Dovey Wan, co-founder of crypto investment holding firm Primitive Ventures, tweeted a screenshot of the stock market boom in the domestic blockchain sector, noting that “as expected, almost ALL (over 100) blockchain-related Chinese A-shares hit the daily upper limit (10% intraday gain)”:
Blockchain firm A-shares on the Chinese stock market. Source: Dovey Wan
A blockchain arms race
Meanwhile, on global markets, Chinese firms such as the Shenzhen Xunlei Networking Technologies Co. soared 107.76% to $4.82 — its highest daily rise since its listing on Nasdaq in 2014, according to the Global Times.
Today, Oct. 28, Wan has also voiced her concern following reported news that:
“China Merchant Bank just announced invested in BitPie, the Bitcoin wallet with longest history and most users back in China … Tho it’s a non-custodial wallet there can be a non-zero chance …. [redacted]”
Blockchain platform Tron (TRX), formerly under intense scrutiny from Beijing, has gained almost 25% on the TRX/USD charts over the 24 hours to press time.
Readers might recall that Mark Zuckerberg had last week attempted to fuel lawmakers’ concerns about a prospective cryptocurrency and fintech arms race between the United States and China, in a bid to seal their approval for the development of Facebook’s Libra stablecoin.
“Now anyone can buy $42 or even $1 worth of Berkshire Hathaway A ($BRK.A, or $TSLA or $SFIX or…) instantly and for free right in @CashApp. Really proud of the team for making buying stocks and building wealth accessible to more people. Rolling out now! @WarrenBuffett!”
As CashApp’s Twitter handle indicated the same day, app users will soon be able to own a piece of hundreds of different stocks — rather than an entire share.
This, as Dorsey tweeted, includes the most expensive stock on the market — Berkshire Hathaway Class A — which regularly trades above $300,000 per share.
The irony of Square — which saw its own stock jump $1 billion within 5 days when it first announced its BTC trading option back in 2017 — promoting its new investing product with the example of Berkshire Hathaway shares will not go unnoticed in the crypto community.
Berkshire CEO’s billionaire chairman Warren Buffett is notorious for his by-now ritual opprobrium toward Bitcoin and cryptocurrencies.
In addition to share fractions, Dorsey also reiterated that users, who aren’t into stocks, can buy fractions of Bitcoin (BTC) using the same interface.
He used the hashtag #Stacksats to refer to one Satoshi; the name (after Bitcoin creator Satoshi Nakomoto) given to the smallest, indivisible unit of the cryptocurrency — one hundred millionth of one Bitcoin.
Earlier this year, during an earnings call devoted to Square’s Q2 2019 results, Dorsey recognized the eye-popping impact that introducing Bitcoin support had on the company’s Cash App revenue.
At the time, Square’s latest shareholder letter had revealed that Cash App had raised $135 million in subscription, services and transaction-based revenue — and that separately, Bitcoin revenue alone accounted for $125 million.
“We love you Bitcoin,” Dorsey said.
In his own annual shareholders’ meeting back in 2018, Warren Buffett, for his part, memorably characterized Bitcoin as being “probably rat poison squared.”
The hedge fund of legendary investor Bill Miller reportedly saw 46% growth in the first half of 2019, partly from Bitcoin investment.
The hedge fund of famous investor Bill Miller saw 46% growth in the first half of 2019, reportedly in some part from investing in Bitcoin (BTC).
Citing an investor document, Bloomberg reports on July 26 that Miller achieved such outstanding results by investing in Bitcoin among other high-performing stocks. Alongside Bitcoin, other investments in the Miller’s fund reportedly include Amazon, security system firm ADT, as well as Avon Products.
The 69 year-old investor reportedly found success by following a similar investment strategy as he used during his three-decade run at Legg Mason, which envisions investing in securities that trade at a large discount to their intrinsic value.
According to Bloomberg, Miller’s fund has $126 million in assets, while Miller totally oversees $2.3 billion at his Baltimore-based firm. Additionally, the fund’s monthly performance has seen some volatility, having surged about 39% in June after dropping 29% the month before.
Miller likes Bitcoin because it does not correlate to traditional markets
Earlier this year, Miller claimed that Bitcoin can potentially have a high value or be worth nothing, considering the biggest cryptocurrency a curious technological experiment. At the time, Miller said that he is not a Bitcoin believer, but rather an observer, adding that he included crypto in his portfolio because there is no obvious correlation between crypto markets and the stock market.
Yesterday, Galaxy Digital CEO Mike Novogratz predicted that institutional interest would push the Bitcoin price back to its all-time highs of $20,000 before the end of 2019.
Per the report, the crypto asset would be used to settle payments on its new digital securities trading platform. The exchange reportedly announced during the Crypto Valley Association conference this week that users of its upcoming SDX platform will be able to swap fiat currency for a new stablecoin.
The exchange explained that “SDX member banks will be able to settle their trades and other obligations against tokenised CHF within SDX once we are up and running.” The firm further explained that the tokens can be coined on-demand:
“SDX would accept CHF payments from member banks in central bank money and issue equivalent tokenised CHF in SDX. The value of tokenised CHF would be pegged 1:1 with CHF at all times. We most definitely favour a central bank issued stablecoin.”
The outlet further claims that Switzerland’s central bank confirmed that it is in talks with SIX “about different options on how to settle the cash side” of trades, but no final decision has been made as of yet.
As Cointelegraph reported in February, SIX Swiss Exchange will test blockchain integration for its forthcoming parallel digital trading platform SDX in the second half of this year. The SDX platform is meant to allow for trading digitized versions of stocks. Users will reportedly be able to use the token to buy securities or redeem it for cash.
Umar Farooq, head of digital treasury services and blockchain at JPMorgan, has revealed the company’s intention to launch pilot testing of JPM Coin with selected clients “around the end of the year” in case if relevant regulators approve the bank to do so.
According to Farooq, JPMorgan has seen an increased interest from global customers in the potential benefits of the bank’s stablecoin project JPM Coin revealed in mid-February 2019. Specifically, JPMorgan clients in the U.S., Europe, and Japan have expressed interest to learn about JPM Coin’s capabilities in speeding up securities and bond transactions.
In this regard, Farooq stated that the bank’s stablecoin has a potential to enable “instant” delivery of bonds via blockchain. The JPM’s executive has also revealed the bank’s positive stance on tokenized and digital securities, predicting that a number of stocks will become digital in five to 20 years. Speaking in an interview in Tokyo, Farooq said:
“We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized.”
In the recent interview, Farooq has reiterated his optimistic stance towards blockchain tech, after claiming previously that blockchain applications are “frankly quite endless.”
Recently, JPM’s managing director of global market strategy revealed that the bank believes that the bitcoin (BTC) industry has changed since 2017 due to impact from institutional investors.
Last year, cryptocurrency proponents either complained about the low prices or celebrated the fact they could obtain cheaper coins. 2019 has been an entirely different story, however, as digital assets have started to gain significant value in comparison to traditional assets like stocks, oil, and precious metals.
Digital currencies have had a great year based on the five months up to June 1st. So far cryptocurrencies have outshined traditional investments like oil, gold, and popular stocks. The market valuation of all 2,000+ digital currencies is now close to a quarter of a trillion dollars. There’s also been a steady $40-100 billion dollars in trade volume every 24 hours over the last few weeks. In comparison, the top performing traditional asset is oil, which is up over 29% since the beginning of the year.
This is followed by stocks like Nasdaq (+15%), S&P (+13%), Dow Jones (+10%), and Nikkei (+6%). One troy ounce .999 Gold (Au) prices have remained around the same value over the last five months but gained 0.46% since Jan. 1. On the first of the year, the price of one ounce of silver was $15.49 but the value has lost 7.48% with current prices at $14.33 per troy ounce of .999 silver (Ag).
The Top 5 Crypto Market Leaders
A great majority of cryptos gained much more value than most of these traditional assets combined. The top runner of 2019 is binance coin (BNB) which has gained 450% this year. BNB has climbed from $6.19 per coin on Jan. 1 to $34.06 at today’s opening prices. Litecoin (LTC) is the second largest 2019 market leader with 265.85% gained when the price was $30.46 on the first of the year and $111.44 per LTC today.
Another coin tezos (XTZ) started the year off at $0.46 per XTZ and on May 28, the price per XTZ is $1.66, an increase of over 260%. Historical data also shows that bitcoin cash (BCH) opened the day at $432 per BCH on May 28, which is 186% higher than the $150 BCH spot prices on the first day of January. The cryptocurrency eos (EOS) has gained 168.48% this year, starting at $2.57 per token and today’s opening at $6.90.
Cryptoconomy Increases by 118% and Daily Trade Volume Jumps Over 500%
Global charts show the entire cryptoconomy hovered around $125 billion on Jan. 1 and at today’s valuation sits at $273 billion, which is an increase of over 118%. The spike in trade volume shows that on Jan. 1 there was only $12.6 billion swapped during the year’s first 24-hour period and on May 28, global crypto volumes are around $83 billion.
This means that massive trading is taking place compared to the first of the year as volume has jumped by a whopping 558%. Bitcoin core (BTC) was the sixth biggest gainer in 2019, capturing 132% in gains. BTC started the year at $3,746 and today’s prices touching $8,724 per coin. Other notable leaders in 2019 over the last five months include DASH (105%), ETH (101%) and ADA (100%).
We can see that cryptocurrency assets have done incredible numbers this year in comparison to traditional investment assets like gold. This year still shows correlated price action between BTC and other cryptos, but there have been a few decoupled movements taking place as well. The recent crypto winter made the community pessimistic in regard to whether things would change for the better, but the recent crypto spring has created some newfound optimism. 100%-450% gains is a phenomenal increase. Every year, cryptocurrency markets never cease to amaze, taking many people off guard.
What do you think of the gains cryptos have seen over the last five months? Let us know what you think about this subject in the comments section below.
Disclaimer: All the prices and percentages in this article stem from the opening spot prices on Jan. 1, 2019 to the opening spot prices on May 28, 2019. Data was gathered from Markets.Bitcoin.com, USAgold.com daily prices, and Trading View. Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”
Per the report, an unspecified source familiar with the matter told the outlet about the company’s plans to raise further funding. Moreover, Bloomberg reports that the round would increase the firm’s value to between $7 billion and $8 billion, but that the details could change.
Other people familiar with the matter also told Bloomberg that the new funds come from existing investors, all of whom asked not to be identified and to keep the details private. While the funding talks are reportedly ongoing, a further funding round could increase the company’s worth to $10 billion, but the numbers are subject to change until the deal is closed.
Robinhood, which allows for zero-fee stock trading, first introduced bitcoin (BTC) and ether (ETH) trading in January last year.
As Cointelegraph reported earlier this week, Robinhood has officially launched its crypto trading app in New York following the acquisition of a BitLicense by the New York State Department of Financial Services in January 2019.
Also during this week, the new April 2019 Exchange Review from crypto data provider Cryptocompare revealed that centralized cryptocurrency exchanges saw a major uptick in trade volume this April.
SEC-approved LTSE stock exchange could link crypto firms and the capital of traditional investors.
One of the most significant introductions that blockchain has made available in recent years is adding new tools through which companies can raise capital. The technology has made it possible to raise funds for a project from investors of just about any pocket size through initial coin offerings (ICOs) as well as security token offerings (STOs).
Typically, these investors put in their money not just in return for a big payday, but they’re usually believers in the project as well. These investors form the community around which new projects are built. This is the concept that popularized the colloquial term “hodl” in the crypto world. This is usually not the case in the traditional investment sphere.
Long-Term Stock Exchange (LTSE), which recently got approval from the United States Securities and Exchange Commission (SEC) to launch a new stock exchange, could soon make it possible for companies to also raise funds through traditional means. This means attracting the sort of committed, in-for-the-long-haul investors that we’ve seen in the crypto space — but through widely acceptable investment tools.
This could well prove to be a revelation for the crypto industry, since many companies operating in the space possess the characteristics that LTSE is after: early stage, sizeable long-term growth potential.
An LTSE spokesperson telling Cointelegraph that “the exchange will be available to companies in every industry” only supports that notion. The company, however, has not provided any further details on whether it expects to see a lot of interest from the crypto/blockchain industry. However, the fact that fintech-oriented investment funds like the Founders Fund and Andreessen Horowitz are backing the new stock exchange, potentially only adding to the excitement.
Should the crypto industry take a closer look?
Blockchain-based capital raising has developed from a unregulated model, through ICOs to the somewhat regulated model of STOs. A few firms — including U.S. online retailer Overstock.com-owned tZERO, Polymath, Securrency, Securitize and a few others — are building the infrastructure to allow companies to take advantage of the regulatory-compliant STO model to raise funds from committed investors that the blockchain world has been able to attract. The security tokens market, given its regulatory-compliant structure, appears to be in direct competition with LTSE.
However, the security tokens market has reportedly failed to live up to the expectations so far, partly because the investors who could bring liquidity to the market haven’t seen enough compelling reasons to take on the technological, regulatory and market risks associated with this new class of assets. For instance, liquidity at the security tokens exchange tZero has been reported low, and the company was reported making a loss.
LTSE, building on an already mature stock market, could become a viable alternative for both for blockchain-related and nonblockchain companies that may have been looking to leverage the security token market to raise funds from patient investors.
What problem is LTSE trying to solve?
For example, Jeff Bezos — the wealthiest man on earth, whose fortune is worth in excess of $100 billion — reportedly invested $3 million in Uber in 2011. The stake he bought then is reportedly worth about $400 million, as of Uber’s initial public offering (IPO) on May 10, 2019. If it were possible for a middle-income investor to invest $10,000 in the ride-hailing company at the same time as Bezos, their stake could now be over $1.3 million. But a stack of regulations makes it difficult for the average middle-income investor to participate at that level.
Early stage Coinbase investor Garry Tan alluded to this issue in a tweet:
Companies do go public later and that is a problem since only private investors have access to the 10X to 100X appreciation in sub-$B valuation high growth
LTSE aims to bridge this gap by encouraging early stage companies with long-term growth potential go public early. The hypothesis is that, if companies go public early enough, everybody can share in the newly created wealth.
The new stock exchange believes that companies delay IPOs mainly because of the market’s short-term thinking, which compels companies to focus on delivering stellar financial results from quarter to quarter. This, according to LTSE CEO Eric Ries, has led to a decline in innovation.
A recent survey of some hedge funds that invested in the popular ride-sharing company Lyft at IPO is an example of the near-term mindedness of the stock market. The survey showed that the investors didn’t believe in Lyft’s long-term prospects. Lyft went public via an IPO on March 29.
Vincent Ning, director of research and operations at Titan Invest, which conducted a survey on hedge funds revealed to the technology news publication Recode that some short-term oriented funds could be out of Lyft’s stock as fast as by the end of the first day of trading.
To potentially force market participants to adopt a longer-term view, LTSE is building a structure that would encourage growing companies to attract and reward long-term, patient capital in the public market. The stock exchange believes its own approach will help build more sustainable companies.
How does LTSE plan to encourage long-termism?
The company aims to mandate companies that list on its exchange to adopt a set of corporate governance principles that foster long-term thinking — both for the company and for the shareholders. It has developed a set of listing standards toward that vision.
The exchange will encourage listed companies to focus on publishing key indicators of future growth and limit emphasis on quarterly predictions. Another part of the principles is to encourage LTSE-listed companies to link executive pay and bonuses to projected performance over the coming decade, as opposed to the typical Wall Street status quo that links pay and bonuses to short-term achievements.
The board of LTSE-listed companies may also have set up a committee that will oversee and report on the company’s strategic plans for long-term growth. The exchange says it will have a structure that allows investors to keep their stake for longer in order to generate more voting rights. This could shield companies from investors with a short-term focus actively pursuing their agendas.
Existing exchanges including the New York Stock Exchange (NYSE) and Nasdaq have their own robust listing rules that contain corporate governance requirements in the same areas — voting rights, board composition — just like LTSE. They, however, do not appear to impose the long-term driven requirements that LTSE is proposing.
Will LTSE impact the crypto fundraising market?
One significant downside of LTSE is perhaps that its attractiveness may be limited to just U.S. companies, since the exchange is basing its operations in the U.S. While foreign companies are able to list on the U.S. exchange, smaller companies that turn to the crypto market for funds may be overwhelmed by the listing requirements.
In such, the STO market, with its global reach, could still remain the best opportunity the small, non-U.S. companies have to gain access to long-term growth capital from public investors.
There’s also the possibility that the success of LTSE will validate the concept of giving companies access to public funds when they are starting out. A ripple effect could then lead to the growth of the STO market as well.
Moreover, since LTSE says it’s open to working with companies in every industry, coupled with the fact that some of its backers are pro-crypto, there could be a slew of opportunities for mutual growth.
Having a stock exchange on which crypto companies could list may level out the playing field between the crypto and other industries. This can also provide additional ammunition in the ongoing discussions on how to get traditional market players involved in the crypto sphere. So far, firms such as Bakkt and ErisX are leading the way — and if crypto firms obtain listings on LTSE, this will further promote the cause.
Amy Starr, a senior official at the U.S. SEC, said that the regulator is happy to interact with crypto businesses to develop better regulation.
Securities laws are “written to be dynamic,” a senior official at the United States securities regulator claimed in a recent panel at Consensus 2019 on May 13.
Amy Starr, chief of the office of capital markets trends at the U.S. Securities and Exchange Commission (SEC), expressed the regulator’s willingness to interact with local crypto and blockchain-related businesses in order to gain a better understanding of how securities laws can be applied in various cases.
The SEC official stated that an active engagement with the regulator is the only way to facilitate a change in securities laws regarding crypto markets. She said:
“The more interaction, and willingness that people want to engage with us, the happier we are because we want this to work. We want there to be innovation in these markets. We want there to be change.”
During the panel, Starr also expressed her stance on the recent no-action letter to cryptocurrency startup TurnKey Jet, which allowed the firm to issue TKJ tokens for the purpose of paying for a private jet charter, since the tokens were not considered to be securities. In particular, the official noted that the decision by the SEC fell “on one end of the spectrum” of similar cases in terms of both the decision and the speed at which it was reached.
Following the SEC’s panel, SEC Commissioner Hester “Crypto Mom” Peirce delivered a speech devoted to the future of cryptocurrencies. In her speech, Peirce encouraged internal regulation between crypto actors, claiming that “testing each other is really healthy.” While still noting that the SEC will be able to detect certain malpractice actions on the market, Peirce suggested that people in crypto should “police one another,” adding that a “lot of regulation can happen without a government regulator.”
Previously, the SEC was criticized for being the biggest regulatory obstacle preventing the crypto markets from growing. In January, CEO and co-founder of Goldman Sachs-backed crypto finance company Circle claimed that the SEC was lacking clarity over how to define various crypto assets.
Recently, U.S. SEC Advisor for Digital Assets and Innovation Valerie Szczepanik suggested that platforms seeking to list initial exchange offering tokens for a fee could face a regulatory problem.