Daily: Ripple news, Ropsten hard fork, EOS & the SEC
DAILY
October 01  |  3 min read

Pain Trade

BeQuant Analytics, a daily cryptocurrency market analysis contributor

Following its acquisition of decentralized payments platform Logos Network through its Xpring initiative, Ripple has announced an expansion into Iceland with its acqui-hire of crypto trading firm Algrim. The new Icelandic team will play an integral role in the ongoing development of Ripple’s On-Demand Liquidity (ODL) product which utilizes XRP in order to facilitate cross-border payments. However, it was the move towards building decentralized finance (DeFi) products based on XRP using Logos Network that drove the price action, with XRP outperforming other large-cap assets. It will certainly be interesting to see how quickly these products can hit the market and, given the success of the Ethereum based offering, the move should be seen as a net positive for XRP, especially considering its lackluster performance so far this year.

What’s more, the acquisition does not necessarily spell out direct competition with Ethereum’s DeFi, in fact it’s the opposite. This is because Xpring has also invested in Kava, the world’s first Interledger solutions provider, which is working to integrate companies and blockchains with Interledger. The team has worked on open-source plugins for the Bitcoin Lightning Network and Ethereum. These plugins enable BTC, ETH and XRP to be sent via the Interledger network. Kava services blockchains, wallets and exchanges to integrate with Interledger to enable cross-chain transactions.

Putting the planned Bitcoin halving in 2020 aside for a minute, could the bullish developments for XRP, together with the fact that mining Bitcoin Cash and BSV is more profitable than Bitcoin, result in a pain trade whereby capital exits Bitcoin and flows into Ethereum and XRP? The contrarian trade may have some merit but is by far one of the most extreme scenarios.

Elsewhere, Ethereum test network Ropsten has forked into two separate chains following the activation of system-wide upgrade Istanbul. Originally expected to activate on Oct. 2 at block height 6,485,846, Istanbul was released two days earlier than planned – on Sept. 30 at roughly 3:40 a.m. UTC. The reason for this, according to an Ethereum Foundation community manager, was due to unusually fast block confirmation times. Ropsten network so far appears to be the result of poor miner communication, not flaws in the Istanbul upgrade code.

In terms of news flow, EOS maker Block.One must pay $24 million in penalties for conducting an unregistered securities sale, the US Securities and Exchange Commission (SEC) announced Monday evening. The SEC said in a press release that Block.One “raised the equivalent of several billion dollars” over a one-year period in an unregistered initial coin offering (ICO). (A total of $4.1 billion was raised.) Block.One agreed to settle the charges, according to the SEC.

Also of note, BK Global Consortium, a firm headed by one of South Korea's leading plastic surgeons, closed a deal in Oct. 2018 to acquire 50% plus one share of BTC Holding Co. — the largest investor in Bithumb’s operator — for 400 billion won ($352 million). However, a fresh report from local news agency Yonhap suggests that BK Global is now expected to default on payments for the deal, having struggled with even the initial down payment of $100 million. The media report goes on to suggest that given the uncertainty surrounding the original deal, unnamed Chinese and American investors are now considering acquiring Bithumb.

Thank you for reading,

The BeQuant’s Analytics team