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Bitcoin Dominance Growing — What It Could Mean for Altcoins

Bitcoin has staged a significant recovery from the 2018 bear market price decline, but altcoins continue to slide even lower.

Bitcoin (BTC) has more than tripled in 2019, moving from under $4,000 at the start of the year and then topping out at a little under $14,000 in June. In the earlier part of 2019, altcoins seemed to be performing strongly, with many calling the trend “altseason.”

However, since Bitcoin began its 2019 charge starting with the “April Fool’s day rally,” most altcoins seem to be slipping when compared to the top-ranked cryptocurrency. There is now a growing debate about whether the altcoin market will experience the same massive price gains seen in Bitcoin during this current bullish cycle. Within this expanding debate, there are several viewpoints. Some say Bitcoin’s dominance will continue to increase while altcoins continually lose ground. Others posit that previous cycles have seen altcoin rallies coming after bullish fatigue sets in for Bitcoin.

Bitcoin dominance chart as percentage of total market capitalization

Whether altseason returns or not, the only point for consonance appears to be the idea that the current bull cycle could have profound ramifications for the still infant market. Several commentators say cryptos are becoming a more mature asset class, which could lead to wider adoption.

Bitcoin vs. altcoins: The altcoin bubble argument

In late 2017, the cryptocurrency market arguably captured attention in the financial sector and beyond. Bitcoin rose to almost eclipse the $20,000 price mark while altcoins also posted all-time highs. The following year, many cryptocurrencies saw these gains virtually wiped out as the market endured a prolonged bear decline. The average price dip across the board was more than 80%.

Many analytical autopsies of the 2017 bull run converge at the conclusion that the sharp price gains were likely fuelled by hype-driven mania for cryptos as a new asset class. Retail investors struck with a fear of missing out (FOMO) rushed to put money into any and all crypto tokens in the hopes of becoming early backers of the “next Bitcoin.”

This FOMO-driven hype occasioned by the initial coin offering (ICO) boom also generated sufficient tailwind for Bitcoin to reach its all-time price high in mid-December 2017. ICO tokens generated a lot of buzz for the altcoin market as well. While the 2018 bear market did not discriminate in its wipeout of the 2017 price gains, the 2019 recovery hasn’t been as widespread across the market. To get a clearer picture of the situation, consider the following comparison by Twitter user and cryptocurrency analyst StopAndDecrypt:

  • Since the hard fork that resulted in Bitcoin Cash (BCH) forming a separate chain, BCH has declined by 11% while BTC is up more than 270%.

  • Bitcoin SV (BSV), the result of the 2018 Bitcoin Cash hash war, has plummeted by more than 40% since the chain split.

  • While BTC is almost triple its price since the 2017 hard fork, Ether (ETH) has made approximately zero percentage gains within that period.

  • Altcoins are also down by more than 80% since the peak of altseason.

There is also another means by which to observe Bitcoin’s increasing dominance over altcoin species. This method requires using the BTC price as the baseline for measuring altcoin price-performance within a specific time period, and the results appear even more dire for altcoins.

Take the ETH/BTC pair, for example, which is down to its lowest ratio. Take United States dollar valuations away and the altcoin performance becomes a tale of declining value.

Source: tradingview.com

Twitter user and Blockstream developer named Grubles, tweeting on Monday (July 16, 2019), delivered a damning indictment on altcoin value proposition, declaring:

“’Altseason’ was just a flash in the pan caused by Bitcoin miners delaying a protocol upgrade and massively profiting from altcoin mining. We’re now returning to 2013 where alts are effectively unused bad jokes like BBQCoin or PPCoin.”

Altseason and the concept of value in a maturing digital asset space

It is mid-2019 and there are hardly any updates from the ICO projects that raised millions of dollars back in 2017. The story for many of these startups can be distilled into the following points.

  • Riding on the “cryptomania” hype of 2017, promising a blockchain-based infrastructure that will solve a particular problem — both real and contrived.

  • Raising millions of dollars from a token sale that most probably was an illegal sale of unregulated securities.

  • Hiring employees to build the blockchain-based project that ultimately failed to materialize even after extensive marketing runs.

  • Getting clobbered by the 2018 bear market that rendered their tokens worthless.

  • Quietly exiting the scene, hoping that no one would notice.

In a private correspondence with Cointelegraph, John Meyer, a managing partner at Starship Capital, provided some commentary on the evolving value proposition narrative in the emerging altcoin landscape stating:

“Most altcoins provide little-to-no tangible value or real-world use. Expect these altcoins to evaporate in short order. However, there is tremendous user-driven momentum in cryptocurrencies that are providing real-world utility on blockchains with tangible value on key industries around the world.”

For crypto bulls like John McAfee, the altcoin market isn’t dead in the water and the current price slide only represents an opportunity for savvy investors to reap the rewards of another altcoin boom having earned returns from Bitcoin’s bullish advance.

McAfee’s bullish altcoin forecasts appear tilted toward privacy coins and medical coins. In multiple tweets published in 2019 alone, the cybersecurity expert and crypto loudmouth has predicted a coming resurgence in the price of these altcoin variants before the end of 2019.

Related: How Blockchain Improves Daily Health Care Routine, Explained

As previously reported by Cointelegraph, global blockchain penetration in the health care sector is expected to reach $1.7 billion by 2026, based on findings released by Acumen Research and Consulting.

McAfee even clashed with veteran trader Peter Brandt earlier in July 2019 on the issue of altcoins regaining a foothold in the market. At the time, Brandt sounded a literal death knell for altcoins, but McAfee disagreed in a tweet, saying:

“@PeterLBrandt says altcoins are done. His knowledge is Stone Age. Bitcoin will forever be a store of value, but each transaction allows both parties to see inside their wallets ever after. If banks did this you would scream. Privacy coins don’t have this flaw. Just one example.”

Tom Lee of Fundstrat Global Advisors also shares similar sentiments with McAfee, stating on multiple occasions that altseason will make a reappearance once BTC reaches a new all-time high. Many of these positive predictions for altcoins appear rooted in historical precedents. However, there is a growing consensus within the industry that the market has evolved since the last bull run in 2017.

In an email to Cointelegraph, Igor Chugunov, CEO of Credits — a blockchain startup that focuses on decentralized apps (DApps) development — argued that altseason will return, commenting:

“The bubble didn’t burst, it is better to say that it is just starting to inflate. The formation of the fundamental components of the cryptocurrency ecosystem is underway, the ICO era and the time when cryptocurrency could be considered as a tool for quick earnings have passed. I can say with confidence that the altcoin season will begin together with the adoption of technology, it is the technology that will determine the future liquidity of the market of altcoins and the general vector of market development. The future season of altcoins won’t cover the whole list of altcoins, it will be related to the coins that present definite value for space.”

Is the fated “cryptocalypse” at hand?

Holding BTC over the last 365 days (as at press time) would mean a 62% gain. However, for the top-10 altcoins in mid-July 2019, the situation is the polar opposite. Of these top-10 altcoins from a year ago, only Litecoin (LTC) has a percentage decline below 50%. Iota suffered the most, dropping more than 80% during the period. Others such as XRP, ETH and BCH have fallen by 58%, 68% and 75% respectively.

Litecoin’s mild decline is due to its strong performance for most of the year thus far. As far as top-10 altcoin price gains go for 2019, LTC has repeatedly been at the top. During its period of positive price performance, some analysts pointed to the upcoming block reward halving event as the key driver.

Related: Crypto Bubbles: Why Traders Believe Altcoins Are Overpriced

There have been numerous comparisons drawn between the cryptocurrency scene and the dot-com era of the 1990s and early 2000s. Apart from the potentially paradigm-altering potential of cryptos, some analysts have also drawn another likely commonality between the two eras — the crash of the market.

Often times, there is the talk of a coming crypto apocalypse that would eliminate from existence many of the over 2,000 altcoin species around today. The aftermath would be similar to the period of the post-dot-com bubble, which saw the rise of the internet giants known across the globe in this present time. Brandt encapsulated this argument in a tweet published at the back end of June 2019, saying:

“Many altcoins benefited from the last bull run in $BTC. Cryptomaniancs expect alts to do so again — they may be very disappointed. 2000 .com bubble is analog. Following 2001-02 tech collapse, dotcoms with real value exploded. The ‘alt’ .coms went bankrupt.”

Whether judgment day is at hand for altcoins remains a matter of debate, but there are some projects already showing disturbing signs. A report by blockchain data analytics firm Coinmetrics, for example, showed that a weather app was responsible for about 96% of the total transactions on the Bitcoin SV blockchain.

During the 2018 bear market, commentators like Xapo President Ted Rogers expressed the belief that the price downturn could be the beginning of a mass extinction event for altcoins. For Rogers, as many as 90% of all altcoin variants stood the risk of becoming nonexistent.

Rogers isn’t alone in this belief, as Barry Silbert of Digital Currency Group and Bitwise Asset Management’s Matt Hougan have also espoused similar sentiments. As reported by Cointelegraph in mid-February 2019, Silbert predicted that most altcoins “will go to zero,” while declaring Bitcoin to the premier cryptocurrency. Also in February 2019, Cointelegraph reported Hougan saying that 95% of all cryptocurrencies will die.

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Top-5 Crypto Tokens Pronounced ‘Dead’ — NEM and BCC Head the List

The rise and fall of “dead” сoins — the top-five most famous coins that didn’t survive and why…

In 2017, the cost of Bitcoin (BTC) reached almost $20,000, and in December 2018, its rate fell to $3,187 per token. Nevertheless, it is a solid price movement for a currency, which was created from nothing about 10 years ago. Bitcoin still dominates the portfolios of most crypto investors and is by far the most popular cryptocurrency, meaning its price is less prone to drops than the rest of the market.This is also indicated by the CoinMarketCap dominance chart. But what about the rest of the cryptocurrencies that have appeared over the past couple of years?

In 2018, CNBC reported that approximately 800 cryptocurrencies, which appeared as a result of initial coin offering (ICO), can now be called “dead,” because they are traded at a price below $0.01. In 2019, this figure continued to increase.

Resources that specialize in “dead” cryptocurrencies have launched, such as Deadcoins and Coinopsy, according to which, in 2018, about 1,000 different cryptocurrencies failed. Many “dead” crypto projects were scams organized as ICOs and some could not stand the pressure of the bearish market in late 2018. That is how Jay Richler, co-founder of Coinopsy, described to Cointelegraph the huge number of failed coins listed in different exchanges: 

“Before 2016, most failed due to just making a coin for fun, and then developers just gave up of pulled a small scam or pump-and-dump. After 2016, market got saturated with coins, so exchange listings now cost large amounts of $$$, for example Binance is like 1 million to get listed from memory. So after 2016, it was either well planed scams with funding and marketing or coins that started just didn’t have the funding and direction.This is most but not all.”

The Deadcoins’ team responded to Cointelegraph by saying that it is convinced that the main reason for cryptos failing is the lack of utility on their behalf:

“Many of the altcoins most probably to fail for many reasons, but the main reason will be the lack of utility and the use case or overlapping with other altcoin or their use case is already satisfied by BTC or other major coins.”

Here are our top-five dead cryptocurrencies — which were terminated by their founders — that turned out to be scams or had trading volumes of less than $1,000 for three months. Some entries in this list may come as a surprise.

Top cryptocurrencies presumed "dead"

Bitconnect

BitConnect tops this list of dead coins, as it is believed to be a fraudulent scheme — one of the largest in the history of crypto. The BitConnect project was accused of creating a large-scale financial pyramid.

BitConnect’s blistering invasion of the CoinMarketCap top-10 list, with a capitalization of $2 billion shortly after the launch of the project in January 2017, stunned many, and rumors of a dubious scheme began to spread rather quickly. However, only by the end of 2017 did cryptocurrency investors decide to publicly accuse the project of organizing an investment scam — a so-called Ponzi scheme.

One of the more prominent critics of the project was billionaire and well-known Bitcoin investor Mike Novogratz, who stated on Twitter that BitConnect really looks like a Ponzi scheme that hurts the image of the entire industry: “BitConnect really seems like a scam. an old school ponzi… bad actors hurt the community. period.”

The reason for all this resentment is the BitConnect lending program. The project promised significant bonuses for deposits in Bitcoin. But according to disgruntled users, the bonus payment mechanism remained opaque, and the nature of its origin was unknown. This led the community to suspect that the project represented a financial pyramid built on top of a multilevel referral system.

Many critics pointed out that the only possible source of bonus profits are deposits from new investors, but that information was kept secret by the founders of the project, whose identities were unknown. However, in early 2018, BitConnect was beginning to collapse. Texas and North Carolina regulators forced the founders to close the lending program and their cryptocurrency exchange, making the BitConnect (BCC) token redundant and subsequently causing it to depreciate. Then, one by one, collective lawsuits started to be filed against BitConnect, and United States authorities came to grips with investigating the activities of the project — whereby a U.S. court decided to freeze its assets.

NEM

NEM, or New Economy Movement, is a cryptocurrency that launched in March 2015. The active development of the NEM cryptocurrency began in 2016. The uniqueness of NEM lies in the fact that its development was carried out on original open-source code, thanks to which the cryptocurrency was able to initiate many useful innovations. The entry, withdrawal and exchange of the NEM cryptocurrency takes place on exchanges.

NEM is used to make instant transfers and payments worldwide without large commissions. It can be purchased both online and for cash, as well as be used for exchange operations among other currencies. NEM has become a very popular cryptocurrency and now is in the top-30 currencies by the market capitalization indicator, according to Coin360.

However, one of the largest cryptocurrency exchanges in Japan, Coincheck, confirmed in January 2018 that a large scale theft of funds from the platform has taken place. A total of $123.5 million in the form of NEM tokens (XEM) was claimed. At the time, Coincheck suspended all operations with NEM and other altcoins. Meanwhile, unconfirmed reports were received that unknown attackers stole further $600 million worth of NEM from the exchange.

Shortly afterward, Coincheck representatives officially reported the total losses of 58 billion yen ($123.5 million). The exchange filed a statement with the Financial Services Agency of Japan (FSA) and local law enforcement agencies regarding the cyber attack. Also, representatives of Coincheck assured that they were studying ways to compensate users for the lost funds. Despite assurances from the NEM Foundation, the news of the Coincheck hack and the theft of such a large amount led to a sharp decline of XEM: The coin dropped sharply in a short period of time, and by February, its value was about $0.60 and is still floating around that level.

Price of NEM since its drop from all time high price of $2.05

Nem

Source: coin360.com

Universa

The Russian-based project Universa attracted $28 million during its token sale in December 2017. The stated goal was to create a blockchain platform for business applications based on the high-speed Universa blockchain protocol, with a capacity of up to 22,000 transactions per second (TPS). An important fact for the promotion of the project was the partnership with Ernst & Young (EY) — and one of the top Russian banks, Alfa Bank — and has certainly strengthened Universa’s image as a domestic blockchain industry pioneer.

The founder of MGT Capital Investments and the creator of anti-virus software McAfee Security, John McAfee, became a member of the advisory committee of the Russian blockchain project, headed by businessman Alexander Borodich. McAfee spoke about this at the time on Twitter:

“I am proud to become an advisor @Universa_news and build McAfee Coin on the fastest blockchain. Join the revolution/ICO today! universa.io.”

However, as soon as the markets cooled down, a conflict among the members of the project’s management became evident, which resulted in legal proceedings being filed following the accusations of damaging the business’s reputation among the founders of the project. But while the management of the company was figuring out their differences, the daily trading volume of tokens hardly managed to reach $42.000, the liquidity was almost absent and the HitBTC exchange delisted this cryptocurrency. 

Bitcoin Diamond

Bitcoin Diamond (BCD) is a fork of Bitcoin. This cryptocurrency was created in November 2017 as a result of the separation of the mainchain of Bitcoin after block #495866. The purpose of the cryptocurrency is the same as the original Bitcoin, as a means of payment that is convenient for online purchases. The BCD token was credited to all Bitcoin token holders automatically after the fork. The accrual was carried out at a ratio of 1 BTC to 10 BCD. Thus, the maximum number of BCD tokens cannot exceed 210 million tokens, while 170 million tokens were released immediately and distributed among Bitcoin holders.

Bitcoin Diamond differs from the original Bitcoin in several key areas:

  • Block size was increased to 8 MB, eight times larger compared to Bitcoin.
  • A new encryption method was implemented, solving issues of confidentiality.
  • Increased speed of each block, reducing delays in confirming transactions and their costs.

The roadmap of the project promised that, by the beginning of 2020, Bitcoin Diamond should surpass Bitcoin in terms of its use cases. But the development plan has left a lot of uncertainties, with the main question being: When will work on the BCD token be competed? 

As per Coin360, Bitcoin Diamond’s capitalization is at around $140.5 million, and the cost of the tokens from the moment of listing has almost constantly been decreasing. At the time of the fork, BCD’s price reached $85 per token. Currently, one coin costs in the region of $0.80, marking a drop of almost 100%. Major players in the crypto market have voiced their concerns regarding the project — with Ledger, for example, stating that Bitcoin Diamond was involved in fraudulent schemes at the end of 2017:

“SCAM WARNING — multiple sites claim to let you collect Bitcoin Diamond. They’ll steal your assets. Never enter your mnemonic into a third party website.”

According to the statement, customers switched to websites related to cryptocurrency, on which they were asked to enter a password, and their BCD tokens were subsequently stolen in a classic case of website cloning. 

Emercoin

It may seem surprising that a traded token is on this list, but Emercoin can be attributed as a loser in the world of cryptocurrencies.

The project started in 2013, but it appeared on the lists of popular exchanges only in 2014. The Emercoin cryptocurrency was conceived as a payment tool on the internet. Presently, Emercoin serves only as a means of payment. In other words, this is money for buying goods — such as games, clothes, programs, etc. But this didn’t offer anything interesting or present attractive options for buyers. However, the developers are claiming that, in the near future, Emercoin will become a unique platform that will protect websites, copyright, etc. 

Despite the efforts of the creators, Bittrex announced at the end of June 2019 the withdrawal of several low-liquidity altcoins, including the Emercoin token — EMC. According to Coin360, the coin is at the 493 line, per the capitalization indicator.

Only the strong survive

No matter how low the price of a cryptocurrency falls, it can go even lower until it reaches zero, as was the case of BitConnect. Under the conditions of a downward market trend, all levels of support can be broken through on the way to full depreciation. That is why investors should stay away from low-liquidity instruments, which do not possess a stable influx of money, especially when those instruments begin to fall. Those who invest in it fall into a trap: Even if investors want to sell a falling crypto currency, they cannot — due to the lack of buyers — and are forced to watch their funds melt away. Richler Vanierwitz from Coinopsy told Cointelegraph how some nonliquid coins can come to life for a while, but then die:

“We were working on uncovering a big scam around local wallet with cryptocurrencies. There were around 500 coins in the wallet, but over time owners of this coins lost 80-90% of funding on these coins, but they kept making more. Through the time the owners revived this coins as new ones and listed again in some exchanges and for a short time the cost of these coins grew again but soon died. So I would not recommend buying any revived coin. Some other coins just get removed from one exchange then few months later get on a new one. Many reasons of the fall.”

Peter Brand, a financial analyst and trader, who correctly predicted an 80% drop in the cost of Bitcoin last year, takes a harsher stance, saying that only a few cryptocurrencies have a future ahead of them:

“Cryptos developed because of BTC. The cryptocurrency story is a Bitcoin story. It is difficult for me to specifically name those coins that will be worthless, but I genuinely believe that 99% will become worthless because their origination was driven by an attempt of a person, company or consortium to ride the coattails of Bitcoin. I believe that LTC and ETH have a good chance to retain value because of their already mass acceptance. On the other hand, I believe that niche coins (developed to address very specific purposes) and coins largely controlled (such as XRP) face an uphill journey.”

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France Set to Approve First Crypto Firms Under New Rules This Month

France is poised to approve initial coin offerings operators and other crypto businesses with its new regulatory approach to the sector.

France is poised to approve initial coin offerings (ICO) operators and other crypto businesses with its new regulatory approach to the sector. 

‘France is a Precursor’

As Reuters reported on July 16, the new rules — expected to take effect later this month — will enable crypto-related businesses to voluntarily submit themselves to national standards on capital requirements, consumer protection and taxation in return for the regulator’s green light.  

Anne Marechal — executive director for legal affairs at the Financial Markets Authority (AMF) — told reporters that the bold crypto regulatory agenda from the G7 presidency holder should make France a forerunner in the field. She said:

“France is a precursor. We will have a legal, tax and regulatory framework […] We are in talks with three or four candidates for initial coin offerings.”

Beyond ICOS, the AMF is also in talks with several crypto exchange platforms, custodians and fund managers, Marechal revealed.

As Reuters notes, momentum to provide greater legal clarity for the little-regulated sector has apparently been galvanized by news of the forthcoming Libra cryptocurrency from U.S. tech behemoth Facebook. 

A meeting of G7 finance ministers in Chantilly, France, today could see France’s Bruno Le Maire and the U.S. Treasury Secretary Steven Mnuchin finding a rare island of common ground when it comes to cryptocurrencies — and Facebook’s plans in particular — against a backdrop of ever-rising transatlantic trade tensions.

The Crypto Regulatory Roulette

Gaging the appetite for regulation in the nascent industry is complex and while some believe that increased oversight could bring greater reputability to crypto firms, change is also fraught with risks. Those unwilling to court the unknown are preemptively selecting proactive jurisdictions to launch their offerings. 

As Frederic Montagnon — a co-founder of LGO, a New York-based cryptocurrency platform that chose to host its ICO in France — told Reuters:

“When you are an entrepreneur, the worst that can happen to you is to set up your business where there is no regulation, to see an adverse regulatory framework later imposed that jeopardizes your whole business.”

As reported, the crypto markets have taken a wild turn after both President Trump and Mnuchin’s explicit focus on the risks of cryptocurrencies — yet some are taking a “no news is bad news” perspective on such high-profile airtime for the sector. 

Le Maire has meanwhile characterized Libra as an “attribute of the sovereignty of the States” and revealed that France intends to demand guarantees from the social media titan in liaison with G7 central bank governors.

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Share Internet Data Launches Banking App in Tandem With LDJ Capital

Internet crowdsourcing company Share Internet Data has partnered with LDJ Capital to incorporate a banking solution into its Internet-sharing platform.

Internet crowdsourcing company Share Internet Data Ltd (SID) has partnered with private equity firm LDJ Capital to launch a blockchain-based digital banking solution. The new digital banking app is called LDJ Digital, according to a press release on July 16.

According to the announcement, LDG Digital can function as a debit card and it supports both fiat money and cryptocurrencies. Moreover, the professed goal of LDJ Digital is to provide banking services to the unbanked, as per the report.

LDJ Digital will reportedly be a part of the existing SID platform and is based on its core technologies and principles. The SID and blockchain technology underpinning LDJ Digital will purportedly make banking accessible and affordable for the unbanked, the press release says.

SID reportedly allows users to provide Internet to other users via its mobile app, somewhat like a mobile hotspot. However, SID users do not have to acquire a password in order to gain hotspot access; instead, the app automatically generates a one-time-use password when SID users are in proximity of one-another. 

As per its website, SID has completed an Initial Token Offering and uses blockchain-based contracts to trade tokens in exchange for Internet usage.

LDJ Digital CEO Jose Merino commented that financial inclusion is a natural upshot of a free Internet ecosystem:

“Free access to the internet opens the floodgates of access to a host of other global resources. Financial inclusion is one of logical results of this. The SID ecosystem is setup to support a robust community that embraces educational, social, and financial inclusion among others.”

As previously reported by Cointelegraph, Napster creator Shawn Fanning’s company Helium performed a limited launch of the company’s Internet of Things (IoT) hotspot devices in June. This project also aimed to create a decentralized Internet ecosystem, and further intended to provide an array of use cases harnessing the devices’ sensing mechanisms. Use cases included tracking pets and preventing bike theft via location-detecting sensors.

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Chinese Token Projects Raised $1.18 Billion In H1 2019

China blockchain fund raising

China has established itself as a
blockchain technology hub and currently leads in the use of the innovation. The
nation has filed the highest number of blockchain patents globally. The East
Asian country has a new world title.

According to data by InWara, out of 583 token offerings launched
in 2019’s first half, those Chinese in origin raised the most capital. Chinese
projects have so far raised an astounding $1.18 billion, which is 33.2 percent
of the money raised from token sales in 2019. This quite surprising since
China’s government is primarily viewed as crypto bearish.

Chinese IEO raises $1 billion

This year, blockchain startups have
raised $2.26 billion in venture funding. In the first quarter, these projects
raised $560 million. In the second quarter, however, they raised at least three
times the first quarter’s amounts resting at $1.7 billion. Digging deeper into
the data reveals that the US had the lion’s share of the token offerings at 66.  

It was followed by Singapore another upcoming crypto friendly environment with 52 token sales. China had 30 despite raising the most considerable amount of cash. Of the token sales, 69 percent were ICOSs while 21 percent were IEOs. STOs had 10 percent. Token-based funding has nonetheless taken a massive hit from the ICO market collapse. The capital raised is 46 percent less since ICO numbers have declined by 74 percent compared to 2018 figures.

In contrast, the IEO rates are growing, registering a 6,000 percent rise with 123 projects. These projects have raised a massive $1.63 billion, and this figure is expected to rise with time as the ICO further declines. China’s dominance in token funding was primarily occasioned by the Bitfinex’s LEO, May 2019 IEO. Floated on Tokinex, the IEO raised $1 billion. Gate came second with $320 million. The US-based 66 token projects raised $255 million, a 7.6 percent of all capital raised globally. Singapore, in its part, raised $232 million.

Support for Blockchain Developers

The Chinese government is greatly attracted to the efficiency and cost savings nature of blockchain. As an illustration, The People’s Bank of China, which is the Chinese central bank, is working on a blockchain based finance and trade platform. In fact, China has blockchain sandboxes to help boost the development of the technology. The Hainan sandbox, for instance, has government-sponsored incubators directed towards startups and entrepreneurs complete with exclusive deals, aid, and other perks.

This US has a National
Action Plan for Blockchain
, calling for “a comprehensive, coordinated,
pro-growth approach to developing blockchain technology in the United
States.” The plan forwarded by the Chamber of Digital Commerce has
nevertheless not established any government strategy for blockchain yet.

In comparison, China is miles ahead.
DLA Piper law firm’s attorney Lin Pang says
that China:

 “Encourages innovation and creativity by providing the resources, including the incubator. For foreign companies [coming in] they want to make sure you work with the local companies and contribute to their economy.”

Chinese blockchain developers also have a much easier time disrupting older systems than their peers in the US. The incumbents in financial services in the US, for instance, are entrenched and mature and have regulations protecting them. Nonetheless, in China, the opportunities for disruption are rife, and the government supports their effort.

The post Chinese Token Projects Raised $1.18 Billion In H1 2019 appeared first on Ethereum World News.

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US SEC Approves Blockstack Token Offering Under Regulation A+

Blockstack has received approval from the SEC to run a public token offering via Regulation A+ — a first use of the regulation for a token offering.

The United States Securities and Exchange Commission (SEC) has given blockchain-based startup Blockstack the go-ahead to run a $28 million public token offering under Regulation A+, according to a report by The Wall Street Journal (WSJ) on June 10.

Blockstack will reportedly launch its token offering online tomorrow, July 11. While other firms have previously taken advantage of Regulation A+ funding, this marks the first time that investors will receive a token, rather than shares in the company.

Regulation A+ is an initial public offering (IPO) alternative geared towards startups in need of early funding. Regulation A+ funding was introduced in 2012 via the “Jumpstart Our Business Startups Act.” As the report says, any member of the public can partake in a Regulation A+ funding round.

While Regulation A+ has more lenient disclosure obligations than as with an IPO, it has two tiers with hard caps on raised funds, maxing out at $50 million within a 12-month period.

This is possibly a precedent-setting moment for the crypto space, as per the report. Initial coin offerings (ICOs) have been on the decline. Crypto firms raised billions of dollars through ICOs until the SEC began an ongoing crackdown in the name of investor-protection laws, as per the report. The report cites research from TokenData, which apparently shows that ICO funding dropped from $6.9 billion in Q1 2018 to $118 million in Q1 2019.

Blockstack founders Muneeb Ali and Ryan Shea reportedly spent 10 months and approximately $2 million to gain approval from the SEC. Ali apparently said that Blockstack had to develop a protocol for running what is essentially a regulated ICO through Regulation A+ from the ground up. As previously reported by Cointelegraph, Blockstart applied for SEC approval to run a $50 million token sale in April.

As the report says, some blockchain-based startups have conducted token sales under SEC Regulation D, including Blockstart. Unlike Regulation A+ sales, Regulation D sales do not require SEC approval; however, they are limited only to accredited investors, i.e. companies that hold a minimum of $5 million in assets and $1 million in its figures’ cumulative net worth.  Blockstart reportedly received $47 million through Regulation D funding in 2017, along with an additional $5 million from venture-capital funding.

According to the WSJ, a crypto-based startup YouNow Inc. has also has filed for a Regulation A+ funding round.

As previously reported by Cointelegraph, major traditional exchanges such as Nasdaq and the New York Stock Exchange have shied away from Regulation A+ IPOs due to recent events.

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Gram Asia to Sell Telegram Tokens at Three Times ICO Price

Gram Asia is selling Gram tokens on July 10 for $4.00 each on the cryptocurrency exchange Liquid, approximately three times the price they sold for during an ICO last year.

South Korea’s Gram Asia is selling rights to its Gram holdings at $4.00 per token starting July 10, according to a report by Bloomberg on July 3.

The proposed sale price is triple the original $1.33 sale price at Gram’s second initial coin offering (ICO) round in March 2018.

The sale on July 10 is apparently happening exclusively through Japanese cryptocurrency exchange Liquid, as per its website. Liquid also hosted the Gram ICO in March, at which time Telegram raised $850 million, bringing its total valuation up to $1.7 billion. 

Citing an email from the exchange, Bloomberg reports that users who buy Gram with the exchange’s native token, QASH, will get a $0.50 discount per token.

Future price estimates for the Gram token vary, but generally fall between $2.10–$8.00, according to research from by Russian research agency Aton.

While Liquid initially announced on June 11 that it would be hosting the sale, a source close to Telegram told Cointelegraph that there is no relationship between the two entities. The source further said that the June 11 press release was the first time they had heard of Gram Asia.

Additionally, a Telegram investor commented that no one has the rights to sell Gram tokens before the official launch. Per a token purchase contract, the buyer agrees to not:

“ENTER INTO ANY swap or other AGREEMENT THAT TRANSFERS, in whole or in part, ANY OF THE ECONOMIC CONSEQUENCES OF OWNERSHIP OF THE INVESTMENT CONTRACT represented by this Purchase Agreement or any Tokens.”

Gram is the yet-to-be-released native token for the Telegram Open Network (TON), a decentralized network project by the open source, encrypted messenger app Telegram. The service, used by over 200 million people, is planning to launch its Gram tokens by the end of Q3 2019.

As previously reported by Cointelegraph, Gram Asia is the largest holder of the Gram token in Asia. Additionally, the exchange Liquid apparently has a deal with Gram Asia, but not Telegram. Liquid has further hinted at being an incubator for TON.

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ICO Craze Still On: Telegram’s Gram Crypto Will Sell For 3x Original Price

Telegram’s In-House Crypto to be Sold on Liquid

As Bitcoin (BTC) and the broader crypto asset market has recovered over the first half of 2019, it seems as though initial coin offerings (ICO) have made somewhat of a resurgence.

According to a recent report from Bloomberg, Gram Asia, a large holder — “whale” — of Telegram’s soon-to-launch cryptocurrency (Gram/GRAM), is looking to liquidate his/her/their stash in a sale starting on July 10th.

To be held via Liquid, a Japanese crypto exchange which many laud for its transparency and above-the-board nature, the sale will see Gram Asia, a South Korea-based entity, sell Grams for $4 apiece.

This is over three times the price purportedly paid by investors of Telegram’s private placement round, accentuating that there is still hype for ICOs in spite of the unraveling of many cryptocurrencies. Grams sold on Liquid will be lowered to $3.50 a coin if buyers use the crypto exchange’s in-house token, QASH.

The tokens purchased won’t be released until Q3 of this year, which is when Telegram, a popular Bitcoin-friendly messaging ecosystem with roots in Russia, is expected to launch its “Open Network”.

It is important to note that this is not a Telegram-endorsed sale, but is instead Gram Asia’s attempt to capitalize on the anticipation of the launch of the social media cryptocurrency.

This sale, which some suggest may be well oversubscribed, comes shortly after Algorand, what analysts dub a “next generation” blockchain, held an absolutely crazy sale. During the event, the Proof of Stake protocol snagged just over $60 million via CoinList. With Algorand expecting to issue over 10 billion Algos in the coming five years, the recent sale valued the network at over $20 billion — crazy.

A Libra Competitor?

For those who haven’t been following news of Telegram’s official sortie into the cryptocurrency ecosystem, the Telegram Open Network is expected to facilitate an array of applications: user-built applications, decentralized data storage, and ways to bypass censorship (implying a decentralized messaging service). Pavel Durov, the chief executive of Telegram, hopes that the blockchain will be faster than Bitcoin and Ethereum, thus giving it the capability to compete with financial incumbents, namely Visa and Mastercard.

Considering the timing of the launch of the chain, the expected use cases, and the fact that Telegram is a social media firm, some have dubbed Gram a competitor to Libra. This may not be how Durov or Zuckerberg planned it, but the two chains are likely going to clash.

Photo by Christian Wiediger on Unsplash

The post ICO Craze Still On: Telegram’s Gram Crypto Will Sell For 3x Original Price appeared first on Ethereum World News.

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Reserve Bank of India Developing Blockchain Banking Platform

The R&D branch of the Reserve Bank of India is developing a blockchain platform.

The Reserve Bank of India (RBI) is developing a blockchain platform for banking in its R&D branch, according to a report by BusinessLine on June 28

The blockchain platform will reportedly host a number of blockchain applications, and is slated to launch next year. This model platform is reportedly being designed to serve banks; according to the director of The Institute for Development and Research in Banking Technology, RBI’s R&D branch, the platform is “for blockchain applications for the government in banking.”

While RBI appears to be moving into the blockchain industry, it has historically not been keen on cryptocurrencies. In April, the RBI specified that cryptocurrency projects, including initial coin offerings (ICOs) and cryptocurrency exchanges, would not be permitted in its regulatory sandbox project, unlike blockchain tech. 

In June, The Economic Times additionally reported that social media giant Facebook is not attempting to register its upcoming virtual currency Libra with the RBI, possibly due to the banks ban on serving cryptocurrency-related business.

As previously reported by Cointelegraph, banks in South Korea are also exploring blockchain tech, while remaining averse to cryptocurrency adoption. The South Korean government likewise does not permit ICOs in the country.

Korean crypto influence Hyun-sik ‘Soso’ Choi has commented on the state of blockchain and crypto in South Korea, saying:

“Korean banks are jumping into the blockchain field. While this proves there is huge interest in the technology from traditional finance, all the attempts are on the tech side. They are ignoring the cryptocurrency part.”