5 Critical Cryptocurrency Happenings For July
As crypto prices continue to slip lower in 2018, a bullish theme has emerged: the mainstream institutional acceptance of digital assets.
Despite the recent volatility, institutional acceptance is hugely bullish for the long term.
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Here are five of the latest happenings you need to know:
1. European ETF Giant Launches Bitcoin & Ethereum ETN Trading
Flow Traders, Europe’s leading ETF trading house, has launched trading in bitcoin and ethereum ETNs (exchange-traded notes).
#-ad_banner-#Utilizing ETNs issued by XPT Provider in Sweden, Flow Traders is the first firm to disclose its buying and selling of crypto notes listed on regulated stock exchanges. XBT Provider reported that Flow Traders has dramatically ramped up its trading in the ETH and BTC notes.
The reason this is a critical occurrence is because it shows the nascent mainstream acceptance of cryptocurrencies. The involvement of institutional traders proves that crypto is far more than just a bubble asset. The increase in ETN volume also improves liquidity, which will lead to more large players getting involved.
Bloomberg reported that Dennis Dijkstra, CEO of Flow Traders, said: “People underestimate crypto. It’s big, and it is to be regulated very soon. The market participants are much more professional than people think. Institutional investors are interested — we know they are because we get requests.”
It’s not just Flow Traders taking a bite of the crypto pie. Notable happenings include Goldman Sachs setting up a crypto trading desk and Barclays PLC providing banking services to Coinbase.
2. ICO Study Released
A study by Boston College revealed that 56% of all ICOs (initial coin offerings) fail within the first four months. While this may not be surprising, the researchers also offered investors insight in the optimal way to purchase ICOs.
Leonard Kostovetsky, one of the study’s authors, told Bloomberg, “Acquiring coins in an ICO and selling them on the first day is the safest investment strategy.” He added, “What we find is that once you go beyond three months, at most six months, ICOs don’t outperform other cryptocurrencies. The strongest return is actually in the first month.”
This is compelling information and one of the few academic studies on ICOs. Investors are well heeded to avoid ICOs altogether due to their volatile and proven weak odds of success. Should you decide to speculate in ICOs, be sure to flip them quickly should profits develop!
3. Litecoin Partner Acquires Bank Stake
In other crypto-turning-mainstream news, The Litecoin Foundation with its partner TokenPay recently purchased a nearly 10% stake in the German bank WEG AG. TokenPay holds options representing 90% control of the bank, but German law does not allow more than 10% control without regulatory approval.
In a press release Charlie Lee, Managing Director of the Litecoin Foundation, stated, “This partnership is a huge win-win for both Litecoin and TokenPay. I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin. I’m also excited about Litecoin’s support in TokenPay’s eFin decentralized exchange.”
Matthias von Hauff, founder and CEO of WEG Bank AG, added: “The partnership with innovative institutions such as TokenPay and Litecoin might at first come unexpectedly for a very conservative institution like us. But we have thoroughly and diligently examined the prospects of a common future, and we became convinced that the future of banking will make adoption of such modern payment methods inevitable. We are therefore proud to have teamed up with the best in the field.”
Wow! I fully expect to see more and more of these types of announcements while cryptocurrency continues to move to Main Street.
4. Venture Capital Giant Moves Into Crypto
Keeping with July’s theme of significant money players moving into the sector, VC kingpin Andreessen Horowitz stepped into the fray by investing in blockchain startup Oasis Labs.
Allocating $45 million, the Oasis Labs investment followed up Andreessen Horowitz’s $300 million crypto fund launched in June.
The fund named a16z Crypto Fund is described as a venture fund that will invest in crypto companies and protocols.
5. XRP Breaks Free Of Ripple
Interestingly, XRP is not the same as the company Ripple. According to Ripple’s Chief Cryptographer David Schwartz XRP was created in 2004 and was given to Ripple to use.
The popular website Coinmarketcap.com has started to refer to the coin as just XRP with a new logo.
There are several significant lawsuits against Ripple regarding XRP.
The plaintiffs in the suits are demanding that XRP be deemed a security because they believe the crypto asset is part of the company (Ripple) that uses the utility coin.
How this will pan out and what it means for investors is very unclear right now.
Risks To Consider: Cryptocurrencies are highly volatile therefore suited for only risk-embracing investors. Only use the money you can afford to lose when speculating in cryptocurrencies.
Action To Take: Be Patient!
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