Bitcoin Bull Tom Lee Double Downs on $25,000 Bitcoin Price Forecast in 2018
Bitcoin bull Tom Lee claims he has not wavered from his previous $25,000 forecast for bitcoin by year’s end, even though he mentioned a price slightly surpassing $20,000 in a recent CNBC interview.
Lee, co-founder of Fundstrat Global Advisors and the best known Wall Street analyst who forecasts bitcoin prices, quickly clarified Thursday evening in a CNBC “Fast Money” interview that he maintains his $25,000 forecast.
Lee initially stated on Squawk Box Thursday morning that bitcoin has traded at 2.5 times its mining cost. The mining cost is $7,000 and rising, he said, meaning by year’s end the mining cost will reach $9,000.
Lee Corrects Himself
By Thursday afternoon, Lee said the estimated mining cost indicates a price over $20,000 – around – $22,000, then added that the $25,000 price can be reached by year’s end “or something like that.”
A few thousand dollars is not something that investors should quibble over since any price beyond $20,000 will be around 200% above current levels, Le said. The price was around $6,600 on Friday morning.
The $6,600 price range returns bitcoin to its April range, where it fell from close to $20,000 late last year. The price peaked at $9,800 in May, and has since lost around 30%.
Lee, who was chief equity strategist J.P. Morgan from 2007 to 2014, said bitcoin and blockchain represent a “multidecade story” that is still in its early stages.
Lee said he performed wireless research in the 1990s and witnessed mobile and Internet convergence over 20 years. Bitcoin’s current situation is “not that different” for the way an industry changes over time, he said.
Bitcoin-friendly digital payments firm Square has withdrawn its application to register as a depository bank.
As first reported by financial publication American Banker, Square quietly removed its name from a public list of pending bank applications maintained by the Federal Deposit Insurance Corporation (FDIC), halting — at least temporarily — its bid to become a full-featured financial services firm.
Square’s application had been on file since September, and it indicated that the company planned to register as an industrial loan company (ILC). Under an ILC charter, licensees may hold insured deposits while remaining exempt from stipulations laid out in the Bank Holding Company Act.
The FDIC has not approved an ILC application since 2008, and at least one major industry group petitioned the FDIC to deny Square’s bid and Congress to “close the ILC legal loophole.”
Square, however, said that it plans to refile after revising its application in light of “constructive dialogue” with the FDIC.
“We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and refile was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application,” the publication quoted a Square spokesperson as saying. “Square Capital is uniquely positioned to build a bridge between the financial system and the underserved, and we continue to work closely with the FDIC and Utah DFI on our applications.”
Some analysts have connected the report to the recent cryptocurrency market decline, which set in over the past 48 hours and has seen the bitcoin price subside back toward $6,500 after briefly flirting with making a run at $7,000 earlier in the week.
Square, which hopes to register as an FDIC-insured bank, allows customers to buy and sell bitcoin from within the peer-to-peer Cash App.
Such a causational relationship may be a stretch, but there is no doubt that the cryptocurrency industry stands to benefit if fintech firms such as Square and Robinhood — each of which has dipped a toe into the cryptocurrency ecosystem — begin offering traditional banking services to customers.
As CCN reported, many major legacy financial institutions have barred customers from using credit cards to purchase cryptocurrency, treated funds obtained through cryptocurrency investing and trading with suspicion, and have been hesitant to provide banking services to cryptocurrency exchanges. Banks that were birthed in Silicon Valley and themselves operate as cryptocurrency brokerages may be more accommodating to the still-nascent industry.
Coinbase and Circle, each of which boasts a multi-billion dollar valuation and also operates a cryptocurrency exchange, are also said to be in the early stages of pursuing banking licenses.
South Korea is Officially Recognizing Crypto Exchanges as Regulated Banks
For the first time in history, the government of South Korea has officially recognized crypto exchanges regulated financial institutions and banks.
Local publications in South Korea have reported that the financial authorities of South Korea have finalized their plans to categorize crypto exchanges as an industry called “Cryptocurrency Exchange and Brokerage” to enable trading platforms to perform at a large capacity with support from local authorities.
From Communication Vendors to Financial Institutions
For many years, the government of South Korea has considered regulating the cryptocurrency sector with practical regulations and policies, primarily to prevent large-scale hacking attacks and security breaches from occurring, as seen in the case of Bithumb and Coinrail in early 2018.
However, local financial authorities feared that the regulating the cryptocurrency market would lead the public to believe that the government has legitimated the cryptocurrency sector. Consequently, South Korea postponed the regulation of cryptocurrency exchanges.
This week, local publications revealed that the government of South Korea has come to a consensus to recognize crypto exchanges as regulated financial businesses, creating a new industry dedicated to cryptocurrency trading platforms.
In the short-term, the newly created regulatory framework for cryptocurrency exchanges may have a negative impact on both the trading platforms and investors, because it would mean stricter Know Your Customer (KYC), Anti-Money Laundering (AML), and customer verification policies.
The recognition wil also bring increased scrutiny for domestic Korean crypto exchanges.
Crypto exchanges like Bithumb, Coinone, and Korbit will also be likely required to overhaul their internal management systems and drastically enhance security measures to remain in compliance with new policies.
Still, in the long run, local analysts have stated that the decision of the government to legitimize the cryptocurrency sector will lead to large-scale institutional investors and retail traders entering the crypto market, allowing digital assets to be considered as an emerging asset class.
South Korean authorities will also alter existing regulations to facilitate the development of decentralized applications and base layers such as Ethereum and EOS.
No More Minor Crypto Exchanges
Previously, crypto exchanges were considered as communication vendors and trading platforms were only required to purchase $20 licenses to operate. In the upcoming months, crypto exchanges will be required to obtain necessary approval from the country’s cybersecurity agencies and the department of financial intelligence.
Moon Byung-ki, SK Infotech high-tech department director, a subsidiary company of South Korea’s biggest telecommunications conglomerate SKT, said that due to the lack of regulations, new exchanges have been able to operate in the country without any security system in place.
“Small to medium-sized cryptocurrency exchanges delay the implementation of necessary security measures and are only focusing on business expansion.”
In the upcoming months, these exchanges will not even be permitted to operate regionally unless they successfully obtain approval from local government agencies.
Regulating crypto exchanges as financial institutions will provide the Financial Services Commission (FSC) direct control and authority over the cryptocurrency sector. As such, concerning investor protection in specific, the cryptocurrency industry in South Korea is expected to see significant changes in the next few months.
Swiss Stock Exchange Operator is Launching a Crypto Assets Exchange
SIX, the owner and operator of Switzerland’s principal stock exchange has announced plans to launch the SIX Digital Exchange – a crypto assets exchange fully regulated by the country’s financial regulator and central bank.
In an announcement on Friday, Swiss Exchange operator SIX revealed its new crypto-initiative which it claims ‘will be the first market infrastructure in the world to offer a fully integrated end to end trading, settlement and custody service for digital assets.’
Dubbed the SIX Digital Exchange (SDX), the blockchain-powered platform will facilitate the tokenization of clients’ existing securities as well as enable the issuance and trading of digital assets.
“The digital exchange will allow clients of SIX to trade, settle and custodize digital assets in the same way they currently do in the traditional world,” explained SIX head of securities and exchange Thomas Zeeb, describing SDX as an all-in-one platform.
SIX further stressed that the platform will see ‘the same standard of oversight and regulation’ from FINMA, Switzerland’s financial regulator and the Swiss National Bank, the country’s central bank.
“This is the beginning of a new era for capital markets infrastructures,” said SIX chief executive Jos Disjsselhof, heralding the launch of the upcoming exchange which will launch services in mid-2019.
He added:
For us, it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry. The financial industry now needs to bridge the gap between traditional financial services and digital communities.
To this end, SIX will also facilitate its clients offer their own tokens through initial coin offerings (ICOs) to raise funds. “We’re putting together a team of developers and advisors that will help clients create ICOs and new products around that,” Zeeb added, underlining SDX as “an ecosystem”.
Pointedly, the exchange operator noted that SDX will not be used to enable the direct trading of cryptocurrencies like Bitcoin and Ethereum and will instead help introduce traditional financial market participants to tokenize their bankable and non-bankable assets into digital assets.
IBM Wins AUD $1 Billion Contract to Develop Blockchain, Tech Initiatives for Australia Govt.
Computing giant IBM has been awarded a landmark contract to develop blockchain and other digital technology initiatives for the government of Australia.
Announced on Thursday, the five-year, AUD $1 billion (~USD $740 million) contract is Australia’s latest attempt to make good on its goal to become one of the world’s “top-three digital governments” by 2025 by investing in research into blockchain technology, as well quantum computing and artificial intelligence.
“This agreement is a testament to our forty-year partnership with the Australian Government. It shows trust and belief in our ability to transform and provide world-leading capabilities, leveraging our investments locally in AI, blockchain, quantum and cloud,” said David La Rose, managing director of IBM Australia & New Zealand. “We look forward to helping the Australian Government to re-define the digital experience for the benefit of all Australians.”
IBM already had agreements in place with four federal agencies, and this new contract — which was spearheaded by the Digital Transformation Agency (DTA) and runs through June 2023 — will extend the public-private partnership to the remainder of the government as well.
It’s not clear to what extent this new partnership will replace those old agreements, and IBM has been cagey about whether it will actually earn more under the deal that it would have otherwise. Nevertheless, it’s also the largest contract negotiated by the Australian government, a fact that the firm has been quick to tout in public statements.
As CCN has reported, IBM has emerged as a major player in the enterprise blockchain space. Just this month, IBM-powered blockchain platform we.trade hosted live trades between four major European financial institutions, including Deutsche Bank and HSBC.
Notably, though, IBM has also dabbled with public blockchain development. Last year, IBM signed an agreement with Stellar — creator of the lumens (XLM) cryptocurrency — to use the XLM network as the “core backbone” for a cross-border banking solution targeting emerging markets.
More recently, IBM partnered with fintech startup Veridium Labs to issue a cryptocurrency token on the Stellar network. The “verde” token is backed by carbon credits, which will help finance the cultivation of a 250-square mile patch of rainforest in Indonesia.
Is Bitcoin Legal Tender? Kenya’s Parliament Gives Treasury 2 Weeks to Decide
Kenyan MPs have given the Treasury secretary a two-week deadline by which he must decide the fate of bitcoin and other cryptocurrencies, specifically regarding their status as legal tender in the nation of 48 million people. The deadline follows a warning issued in April by the Central Bank of Kenya (CBK).
The Finance and National Planning Committee asked agency officials to explain the popularity of cryptocurrency trading in Kenya, as well as why the Treasury and the CBK were permitting the unregulated currencies to be traded and invested in with no licensing procedure or capital gains tax being required, echoing the familiar situation being seen in nations around the world as government regulators start to finally take notice of the surge in crypto trading.
The committee chairman, Joseph Limo, laid out the situation in no uncertain terms.
“We are surprised to hear that even the CBK is not aware that there is a lounge at Kenyatta University, an ATM in town, and a hotel in Nyeri which trade in bitcoins. There is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it like trade in M-Pesa and bank transactions.”
Kenya’s MPs have given Treasury two weeks to determine the legal status of cryptoassets.
The CBK did issue a notice to the public in December 2015 warning the public about the use of digital currencies, stating in the document that “virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business.” The notice goes on to list other risks associated with cryptocurrencies.
On Tuesday, Henry Rotich, head of macroeconomics at Treasury, criticized the volatility of cryptocurrencies by pointing out the dramatic fall in bitcoin’s value seen over the last several months as an example, which perhaps does not bode well for the classification of crypto as legal tender in Kenya.
Mr. Rotich told MPs that like any other developing technology, cryptocurrency is still under review by the government in terms of whether it would be allowed to flourish in the country or be prohibited and regulated, pointing out the potential to facilitate money laundering as one of the primary concerns surrounding the technology.
“I am not aware of people operating locally. But I will endeavour to find out whether we have local exchangers. The issue of cryptocurrencies is evolving and we can take a position as a country. This is a delicate balance between supporting innovation and killing it,” he said.
India recently went through the same process as Kenya is undergoing now, ultimately ruling that bitcoin and other cryptocurrencies were not legal tender.
Major European Banks Complete Live Trades on IBM Blockchain
After undergoing development for over a year, the first live trades have occurred on the IBM-powered trade finance blockchain platform, we.trade.
Through four banks, 10 firms were able to execute 7 trade transactions across 5 countries in the last 5 days. These are the first such trade transactions employing blockchain technology to be considered commercially viable.
The we.trade digital trade solution, which has been developed using the Hyperledger Fabric blockchain technology, leverages smart contracts making it possible for event-based payments to be made automatically. Following a competitive bidding process that drew six tech companies, IBM was granted the contract to offer a cloud-based platform last year in June.
Members of the we.trade consortium include UniCredit, Societe Generale, Santander, Rabobank, Nordea, Natixis, KBC, HSBC and Deutsche Bank. To make the we.trade blockchain platform a reality all the internal procedures and governance of the banks were met.
Originally known as Digital Trade Chain
The consortium, which initially went by the name of Digital Trade Chain before a rebranding exercise, was formed in 2017 with a view of closing the financing gaps that hamper both cross-border and domestic trade with regards to small and medium-scale enterprises located in Europe.
Mid last month a legal entity for the we.trade platform was created in order to allow the partners in the consortium to offer the blockchain solution to their clients. This resulted in the formation of a joint venture known as we.trade Innovation DAC which was incorporated in Dublin, Ireland. The nine founding banks are equal shareholders in the JV which will own, manage and well as distribute the we.trade blockchain platform.
Looking Beyond Geographical Boundaries
Currently, we.trade is available in eleven countries in Europe and this includes the United Kingdom, Sweden, Spain, Norway, the Netherlands, Italy, Germany, France, Finland, Denmark and Belgium.
According to the chief operating officer of we.trade, Roberto Mancone, the joint venture will, however, not limit itself to the countries in which its founding members are based in:
“…We are delighted to have launched for the first time in the world, a blockchain based platform that enhances the overall customer experience when trading internationally. The next step will be getting buy-in from additional banks and their customers in Europe and further afield.”
Besides expanding into new markets, we.trade also looking to allow some banks to join on a license-type basis as this will allow a faster expansion to as many financial institutions as possible. These banks will be provided with their own node on the blockchain thus allowing them to offer their clients access to the we.trade platform. Additionally, the joint venture intends to enlist other trading partners including credit agencies, freight forwarders and shippers.
Exclusive: Malta PM Confirms Parliament Will Pass Three Cryptocurrency Bills
Malta is making quick progress in establishing itself as the world’s friendliest jurisdiction for cryptocurrency firms.
In a press conference today, Malta’s prime minister Joseph Muscat confirmed the parliament will favor and approve three cryptocurrency bills designed to embrace the blockchain sector. The Mediterranean island nation’s prime minister revealed the bills will pass the third and final reading on Wednesday’s evening session to become law.
Speaking exclusively to CCN, the Parliamentary Secretary for Digital innovation and Finance Silvio Schembri stated:
“This is the last stage of the legislation that will put Malta on the international map for blockchain and crypto regulation. There is political consensus on this roadmap and we are foreseeing that this area will be the mainstay of our economic growth for the next 4-5 years”.
Today’s final reading comes a week after the Maltese Parliament passed the second reading of three bills that covers the regulation of initial coin offerings (ICOs), guidelines for cryptocurrency exchange operators looking to establish a presence in Malta and the broader regulation of the cryptocurrency and blockchain sector.
An overview of the three bills- voted for unanimously by the Parliament – can be found here.
Malta first laid the foundations of becoming a crypto-friendly ‘blockchain island’ with a national strategy introduced in May 2017. “We must be on the frontline in embracing blockchain and Bitcoin…we must be the ones that others copy,” Prime Minister Joseph Muscat said at the time.
In a sign of things to come, Binance – the world’s largest cryptocurrency exchange – relocated its headquarters to Malta earlier in March. OKEx, the world’s second largest exchange by trading volume after Binance, became the second major exchange operator to establish a presence in Malta.
Despite its status as Poland’s biggest crypto exchange, BitBay suspended operations after domestic banks refused to offer banking services before announcing its move to Malta, citing “productive discussions with the government of the Republic of Malta and a friendly business environment.”
Bitcoin and Ether Surge 6% as Crypto Market Adds $15 Billion in 2 Hours
In the past 2 hours, bitcoin and ether, the native cryptocurrency of Ethereum, recorded a 5 percent increase in value supported by a sudden spike in volume.
Within merely hours, the volume of bitcoin surged by over $1 billion while the volume of ether increased by nearly 20 percent.
Volume is Coming Back
Earlier today, CCN reported that the next 24 hours would be crucial to the crypto market and will define the trend of major digital assets including bitcoin and ether throughout this week.
“The volume of bitcoin has recovered to $4.6 billion and the volume of Ether has risen to $1.5 billion, from $3 billion and $1 billion respectively. The recovery of the daily trading volumes of major cryptocurrencies signify an increase in stability in the crypto market. The next 24 hours will likely dictate the short-term price trend of bitcoin throughout the week,” a CCN report read.
Over the last several hours, the volume of both bitcoin and ether rose by $1.5 billion, while the volume of Tether achieved $4.2 billion. The movement of the volume of Tether (USDT) and BTC / ETH to the upside signify that investors are reallocating their funds stored in USDT, whose value is hedged to the value of the US dollar, to digital assets.
Already, as a result of the short-term bounce of bitcoin, tokens including Aelf (ELF), ICON (ICX), Zilliqa (ZIL), WanChain (WAN), and 0x (ZRX) increased by the range of 6 percent to 21 percent, with ZRX recording a 21.5 percent gain against bitcoin and a 27 percent gain against the US dollar.
The rise in the price of bitcoin from $6,300 to $6,600 in the past two hours demonstrates more significance than a mere 5 percent increase for the digital asset; it could lead the price of bitcoin to potentially break the $7,000 mark throughout this week with strong momentum and volume.
Funds are Still Bullish
Ryan Rabaglia, a partner at Octagon Strategy, said that despite major corrections, the cryptocurrency market has always managed to come out of bear cycles with hundred percent gains and big rallies. He stated that the market will see its previous numbers by the end of 2018 and funds are still bullish and optimistic regarding the mid-term growth of the industry.
“Year over year, the cryptocurrency market is up well over a hundred percent still, the markets are still in the growth phase and it is still a nascent industry. The regulatory stance of the industry is a double edged source. The uncertainty that is driven around this regulation is what gives pressure to this market and drives this market further down” Rabaglia said, emphasizing that the establishment of regulation will lead the market to surge in the long run.
The cryptocurrency community has been extremely optimistic in regards to the corrective rally of bitcoin and ether over the past two hours. While analysts could downplay the corrective rally given that it really was only a 6 percent increase in value, the rally was a symbolic movement with a large spike in volume that may dictate the trend of the cryptocurrency market in July.
