Grupo XP, the largest independent brokerage in Brazil, has publicly released its plans to launch a Bitcoin and Ethereum trading platform by the end of 2018.

Guilherme Benchimol, the chief executive officer of Grupo XP and XP Investimentos SA, stated that the business will integrate Bitcoin and Ethereum into the existing infrastructure of the brokerage, allowing more than three million investors in the country to invest in the asset class.

Monumental Decision

As CCN previously reported, on Sept. 20, the government of Brazil and its antitrust watchdog have launched a formal investigation into banks and major financial institutions in the country after receiving complaints that crypto exchanges received subpar financial services from local banks.

Officials at the Administrative Council for Economic Defense (CADE) said:

“However, it does not seem reasonable for banks to apply such restrictive measures a priority on a straight-line basis to all cryptocurrency companies, without examining the level of compliance and the anti-fraud measures adopted by individual brokerage firms conferring unlawful treatment per se on businesses brokering cryptocurrencies.”

In an official announcement, Grupo XP CEO Benchimol emphasized that he personally is not a fan of cryptocurrencies as a store of value and consensus currency. But, he stated that the company feels obligated to start advancing in the market because ultimately, similar to banks, investment firms are required to meet the demands and needs of their clients.

“I must confess, this is a theme I’d rather didn’t exist, but it does. We felt obligated to start advancing in this market,” Benchimol said.

brazil

The surprising decision of Grupo XP is particularly monumental for the South American cryptocurrency market because it comes at a time in which the government of Brazil has taken its first approach towards legitimizing the market with stable financial services and banking partners.

With support from the government and the country’s largest investment firm involved, in the next few months the cryptocurrency market of Brazil will likely see an emergence of exchanges that are capable of providing services that were not available to the population less than nine months ago.

It is entirely possible that the encouragement of the government to banks to provide financial services to local cryptocurrency exchanges could leave the market open to established exchanges that are eying international expansion.

Already, in the past week, Binance and Upbit, the crypto market’s two largest exchanges alongside OKEx and Huobi, have expanded to Singapore.

Market Structure

Since mid-2017, the US, Japan, and South Korea have seen the stabilization of their respective cryptocurrency exchange markets equipped with robust infrastructure and practical regulatory frameworks designed to protect investors and facilitate the growth of crypto-related businesses.

For many years, South America and Europe have lagged behind Asia and the US due to regulatory uncertainty, but the forward-thinking approach of the Brazilian government and the encouraging trend of major financial institutions entering the crypto market could potentially lead to exponential growth of the crypto market of Brazil, Argentina, and Venezuela.

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New York State Attorney General Barbara Underwood has referred three major cryptocurrency exchanges to the state’s Department of Financial Services (NYDFS) for potential violation of New York’s virtual currency regulations. The exchanges referred are Binance, Gate.io and Kraken. This was revealed in the Virtual Markets Integrity Initiative Report released earlier today by the Office of the New York State Attorney General (OAG).

The report details the concerns initially raised by the OAG about the operations of cryptocurrency exchange platforms, especially regarding security, internal controls, market surveillance protocols, and other relevant consumer and investor protections.

Cat and Mouse Game

Earlier in they year, CCN reported that the OAG sent out a letter with a 34-point questionnaire to 13 crypto exchanges, including some without active operations in New York, asking them to take part in its Virtual Markets Integrity Initiative aimed at fostering greater transparency into their operations. The 13 exchanges addressed were GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit Trust Company, and Huobi.Pro.

binance cryptocurrency exchange
Binance, the world’s largest cryptocurrency exchange, may be unlawfully operating in New York, the state’s attorney general’s office said in a new report.

Following the letter, Kraken CEO Jeff Powell responded with strong words, stating that the OAG’s demands showed “disrespect” and “entitlement,” and that the letter showed Kraken made the right call to “get the hell out of New York three years ago.” According to the OAG report, Binance, Huobi, and Gate.io also declined to participate in the initiative, stating that they do not allow trading from New York.

Per the report, the OAG then investigated whether in actual fact these platforms accept no trades from New York State, and based on the results of the investigation, it made the recommendation to forward Kraken, Binance, and Gate.io to the Department of Financial Services for a thorough investigation on possible flouting of the state’s virtual currency laws.

‘Alarming Response’

In the document, the OAG bemoans the lack of regulation and supervision within the crypto exchange ecosystem, singling out Kraken for its “alarming” response to the initial letter.

An excerpt from the report reads:

“The OAG could not review the practices and procedures of non-participating platforms (Binance, Gate.io, Huobi, and Kraken) concerning manipulative or abusive trading. However, the Kraken platform’s public response is alarming. In announcing the company’s decision not to participate in the Initiative, Kraken declared that market manipulation “doesn’t matter to most crypto traders,” even while admitting that “scams are rampant” in the industry.”

In another significant move, the report also issued a direct warning to customers trading on the four non-participating exchanges, stating that the platforms may have received payment in exchange for listing digital assets, which should inform customers’ decisions to interact with them in any way.

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Fidelity Investments CEO Abigail Johnson has revealed that the company is working on a number of cryptocurrency and blockchain-related products and offerings, with their release tentatively fixed for sometime before the end of the year.

Speaking on Friday at the Boston Fintech Week conference, Johnson declined to go into any specifics regarding what exactly Fidelity is working on in the crypto space, but investors and other market participants are likely to pay close attention to subsequent Fidelity announcements as it continues to build a reputation as one of the most crypto-positive large financial service firms in the world.

‘A Few Things Underway’

Speaking about Fidelity’s plans for moving into the cryptocurrency space, Johnson said:

“We’ve got a few things underway, a few things that are partially done but also kind of on the shelf because it’s not really the right time. We hope to have some things to announce by the end of the year.”

The announcement will come as welcome news to crypto markets, which continue to anticipate the entry of large institutional investment that by and large has not yet taken place. In a market with a total capitalisation still below $300 billion despite a surfeit of publicity and investment sentiment, Fidelity has consistently been one of the few large firms that has repeatedly and openly signaled its interest.

Abigail Johnson Fidelity
Fidelity CEO Abigail Jonson | Source: Bloomberg/YouTube

In June, CCN reported that the company was rumored to be at work on a crypto exchange. In the same month, the company is said to have expressed interest in a hiring a fund manager to run a new cryptocurrency fund. Neither of these rumors have been confirmed by the company.

After launching in 2015, the company’s public charity organisation Fidelity Charitable also raised nearly $6 million in crypto donations in only the first six months of 2017. According to Johnson, the success of Fidelity Charitable lay in the fact that it gave a new class of wealthy crypto entrepreneurs an easy way to become philanthropists.

Fidelity isn’t Working on the Crypto Products it Thought it Would be

Johnson also stated that while the company is still exploring uses for crypto and blockchain technology and modifying many ideas along the way, its goal is to place the needs of the market before the technology.

In her words:

“What we started with was building a long list of use cases for either Bitcoin, Ethereum, other cryptocurrencies, or potentially just raw blockchain technology. Most of them have been scrapped by now or at least put on the shelf. The things that actually survived were not the things I think necessarily we expected. We were trying to listen to the marketplace and anticipate what would make sense.”

Despite the growth of cryptocurrencies and digital currency, the Fidelity CEO still maintained that the company does not expect financial services to be completely taken over by electronic offerings in the future, and that this will inform Fidelity’s decisions going forward.

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Bitcoin price on Tuesday appreciated as much as 2.88 percent against the US Dollar.

The BTC/USD is trading at 6326-fiat at the time of this reporting. The pair opened the day forming lower lows towards 6229-fiat. There was already a minor uptrend in place on a bounce back from 6205-fiat from yesterday. However, BTC/USD lacked adequate bullish momentum during the Asian trading session. The sentiment began to improve around the mid-European session, right after Ripple started trending upwards against the USD. As a result, BTC/USD formed higher highs towards 6384-fiat, while eyeing 6400-fiat as its potential upside target. Nevertheless, wted ith the US session still in play, the pair has corrected back while testing 6300-fiat as its next potential support level.

BTC/USD Technical Analysis

BTC/USD is trending below its 50H, 100H and 200H moving averages, while the 50H MA is going below the 200H MA on the hourly charts. Its a death cross in a traditional sense, but one should not take it seriously for its longevity. The pair is trading inside a small ascending triangle as of now, which could influence some attractive intra-triangle price action. A breakout scenario cannot be confirmed up until BTC/USD invalidates its psychological resistance near 6500-fiat – also coinciding with a long towards the triangle resistance. A continuous bearish pattern, however, has more probability purely because of the overall bearish bias sentiment. The RSI and Stochastic indicators are telling the same via their reversal actions from overbought positions.

That said, the ascending triangle support could play a vital role in reversing the trend towards 6500-fiat. A bounce back from 6300-fiat also means the same.

BTC/USD Intraday Analysis

The range, that we are watching today for our intraday strategy today, is defined by 6300-fiat as interim support and 6400-fiat as interim resistance. Our first action is to wait for BTC/USD to break below 6300-fiat and open a path of least support towards triangle support. An ideal short scenario with a stop loss somewhat 2-pips above the entry point.

A reversal from 6300-fiat, on the other hand, will have us switch to intrarange and put a long position towards 6400-fiat. A stop-loss 4-pips below the entry point will define our risks. A breakout scenario above 6400-fiat will have put a similar long position towards 6500-fiat, our primary upside target.

We will also be looking out for a triangle breakout scenario to retest 6600-fiat. Looking south, a breakdown scenario would also mean restest of 6117-fiat, September 8’s bottom.

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This post credited to CCN

For the first time in history, US household wealth has surged above the $100 trillion mark, fueled by the rise in the value of stocks and properties. However, analysts say the unsustainable growth in household wealth could cause a crash, which may lead millennials to flock to Bitcoin.

In September, US household wealth reached $100 trillion, and ostensibly it seems like a positive development for US markets. But, in comparison to the stagnation in actual US household income, it is quite evident that the rapid growth rate of US household wealth cannot be sustained in the long-term.

Speaking to Business Insider, AJ Bell investment director Russ Mould stated:

“Household net worth cannot sustainably grow this much faster than incomes. Assets have been bid up and at some stage there has to be chance that they correct, just as happened in 2000 and 2007.”

Bubble-Like Behavior

According to Mould, the US stock market experiencing one of the strongest bull markets in history and the real estate market continuing to increase in value led to an abrupt increase in household wealth. However, if household wealth cannot be backed by stable income, then the market will be vulnerable to a major correction.

“The difference is likely to be accounted for by the surge in the value of financial and other assets — equities, bonds, property and rankly everything from vintage cars to art to wine to baseball cards. And this is one warning that at some stage another collapse in financial markets will sweep around the globe,” Mould added.

Bitcoin Housing bubble crash

Nouriel Roubini, a widely recognized economist and professor at Stern School, also recently called for a financial crisis in the US market by 2020, explaining that the market has been demonstrating bubble-like behaviors over the past year.

With the discrepancy between US household wealth and income growing exponentially and global debt rising to $250 trillion, Mould emphasized that the US market is due for a correction, whether that will lead to a minor correction or a financial crisis as Roubini predicted remains uncertain.

Viability of Bitcoin as an Investment

Bitcoin, like gold, is often considered as a store of value with no correlation to the broader financial market. It moves independently of traditional assets and commodities, which allows Bitcoin to operate as a reliable store of value in times of uncertainty and market volatility.

While there exists no correlation between Bitcoin and the broader financial market, Matt Hougan, vice president of research and development at Bitwise Asset Management, told Bloomberg in an interview that the decline of the global market does not guarantee a bull market for crypto.

“Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist,” Hougan said.

Still, considering the increasing demand for Bitcoin from millennials, with surveys finding that over one third of millennials are planning to invest in cryptocurrency within the next few years and 80 percent of American millennials already aware of Bitcoin, it is highly likely that if a financial crisis occurs in the near future as experts predict, Bitcoin will emerge as a viable store of value alongside gold.

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This post credited to CCN

Bitcoin price on Thursday extended its prevailing bearish correction sentiment and dropped as much as 6.5 percent from the yesterday’s low near $6,710.

The BTC/USD in the very first hours of today’s session formed lower highs and lower lows towards 6731-fiat and 6303-fiat. It very much set the sentimental course for the rest of the Asian and European session. Both the trading sessions lacked strong bullish corrections, putting BTC/USD on a slow path to the downside. At the early European hours, the pair retested 6306-fiat as the range bottom, only to recover towards 6500-fiat.

In the opinion of many strategists, Goldman Sachs’ decision to halt its long-planned cryptocurrency desk over regulatory issues caused the latest BTC/USD correction. However, the factor is too lousy to correlate for a market that has been in a massive bearish formation since November 2017. Even in the recent price action, we noticed the pair’s bullish momentum getting slowed down near our previous Rising Wedge resistance. We had expected a breakout scenario, anyway.

As we can notice, the BTC/USD is already inside a massive descending triangle, giving us enough hints of both previous and potential upside reversals. So far, we have not broken below the lower support – the pair bottom around 5800-fiat – so a run towards the said level followed by a reversal should not surprise. If we manage to extend the repeal such that upper trendline is broken, we could expect a run towards the previous lower high around 8490-8500 area.

BTC/USD Technical Analysis

The BTC/USD has slipped below its near- and long-term moving averages following the bear action. The 50H MA has its head towards the south and should mean an extended breakdown session if it crosses below the 100H MA. In case the 50H MA crosses below the 200H MA, then it will be a death cross scenario which could mean a breakdown below the descending channel support discussed above.

The RSI and Stochastic Oscillator both have slipped inside their respective oversold areas. The technical indicators – all together – point to strong selling sentiment. in the Bitcoin market.

BTC/USD Intraday Analysis

Bitcoin is attempting an upside correction on a bounce back from its intraday low at 6303-fiat and is targeting 6500-fiat as its psychological resistance. Naturally, it is the range we are watching out for today.

To begin with, we are waiting for a breakout above 6500-fiat to clear our long position towards the 100H MA. A stop-loss meanwhile around 2-pips below the entry position would protect us from an extended bearish correction. Looking the other way, a break below support would have us enter a short towards 6150, our downside target.

Trade safely!

Featured image from Shutterstock. Charts from TradingView.

This post is credited to CCN.

China’s ongoing drive to dominate the emerging global blockchain technology sector has been underlined by news that Alibaba Group Holding alone filed more than 10 percent of all blockchain patents worldwide in 2017.

Intellectual Property Rights Arms Race

Research by Thomson Reuters shows that 56 percent of all 406 blockchain patents issued around the world in 2017 came from China, with the United States a distant second with 22 percent. Combined with the rapid rise in blockchain patent filings from 134 in 2016 to 406 in 2017, the data tells a story of an ongoing intellectual property rights race that China is currently winning convincingly.

The Nikkei Asian Review reports that of the 406 blockchain patents issued in 2017, Alibaba alone filed 43, with other Chinese tech giants like Tencent and Baidu also dominating the list of blockchain patent owners.

The US still leads China in terms of overall number of blockchain patents filed, but China is fast closing the gap, and on an annual level China is actually in the lead.

Source: IRP Daily

No to Crypto, Yes to Blockchain

China has a well-documented atmosphere of regulatory hostility to cryptocurrencies and ICOs, having instituted a total ban on all crypto trading and ICO fundraising earlier this year. Following the ban, auxiliary bans and online purges have become commonplace in an effort to enforce restrictions.

Despite this, Chinese authorities remains very receptive to the technology behind cryptocurrencies, with Chinese President Xi Jinping describing blockchain technology as one of a new generation of technologies that is “substantially reshaping the global economic structure.”

Speaking to the Nikkei Asian Review, Taiwan-based IP specialist and Eiger Law partner John Eastwood explained China’s eagerness to grab as much ‘land’ as possible in the blockchain technology IP contest.

He said:

“Blockchain is a new technological landscape where it could be very profitable for Chinese companies to grab significant territory in their patent claim language. Holding several patents helps to give an aura of legitimacy that helps many companies in the blockchain field to attract investors or acquirers.”

Alibaba’s Grand Designs

Local Chinese media reported last week that the Wuchang municipal government in China’s northeastern Heilongjiang Province entered into a blockchain partnership with Alibaba subsidiary companies Ant Financial and Alipay for the purpose of curbing food fraud and ensuring consumer trust.

Wuchang is renowned for its unique high-quality rice, but a recent spate of counterfeiting incidents have eroded consumer trust and damaged the livelihoods of farmers. The new partnership brings together an Internet of Things (IoT) tracking solution and a blockchain, ensuring that every pack of Wuchang rice sold on Alibaba’s Tmall platform will have a supply chain that is fully visible to consumers via a QR code.

The company is also working on similar anti-food fraud projects in Australia and New Zealand in partnership with PwC and the postal services in both countries. At the same time, it is expanding into the healthcare space with a partnership with the eatern Chinese city of Changzhou to store medical data on a blockchain, giving authorized health personnel instant access to patients’ complete medical histories.

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This post is credited to CCN.