June 25 – July 1, 2018 | OSC, Bitcoin ETFs & More Crypto News
3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Ontario Securities Commission Releases Cryptoasset Research Report
June 28, 2018 – The Ontario Securities Commission (OSC) has released a detailed report which analyzes data on the current financial consumer understanding of the cryptoasset market. Additionally, the report delves into the attitudes and behaviors seen from cryptoasset owners and provides overviews to the entire cryptoasset market from Canadian regulatory standpoints. The data was gathered through a survey that was conducted on over 2,500 Ontario residents back in March 2018 by Innovative Research Group Inc.
3iQ sees this research report as a useful tool for Canadian investment advisors who, whether new or experienced in thecryptoasset market, are looking for a better understanding on current regulations surrounding cryptoassets in Canada, as it cites recent efforts and decisions from the Canadian Securities Administrators (CSA).
June 30, 2018 – Major cryptocurrencies bitcoin and ether traded sharply higher on Friday night, adding fuel to the approximate $26 billion USD increase in market capitalization added to the crypto market. Both bitcoin and ether saw over 10% increases in the late Friday session on increasing volume from the previous trading day. Past daily trading volume had been around $3 billion USD for bitcoin, and ether at $1.2 billion; however, the Friday session saw an increase to $4.7 billion USD and $1.6 billion USD respectively. Arthur Hayes, the CEO of major cryptocurrency exchange BitMex, said last week that he still sees bitcoin hitting $50,000 USD this year.
Hayes emphasizes that this correction in bitcoin and the overall crypto market could differ from the correction in 2014, largelyin-part from the significant increase in the number of market players. “In 2013 to 2015, we went from $1,200 to $200. In 2015 to 2017, we went from $200 To $20,000. So, we’ve done these sort of moves before. I think the time span is going to shorten because you have many more people involved in the market, who have invested capital and resources to trade this asset class,” said Hayes.
Goldman Sachs-backed Circle Sees Booming Institutional Demand
June 25, 2018 – Despite the negative price performance of bitcoin back in May, the Goldman Sachs-backed crypto firm Circle reportedly saw a 30% increase in new institutional clients month over month. The company also noted that its institutional trading platform “Circle Trade” had 15 times the amount of transaction volume since last year. To meet this increasing demand, Circle is looking to utilize more automation on its trading platform in an effort to minimize human interaction when placing orders. The pivot is set to cater to clients who want access to high-frequency trades and block orders.
Jeremy Allaire, the CEO of Circle, says that recent feedback from family offices and venture capital firms suggests that the trading platform needs to be better equipped to handle large orders that their clients are used to in the equity market. “In May, which was a challenging month, we saw a sharp increase of unique new counter-parties,” said Allaire. “A lot of folks on the institutional side are on-boarding, and getting their ducks in the row.”
Introduction of Bitcoin ETFs Could Take Bitcoin Higher
June 25, 2018 – Michael Strutton, the CEO of IronWood, notes in a recent report that the introduction of ETFs to the cryptocurrency market could propel the price of bitcoin to $35,000 USD. Strutton believes that the approval of pending Bitcoin ETFs with the US Securities and Exchange Commission (SEC) could bring many new investors to the bitcoin market. Upon approval, millions of potential investors who use traditional brokerage accounts will have access to Bitcoin investments, potentially creating a surge in demand for the cryptocurrency. In addition, the approval of Bitcoin ETFs from regulatory bodies such as the SEC could spark more institutional interest in the industry.
Strutton analyzes the market by highlighting current bitcoin wallet users and their current investment holdings. By using publicly accessible bitcoin wallet information, Strutton can compare current bitcoin holders to the current size of broker-dealers and their total money managed. Interestingly, out of the 22 million current bitcoin wallets, only about half of them hold more than $6.50 USD worth of bitcoin. Assuming that the release of Bitcoin ETFs attracts just 20% of the available equities trading market of 122 million, there would be 24 million new bitcoin investors. “If ETFs add 24 million US investors and the upward momentum adds 14 million from the rest of the world, then that adds $84 billion and $336 billion, respectively, to the market cap. Over the past six months, Bitcoin’s market cap has swung from $326 to $110 billion. Adding $420 billion to the market cap could put the Bitcoin price range from $26,000 to $44,000,” said Strutton.
June 26, 2018 – Facebook has reportedly reversed its ban on cryptocurrency-related advertisements. The company now offers a preapproval request form specifically designed for companies looking to advertise cryptocurrencies. The form requires advertisers to select their type of cryptocurrency advertisement: “Cryptocurrency products and services”, “Education on cryptocurrency”, “Cryptocurrency industry news”, and “Other content related to cryptocurrency products and services”. Notably following the “Cryptocurrency products and services” option, the company reminds advertisers that they still cannot promote ICOs. Facebook had previously banned all crypto-related ads back in January.
Advertising remains a primary revenue generator for Facebook, and it’s no surprise that the allure of cryptocurrencies to its users can bring in more advertisers. By preventing the promotion of ICOs, the company can protect its users from potentially getting scammed – all whilst generating revenue from legitimate cryptocurrency businesses like news agencies or exchanges.
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