Bitcoin ended its 2-day losing streak yesterday to finish the session with minor gains, however in early European trade Bitcoin and Ethereum are trading lower by around 1%. Crucially, Bitcoin is trading below the $8,000 level, with support seen at the $7,750 area, which, if broken, opens up the door for the bears to test the low $6,000 area.
The downtrend in volatility may also soon be tested, given the upcoming deadline of November 4th for Ifinex to present their case for the NYAG lawsuit to be dismissed or else the company may be required to continue to comply with the investigation. If the case by NYAG is allowed to proceed actual arguments won’t likely begin until 2020.
The bulls would of course argue that this is not the first time Tether has been subject to high profile scrutiny and what's more important for Bitcoin is that there are now just over 3mln Bitcoin left to mine (cap set at 21mln). This is particularly important given the block reward halving which is due to take place next year.
In other news, a G7 task force reports that stablecoins, such as Facebook’s Libra, present significant risk to the global financial system but also have potential in the field of payments. In a report requested by the G7 Finance Ministers and central bank Governors, the relevant task force confirmed that the G7 would not allow any global stablecoin to launch without adequately addressing the related challenges and risks. The task force found that thus far, the first wave of cryptocurrencies has failed to provide a reliable and attractive means of payment or store of value. Stablecoins, on the other hand, are more readily usable as a means of payment and store of value and could potentially develop global payment systems that are faster, cheaper and more inclusive than present systems.
Elsewhere, Telegram responded to the United States securities regulator, arguing that Gram, the native cryptocurrency for the Telegram Open Network (TON), is not a security. Telegram urged the United States District Court for the Southern District of New York to deny the US Securities and Exchange Commission’s (SEC) request for a preliminary injunction. Moreover, the firm asked the court to enter an order that maintains the status quo regarding the offer, sale or distribution of Grams. In reference to the SEC’s recent emergency action against Telegram on Oct. 11, the filing document claims that ”the SEC’s instant application is an ‘emergency’ of its own making.” Reiterating its previous claims, Telegram’s legal council wrote that the firm has been voluntarily engaged with the financial authority regarding both the TON blockchain and Grams for the past 18 months, but the SEC has not provided any clear feedback on the matter.
Thank you for reading,
The BeQuant’s Analytics team