After a turbulent three weeks, the price of bitcoin has rallied again to surpass the $4,250 mark on Thursday to peak at a seven-day high of $4,360 on Sunday, October 1. This rally is a testament to the resilience and maturity of bitcoin as an asset class.
It is important to highlight that bitcoin is rallying while a slowdown can be witnessed in the overheated and saturated ICO market. Token sales have raised over $2 billion in the past nine months and have jumped onto media headlines in spring when several blockchain projects raised tens of millions without even having a functional proof-of-concept. This, combined with the strong performance of some of the newly issued digital tokens raised eyebrows among investors as well as regulators.
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Since the beginning of the summer, the U.S., Canada, Singapore, China, South Korea, Switzerland, and the U.K. have issued guidelines and regulations regarding the sale of digital tokens for the purpose of funding raising. Regulations range from outright bans of ICOs in China and South Korea to a simple warning about the riskiness of investing in such ventures in the U.K.
Interestingly, in the last two months, the amounts that are being raised through initial coin offerings are seemingly dropping as many high-profile, well-marketed blockchain projects are failing to come anywhere near their token sale funding targets and many new digital tokens have been underperforming since their launch.
The well-marketed Paragon project, for example, has only managed to raise two percent of its ambitious funding target of $100 million while Change Bank has only managed to raise seven percent of its $40 million token sale funding target thus far according to ICODrops.
Whether this apparent slowdown in the ICO market is being driven by the increase in regulations or the oversaturation of the ICO market by a wave of low-quality projects is not certain. Regardless, the price of bitcoin is moving upwards again, which may also be a sign that there is a move away from ICO tokens back to more established cryptocurrencies as the controversy around the ICO market continues to grow.
This week’s review is compiled from contributions by Christoph Bergmann, Liam Kelly, Jamie Holmes, Joseph Young, and Michael Scott.
Japanese banks announced plans to introduce a digital currency in time for the 2020 Tokyo Olympics. A consortium of banks, led by Mizuho Financial Group and Japan Post Bank, has garnered the blessings of the country’s central bank and financial regulator to launch J-Coin, an electronic currency used to purchase goods and transfer money using smartphones.
Transactions of J-Coin which can be converted to Japan’s fiat currency yen on a one-to-one basis will occur via a smartphone app with an accompanying QR code that can be scanned in stores.
J-Coin is seen by many of its advocates as a potential means of weaning the Japanese off their heavy reliance on cash, which currently accounts for 70 percent of all transactions. This is higher than any developed country, where on average cash usage rates are only 30 percent.
City A.M. reported on September 21 that Blockswater, a Swedish liquidity provider, filed a market abuse report against J.P. Morgan. The accusation followed a tirade conducted by the company’s CEO, Jamie Dimon, who said that he would fire any of his employees for trading in bitcoin.
Dimon reported last week that he would “fire them in a second… For two reasons: it’s against our rules, and [the employees in question] are stupid. And both are dangerous.” Dimon among many others seem bent on continuing to portray bitcoin, and other cryptocurrencies for that matter, as an exclusively illicit trading objective.
These statements, as well as declaring Bitcoin a “fraud, which is good only for murderers and drug dealers” at a Barclay’s speaking event, sent the cryptocurrency into a downward spiral. Ethereum also dropped 4.81 percent to $279.55 shortly following Dimon’s comments.
It should also be noted that J.P. Morgan traded bitcoin derivatives on the Stockholm-based Nasdaq Nordic exchange before and after Dimon’s statements.
Florian Schweitzer, a managing partner at Blockswater, finds it hard to believe that Dimon had not recognized the effects his words would have on the currency. Schweitzer and his colleagues also declared Dimon’s actions, “as a clear case of double standards and [that] it smells of market manipulation.”
The Municipality of Rotterdam and the Port of Rotterdam Authority in the Netherlands have launched BlockLab, announced on September 21. The blockchain research lab that will focus on demonstrating the potential of blockchain technology in industries outside of finance.
BlockLab and its operations will be financed by the Dutch government and the regional development corporation InnovationQuarter. In the upcoming months, blockchain developers, researchers, and experts at BlockLab will explore various applications of blockchain technology, including efficient energy transition, processing of cargo flows, port logistics, stock financing, and the settlement of transactions without the necessity of intermediaries.
In its first few months, BlockLab will lead its research with a team of five core researchers who will work from the Cambridge Innovation Center in Rotterdam. But, testing and implementation of blockchain technology-based applications will be completed in the field lab or the headquarters of BlockLab.
On October 17, Ethereum will reach the third stage of its life cycle. After passing Frontier and Homestead, another hard fork will ring in the Metropolis era. The first part of the hard fork will activate some changes, which are not as fundamental as expected, but will significantly change Ethereum nevertheless.
The hard fork will push back the Ethereum Ice Age by another 18 months, increase the performance of the Ethereum blockchain, change mining rewards, add privacy features to ether transactions and improve the platform’s smart contract functionality.
A dedicated hardware wallet for Monero was first proposed in August 2017 and the project has now been set in motion. With the goal of 996 XMR reached (worth around $97,608 at the time of writing) thanks to contributions from 39 individuals, Michael Schloh von Bennewitz will deliver a printed circuit board, which will form the foundation of an independent hardware wallet. Built by the Monero community for the Monero community.
To find out more, BTCManager spoke to Michael Schloh von Bennewitz and ‘Anonimal,’ lead developer of Kovri and the man instrumental into bringing Michael’s expertise on board.
Author Cal Newport in his book Deep Work Rules for Focused Success In a Distracted World calls the ability to focus without distraction one of the most valuable skills in our economy.
But in this same book he makes an equally if not more important premise; that deep work makes one better at what they do, providing the sense of true fulfillment that comes from craftsmanship. In other words, skill development and delivering value is the quintessential means of producing an income and making a sustainable living.
One startup that’s employing this message is a recently launched distributed platform called Gitcoin. This self-funded project aims to disrupt the status quo of how software problems are solved today by distributing of Gitcoin Bounties to developers that successfully complete projects.
Cryptocurrency markets made a comeback on September 27 and demonstrated strong gains across the board. One of the strongest performers was AEON, which is based on the CryptoNote protocol.
AEON is sometimes referred to as ‘Monero’s Litecoin.’ This is in reference to its use as a testbed for ideas and upgrades that could be used for Monero (and vice versa). With XMR-USD breaking to fresh highs above the $100 handle, it is interesting that AEON is starting to show some interesting price behavior. Just the gain in value on September 27 alone had some in the small community scratching their heads.
AEON-USD reached a fresh high above $3.00 but has since settled above the $2.00 handle at the time of writing.