Category: Cryptocurrency News

Now that the blockchain technology has already accelerated its footprints in the emerging country like India, the Indian crypto traders have plotted the ways to trade cryptocurrencies mostly the crypto major Bitcoin to thwart the ban imposed by the central bank – Reserve Bank of India. The central bank has already warned all the financial institutions from offering services to all those companies that deal with cryptocurrency.

However, amongst the restrictions imposed by Reserve Bank of India, Indian traders have started finding various ways to escape the ban. Since there are a variety of methods that they can use, where one is Dabba trading to be used by traders as per the valid source from Business Today.

The excerpt from the news as follows:

“Ever since the banks were stopped from providing financial services to digital exchanges, the trade of bitcoin through Dabba trading has increased manifold”.

On the transaction summary front, through Dabba trading brokers don’t execute trades on the existing system in place like commodity or stock exchange. On the contrary, they transfer money with the help of Hawala network and execute a trade by using an overseas bank trading account based in Dubai, UK, and Europe. This will, in turn, accelerate the Dabba operators betting on bitcoin and related transaction thereby increasing their earnings.

As per the valid source of the finance publication, such traders are usually located in Mumbai, Kolkata, Surat, Rajkot. Their main aim is to build a bridge the gap between a customer and foreign trading company. While in the transaction, the broker accepts payments in cash and purchases bitcoins through the overseas trading account and sells them when the stake placed in India is settled. The spread in the transaction is paid in cash to the customer as a benefit. Most of the transactions are done through Messaging App called Telegram which is a cloud-based instant messaging services with end to end encryption where the money in cash is transited through the Hawala channels as per the valid source of finance publication. However such kind of transactions also executed with the help of official channels where brokers maintain both the Indian as well as overseas bank accounts.

Needless to say that the use of cash in physical form for trading cryptocurrency has increased since the country’s central bank has imposed certain restrictions. Because people have started using cash to earn more money through cryptocurrencies.

Additionally, in order to escape the restriction imposed by Reserve Bank of India, a number of crypto exchanges in India have launched their peer to peer (P2P) trading solutions.

Let us not forget that the human mind is eclectic as it always finds where to get comfort. However, it is highly recommended to trade with cryptocurrency (because it has a great potential) following strong ethics in place, only then the long-term story of the crypto-related world will be fascinating!!

 

As per the statement was given by Taiwan’s Central Bank Governor Yang Chin Long, the country has claimed and raised its remark having said that the cryptocurrencies do not contain trustworthiness in themselves and so they can not let the existing currencies to flourish. This is why the country is reluctant to incorporate cryptocurrencies to drive transactions through them.

According to Liberty Times report, Yang while speaking to a forum explained the importance of digital economy stating that use of any currency requires a long history of trust that it has created in the country where it is used which is already vanished in case of cryptocurrencies especially when the currency’s value declined to zero. This scenario will lead to only a short-term movement and not the long-term strategic view.

On the cryptocurrencies front, they still face various types of complexities ranging from the large volatility in their value, supply-related issues among others. But because no compensation or redress for loss incurred out of the crypto related transaction, they are widely used by ruthless people as stated by Yang.

Eventually, in 2013 the Central Bank did not approve cryptocurrencies as true currencies due to a large number of complexities involved but claim them as virtual merchandise to trade as per the valid source of Liberty Times.

 

The cryptocurrency scenario in the Eastern part of the world has seen some compliance related changes. In Japan, it would become mandatory for the exchange operators to set ceilings on customer trading as per the valid source of the Japan Virtual Currency Exchange Association. The association will soon file for Financial Services Agency approval in order to be recognized and self-regulated body under the payment services law in Japan.

The rule specifies for transaction, where it aims to prevent all those cryptocurrency traders that trade with the small assets and that are suffering from heavy losses and facing complexities with inadequate cash-flows to pay regular expenses.

As per the valid source, the industry group will allow exchange operators to select either of the options that will prevail transaction satisfactorily. The limit based options specified by the industry group where particular limits are set for different customers group based on their age, assets, income, among other parameters. On the contrary, another option is to place a blanket ceiling low for the safety of customers with limited assets.  With this, the industry group has certain mechanism in place where minors have to get permission from parents or other respective guardians especially when they start trading activities, as well as it prohibits margin trading in principle and demanding regular checks on the decision making ability of elders. Besides this, the group may restrict large contracts as a measure against unethical practices like money laundering, etc.

On the whole, the industry group would like that all the transactions run while holding an ethical approach. Because when it comes to trade or transact either in capital market or crypto market, one has to hold medium to a long-term approach.

 

Now that the Blockchain technology has become omnipresent, the number of active crypto funds has exceeded to 312 increased by 24% (approx.) as per the valid source of Autonomous Next – an Analytics firm. The growth was seen much higher since 2016 by 456%, and 791% since 2015 as per the valid source. Let us not forget that the year 2018 has received the lowest percentage of increase in cryptocurrency funds year over year basis. The analytics report shows that the majority of newly build-up crypto funds started their operation during the second quarter of 2018. On the contrary, only 20 funds initiated their operation in the first quarter.

Besides the incremental size in percentage terms, the collective value of all cryptocurrency funds stand around $7.5-$10 billion. On the analytical perspective, the industry has been quite centralized while around 10 largest firms contributed approximately 43% of total industry capital whereas 80% capital contributed by the 50 largest firms in the crypto industry.

Stimulate the growth of Cryptocurrency Funds

Likewise capital market, the crypto market has common fundamentals like geopolitical factors, macroeconomic factors that affect the price of cryptocurrencies and growth of the industry. When the news like Van Eck’s application for Bitcoin led ETF with the SEC aired in the market, so it  affected the entire industry most positively. The number of cryptocurrencies is increasing by leaps and bounds. The crypto major Bitcoin is contributed about 1% of the entire Gold market. As per the valid source of CoinMarketCap, there are 1691 cryptocurrencies are traded on12166 markets worldwide.

Let us not forget that the cryptocurrencies have just got their edge and already become well-known amongst the investors’ community worldwide. However, they still have a long way to go!!

 

The major cryptocurrencies like Ethereum, EOS, Nabulas  have been ranked closely each other with Ethereum and Nabulas follows EOS that received the top rank for the second time while the rating done by China’s CCID Research Institute. As per the CCID study, the EOS has been the mainstream amongst all the cryptocurrencies in Blockchain industry.

 

When we talk about the research institute – CCID which is backed by the Chinese government that carries out its assessment regarding Global Public Chain Technology. The excerpts (through the translation into English) from the CCID’s website as follows:

 

“The global public chain technology assessment work was organized and implemented by the CCID (Qingdao) Blockchain Research Institute. It was jointly carried out by a number of units including the CCID Think Tank under the China Electronic Information Industry Development Research Institute and the China Software Testing Center. The purpose is to scientifically assess the development level of global public chain technology.”                                                                                                                   

The recent ranking done by the CCID as on 17^th May 2018, the major cryptocurrencies ranked in chronological orders are EOS is followed by Ethereum, Nebulas, GXChain, NEO, Stellar, Steem, Lisk, Waves, Komodo, BitShares, DASH, Ripple, IOTA, Ark, etc.

The project at CCID was bifurcated into three categories ranging from technology to application to innovation. Let us discuss about the three prominent cryptocurrency that have priority over the entire ranking as follows:

 

EOS has seen many setbacks just in the past month. However, this crypto has reflected its impression through a variety of consensus algorithm by using a delegated proof-of-stake (DPoS) that has acquired priority over the scale and speed at the expense of some decentralization.

 

Now at the second rank, Ethereum that uses a proof-of-work (PoW) consensus algorithm. However, just recently this crypto has executed its roadmap to transition to PoS. The developers of Ethereum are constantly working to resolve the project’s scalability issue.

 

The third one crypto Nebulas that was founded in Singapore in 2017 by Nebulas IO Foundation ranked sixth on the previous rankings, however, in 2018 it has got rank third. The enthusiasts of Nebulas call the project the new “Google for Blockchain”.  It contains a variety of projects like a search engine and upgradeable smart contract capabilities. The major difference between the Google and Nebulas is Google is inclined to day-to-day searches, on the contrary Nebulas focuses specifically on searches throughout decentralized applications, users’ blockchain assets as well as smart contracts.

The recent scenario reminisces about how Bitcoin has scaled up over the past month. On the contrary, Ethereum recovered just below 15% in the same period whereas Ripple gained up to 16%. However, the growth of Bitcoin Cash obstructed despite having the better features compared to Bitcoin in terms of scalability and speed – two major parameters.

 

Investors’ superfluity towards Crypto based ETF

 

There are a number of fundamentals that significantly play the higher performance of Bitcoin as compared any cryptocurrency. Now that SEC-regulated cryptocurrency called ETFs are expected to enter the market soon, more and more fund managers are in rat-race to introduce their own cryptocurrency based ETF to raise capital from the institutional and accredited investors. However, the Security and Exchange Commission (SEC) is yet to approve the crypto-based ETF. The major benefits of crypto-based ETFs are that they are liquid financial instruments. They could be easily traded without paying transaction fees.

 

While doing portfolio planning, it is recommended parking capital with crypto based ETFs as it is one of the safest ways for unregulated crypto funds that the institutional investors have in their portfolio. So the accredited investors are awaiting to welcome the arrival of crypto based ETFs soon. This will definitely prove to be the new asset class that gives a boon to other crypto currency like Altcoins.

 

Corporates’ inclination towards using crypto currency – Bitcoin

 

Now that the blockchain industry has been omnipresent amongst the investors and corporates community world-wide, the major credit card company – Mastercard won a patent to manage the ‘fractional reserves of block chain currency’. The concept is as simple as it allows Mastercard users to execute transactions using as currency.

 

The major benefit to use cryptocurrency through the credit card is that it speeds up the payment process. For example, the Bitcoin led transaction takes around ten minutes to process. Let’s us not forget that the configuration done by Mastercard would allow the transactions done as quickly or directly as possible. It is expected to incorporate the Bitcoin based transactions almost in all transactions going forward.  The major benefit for the Master card to use Bitcoin except other digital coins available in the market is that the Bitcoin allows peer-to-peer transactions that makes transactions decentralized. We may also expect the other credit card majors will start using the same model to the extent that the Mastercard’s model is successful down the line.

The geo-political factors between the two geographies

The US and China trade frictions are well-known that have led the fluctuation in prices of crypto currencies worldwide. The people have observed this movement by looking at the change in Bitcoin’s price and the devaluation of the Chinese Yuan. Let’s not forget that the devaluation of the Yuan mainly caused by the US trade threat that has had Chinese investors to exchange their Yuan versus Bitcoin and not versus traditional currencies due to the limitations prevailing in the foreign exchange operations in China.

Needless to say that if the present geopolitical condition persists between the two countries – USA and China for a longer period of time, the Bitcoin prices are expected to hike thereby allowing Chinese investors to be a part of foreign holdings in an off-regulated cryptocurrency even though the trading in the cryptocurrency like Bitcoin is not  allowed in China.

The aforesaid factors clarify as to why the Bitcoin outperforms compared to the rest of the crypto currencies in the market. On the whole, Bitcoin leads the market despite the fact that altcoins offer more innovative and appealing features from the technology point of view.

The world largest economy the U.S. may overhaul its money supply containing paper currency, cheques, and coins if crypto-based bull market accelerates its speed. According to the UBS – a global banking giant advises the crypto bull rally that they have to trade patiently while keeping in mind the real facts about the U.S. money supply. The crypto major Bitcoin must trade at  $213000 precisely if it really adds value to the US economy.

Because in the present scenario where Bitcoin is unstable and limited and cannot be feasible through which that can be used as a means of payment for any global transactions. Nor does it gets accommodated in any asset class as said by UBS.  When we compare Bitcoin with other payment methods like VISA, Mastercard, the Bitcoin can be recognized as payment options only if it adds its network capabilities that it currently lacks the processing power in order to handle multiple transactions at once.

The crypto major will struggle until it fixes this problem in place. Only then it will widely be accepted by everyone and thereby fuelling its growth. With this, the major concerns with the Bitcoin are its extreme volatility that creates a complex situation for its growth and wider recognition as per the valid source by UBS. Additionally, the unusual demand and fixed supply of the crypto major make the system vulnerable to higher price volatility thereby making it difficult for Bitcoin to be considered a new asset class. Needless to say that the year 2018 has been frustrated for Bitcoin as it has lost more than half of its value approximately $20,000 since December last year.

Amongst all these complexities, the Bitcoin initiated a rally by rising above $8000. This is a good signal amongst all those cryptocurrencies that are traded on worldwide exchanges.

Let us not forget that there are more than 1750 cryptocurrencies (as per CoinMarketCap) are traded currently. Now that the blockchain technology and the crypto concept have started gaining its footprints amongst the worldwide investors and entrepreneurs community, there is a variety of mechanism requires to be in place for the perspective to gain a competitive advantage against the traditional payment methods in place!!