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Israel Securities Authority Is Looking To Private DLT Exchanges To Model Its Regulations

Israel’s securities regulator is calling on private sector players to submit proof-of-concept for Distributed ledger technology (DLT) backed virtual assets trading platforms.

According to CoinDesk, Israel Securities Authority (ISA) held a conference on Jan 20 in Tel Aviv where it announced that it was set to provide a full virtual value chain meant for investors which will comprise of virtual assets which are held, traded as well as settled through DLT. in connection to this, the agency is now calling for the players in the industry to submit their pitch that must have proof-of-concept.

The regulator stated that after the completion of this stage, it will come up with requisite regulation which will make it easy for the launching of digital platforms in the country’s capital market.

As per the conference notes, DLT presents not just a capital markets evolution, but it has become a necessity and Israel and the securities regulators should work towards creating an enabling environment. Majority of the people who presented their views during the conference stated that fresh and low-cost DLT-based platform have the potential of opening up extra financial opportunities for new entrants in the market. The regulator also indicates that Israel can be an example to other securities regulators around the world.

The endorsement of DLT by the authority comes a few days after a committee that was created to analyze the technology for half a year, taking into account all the technology aspects ranging from issuance of tokens to smart contracts. According to the committee’s report, DLT can transform the country’s capital market and can propel the market as the center of global technology. The committee also found that DLT could be a solution for faster settlements and can help to streamline clearance.

The committee also states that DLT in capital markets has an advantage especially in IPOs, clearance and trading. They also found that DLT will help in lowering associated costs. The technology can help in spurring innovation in the market and open up the market to many players as well.

ISA uses DLT through its messaging platform ‘Yael’.

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Author: Joseph Kibe

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Ukrainian Watchdog to Track Cryptocurrency Transactions Over $1,200 For AML

Authorities in Ukraine are planning to track all crypto transactions that exceed $1,200, says Oksana Makarova, the Ministry of Finance’s head in the country.

The matter was discussed in an interview with MC Today, a local news outlet. It was also mentioned the law for anti-money laundering in crypto transactions, the law that President Volodymyr Zelensky signed just last month. It’s a first for the anti-money laundering law in Ukraine to address crypto too.

Operations Considered Suspicious to Be Reported to the SFCM

In case a payment service provider finds an operation to be suspicious, it needs to report it to the State Financial Monitoring Service (SCFM), the agency that can block any transaction and even confiscate the cryptocurrencies that are obtained illegally. Makarova said,

“SCFM has access to an analytical product that allows investigations into the origins of crypto-assets and their uses. It is impossible to stop operations now, but it is possible to block crypto wallets and remove illegally obtained crypto assets. This can be done by accessing the crypto’s private keys as a result of complex investigations.”

Cryptocurrency Not Yet Defined as an Asset Class by the Ukrainian Law

The Ukrainian law doesn’t yet define cryptocurrency as an asset class. Makarova mentioned that a few national agencies are working together to make a new virtual asset regulation, which regulation is supposed to be revealed to the public in the next 4 months. The Ukrainian parliament already has under consideration a bill that proposes a 5% tax for crypto revenue.

While it’s not yet known just how much crypto is now circulating in the country, Makarova thinks the volume is high but that money laundering is still mostly conducted with cash. She also said the legalization of cryptocurrencies brings new opportunities for the crypto industry to develop in the country.

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Author: Joseph Kibe

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2nd Largest Bitcoin Mining Pool Produces A Stale Block, Leading To A $3 Double Spend

A research conducted by BitMex indicate that two Bitcoin mining firms found out one transaction block at exactly the same time. BitMEX Research tweeted the discovery stating that the stale block took place exactly at block height 614,732. The two firms in competition were Bitmain’s BTC.com as well as Poolin.

BitMEX also reported that BTC.com emerged the ‘winner’ of the block which resulted to a stale block for Poolin. Poolin was started by Bitmain’s former employees and now Bitmain is seeking legal address for the violation of a non-compete agreement.

Currently, the mining difficulty for Bitcoin is at all time high (ATH) which means that it is difficult for stale blocks to occur, but this is only in theory. But, as Bitcoinist reports, after several months, two mining pool who are in competition are likely to occur on one block header exactly at the same time. The last time such an event took place was in October last year which was between BTC.com and Bitmain’s Antpool.

When a stale block occurs, there are fears that it could be as a result of double spend. However, BitMEX Research was quick to allay such fears stating that they had underatek an analysis of the likelihood of a double spend. The researchers noted that stale block had 39 txs and the winning block 614,733 had 38 txs. In this regard, only 0.00034801 or US$3 had been double spent.

Since the amount of Bitcoin which could have been double spent is very little, it is improbable that a mischievous blockchain ‘reorg’ attempt or attack could have been attempted. The computing potential or hash rate of the Bitcoin network makes it almost impossible to have a 51% attack, albeit theoretically.

Stale or rogue blocks are also possible during hard forks when the main chain divides into two distinct ways. In most cases, disagreement on different protocols can lead to supporters agreeing to move to form a fresh chain. This is how Bitcoin Cash emerged and has also led to another hard fork which has created Bitcoin SV.

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Author: Joseph Kibe

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BTC Price Blows Past $8,900 But Traders Say Nothing Abnormal, Bitcoin Still Ranging

Crypto Twitter is expecting Bitcoin to pullback, but it isn’t stopping. The leading cryptocurrency today again defied market expectations and climbed past $8,900.

During the weekend, we started making our way upwards around $8,270 and today we jumped as high as $8,983.

Analyst and trader have been calling for Bitcoin to make a pullback around $8,800-$8,900 but with how strongly BTC is moving, we might be able to cross above $9,000.

“The longer we range above $8k, the more bullish,” is how investor and trader Josh Rager feels about BTC.

Trader Nik Patel is also of the opinion that a close above $8,800 would be “very bullish” for the leading cryptocurrency as it makes a “Strong close on the 1H, above prior swing-high but comfortably below next resistance, so no swing-failure yet to indicate downside.”

But it’s all about volume. A rising price with a rising volume is a bullish sign and as trader Scott Melker says a “true trend.”

Impact of a deadly Coronavirus rattles investors

While bitcoin is surging, the US stock market is tumbling down as concerns over the impact of a deadly Coronavirus originated in China rattles the investors.

The S&P 500 sank the most in about four months while the Dow Jones Industrial Average briefly wiped the gains it made in 2020. China’s financial markets meanwhile remain closed until next Monday after authorities extended the Chinese New year break by three days as they struggle with the worsening virus crisis.

The offshore yuan dropped to its lowest level this year as the pneumonia-like virus infected over 2,700 people and killed 80.

Bitcoin buyers buying narrative?

Amidst this, gold gained in haven assets. Could this be why Bitcoin is also rising?

According to economists and trader Alex Kruger, “Stocks were at its most overbought level since 2012 when the coronavirus panic started, and thus particularly vulnerable to bad news.”

But what about the fact that Bitcoin price has already mirrored gold thrice this year. Kruger says “BTC has had a clear risk-off component in 2020. Iran was a game changer.”

Rager also feels Bitcoin price and Coronavirus’ connection has been “sensualized” when “Nothing abnormal has happened to BTC price,” because it is still ranging between $8k to $9200 but said “sustaining price is positive.”

According to Mati Greenspan, founder of Quantum Economics, “Perhaps a few are buying on this narrative but what seems more likely to me is that upward pressure is a result of Fed printing & additional liquidity in capital markets.”

But that means it’s “acting more like a risk asset than a safe haven.”

So, it could be Fed or Bitcoin might have finally started acting like a safe haven or…

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Author: AnTy

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Japanese Crypto Exchange Liquid to Offer Bitcoin Perpetual Contracts

The famous Japanese cryptocurrency exchange Liquid has announced on Monday that its platform will support Bitcoin (BTC) perpetual contracts offering 100x leverage to traders.

A lot like futures but different from the traditional contracts, perpetual contracts don’t expire at a certain date. This is how Liquid explained the newly offered perpetual contracts product:

“A perpetual contract has no expiry date and has no interest fees. Instead, a funding swap occurs between all open perpetual long and short contracts on Liquid. When trading perpetual contracts on Liquid you are trading contracts based on the price of BTC. Perpetual BTC contracts are represented by the P-BTC ticker on Liquid.”

The New Investment Instruments Still in Beta Phase

The date for the public launch if the new investment instruments hasn’t been given yet, as the project is still in the closed beta stage. For now, Liquid is inviting traders to perform tests on its platform and talks about a promotional offer of free services for one month. The company has been launched back in 2014. It’s a subsidiary of Quoine, the Japanese fintech behemoth. Its platform grants users access to crypto exchanges from all over the world. Besides, it’s valuated at more than $1 billion.

Liquid Will Be a Direct Competitor of Huobi and Binance

After the new instruments are going to be launched, Liquid will compete directly with giants like Huobi and Binance. Back in 2019, FTX backed by Binance launched a similar instrument that tracks 8 of the most popular crypto projects in China.

The financial regulator in Japan is thinking of putting a 2x leverage cap that depends on the crypto margin trading at exchanges, while Liquid is continuing to offer its very large client base more crypto-based services. For example, last year it redefined and improved trading services by introducing an isolated margin trading. More than this, its platform held a public sale for the Gram token created by Telegram, only to recently cancel it.

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Author: Oana Ularu

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Swiss Private Banking Giant Julius Baer Adds Digital Asset Trading And Crypto Custody Services

The major Swiss wealth management and private banking group Julius Baer just launched, in partnership with Seba, its new custodial and trading cryptocurrency services.

The announcement was made on January 21, after the minority equity stake acquisition from 2018 and the partnership closed with Seba Bank AG, which happened back in February 2019. According to the announcement, Julius Baer’s entrance into the crypto space has been postponed because Seba had to be regulated.

Julius Baer Says Crypto Services Are in Increasing Demand

While not too many details on the offering have been given yet, it’s very likely Seba’s capabilities and platform are going to be used. In order to meet the rising need, Julius Baer will offer services such as crypto transaction solutions, custody of digital assets and overviews on a consolidated portfolio for both digital and traditional assets. According to their security, liquidity and technical robustness, the bank is going to select the most important cryptocurrencies. It hasn’t yet mentioned anything about the offered assets.

Seba is Fully Regulated

Seba was given its FINMA license at the same time with Sygnum. Back in December 2019, it started offering services to accredited and institutional investors from 9 new countries. It provides a wallet app plus banking and card facilities for more than 5 of the most important cryptocurrencies, such as Bitcoin (BTC), Litecoin (LTC), Ether (ETH), Ether Classic (ETC) and Stellar (XLM).

Seba investors are also offered crypto to fiat and crypto to crypto conversion services. Furthermore, the bank gives enterprise accounts to blockchain companies and their employees. As reported, Sygnum is too looking to expand globally, as it’s in talk with regulators to obtain a license for banking in Singapore.

Blockchain Technology Can Change the Financial Services Game

Back in the fall of 2019, the chief strategist and head of research and investment solutions at Julius Baer, Christian Gattiker-Ericsson, said cryptocurrencies are in a “Darwinian” selection process, with the winner remaining to be determined. He also noted that blockchain technology can change the game when it comes to financial services.

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Author: Oana Ularu

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Iran’s Ministry of Industries, Mining, and Trade Grant More Than 1,000 Crypto Miners Licenses

Iran is regulating crypto miners after a new licensing regime has been introduced by the country’s government.

According to an official representative from the Iranian ICT Guild Organization (IIG), which is a body that represents Iran’s computing sector, the Ministry of Industries, Mining and Trade has given more than 1,000 licenses to crypto miners.

The New Regulations Failed to Attract Foreign Investments

Amir Hossein Saeedi Naeini, also an IIG representatives, said that even though the cryptocurrency mining operations are now regulated in the country, this hasn’t attracted too many foreign investments. These are exactly his words, from local media reports:

“Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy. [But] most potential investors have left for neighboring countries, because they offer incentives for crypto miners.”

Mining Operators Attracted to Iran

The mining industry in Iran has evolved greatly over the past few years, seeing operators are very attracted to the country’s state-subsidized tariffs on electricity. There are thousands of members operating on the most popular Iranian mining channels. Besides, last year, the government of Iran came with new legislation for crypto mining to be recognized as a legitimate business. The draft proposal says operators need to submit details about their mining activity in order to receive a license that they need to renew every year.

Licensing Regime for Big Operators Only

The Minister of Industry, Mine and Trade approved the licensing regime in the summer of 2019. The licenses are being given only to mining farms that use over 30 kilowatts of electricity, meaning small household operators can’t get one. Before licensing, mining was conducted in fear because the non-compliance penalties were very high. Those who were caught not complying had to face big fines and their equipment was confiscated, not to mention some of them even ended up in jail. In June 2019, over 1,000 mining rigs have been confiscated from only 2 operators.

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Author: Oana Ularu

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CME Gaps for Bitcoin Price Fill over 95% of the Time: Research

CME Gaps are popular topics that frequently get talked about in the crypto market, which usually has seen Bitcoin dumping.

These Gaps occur because unlike the Bitcoin market that works around the clock, no matter if it’s the weekend or a national holiday, the regulated market doesn’t. Bitcoin is never down. However, the regulated market, CME’s market doesn’t share the same 24/7 global trading hours of most other crypto exchanges.

During this period, no trades are conducted which causes “gaps” to form on CME Bitcoin price charts which rarely form on other exchanges.

What’s’ the best strategy to trade the CME Gap

Talking about this apparent anomaly, Market Science, a research service released a CME Gap Study to analyze its effects.

The firm found that there is no clear reason for what caused such a phenomenon to occur, though it’s likely it originated in equity and fixed income markets, “where vastly diminished overnight liquidity effectively closes them” as a result instruments in the market open at different prices than they close at.

In the Bitcoin market, gap filling is one of the most popular strategies around CME downtime. And since the launch of Bitcoin futures in Dec. 2017, these gaps filled 95% of the time. In 77% of these cases, Bitcoin made a retracement in the subsequent week.

“Virtually all the moves are actually retraced before next Friday market close,” it said.

But it doesn’t mean trading for that gap fill with leverage is the strategy to follow. Market Science says what one needs to do is to open a trade in the opposite direction of the weekend gap upon the CME market open and then close at the gap open level if touched. In case not touched, hold until either the next CME Friday market close or the next CME Sunday market open.

Fading the gaps have a negative edge

However, some gaps don’t fill for an entire year but these are unprofitable most of the time that gaps don’t fill. The losses, in this case, are pretty significant, “offsetting the high strike rate for gaps closing.”

Fading the gaps it said has a “significant” negative edge in the 1-2 days following the CME open. The better strategy here would be trade in the direction of the gap immediately following their formation.

However, this analysis didn’t take into account the magnitude of each gap. But even taking that into account, while it produces improved risk-adjusted returns slightly, it is still not worth trading.

On comparing the data from crypto derivatives data BitMEX to that of CME, the report found, “Average gap size actually decreased slightly since the CME launched its futures products.” This difference is “more significant” when accounting for volatility, 25% smaller in relative terms after the CME opened.

As for whether the impact CME future gaps have had on XTPUSD price action is significant, the research states that’s a no.

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Author: AnTy

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The Upcoming Cut in Bitcoin Supply Means Zero for BTC Price Says, Analyst

  • Searches for bitcoin halving on Google Trends on an uptrend
  • “Makes no sense” to discuss if the halving is priced in says economist and trader Alex Kruger
  • Last time BTC price saw a 30% drop within a month of halving

We are just 105 days away now from the Bitcoin reward halving event. The event the crypto community is eagerly awaiting for which will cut the yearly production of Bitcoin in half, decreasing the reward from 12.5 BTC to 6.225 coins per block.

As we fast approach the halving, the searches for the bitcoin halving on Google Trends have started climbing as well.

As we can see, the biggest uptrend came during the last halving and a comparatively very small but noticeable bump came when BTC made a new all-time high in December 2017. But a clear uptrend can now be seen in the Google searches yet again.

Halving Price In or Not?

While people’s interest has re-emerged in halving, so has in the discussion whether this event is already priced in or not.

Economist and trader Alex Kruger, argues that the whole idea of trying to guess that “makes no sense,” because “the date is too far off for the market to have any clarity about it,” though it is bullish in the long term.

Analyst Bob Loukas is also “very bullish” on BTC price but not because of halving. In fact, he says “an upcoming, known cut in supply, means zero.”

He explains that the amount of coin is one hundred percent meaningless, the supply constraint and a known schedule are what’s “very important” to the network value.

A 30% Drop in BTC price within a month of halving

What can’t be ignored are the previous price upswings. After the first halving, the one-year rise in BTC value was from $11 to $1,100 and the second halving’s record growth took us from $600 to $20,000 within 18 minutes.

But Loukas says that is a “serious case of bias fitting,” because the last halving period was actually a “poor performing period within a massive bull uptrend.” He shares a chart that shows that the price dropped 30% after the July 9, 2016 halving.

Towards the end of May 2016, the price of BTC began surging from $440 to climb to $770 in mid-June. In the beginning of July, the time the halving came, the price was trading at $660 that was followed by a drop to $550 in August.

From there, the rally continued to hit an all-time high of $20,000 in Dec. 2017 while recording several pullbacks on the way.

The May 2016 rally of 80% wasn’t “pre halving” rally, rather just another short term rally that we saw during that period, Loukas said.

Bitcoin’s 20-fold price increase between 4-year cycle Bullish

As for the miners’ reward that will be cut into half Loukas says miners do not sell reward, their business case is to hoard bitcoin. Miners he says believe that the world’s leading cryptocurrency will appreciate over time.

Miners actually sell their BTC because they have to cover operational costs. But halving does not change that cost, which means bitcoin miners will sell the same amount of BTC that they were selling before the halving.

What halving changes in the margins but “that’s not an issue in a secular bull market when the price is increasing 20-fold between 4-year cycles,” said Loukas.

And that is why the analyst is “very bullish” on BTC price, because of this 4-year cycles and not the halving.

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Author: AnTy

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WEF’s New Global Consortium To Focus On Cryptocurrency Governance Framework

The World Economic Forum (WEF) has announced the creation of a global consortium which will come up with a governance framework for all cryptocurrencies comprising stablecoins.

In a blog post, WEF announced that after extensive consultation among the global community members, an international consortium which will work closely with financial institutions, representatives of governments, developers as well as other global community members to analyze the type of crypto governance which can enhance financial inclusion.

Klaus Schwab, WEF founder who is also the chair, said that virtual currencies are critical area of interest which needs input from different sectors, geographies as well as functions. He said:

“Building on our long history of public-private cooperation, we hope that hosting this consortium will catalyse the conversations necessary to inform a robust framework of governance for global digital currencies.”

According to CoinDesk, the new consortium will aim at providing solutions to the current fragmented regulatory regime in different countries. The consortium will also advocate for innovative regulatory approach in order to enhance technological advancement. The consortium is also expected to come with principles that will encourage the public and private players to work together in exploring the various prospects which comes with virtual currencies.

The international consortium has the backing of various central banks basically from the developing countries and different non-governmental entities. The consortium also has backing from Mark Carney of Bank of England who has previously argued that digital currencies have great potential.

The initiative received support from industry players such as Libra Association’s David Marcus, ConsenSys’ Joe Lubin as well as Neha Narula from MIT’s Digital Currency Initiative. They all praised the efforts taken by the WEF.

The new developments come just a few days following the forum’s blockchain head, Sheila Warren together with Sumedha Deshmukh who came up with ‘Blockchain Bill of Rights’. Last week, various central banks stated that they will set up a working group which will analyze how the crypto technology can be used in the finance sector.

WEF also announced that an international technology governance summit will be held on April 21-22 this year.

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Author: Joseph Kibe