Your weekly dose of insightful market analysis and trending stories.

The Highlight of the Week

PayPal Withdraws from Facebook-Led Libra Crypto Project,

Facebook Libra was an audacious attempt to take on the governments across the world. Instead of pegging their token to one sovereign currency, Facebook/Libra decided to design a token based on a basket of currencies. When the attempts to make one global currency haven’t been fruitful for ages now, why anyone would think that their currency will be approved is perplexing. On one side, governments such as France and Germany have conspicuously opined that they do not intend to launch Libra in their countries, and on the other hand, the US has also, in its way, protested against the Libra project. In other words, governments across the world are against the idea of a new corporate-issued currency backed by a basket of sovereign currencies.

As the governments are hostile towards the idea of Libra, the chances of regulatory approval are deteriorating by the day. In this backdrop, it is difficult for Libra council members to remain optimistic about Libra’s current form. After all, it is not cheap to be a Libra council member. PayPal is the first to opt-out. And as the regulatory limbo continues, we expect that it won’t be the last one unless a few changes made to bring regulators on board.

Technical Analysis

Bitcoin

The recovery off the lows is impressive, and it feels great to see green. We continue to believe that Bitcoin will benefit from weakness in the stock market and geopolitical uncertainties. We can't see how big traditional portfolio managers can avoid buying Bitcoin in Q4. All that said, we need to Bitcoin breakout on the upside. Based on Gann's work, the best-case scenario would be a strong burst through 8500.

Full analysis: https://tmt.link/xbt-ta-oct-07-19

Ethereum

We like our bullish thesis in Ethereum (ETH). We continue to believe that the next significant up move in crypto will be led by Ethereum (ETH).

Full analysis: https://tmt.link/eth-ta-oct-07-19

EOS

It may be time to buy the next small dip in EOS. If it works out to be a good trade, a bottom may be in place.

Full analysis: https://tmt.link/eos-ta-oct-07-19

Top News From Last Week

SEC charges Block.one for an unregistered security sale of EOS tokens

The SEC is trying to set a precedent. However, in our view, this verdict has a problem. As the regulatory body, it is the job of the SEC to incentivize good behavior on the founders' part in the crypto-asset industry. On EOS' $4 billion token sale, the fine is a meager 0.6% of the total amount raised. To put it into the context, even the Block.one domain name costs $30 million!

One of the reasons cited behind the decision is that Block.one is working with the SEC.

Block.one is initiating a process of consultation and discussion with staff of the Division, including the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) in connection with the Voice token. Block.one will continue to engage with staff of the Division and FinHub on its future projects, as appropriate.

In connection with any offerings relying on Regulation D, Block.one intends to work closely with its securities counsel to ensure compliance with Regulation D generally and will continue to engage experienced U.S. securities counsel for such purposes. (From SEC filings)

On top of that, the SEC may allow Block.one to conduct a new token sale for its Voice tokens.

The problem is, on the one hand, Block.one is getting away with pocket change compared to the amount they raised, and on the other hand, Blockstack, which raised $23 million, invested more than ten months and $2 million to get the necessary approval from the regulators.

The message seems to be precise; it is better to do what you want and pay fine than to play by the rules.

Bitfinex and Tether saga continues

A class-action lawsuit claiming damages worth more than $1.4 trillion was filed against Bitfinex and Tether by the lawyers who successfully fought against Craig Wright. The allegations include:

  • Market manipulation
  • Antitrust Violation (Abusing monopoly)
  • Defrauding investors and so onOver the years, multiple stablecoins have hit the market. Therefore, reliance on Tether has been on the decline. There could be short term liquidity problems if the Tether is convicted. However, in the medium and long term, other stablecoins will be able to fill the gap.

Top Performing Tokens

Top performing tokens from SEPT/28/2019 to OCT/04/2019 were:

Worst Performing Tokens

Worst performing tokens from SEPT/28/2019 to OCT/04/2019 were:

Tokens with Most Volume

Tokens with the most volume from SEPT/27/2019 to OCT/03/2019 were:

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Token Metrics Media LLC does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Token Metrics Media LLC registered as an investment adviser or broker-dealer in any jurisdiction.

Information contained herein is not an offer or solicitation to buy, hold or sell any security. The Token Metrics team have advised and invested in many blockchain companies. A complete list of their advisory roles and current holdings can be viewed here: https://blog.tokenmetrics.com/disclosures/