February 25 – March 3, 2019 | Facebook Cryptocurrency, Sovereign Wealth Funds & More Crypto News

3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.


The Bitcoin Bulls are Back

February 28 – Bitcoin has officially broken its six-month losing streak, as the cryptocurrency posted gains for the month of February. The price of bitcoin at the beginning of February was around $3400 USD, and closed the month around $3800 USD, posting 11% gains for the month. Some bullish news has helped fuel demand for the cryptocurrency in February, notably the entrance of major pension funds who have taken stakes in crypto venture capital funds that have exposure to underlying cryptocurrencies. Other notable events include Nasdaq’s new digital currency price indexes for Bitcoin and Ethereum, the Swiss Bank Julius Bär announcing a range of digital assets for its clients, and the major US investment bank JP Morgan introducing its own crypto coin.

On a technical level, bitcoin has now bounced twice off its 200-weekly moving average, setting higher lows around the $3200 USD and $3400 USD levels over the past few months. Interestingly, major US equity indexes, such as the S&P 500, also notably bounced off their 200-weekly moving averages back in December and rallied significantly into the month of March. “The last eight months is already being dubbed the ‘crypto winter’ and while prices were falling, it was understandable that the large incumbent financial institutions had shelved some of their crypto projects,” said Mati Greenspan, a senior market analyst at eToro. “Now that the market is showing signs that spring is coming, those plans are back on the table. After all, they wouldn’t want to miss out on the next bull run.”

Read the full article here.


Facebook Could Release its Own Cryptocurrency in 1H 2019

February 28 – Facebook is preparing to introduce its own cryptocurrency to its messaging services. The “Facebook Coin” would be a new cryptocurrency that would allow users of Facebook Messenger, WhatsApp, and Instagram to send money to other friends that use the messaging services. Between the three messaging systems, there are approximately 2.7 billion users around the world. Facebook is planning to manage these three systems under one umbrella, which would essentially allow the cryptocurrency to move across all three systems. The Facebook Coin is expected to be some kind of “stablecoin”, meaning it will more than likely have its value pegged at a 1:1 ratio with a major fiat currency such as the US Dollar.

According to anonymous sources that spoke with the New York Times, the Facebook Coin has been largely kept a secret from Facebook employees. Approximately 50 engineers have been working on the project in separation from other Facebook employees. Facebook has also been working with crypto exchanges on the project, which means that the Facebook Coin may also have a secondary market that would allow the coin to be traded against other major currencies such as Bitcoin.

Read the full article here.


Singapore Sovereign Wealth Fund Invests in Crypto Exchange Coinbase

February 28 – Another major institutional player has disclosed ownership in a crypto venture capital deal this week. GIC Private Limited, the sovereign wealth fund for the country of Singapore, has reportedly taken a stake in a leading cryptoasset exchange, Coinbase. Last year, Coinbase had raised around $300 million USD in a Series E round. Participants of the funding round included Tiger Global Management, Wellington Management and Andreessen Horowitz, but GIC Private Limited’s participation was previously disclosed. GIC Private Limited now joins a foray of other sophisticated investors, endowments, and pension funds that have taken the plunge into crypto venture capital.

GIC Private Limited has approximately $100 billion USD in assets spanning across 40 countries which range from government bonds to other private equity deals. For Coinbase, the funding round gave them a valuation of $8 billion USD, making it one of the most valuable startups in the world. According to documents retrieved from Bloomberg, Coinbase was forecasting around $1.3 billion USD in revenue for 2018, which is impressive given the significant retracement in underlying cryptocurrencies for that year.

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Ethereum Hard Fork Upgrade Activates With No Chain Split or Significant Volatility

February 28 – The long-awaited critical upgrades to the Ethereum network, Constantinople and St. Petersburg, have now been activated and integrated into the Ethereum blockchain. The upgrades bring major improvements to the blockchain, including new core protocol specifications, client APIs, and contract standards. However, the most significant changes that these upgrades bring to the blockchain are the reduction of block rewards from 3 ETH to just 2 ETH, which is a continuation of the previous fork Byzantium years ago that reduced the reward from 5 ETH to 3 ETH.

The hard fork officially activated on the 7,080,000 block. Unlike other crypto blockchain hard forks, such as the Bitcoin Cash hard fork of Bitcoin, there appears to be no “chain split” in the consensus of developers and miners about the upgrade. The “chain split” occurs when there is a disagreement about the upgrade from developers and miners, meaning a new crypto is born using new code, making two cryptos rather than just upgrading and adopting the existing crypto. Hard forks often cause volatility for the underlying cryptocurrency, as uncertainty arises over which new blockchain will be supported by miners and the rest of the network. For the case of Ethereum with Constantinople and St. Petersburg upgrade, there appears to be no chain split or network difficulties, and at the time of writing, the cryptocurrency ether is trading without much volatility and prices are currently held in a tight range.

Read the full article here.


Securities Lawsuit Against Ripple Will Stay in Federal Court

March 1 – According to a recent tweet by lawyer Jake Chervinsky, the ongoing securities lawsuit against the crypto startup Ripple will stay in federal court. Unlike Bitcoin and Ethereum, Ripple has long been seen by the crypto community as a “centralized” token, meaning some kind of controlling authority could, in theory, change elements of the blockchain or modify transactions without the consensus of miners and the rest of the network. The issue with centralization is that some kind of controlling authority could directly “profit” from the use of the token, meaning it raises issues around securities classification. The federal court case against Ripple argues that its initial coin offering (ICO) raised money illegally, and conducted the sale of unregistered securities without filing to the US Securities and Exchange Commission (SEC).

Last year, the US Securities and Exchange Commission (SEC) noted that both Bitcoin and Ethereum were not classified as securities at the time of issue, mostly in part due to their decentralization and there being no indication of single controlling entities that could profit. For the case of Ripple and its ongoing lawsuit, the ruling from the United States District Judge Phyllis J. Hamilton denies the plaintiffs’ motions to remand, meaning that Ripple must stay in federal court. “The Court has denied the plaintiffs’ motions to remand. This means the case stays in federal court, a minor but meaningful victory for Ripple,” said Chervinsky in a tweet.

Read the full article here.


3iQ Global Cryptoasset Fund: Price as at March 1, 2019

3iQ is the first regulator approved multi-cryptoasset portfolio manager in Canada, providing accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.


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2019-03-04T11:47:40-04:00 March 3rd, 2019|