Bakkt Launches Bloody Tuesday Cryptocurrency Market and Other News of the Week
This week has been for the cryptocurrency industry as one of the most memorable in 2019 – a long-awaited launch of the platform Bakkt finally took place, however, the growth of the market, as suggested by many, has not happened. Moreover, during the week the price of "digital gold" fell by an impressive 20%.
The price of bitcoin
On Monday, bitcoin traded at around $10,000, but even a small reduction during the day, there are signs of collapse, which can be observed on the following day, when the asset for a short period of time fell more than $1000.
The decline continued the next day – at a certain point bitcoin fell below $7800. Further recovery attempts were far from luck, and by late Sunday the first cryptocurrency was trading near $8,000 with a tendency to further decrease.
Note that this was the deepest weekly drop in bitcoin for the whole of 2019, which pulled into the deep red zone and the rest of the cryptocurrency market.
Against the backdrop of a sharp decline in the price of bitcoin, the market sentiment indicator Fear & Greed Index earlier this week fell to around 24, which means an extreme degree of anxiety among investors.
The tool takes into account factors such as volatility, market dynamics, trading volumes, social media trends, data from various studies, the BTC dominance index, as well as Google Trends data.
Interestingly, a sharp drop in the market occurred in anticipation of the expiration of bitcoin options on Deribit and LedgerX exchanges, as well as CME futures.
According to Arcane Research, an analytical company that analyzed data from January 2018 to August 2019, on the eve of the expiration of CME futures contracts, the price of bitcoin fell by an average of 2.27%.
Meanwhile, CoinDesk Markets analysts pointed out that on Friday the price of bitcoin closed below the 200-day moving average (MA 200), regarded by many investors as a kind of border between the bull and bear markets.
The prevalence of sellers is indicated by the MA slope with periods of 5 and 10, as well as the histogram of the MACD indicator. Moreover, the fall in prices is accompanied by a significant increase in trading volumes, confirming the strength of the downward correction.
The well-known trader Tone Weiss, meanwhile, has suggested that bitcoin moves to $4000.
The start-up of deliverable bitcoin futures from Bakkt
In the night of Monday, September 23, held a widely publicized launch of cryptocurrency platform Bakkt. Its first products are futures contracts for bitcoin with a physical settlement – at the expiration of the contract payout in case of a successful bet in bitcoin and not Fiat, as it happens, for example, on the Chicago Mercantile exchange.
However, as mentioned above, the expected growth of the market in connection with the launch of the platform is not only hosted, but also during the week the price of bitcoin dipped noticeably. Quite modest while the volume of trades, which also drew the attention of the experts.
So, by Sunday evening the total volume for the monthly transactions on the platform was 165 BTC at the last contract price $8037.5.
Bakkt CEO Kelly Loffler, however, is convinced that the launch of the platform is an extremely important event for the industry.
Three reasons why Bakkt's deliverable bitcoin futures are important for the entire industry, according to the head of the company, are as follows:
- proven and regulated infrastructure;
- adoption of new technology based on digital currencies;
- The rapid spread of innovative management practices and the transfer of digital value.
Stuttgart Stock Exchange Launches Spot Bitcoin Trading
Also on Monday, another important event, however, appeared in the shadow of Bakkt. Germany's second largest stock exchange, Börse Stuttgart, in partnership with fintech company solarisBank, has announced the launch of regulated spot trading in cryptocurrencies. At this stage, only one pair is represented on the site - Bitcoin to Euro.
Trading on the Börse Stuttgart Digital Exchange (BSDEX) is carried out in accordance with the German Banking Act. At the same time, both retail and institutional traders have access to the trading platform, and it itself is not much different from the existing platform for trading in securities.
The number of Lightning nodes in the Bitcoin network has exceeded 10,000
On Thursday, September 26, the number of active Lightning nodes in the bitcoin network exceeded 10,000 for the first time. It was noted that 40% of the network bandwidth is controlled by only one player, LNBIG.
An anonymous programmer providing the work of these nodes, said that micropayments are the future, and the Lightning Network is the same breakthrough as bitcoin itself. He also said that he reduced the fees for using his channels to almost zero, because he previously earned only $ 20 per month.
LNBIG uses the LND client, as c-lightning and Eclair are less convenient.
“If at least a small part of Bitcoin users starts using LN, then my project will become profitable instantly,” said the LNBIG operator.
EOS network successfully hosted the first hard fork
EOS block manufacturers have activated version 1.8 of the EOSIO protocol. A massive update required the first hard fork on the network, which took place on Monday, September 23.
The release includes updates to the consensus protocol # 6831 and # 7167, as well as a set of protocol functions that are activated independently of each other. These included fixing problems related to a deferred transaction, prohibiting references to non-existent resolution, resolving conflicts of deferred transaction identifiers, and other important functions aimed at making interaction with the EOSIO blockchain cheaper and more complete.
Brendan Bloomer, CEO of Block.one, the company responsible for developing the EOSIO protocol, noted that the new release will allow application developers to offer their users a free and seamless interface, while the latter will no longer have to worry about overuse of resources.
Telegram will pay up to $ 400 thousand to the creators of smart contracts for TON
This week, representatives of the Telegram messenger announced a competition for creating smart contracts for the Telegram Open Network (TON) blockchain platform.
According to the terms of the competition, participants must:
- create one or more smart contracts in accordance with the description in the attached file;
- offer improvements for FunC or TON virtual machine;
- identify bugs and suggest corrections for the Telegram Open Network test network.
The prize fund ranges from $ 200,000 to $ 400,000, and the competition will end on October 16 at 01:00 Moscow time.
Recall that the launch of the main Telegram Open Network should take place no later than October 31, otherwise, in accordance with the agreement, the project is obligated to return funds to investors.
Equating cryptocurrency mining to finding a treasure is a strange idea of Russian bankers
This week, the Association of Banks of Russia (ADB) prepared the concept of cryptocurrency circulation, which, according to its concept, will deprive the owners of digital assets of anonymity. This implies the possibility of collecting cryptocurrency in the framework of enforcement proceedings, in case of taxation or bankruptcy.
It is proposed that the system of tax collection be made similar to that applicable to investors in the securities market. To implement his ideas, ADB Vice President Anatoly Kozlachkov, in particular, proposed equating cryptocurrency mining to occupying property or finding treasure.
“Using legal fiction, it could be argued that the first owner of the crypto assets“ found ”them, since receiving from an anonymous system can be conditionally considered a find,” the ADB document says.
The organization proposes to consider cryptocurrencies as “newly created” property produced by the citizen himself.
We asked the experts whether such a non-standard idea would be able to achieve recognition of the Russian financial regulators and whether it would put an end to the taxation of cryptocurrencies. The short answer is no. More advanced - the ADB proposal can be considered a “fantasy”.