could be performed by cloud-based mining but not applications devices. Apple Inc assists Google’s decision made in April 2018, which very similarly does not allow in-browser mining of cryptos as these activities are contrary to their terms and conditions.

In addition, chairman and CEO of JPMorgan Chase Jamie Dimon while on a live interview on CNBC along with Warren Buffet, made it clear for bitcoin followers or investors to be aware.

It is our opinion that a solution can be found. However, market participants should be on the lookout as the industry’s inexperience could be exploited further and even bigger amounts than 30 M could be stolen.  Eventually governments and regulations could make the necessary changes to confirm security and reliability to market participants by identifying users or by finding a way to trace digital assets.


Technical Analysis:

Bitcoin fell 1.05% to $6,700 but remained just above lows seen over the weekend of 6,633.9.

It is current trading between our noted $6,700 resistance level and the $6,100 support level.

A break above $6,700 resistance level, however, will not only lead to an advancement to $7,120 resistance level but also signal a reversal of the downtrend from the May 5 high of $9,948.98.

If the bears dominate the market Bitcoin could have downward movement break below $6,100 Support level and could aim for the $5,700 Support barrier.