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Price of XRP & Beaxy, Bakkt to Launch Futures, Ponzi Scheme & Bitcoin
August 19  |  12 min read

Crypto Week #33 Overview

The COIN360 Editorial Team

After ending two successive weeks with gains, the price of Bitcoin stumbled, and it was not a small decline. In only a matter of days, the progress from the last couple of weeks was completely wiped as Bitcoin fell below the $10,000 mark. Luckily, the dip appears to have been corrected, as it managed to recover a bit before closing the week. All other top five cryptocurrencies ended the week with losses, with Litecoin being the most affected of all. Other developments include multiple sell-offs allegedly related to a $3B Ponzi scheme, a lawsuit against Ripple for allegedly selling unregistered securities, and the announcement of a release date for Bakkt’s Bitcoin futures.

Here’s what you need to know about last week’s happenings in crypto.

1. Cryptocurrency Market Analysis

Bitcoin (BTC) started at $11,528.19 on Monday, the highest price of the week. By Thursday, the very first cryptocurrency had dipped below $10k, reaching its lowest price of the week at $9,675.32, having decreased over 16% from Monday’s peak. On Sunday, Bitcoin closed at $10,345.81, losing 10.3% of its value during the week. The market capitalization for Bitcoin shrank 9.1% throughout the week, closing at $185B on Sunday.

Bitcoin price and market capitalization, charts, volume in USD

Bitcoin 7-day price and market cap chart. Source: COIN360

Ethereum (ETH) opened the week at $216.06, and later on Monday the highest price of the week occurred at $216.14. Throughout the week, ETH’s price decreased until it hit its lowest price on Thursday at $178.14, decreasing 17.6% from the highest price of the week on Monday. On Sunday the second largest cryptocurrency by market capitalization closed at $194.49, experiencing a 10% decrease during the week. Ethereum’s market capitalization closed the week at $20.9B, shedding 7.9% of its value throughout the week.

Ethereum price in USD, market capitalization, charts, volume

Ethereum 7-day price and market cap chart. Source: COIN360

Ripple (XRP) opened at $0.302169 on Monday and following the market’s trend, held its highest price of the week later that day, peaking at $0.303528. Wednesday held XRP’s lowest price of the week when the coin sank 17% to bottom out at $0.252390. XRP closed at $0.282646 on Sunday, decreasing 6.5% throughout the week. The market capitalization for Ripple lost almost 6% of its value during the week, closing at $12.1B on Sunday.

Ripple price, market capitalization, charts, volume in USD

Ripple 7-day price and market cap chart. Source: COIN360

Bitcoin Cash (BCH) started at $336.16 on Monday and unlike the previous cryptocurrencies, BCH’s highest price of the week didn’t come until Wednesday, when it peaked at $353.70. On Thursday, however, the coin suffered a 20.3% loss from the day before and bottomed out at $282.04. By Sunday, BCH had gone back above the $300 mark, closing at $316.51, but it wasn’t enough to close the week with gains, losing 5.9% of its value throughout the week. BCH’s market capitalization also suffered losses, shrinking 4.1% during the week and closing on Sunday at $5.7B.

Bitcoin Cash price, market capitalization, charts, volume in USD

Bitcoin Cash 7-day price and market cap chart. Source: COIN360

Litecoin (LTC) started the week at $89.70, just below the highest price of the week, $89.71, later on Monday. The lowest price of the week took place on Sunday at $71.67, 20.1% lower than the highest price on Monday. Sunday closed with Litecoin at $76.27, losing 15% of its value throughout the week. Litecoin’s market capitalization ended the week at $4.8B, shrinking 11% in size during the week.

Litecoin price, market capitalization, charts, volume in USD

Litecoin 7-day price and market cap chart. Source: COIN360

2. Ripple Facing Lawsuit that Claims XRP Is an Unregistered Security

XRP investor Bradley Sostack is taking Ripple to court for reportedly selling unregistered securities. His latest filing, submitted on Aug. 5, includes guidance from the SEC’s Framework for Investment Contract Analysis of Digital Assets, making it the first federal court case to cite it. The complaint states that XRP purchasers “made an investment of money in a common enterprise”, “(...) had a reasonable expectation of profits”, and that “the success of XRP requires efforts of Ripple and others” as arguments for XRP to be classified as a security, including roughly 40 tweets from the company, executives, and employees to support the claim. Ripple will have to submit an answer to the filing by mid-September. In addition to this, Ripple is also facing accusations of price manipulation, which could lead to further decreases in price.

In response to Sostack’s lawsuit, trader and former JP Morgan Chase VP Tone Vays criticized XRP on Twitter, explicitly calling XRP a scam coin and saying that it “should never have existed” while plugging the upcoming episode of his podcast.

3. Coinbase Acquires Xapo as Institutional Bitcoin Adoption Rises

Brian Armstrong, CEO of Coinbase, tweeted on Aug. 16 that 2019 has had an upwards trend in institutional Bitcoin uptake as crypto deposits from institutional customers are around $200-400M a week. Armstrong shared the information in addition to having tweeted news confirming Coinbase’s acquisition of Xapo’s institutional business, turning the exchange into the world’s largest crypto custodian with $7B of assets under custody.

4. Binance to Resume Activities in the U.S. Within 2 Months

After restricting services in the U.S. back in June in order to develop a fully regulated fiat-to-crypto platform to operate with the Financial Crimes Enforcement Network (FinCEN), Binance CEO Changpeng Zhao stated in an interview published on Aug. 15 that it is possible that the exchange will resume crypto-to-fiat operations in the U.S within the next two months. CZ showed optimism for the future of the regulatory landscape in the country, and stated that the exchange would be navigating the U.S’s regulatory environment with the help of their new partnership with BAM trading services.

5. Dusting Attack Against Litecoin Affected Almost 300,000 Addresses

In a report from blockchain data and metrics firm Glassnode, it was revealed that the attack that took place on Aug. 9 affected 294,582 addresses. During the analysis, a similar scale attack was found, dating back to April. James Jager, project lead at Binance Academy, stated that the person responsible for the attack reached out and stated they intended to advertise their mining pool based out of Russia but that thus far, it is unclear whether they had ulterior motives. Jan Happel, co-founder of Glassnode, also referred to dusting attacks, stating that the intents behind these types of attacks don’t always align.

6. Bakkt to Launch Custody and Bitcoin Futures on Sep. 23

After months of anticipation, Bakkt announced on Aug. 16 that it has been cleared to launch, and announced Sep. 23 as the launch date after its contracts received approval from the CFTC and the New York State Department of Financial Services gave its approval for the creation of the Bakkt Trust Company. The Bakkt Warehouse, the announcement reads, will be part of the Bakkt Trust Company, and will take custody of Bitcoin for physically-delivered futures.

Bakkt will launch daily and monthly Bitcoin futures contracts. They will be exchange-traded on ICE Futures U.S, and cleared on ICE Clear U.S.

7. $3B Ponzi Scheme Allegedly Massively Dumping Bitcoin

Dovey Wan brought attention to the PlusToken Ponzi scheme on Twitter on Aug. 14, noting that it involved 70K BTC and 800K ETH, and that more than 10 million investors were possibly affected by it. According to her Twitter thread, PlusToken started selling off BTC in July, moving funds into several exchanges in batches of 50-100 BTC. Recently, she adds, Chinese traders have been continuously dumping 100 BTC on Binance, which could also be linked to PlusToken.

However, further research from crypto analytics firm TokenAnalyst found no evidence that PlusToken had actually moved considerable amounts of BTC to exchange addresses. According to TokenAnaylist co-founder Sid Shekhar, the addresses seem to not be owned by exchanges. An analysis of PlusToken’s transactions shows that thousands of BTC had been sent to online mixing services in order to obfuscate their origins about a month ago.

8. Nvidia Reports a 16% Increase in Revenue From Last Quarter

Major graphics chip company Nvidia reported $2.58B in revenue at earnings of $1.24 per share during Q2 Fiscal 2020. The firm’s financial report was published on Aug. 15 and it compared the earnings with the $2.2B made last quarter, displaying a 16% increase. Year-over-year revenue, however, remains down by 17%, as the company reported $3.12B during the same period last year when the demand for GPUs from cryptocurrency miners increased drastically. Although there have been developments in its GPU output as well as in its AI business, the company’s gaming business segment is its biggest revenue driver.

9. Fear and Greed Index for Bitcoin Hits a 244-day Low, Similar to Dec. 18

The index by data platform that measures sentiment about Bitcoin and other large cryptocurrencies on a scale that goes from 0 (extreme fear) to 100 (extreme greed), dropped down to 11 on Aug. 14, which is labelled as “extreme fear” from investors, after displaying a high of 66 on Aug. 6. Notably, the last time this happened was on December 13 of last year, when Bitcoin’s price plunged to around $3,300. Since then, according to the index, sentiment has fluctuated between 13 and 31. According to the index’s official description, extreme fear can also be understood as a buying opportunity.

10. SEC Postponed Formal Decision on Three Bitcoin ETF Proposals

The U.S. Securities and Exchange Commission (SEC) has delayed its formal decision on three Bitcoin ETF proposals. On Aug. 12, the SEC published a document in which they delayed their decision on rules changes proposed by NYSE Arca and Cboe BZX Exchange for Bitcoin ETFs by asset managers VanEck SolidX to Oct. 18, Bitwise Asset Management to Oct. 13 and Wilshire Phoenix to Sep. 29, in order to designate more time to approve or deny the proposed rules changes. This marks the third delay for VanEck’s and Bitwise’s proposals, having being filed in Jan. and Feb. respectively.

11. Poloniex Removed 23 Trading Pairs Due to Low Volume

On Aug. 15, San Francisco-based exchange Poloniex announced it would be removing 23 trading pairs, including LTC/XMR, DASH/XMR, ZEC/XMR and CVC/ETH, from the exchange on Aug. 16, allegedly due to low volume. The exchange stated that after the removal, each asset would still continue to be independently tradable. This comes in addition to 9 other cryptocurrencies whose offering were discontinued for U.S. customers back in May due to the regulatory uncertainty of those assets in the country.

12. Samsung Silently Adds Bitcoin Support to Keystore

Without making any special announcement, Samsung updated the SDK information for the Keystore, Samsung’s platform for managing digital keys. The most notable change is that the new information also includes support for Bitcoin and Klatyn in addition to the previously supported ETH and ERC-20 tokens. As of right now, the Samsung Blockchain Keystore is only available for the S10 product line, and can only be used in South Korea, the U.S., the U.K., Spain, Switzerland, Germany, and Canada. The FAQ of the SDK also adds that there are plans to support more cryptocurrencies and regions in the near future.

13. Kleiman v. Wright: Bitmessage Developer Testifies Against Wright for Fake Documents; Federal Court Dismisses Motion to Dismiss Case

Last week saw two further developments in the ongoing trial between the estate of David Kleiman and Craig Wright. First, Bitmessage developer Jonathan Warren testified against Craig Wright, pointing out chronological inconsistencies in some of his documents. Namely, contracts, emails, and Bitmessages were faked in order to claim Kleinman’s assets. Particularly, Warren calls the legitimacy of Bitmessages into question, since some of them date from October 2012, and Bitmessages was not released until November of that year.

In addition to this, Florida Federal Judge Beth Bloom decided to dismiss Wright’s motion to dismiss the case. In her answer, Justice Bloom states that Wright’s record is “replete with instances in which the Defendant has proffered conflicting sworn testimony before this Court (...) the Court simply does not find the Defendant’s testimony to be credible”.

14. Price of XRP Down 40% on Beaxy Exchange After Intentional Sell-off

Beaxy exchange suspended trading on Aug. 12 after users purposely crashed XRP’s price. On Monday, the exchange experienced a surge in XRP trading prices, with a sell-off that led to a 40% reduction of XRP’s price on other exchanges and the halting of all trading activity and withdrawals across the exchange. The company stated that thanks to the exchange’s internal KYC procedures, they’d be able to identify the people responsible for the crash. On Aug. 15, the exchange went down for maintenance to implement a rollback that reverted all-related activities back to Aug. 12.

Final Thoughts

Seeing the Fear and Greed index hit a low that had not been seen since the 2018 cryptocurrency crash speaks volumes of how traders felt about last week’s drop in the price of Bitcoin. In addition to this, a third delay for the SEC’s formal decision regarding the proposed Bitcoin ETFs, and the recent attacks targeting XRP and LTC can only heighten feelings of uncertainty and fear. Thankfully, it looks as if massive institutional adoption could be on the horizon for crypto. Coinbase’s new acquisition of Xapo’s institutional business, and Bakkt finally announcing its launch date have the potential to be key developments that could set the stage for future institutional investments in crypto. Binance resuming activities in the U.S. soon could also have a positive effect on the market, and the added support of Bitcoin for the Samsung Blockchain Keystore has the potential of introducing Bitcoin to millions of potential new investors. With the advent of these developments, the feelings of fear and uncertainty could possibly go away.

We wish you a great week,

The COIN360 Editorial Team