The crypto market remains soft, albeit the slide south has subsided somewhat and Bitcoin remains in close proximity to the key $10k level, while Ethereum is trading around $185, with the contango delta little changed from yesterday. Going forward, the price action is expected to remain a by product of technical levels between $10,000-8,500 to the downside and between $10,850-11,000 to the upside, in addition to the recent developments surrounding Tether and Bitfinex. Looking elsewhere, long Ethereum Classic vs short Ethereum has proven to be a very profitable trade ahead of the hard fork. As pointed out in the past, Ethereum Classic’s hard fork, the Atlantis hard fork, is scheduled for September 17 or at block 8,772,000 on the blockchain. Atlantis, paired with a later upgrade called Agharta, is intended to boost chain interoperability between the Ethereum Classic (ETC) and Ethereum (ETH) networks. Given the underperformance of ETC relative to ETH this year, this move seems like a good RV play.
The Bitcoin (BTC) network hash rate remains near all-time highs despite fresh turmoil in China where floods have been wiping out mining operators. According to various reports earlier this week, the rainy season in China’s northwestern Sichuan province has spelled disaster for at least one Bitcoin mining farm: Poolin, the fourth-largest active mining pool on the Bitcoin network, was completely destroyed by the floods.
In other news, the White House issued two advisories regarding illicit drug purchases in the United States that contain references to specific cryptocurrencies allegedly used as a part of this process. The advisories were addressed to various financial institutions as well as digital payment platforms. The documents state: “An analysis of sensitive financial data indicates that domestic illicit drug manufacturers, dealers, and consumers use online payment platforms or CVC (convertible virtual currencies) to purchase precursor chemicals or completely synthesized narcotics primarily sourced from China.” The advisories also note that “CVC transactions generate a significant variety of information elements that may be extremely useful to law enforcement.” Therefore, financial institutions are recommended to collect these details in case of any suspicion.
In related news, the United States Department of the Treasury has added multiple cryptocurrency addresses to its Specially Designated Nationals (SDN) list under the Foreign Narcotics Kingpin Designation Act, also known as the Kingpin Act. These addresses, and the individuals associated with them, have been deemed to be associated with foreign narcotics operators.
Thank you for reading,
The BeQuant’s Analytics team