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Current State of The Crypto Market (March 20th, 2019)

Hackers:   New Zealand-based cryptocurrency exchange Cryptopia has resumed trading on 40 trade pairs, according to a tweet from the firm on March 18.  In the tweet, the company announces that it has “resumed trading on 40 trade pairs that we have quantified as secure. We will continue to expand this list as we clear more coins.” This update follows the exchange’s recent announcement of the plans to reopen trading on its platform by the end of March, following a $16 million hack in mid-January.  As previously reported, Cryptopia’s co-founder Rob (Hex) Dawson said that the company re-launched its website in read-only form on March 5, however the platform showed the balances as they were on January 14, 2019, the date of the hack. The exchange explained that the website could be used to reset passwords and two-factor authentication credentials, which is also a top priority issue in terms of client support at the current stage.

 

Bullish Key Players:  Now that the cryptocurrency market has seemingly bottomed or is near its bottom, an influx of Chinese Yuan has entered the market, most of which going to Bitcoin.  According to data from Coinlib, money flow into Bitcoin over the past 24 hours shows the Yuan is the second-top entry fiat currency at $161.25 million, after the US Dollar at $246.34 million.  And it’s not just Bitcoin. Coinlib data shows $74 million worth of Yuan went into Ethereum, and over $20 million went into Stellar.  In total, $255 million worth of Yuan has gone into crypto over the past 24 hours, making Yaun the second-top fiat currency entering crypto after the US Dollar.  In addition to the data provided by Coinlib, which aggregates data from leading cryptocurrency exchanges, peer-to-peer exchange volume is showing an increase in Chinese capital to the markets as well.  LocalBitcoins, the popular P2P/over-the-counter Bitcoin marketplace has experienced an increase in volume by over $2 million from the previous week. According to their data, 25.4 million CNY ($3.7 million) was in crypto trade for the week of 2019-03-16.  Moreover, top international cryptocurrency exchanges like Binance, ZB.com, OKEx, and Huobi in which Chinese traders buy and sell crypto have experienced increased trade volume.

 

Banks & Institutions:  Silvergate Bank, one of the few U.S. financial institutions that actively serve cryptocurrency businesses, added 59 such clients in the fourth quarter, but its deposits from the industry shrank 8 percent.  According to an updated IPO prospectus filed with the Securities and Exchange Commission, as of December 31, the San Diego-based bank had 542 clients in the industry, including crypto exchanges, institutional investors in digital assets, and others. That’s up from the 483 crypto clients as of September 30th that Silvergate counted when it first filed to go public last year.  Among the new crypto clients signed in Q4 were two exchanges, 24 investors and 33 firms in a miscellaneous category that includes blockchain protocol developers, miners and service providers, according to the updated prospectus.  For the first time in an SEC filing, Silvergate identified some of these clients, a few of which were previously not publicly known to be bank customers: market maker Genesis Trading and investment funds Kenetic and Polychain Capital.  Earlier published reports have noted that the bank worked with bitcoin wallet provider Xapo, diversified crypto startups Paxos and Circle, and exchanges Gemini, bitFlyer, Kraken, Coinbase, Bitstamp and Bittrex.

 

Adoption:   Chicago’s mayor, Rahm Emanuel, took the podium at a March 18 meeting in Chicago Illinois to discuss the city’s FinTech movement, mentioning points on cryptocurrency and blockchain.  The former chief of staff to U.S. President Barack Obama has made a name for himself for being an unconventional leader. After acknowledging his own lack of knowledge regarding blockchain, he stuck to what he knows best: politics.  As countries like Iran and Venezuela facing financial embargoes are increasingly turning to crypto as a possible way to maintain global transactions, Emanuel, in response to an audience question, explained adoption could be inevitable.  Emanuel said, “Nation states are falling apart, or receding. City states are emerging, so the political structures we all grew up under are changing. One day, somebody’s going to figure out – whether that’s Argentina, ten years from now, five years from now – how to use cryptocurrencies to stay alive when their facing a financial crisis, and then you’re going to find out that this moment has arrived.”  Ultimately Emanuel said he thinks “an alternative way of currency dealing with the debt markets is going to happen” at some point in the future.

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