Bitcoin has entered what could become its 3rd day of consecutive losses and even though the spot rate has recovered back above the $8,000 level in the early European session, historical data indicates that Thursday is not the day to expect Bitcoin to finish the session higher. Over the course of 2019, out of the 156 days that Bitcoin finished in the green this year, only 19 took place on Thursday, an equivalent amount to those that occurred on Sunday. Friday seems the more likely day for gains, with 27 “up” days so far this year. What's more is that since January this year, there have been 14 instances when Bitcoin had 3 days of consecutive losses and the average for that happening the past 5 years is 16 times over the course of an entire year.
Concerning regulation, it is worth recapping the publication by the FCA on Oct.15. In it, the FCA suggests that it would go beyond the strict requirements of 5MLD and gold-plate to ensure that a broad range of UK-based crypto asset businesses would be subject to AML/CTF requirements. The consultation also suggested that the FCA should be the regulator to supervise the compliance of crypto asset businesses with 5MLD.
The FCA’s new consultation is not really a pure consultation but rather a hybrid – a statement and a consultation. The statement element asks no consultation questions, but instead confirms that, as part of the FCA’s new supervisory regime, from 10 January 2020 it will be putting into place a mandatory registration requirement for all crypto asset businesses in the UK that fall within its remit. Any crypto asset business under the remit which intends to launch operations after 10 January 2020 must be registered with the FCA before it can launch. Any crypto asset business which is already operating in the UK on 10 January 2020 must be registered by 10 January 2021.
In other news, Telegram announced that it will postpone the launch date of its Telegram Open Network (TON) following issues with the United States Securities and Exchange Commission (SEC). According to an investor message, Telegram told investors that it wants to push back the deadline to April 30, 2020. As a guide, the launch was initially set for late October, but the SEC abruptly declared its $1.7 billion dollar token offering to be illegal. Telegram raised the massive sum for its new network by selling TON’s native Gram tokens to qualified investors in two separate rounds.
Elsewhere, Federal Reserve Bank of Dallas President Rob Kaplan said that the US central bank is “actively looking at and debating” issuance of digital currency, amid growing worries among current and former regulators that the dollar might be at risk of losing its status as the world’s reserve currency.
At the same time, another Fed official, Lael Brainard, outlined how global stablecoin projects raised complex regulatory issues that at best could delay Libra’s anticipated 2020 launch, and, if left unresolved, place consumers and the international banking order at heightened risk. CoinDesk writes that Libra’s plans to be “opaquely tied to a basket of sovereign currencies” further complicate matters because it is unclear what right users and holders would have to those underlying assets, if any.
Finally, in a speech at an Official Monetary and Financial Institutions Forum (OMFIF) meeting, a deputy governor of the Banque De France, called for a global regulatory framework on crypto assets. Specifically, he said that “there is indeed a need for overall consistency to prevent regulatory arbitrage under the ‘same activities, same risks, same rules’ principle.” Beau did not offer any direct answers to Libra’s challenge, other than to note the need for global regulations and share his hopes that central banks will experiment with central bank-issued digital currencies (CBDCs) of their own.
Thank you for reading,
The BeQuant’s Analytics team