Market report

THE RANKING BANKING

London Block Exchange

9th January 2017

Korea out of CoinMarketCap creates a strange dip across the board.

THE RANKING BANKING

Korea out of CoinMarketCap creates a strange dip across the board.

CoinMarketCap is a popular website that ranks cryptoassets prices around the world and averages their data for comparison purposes. Several players exist in this space but few are as comprehensive, simple and — until yesterday — neutral, as CoinMarketCap.

At around 4 AM GMT Monday, the website decided to remove all Korean exchanges from their weighted average calculations — namely Bithumb, Coinone and Korbit. They did this without any prior announcement!

These exchanges had been trading at around 40% to 50% premiums compared to other non-Korean exchanges over the past days. As we write, the price of a bitcoin in Korea’s Bithumb is £16,050 ($21,770), and the new CoinMarketCap’s average is £11,180 ($15,160)!

Cryptomania has gripped the country but capital regulations have made arbitrage impossible, as they fuelled the price differences and distorted the data. The unexpected move created confusion in the markets and resulted in a 10% average dip.

Some people are claiming this was orchestrated to halt bitcoin cash and Ripple’s XRP rise, but the timings don’t coincide and even the Chief Cryptographer of Ripple applauded the move. The markets have so far recovered 5% and most assets are trading sideways.

THE REGULATION TEMPTATION

Is China really banning mining but allowing crypto exchanges again?

Everyday a new cryptoscam pops up. At least that’s the conclusion of two university researchers who analysed the BitcoinTalk forum between 2011 and 2016. So what do we make of the daily headlines about incoming regulation for the space?

We tend to agree with Chris Burniske, a famous cryptoassets writer and analyst of the industry — interviewed yesterday for this eight minute podcast — who calls cryptoasset regulation a healthy development. Why? Because we need clarity!

It’s especially relevant as cryptomarkets are becoming more mature and even institutional investors are waiting for new and regulated market platforms to place their bets. For example, there are currently 23 bitcoin ETF instruments awaiting approval.

Also, when governments announce changes in their regulatory stances we tend to see severe price movements. Just this morning, reports of a Beijing District Court having dismissed the 2017 lawsuit against Chinese exchanges are creating waves online.

Be sure to keep an eye on these developments! Six days ago, the People’s Bank of China announced they would curb electricity usage for mining operations. Yesterday, a top regulator asked local governments “to guide an orderly exit” of Chinese miners from the crypto business!

This is very confusing, as last Friday the central bank announced they were not trying to ban miners! Regardless, this might be good for the decentralization of cryptocurrencies like Bitcoin, as currently China concentrates nearly 70% of the mining hashing power!

WHAT TO LOOK OUT FOR TODAY

To prepare for tomorrow!

Next Monday Wall Street bankers will receive their annual bonuses, averaging over £100,000. Some analysts are expecting a cryptoassets buying frenzy!

This Friday, Bittrex, a famous US-based exchange for alternative cryptoassets, is removing the DigixDAO, Metal and Trigger markets!

Several exchanges serving the Indian market have had their banking operations suspended. India’s Ministry of Finance said cryptocurrencies are like ponzi schemes.

  • exchanges
  • xrp
  • regulation
  • Bitcoin
  • mining