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Bitcoin Weakens Despite No Crypto-Negative Headlines: BTCManager’s Week in Review Feb 4

Originally published on: BTCMANAGER
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February 04, 2019

Despite a lack of bitcoin-negative news, the bears have won over the bulls this week, which has resulted in a week-on-week decline in the price of bitcoin by over three percent.

The re-application of CBOE and VanEck for a cryptocurrency ETF failed to boost the price of bitcoin, despite the move potentially opening the door to the much-anticipated Bitcoin ETF once again. After previously withdrawing their application due to the US government shutdown, CBOE and VanEck re-applied for a crypto ETF from the SEC on January 31, 2019.

In Germany, retail investors can now buy bitcoin and several altcoins using Boerse Stuttgart’s new crypto trading app called BISON. The launch of the stock exchange-backed trading app could lead to an increase in bitcoin investments in Europe’s largest economy.

Moreover, New York is set to receive more Bitcoin ATMs as Cottonwood Vending has received a BitLicense to conduct cryptocurrency business in the State of New York. Cottonwood operates in New York as a Bitcoin ATM dealer. Their ATMs allow users to automatically deposit fiat currency to buy and sell bitcoin through the use of their wallets or withdraw cash.

More Bitcoin ATMs should further bitcoin adoption, especially when placed in of the most money-driven metropolitan cities in the world.

Additionally, Fidelity announced that it plans to start its crypto custodian service in March, which should help to attract more institutional investors to crypto assets in 2019. 

The altcoin market echoed bitcoin’s sentiment this week and dropped between five and fifteen percent week-on-week.

This week’s contributions have been provided by Alex Lielacher, Aisshwarya Tiwari, Tokoni Uti, Priyeshu Garg, and Ogwu Osaemezu Emmanuel.

After previously withdrawing their application due to the government shutdown, CBOE and VanEck have re-applied for a crypto ETF from the SEC on January 31, 2019.

There has been a long and drawn out battle to secure a cryptocurrency ETF from the SEC. Firm after firm has applied and have been repeatedly denied the coveted fund type. Now it seems Chicago Board Options Exchange’s (CBOE) and VanEck, an investment firm, are giving the ETF application another try after previously withdrawing their application on January 23, 2019. On January 31, 2019, they put in their application again.

Their initial reason for withdrawing their application was put down to the then-ongoing government shutdown during which the SEC was only open on a limited basis, even as the February 27, 2019 deadline for review approached. This was not the only setback the CBOE and VanEck have experienced in their pursuing an ETF either. The companies first filed for a crypto ETF on June 6, 2018.

On January 30, 2019, Wrapped Bitcoin (WBTC) went live on Ethereum blockchain as scheduled. This is a Bitcoin backed ERC20 token aimed at bringing Bitcoin and other cryptocurrencies to the Ethereum mainnet. The community-driven initiative is anticipated to bring in liquidity to the DEX, DeFi sectors. WBTC was launched on October 26, 2018, as a joint venture between BitGo, Kyber Network, and Republic Protocol.

Wrapped Bitcoin or WBTC is the first token that makes Bitcoin compatible with the Ethereum chain. It standardizes Bitcoin to the ERC20 format and basically creates smart contracts for Bitcoin.

WBTC is jointly initiated by Kyber Network (KNC), Ren, and BitGo. However, BitGo will be the initial custodian.

Kyber’s on-chain liquidity protocol allows decentralized token swaps to be integrated into any application, enabling value exchange to be performed seamlessly between all parties in the ecosystem. Ren is an ecosystem that is anticipated to enable a world of privacy-preserving applications. Ren is basically an open-source decentralized dark pool exchange that facilitates cross-chain atomic trades on a hidden order book over the Ethereum and Bitcoin networks. BitGo is a leader in security, compliance, and custodial solutions for blockchain-based currencies.

A Decentralized Autonomous Organization (DAO) would be formed specifically for this project. This DAO will serve to perform on chain auditing of WBTC to make sure it is always backed at a 1-to-1 ratio with Bitcoin. This means that for each WBTC minted into existence, there should be an equivalent amount of Bitcoin held in custody in a 1:1 ratio, making it a fully backed asset.

Germany’s second-largest stock exchange, Boerse Stuttgart, announced the launch of its new crypto trading app, called BISON, which aims to offer “simple, fast and secure trading in cryptocurrencies.”

The newly launched BISON app enables investors to trade and securely store digital assets for free using their iOS or Android devices. According to a press release from Boerse Stuttgart, the German stock exchange has been developing the app for a year through its subsidiary Sowa Labs GmbH.

Using BISON, it only takes a few minutes to register and verify your identity via a video call. Next, users can transfer fiat currency into their BISON accounts and begin investing.

It is also important to note that BISON users are investing in actual cryptoassets and not in crypto CFDs as is the case on some trading apps. This is a testament to Boerse Stuttgart’s belief in and commitment to cryptocurrencies.

While cryptocurrency market continues to be dominated by the bears, some HODLers have found a new robust way to earn money despite it. A Bloomberg report published on February 1, 2019, notes that some investors are earning interest on their crypto holdings by staking them.

For the uninitiated, PoS differs from PoW in that the former requires “staking” digital currencies instead of performing complex mathematical computations to add a new block to the blockchain or to validate transactions.

In exchange, these “stakers” receive rewards in the form of coins for helping validate transactions. The PoS protocol can generate returns ranging from five to 150 percent depending on the amount held and coins staked.

PoS-based projects such as Tezos, Decred, EOS, and Livepeer have had a relatively better time in the bear-trodden market compared to their PoW counterparts.

Kyle Samani, a managing partner at Multicoin Capital Management, said:

“Regardless of market conditions, staking provides returns denominated in the asset being staked. If you’re going to be long, you might as well stake.”

South Korea’s state financial regulator, the Financial Service Commission (FSC), will continue the ban on initial coin offerings (ICOs) as confirmed in a press release published on January 30, 2019.

South Korea officially curbed ICOs on September 29, 2017, when the FSC stated that it would ban all forms of the blockchain funding method “irrespective of technical terminology.” The financial watchdog also banned margin trading on cryptocurrencies through the ruling.

At the time, the FSA voiced very strong opinions against the ICO method of raising funds stating that they are overly speculative in nature and constitute a “violation of the capital market law.” The regulatory body added that “stern penalties” will be imposed on those who continue to partake in this volatile and illegal method of crowdfunding.

Bitfury, a highly-reputed firm dedicated to securing the Bitcoin blockchain, is collaborating with Commons Foundation, a Seoul-based organization focused on creating and implementing cultural, economic, and social peer-to-peer models.

The duo will launch a Bitcoin transaction processing center in Paraguay, as part of the latter’s “Golden Goose” initiative aimed at promoting widespread adoption of cryptos and blockchain technology in Spanish-speaking nations, according to a blog post on January 31, 2019.

In a bid to promote the adoption and integration of cryptoassets as well as its underlying distributed ledger technology (DLT) into the daily lives of Spanish-speaking nations, Commons Foundation has allied with Bitfury.

Per the blog post, both firms will collaboratively build a series of Bitcoin transaction processing centers in the South American nation as well as other Spanish-speaking regions using Bitfury’s BlockBox AC mobile data centers.

Cottonwood, a Bitcoin ATM operator, has confirmed in a January 31, 2019 tweet that they have received a virtual currency license from the state of New York.

Cottonwood Vending LLC has gotten 2019 off to a productive start, announcing on January 31, 3019, that they have received their virtual currency license from the New York State Department of Financial Services (NYDFS) via a tweet.

Cottonwood operates in New York and the surrounding areas as a Bitcoin ATM dealer. Their ATMs allow users to automatically deposit fiat currency to buy and sell bitcoin through the use of their wallets or withdraw cash. Their ATMs are touchscreen and automatically syncs with the wallets.

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