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Reports: A Bitcoin ETF Could Be Approved In 2019

The talk in town is no longer about if a Bitcoin ETF will be approved, but rather when. That means that the approval is currently deemed imminent. However, the crypto market may have to wait a while longer for this to happen as it is unlikely to come into play in 2018. Predictions from various sources indicate that the approval may come sometime in 2019, terming the year as the more realist period for the expected development.

SEC To Review Verdict

Perhaps one of the more important factors that could affect this perception is the issue surrounding the US SEC’s decision to review its earlier verdict to reject ETF approval proposals by the Winklevoss twins. At the moment, the approval seems imminent, but it’s the timing that has some people concerned.

An ETF includes any kind of fund, be it mutual or hedge fund, that is traded within a listed exchange platform. With an ETF, most assets traded are regulated by CFTC or SEC. Currently, very few crypto assets are recognized by these two regulatory bodies. As such, any trading fund would need to list its shareholders as securities. Because of these regulatory challenges, SEC is still wary of approving their ETF proposals.

There Have Been Attempts

There have been noted attempts to get SEC to approve ETF applications, with the most noticeable being the recent proposals presented by the Winklevoss twins in March 2017 and July 2018. However, the two applications were turned down. More applications have followed, from various other parties, with varied revisions and details.

In August 5 2018, a report from the US Equity Research and written by Scott Suh andMichael Graham opined that the imminent approval of a Bitcoin ETF was at the top of the agenda for the majority of institutions seeking to breaking into the new digital asset class. They mentioned the application by SolidX /VanEck as one of the various applications awaiting verdict. Although some major industry players don’t really take a Bitcoin ETF as very necessary, there’s a general consensus that its approval would likely trigger a short-term event and it could well fuel a bullish run.

As for the proposal presented by VanEck/SolidX, the SEC review date has been set for September, and there’s a possibility that this date may be change. This makes 2019 the more realistic timeline for the review and possible approval of a Bitcoin ETF. However, the ball is now in SEC’s court, and the market can only anticipate.

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Bitcoin Will Flash Dump then Moon, Says Veteran BTC Analyst Willy Woo

Veteran digital analyst, Willy Woo, correctly predicted back in late May, that Bitcoin (BTC) would test levels below $6,000 before any signs of recovery would be seen in the markets. Back then, he did not see BTC holding the $7,000 price level and had this to say:

I think we are gonna go to $5500-5700 next, I can’t see $7000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long time-frames here, looking into June for rough timing of this to play out at a best guess.

Woo would also add that BTC was less likely to drop below $5,000 during that time period.

I don’t necessarily think we’ll fall through the 5000s… sure it’s a possibility but it doesn’t have to. It’s not a repeat, it’s not Mt Gox and Willybot pushing up price with faked orders, we aren’t detoxing from a scam bubble. Technically $5000s is a very strong support band

Sure enough, BTC fell to its lowest value this year on June 29th when it was valued at approximately $5,800 – $5,900. Three weeks later, BTC has been soaring at levels above $8,000 since last Tuesday, July 24th. However, these values have been short lived for BTC has dropped to the current value of $7,615 in a period of just 2 days.

The Flash Dump then Moon

Willy Woo has once again predicted that Bitcoin will probably continue to decline in value due to a flash dump. When this is done, BTC will moon just like Gold did during the Wallstreet Financial Crisis of 2008. Mr. Woo made this comments via twitter when he stated the following:

Interesting to see most think BTC will moon. I think BTC will flash dump, then moon afterwards, just like with Gold in WFC 2008. Flight to safety: everything else sells off to USD, then used to unwind leveraged positions, then afterwards havens like Gold and BTC have a bull run.

He would also add that its performance is contingent on institutional investors buying BTC.

Probably also contingent on how many institutional players are in the BTC market over that period. Normal retail HODLers won’t tend to have large leveraged positions to unwind from, apart from maybe mortgages.

The full tweet can be seen below.

Willy Woo has also advised how to trade in a bear market. He stated that:

When in bear, stay in USD as a base currency, then short (and long with extra care). When in bull stay in BTC and do vice versa.

Mr. Woo has on many occasions preferred to use the NVT signal/ratio to analyze the future of BTC. Standard NVT Ratio is simply the Network Valuation divided by the Transaction Value flowing through the blockchain and then smoothed using a moving average. NVT Signal then applies the moving average to only the transaction value. The signal is the work of Willy Woo and Dimitry Kalichki.

Disclaimer: This article is not meant to give financial advice. Any opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Institutional Investors are Swapping Bitcoin Futures for Physical BTC in Wall Street

It seems like the institutional investors at Wallstreet have also succumbed to FOMO that is related to the current Bitcoin (BTC) rally. The King of Crypto has been increasing steadily from Friday, July 13th, when it was valued at $6,200,. BTC has since gained by 34.4% to current levels of $8,335.

This impressive rally in almost 2 weeks, is the reason two Wallstreet institutional investors have completed the first-ever exchange of their positions in the CME’s Bitcoin futures market, for an equivalent amount of the ‘physical’ Bitcoin asset in an EFP transaction. According to CCN.com, the CME EFP Bitcoin transaction was facilitated by  E.D & F Man Capital Markets, which is a registered futures commission merchant, and itBit, an institutional-grade cryptocurrency exchange.

According to the CME Group website, EFPs are defined as follows:

An Exchange for Physical (EFP) is a particular type of Exchange for Related Position (EFRP) transaction and may be executed in any CME equity index future in accordance with Rule 538 and any associated advisories.

The EFPs are then used by traders as follows:

EFP transactions allow investors to convert between futures and either ETFs or baskets of the underlying index constituent stocks, without exposure to intraday market execution. This not only allows investors to optimize their holdings to meet their leverage, capital, tax and liquidity needs but to also differentiate between the tool they use for trading and how they want to hold their exposure.

In an EFP transaction, two parties exchange equivalent but offsetting positions in an equity index futures contract and an underlying physical equity (either a related ETF or basket of shares). One party is the buyer of futures and the seller of the physical shares, and the other party takes the opposite position. The EFP is a privately-negotiated transaction between the two parties to the trade, where the consummated transaction must be reported to the Exchange.

These transactions are common in traditional trading, but this is the first time an EFP has been used with a digital currency as the underlying asset. The current expiration date of the CME Bitcoin futures is this Friday, the 27th of July. The EFP transaction might have been as a result of the investors seeing that BTC is on a rally rather than on a decline as earlier expected.

Brooks Dudley, from E.D & F Man Capital Markets Inc., had this to say about the trade:

Every day we facilitate EFPs for our clients in physical assets such as soybeans, wheat and treasuries. EFPs on CME Bitcoin futures mark an important step forward in the maturity of the regulated derivatives market for digital currencies.

As the cryptocurrency markets continue to evolve, EFP trades might become common. Owing to the fact that the U.S. Commodity Futures Trading Commission (CFTC) has only approved Bitcoin futures products that are settled using cash, the EFPs will provide more flexibility as to how Wallstreet interacts with digital assets.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Cryptocurrency Stocks Stage a Comeback Amidst a Resurgence of Bitcoin Hype

As Bitcoin continues to perform well in recent days, the prices of cryptocurrency stocks are once again in the green. The value of small to medium firms that rebranded with blockchain in 2017 is seeing a significant value boost coinciding the present BTC price rally.

Bitcoin, Cryptocurrency, and Blockchain are the Magic Words Once Again

In 2017 cryptocurrency was a buzzword that meant astronomical growth. While the likes of BTC, ETH, and other virtual coins were steadily gaining new all-time highs, some company executives came up with a brilliant plan. They decided to rebrand their companies using blockchain.

It didn’t matter whether the firm had anything to do with decentralized technology. Some merely added blockchain to their company name, while others branched out into the technology itself. By so doing, many were able to ride the wave of crypto price surge of late 2017.

However, the start of 2018 brought with it a massive decline in cryptocurrency prices. The bear run caused the market to lose more than half of its market capitalization with coins like BTC shedding over 60 percent of its value. As crypto prices tanked, the share prices of these “crypto stocks” also declined significantly, showing that there was some coupling between the two.

Shares of companies like Marathon Patent Group Inc., NXT-ID Inc., and Riot Blockchain Inc. have increased significantly over the past few days as can be seen in the chart below. Riot Blockchain Inc.’s stock rose by more than 40 percent when BTC price surged on July 17.

Bitcoin Hype Reaching Fever Pitch

So far in July, Bitcoin has gained close to 30 percent moving from $6,300 to just above $8,100 (at the time of writing this article). Apart from the price rally, there is a palpable buzz of excitement in the market at the moment due to a raft of positive developments.

Today, the top-ranked cryptocurrency has managed to break above $8,000; a milestone last achieved on May 22. BTC is currently up more than five percent, and traders will be hoping the price can test the $8,300 and $8,500 resistance levels given the positive sentiment that is awash in the market at the moment.

What are your views on the apparent coupling between the BTC and crypto stock price performance? Do you think other companies will elect to adopt the once trending practice of attaching blockchain to their brand identity? Let us know your thoughts in the comment section below.

Image courtesy of Bloomberg.

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Bitcoin (BTC) Breaks $8,000 as Alt-coins Suffer

Bitcoin (BTC) has done it! Bitcoin (BTC) has broken the $8,000 price ceiling. According to coinmarketcap.com, BTC gained well from values of $7,724 to $8,006 in a matter of 5 hours. Some exchanges such as Binance, witnessed a higher value of BTC at around $8,047. The King of Crypto is currently trading at $7,989 and up 3.72% in the last 24 hours at the moment of writing this.

BTC reaching $8,006. Source, coinmarketcap.com

Many crypto-traders and enthusiasts believe this is the start of something great in the form of another Bitcoin Bull run that could lead to the King of Crypto finishing the year at a value greater than last year’s peak of $20,000.

In an interview to CNBC’s ‘Fast Money’, Brian Kelly, CEO of the digital asset focused BKCM fund, gave the following reasons as to why Bitcoin is beginning to look more bullish.

  • Upcoming Bitcoin ETF decision by the SEC
  • More institutional investors considering cryptocurrencies and blockchain tech as investment options
  • The advancement of blockchain as ‘Web 3.0’
  • End of Bitcoin selling pressure in the markets

Brian Kelly’s remarks coincide with Bitcoin further gaining dominance in the crypto markets to current levels of 46.8%. BTC dominance was 46% only 24 hours ago when Ethereum World News covered the story. With the total crypto market capitalization yet to reach $300 Billion and at current levels of $293 Billion, it is the alternative coins that seem to be suffering from the dominance of Bitcoin.

Looking at the cryptomarkets, Ethereum (ETH) is yet to break the $500 mark and is currently trading at $470 and only up 1.11% compared to Bitcoins 3.79% in the last 24 hours. XRP is currently $0.45 and down 0.84% in the last 24 hours.

The losses of XRP are not unique to the remittance coin. Other coins that have shown a decrease in value are as follows and at the moment of writing this:

  • EOS –  down 1.53% in the last 24 hours and trading at $8.09
  • Stellar (XLM)  – down 0.08% in the last 24 hours and trading at $0.29
  • Cardano (ADA) – down 0.73% and currently trading at $0.168
  • IOTA – down 2.84% in the last 24 hours and currently trading at $0.96
  • Tron (TRX) – down 1.22% in the last 24 hours and currently trading at $0.035

The only logical conclusion is that investors, who include regular crypto-traders, have transferred their funds from their favorite alt-coins to BTC for the King of Crypto is showing signs of sprinting to the finish line at a value higher than last year’s peak of $20,000.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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