CoinMetro’s CEO, Kevin Murcko brings you the most recent crypto market news during the weekly AMA every Friday.
Crypto Market News Highlights
Tron Censors Ethereum Defector POP Network, Raises Centralization Concerns
This company was lured to do their token sale on Tron’s blockchain, mainly because they were offered perks. Right after they distributed their tokens that were bought through Tron’s own token sale participation functionality.
The tokens disappeared on the day they were supposed to be distributed. They launched a secondary token, which was immediately erased.
There’s only one block explorer for Tron, and the Tron Foundation controls it. They’re not allowing the token to be visible.
So, people are crying out about centralization. Kevin would say that they’re doing so correctly. However, Kevin hasn’t really dug in to if there are some terms and conditions which might apply to the token sale platform on the Tron blockchain, it’s possible.
But ultimately with what Kevin has heard and seen from the upper echelon of Tron’s management board and the decisions they’ve made, Kevin would say that they probably don’t have those terms and conditions and this is simply a strongarm move because they probably felt that there was some competition against Tron’s Bittorrent project.
We will have to see how it evolves.
U.S. SEC delays its decision on Wilshire Phoenix’s Bitcoin ETF until Feb.
This is not a surprise. If anything, it’s a surprise that they’re still trying to get an ETF approved, knowing that the SEC’s concerns about manipulatable markets and privacy still haven’t been addressed.
These guys tried to address it by saying that they’re going to diversify into treasury notes, and only a small portion would be diversified into Bitcoin inside a Bitcoin ETF. That might dilute volatility a bit — but does it get around manipulation? If the SEC is believing that Bitcoin markets are manipulated — and they’re probably correct — having less Bitcoin in the underlying product might mean less manipulation, but it doesn’t eliminate manipulation.
This has more to do with the maturity of the market as a whole. For example Bakkt allows SEC some type of regulated venue where they can pull price discovery information from. It’s going to help, but still in its infancy.
These will continue to keep getting denied. It won’t be approved in February either.
Libra Lacks Strategic Plan for 2020 Launch, Says Board Member
Considering the fact that their initial plan was flawed, being structured as a sovereign central bank, and they haven’t changed that structure yet — so, obviously they don’t have a strategic plan. They had one. It got squashed by France, Germany, the US, etc.
Libra is trying to revert from this “central bank type structure”, so they’re going down the right path.
TD Ameritrade Doesn’t Deny Potential Inclusion of XRP Into Service
They also didn’t say that they’re going to do it.
What they said is that they have access to CME futures with Bitcoin, and they’re looking at other possibilities to add. But as you can see, they added in a regulated product — a CME future. They don’t just trade Bitcoin.
There might be some ETPs — European Traded Papers — based on XRP. Maybe. Not really any other regulated product that is underpinned by XRP that they could offer. Kevin doubts this will happen in the short term.
XRP/EUR pair is available for trading at CoinMetro.
IMF Urges Philippines’ Central Bank to Collect Crypto Exchange Data
The Philippines has now authorized 10 virtual currency exchange providers, that actually allow conversion of the Philippine peso into its digital form, so a stablecoin/smart token. They’re not yet collecting the AML/KYC reporting data from those exchanges. Something like AMLD5.
The Philippines have come out strongly to say that crypto can be used in bad ways to finance terrorism and so on, yet they’re not doing anything to track its usage. So the IMF is simply telling the Philippines to at least do the work to figure out that this money isn’t being funded into criminal activity.
Learn more about CoinMetro’s KYC/AML practices.
They did launch EUR pairs. But there’s no way to fund your account with euro, unless you’re in Binance Jersey.
It’s not hard to launch tradable pairs on a currency. All they need to do is open up on a third party FX platform, open a hedge on the USD/EUR pairing, and they can basically price BTC/EUR and use the liquidity from BTC/USD, and hedge it against the EUR price. The same process for any other currency. Anyone can do this.
The reason why we don’t do that, is because without the ability to get streamlined onramp and offramp processes for that underlying fiat currency — or at least some type of liquid, decentralized and risk free underlying stablecoin — what’s the point of being able to trade, if you constantly have to move the currency back into your native fiat currency?
If you are instead using a USD stablecoin to hedge and trade into euros, you might actually be losing more money than you are making, by inducing invisible trading costs.
Kevin guarantees that Binance will not have 180 fiat currencies in 2020. 180 crypto pairings? That can be done over a weekend. But what’s the real gain to trade a pair if you can’t liquidate out of the underlying fiat currency?
All CoinMetro listings are paired with EUR and CoinMetro supports both euro withdrawals and deposits, by Instant SEPA, SWIFT and VISA/Mastercard.
Europe’s central bank ECB proposes “unattractive rates” for digital currency
This whole thing about central banks and digital money on blockchain or a DLT, ECB is saying that they’re looking into it and that they are gradually getting to the point where they’ll come out and say that they’re going to try one.
Essentially, a smart token/pegged value token which is pegged to the underlying fiat currency — Euro in this case. They don’t want people to hoard them, and don’t want people to move in mass droves into these backed tokens, so they probably want to give a negative interest rate which is worse than the underlying rate from hoarding cash.
That leads Kevin to wonder, if it’s a central bank issued digital token, that means that the central bank mints, controls, and burns the token. Just like they can create or remove currency from the market. What’s the difference? Are they planning on giving up a bit of that control? Is it risk mitigation because they want to make sure that there are no problems with the digital version? Or they simply don’t understand what they’re talking about creating.
However, Kevin finds it interesting to see that the wheels are starting to turn. They may be completely incorrect with this strategy, but they’re at least thinking about a strategy.
“Stablecoins Are Crypto’s Version of Fractional Reserve Banking
No they’re not. Fractional Reserve Banking is that the banking legislation around the world allows a bank to basically receive for example, 1 EUR, from a depositing customer that sits in an account. They’re allowed to loan out a multiple of that. 100 times for example. If you deposit 1 dollar, they can loan out 100 dollars. The bank pays you an interest rate of 1%. They then loan out that 1 EUR, and 99 virtual dollars that don’t exist, at a rate of 20%. Even if the default rate on those fake dollars is high, they still make enough money to cover your measly 1% for the money you staked, as well as a nice little piece of profit.
Now, if you believe that something like Tether is making fake tokens and then spreading those fake tokens to manipulate the price of Bitcoin, so they can profit from the Bitcoin move, that’s still not fractional reserve banking. There’s no loans in place. They’re not making money directly from that money, they’re making money indirectly.
Kevin doesn’t see the correlation. The author is probably trying to say that stablecoins aren’t really that stable.
Bitcoin Dip Continues after Trump Derails Iran Fears; Still Bullish?
We’ve been in a downtrend on Bitcoin since $20k. We’re still in that downtrend. No bullish movements since the drop. This doesn’t mean that there can’t be retracement inside a bearish market. If this market was more mature than it is, then those Iranian fears would have caused more volatility because most people don’t react the same way that analysts do. Retail guys tend to trade what other people tell them to trade.
We don’t have the market infrastructure that peaks and moves around fundamentals, yet.
CoinMetro’s Pro platform enables shorting of assets, with or without leverage.
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Tune in every Friday for “This Week in Crypto” with CoinMetro’s CEO Kevin Murcko on our Youtube channel: https://www.youtube.com/coinmetro
