The end of the previous week could have brought more clarity to crypto investors and enthusiasts on the possibility of the Bitcoin ETF approval. The U.S. government shutdown that has started at the end of December, however, led to the temporary suspension in the work of a number of federal agencies. The absence of a decision on a Bitcoin ETF application led to a moderate decrease in demand for Bitcoin and other cryptocurrencies in light of investors’ fears that crypto markets were in search of a new “bottom.” But not everything is so pessimistic as it may seem at first glance. Last week, there was a lot of exciting news making one look boldly into the future and maintain confidence in the increase of Bitcoin price in the coming months.
VanEck Withdraws Its Application, but Will Soon Try to Get Approval Again for Bitcoin ETF
Many investors in crypto assets waited with a sinking heart for the final deadline for the SEC’s decision on the joint Bitcoin ETF application from the Cboe & VanEck and SolidX. But yet again, the joint project was not approved. This time, applicants themselves made a decision to withdraw.
After consulting with lawyers, the representatives of the companies declared their unwillingness to receive approval for making changes to the rules of exchange activities that would approve a Bitcoin ETF with a minimum number of members of the Commission continuing to perform their duties. In theory, approval of a change in regulatory standards could occur automatically, due to the absence of Commission members in their workplaces. But the applicants did not resort to this method, as VanEck CEO Jan Van Eck told in an interview with financial television channel CNBC. At the same time, he also confirmed his willingness to resubmit an application in the near future, although it is not yet known whether it will be filed before the resumption of the work of the state department or after. The head of Cboe, Edward Tilly, went further and declared his readiness to launch Bitcoin ETNs, which are a similar tool but for a broader range of retail investors.
The application for a license from Bakkt, a platform for trading Bitcoin futures, which was pending before the Commodity Futures Trading Commission (CFTC), also suffered from the forced government shutdown. On Thursday, January 24, the official launch of Bakkt was to take place; however, it was postponed again until the CFTC can reach its decision. Without this step, work is impossible in the United States, because the previously unauthorized attempts were punished by the imposition of fines. Over the past month, CoinAlpha received a $50,000 fine from the SEC for violating the rules of securities circulation.
Nevertheless, in different parts of the U.S., the authorities continue to work. Last week, the New York Department of Financial Services (NYDFS) granted two BitLicenses to digital currency startups. One of them was Robinhood, which now has the ability to transfer funds, including cryptocurrency. The second, LibertyX, will service ATMs that can convert cryptocurrencies to fiat money and back. Under the terms of the license, however, only New Yorkers can use these services. It is worth noting that in the past, BitLicense was also granted to Coinbase and Genesis Global Trading exchanges, as well as the BitPay payment service.
U.N. Sees Great Prospects for Cryptocurrencies
The U.N. continues to actively advocate—like the other international organization, the IMF—for the use of the blockchain and cryptocurrencies in many areas of life. This is stated in the updated 2018 survey on the global economy that was published on the official website of the organization. These innovations will reduce bureaucratic barriers and increase the possibilities for effective management, obtaining reliable information, and dealing with problems such as human trafficking and carbon emissions. Blockchain, according to the authors of the report, will reduce dependence on centralized authorities, as well as their intricate system of supervision and legislative rules. At the same time, the level of trust between the participants will increase due to their confidence in the impartiality of the operation of computer code. In this connection, within the walls of the United Nation, there already are ideas on the use of blockchain in matters of personal data, registration of property rights, and information on food products.
Bitcoin Overtakes PayPal but Is Still Very Far from Visa
Bitcoin’s turnover decreased slightly in 2018 compared with the previous year: from $3.66 trillion to $3.36 trillion. According to Satoshi Capital Research, this is most likely due to disappointment in the plummeting rates of cryptocurrencies rather than a change in the perception of the blockchain technology. At the same time, by the end of 2016, when cryptocurrencies were not so popular, the amount of transfers in Bitcoin was only $552 billion.
At the same time, the developing technology, which has no apparent application in the financial world, is already well ahead of its eminent counterparts. Thus, according to the results of 2018, the number of transactions on the Bitcoin network was 6 times higher than the number of transactions carried out in PayPal, and 16.5 times higher than on the global transfer network Western Union. Yet, the network of the first cryptocurrency is still inferior to its competitors Visa ($10.2 trillion), AliPay ($8.3 trillion), and MasterCard ($5.2 trillion). At the same time, trading operations on crypto exchanges amounted to $2.2 trillion of the total Bitcoin transaction volume—the number increased by 158.91% over the past year.
On the plus side, the number of average daily transactions increased to a level that preceded the beginning of the rally to almost $20,000 in the winter of 2017. In the coming months, the market will be more inclined to push off from the formed “bottom” to the top, and not seek new support levels. Nevertheless, it is definitely not worth going all-in on Bitcoin right now.
Durov’s TON May Be Launched in March
According to a Russian news outlet The Bell, the Telegram Open Network (TON) blockchain, which gained fame thanks to Pavel Durov last year, is rumored to be very close to completion. There were even rumors that the informal presentation of the TON blockchain’s native cryptocurrency would take place at the World Economic Forum in Davos. But it is more likely that it will be held behind closed doors for early investors at the end of this month. The demonstration of the possibilities of the new blockchain and its main network for a wider audience was allegedly postponed for March or April of this year. According to the article, the test network’s audit will be performed in February. Trading of the new cryptocurrency can start in Japan and other Asian countries, as well as in the U.K.—its legislation is already being studied by company specialists.
The most critical events in the crypto market in January 2019:
The expiration of January Bitcoin futures contracts on CME is scheduled for January 25, 4:00 PM GMT.
The launch of the Bakkt platform, scheduled for January 24, 2019, did not occur due to the shutdown of the U.S. government and, particularly, the CFTC regulator.
The Zilliqa (ZIL) blockchain’s main network is set to launch on January 31, 2019.