Last Month’s Top News Updates:
September 1
Governor of the Bank of England (BoE), Mark Carney suggests that a virtual currency could one day replace the US dollar as king of the foreign exchange market. After conceding that the current financial system may be outdated for the Internet age, Carney urged central banks to seek to mitigate the influence of the US dollar and be receptive to the role of cryptocurrencies in the foreign exchange market,
“US developments have significant spillovers onto both the trade performance and the financial conditions of countries even with relatively limited direct exposure to the US economy. In the longer term, we need to change the game. It is an open question whether such a new (cryptocurrency) would be best provided by the public sector, perhaps through a network of central bank digital currencies.”
September 2
Big Four auditing firm, PricewaterhouseCoopers (PwC) releases a statement that it will start accepting Bitcoin payments from October. Lauding Bitcoin as the first peer-to-peer payment mechanism based on a decentralized trust model that cannot be compromised, PwC Luxembourg said the move was an acknowledgment of the needs of its clients and the willingness of the firm to support the growing cryptocurrency ecosystem. PwC also revealed that it had more than 400 staff working on blockchain and cryptocurrency projects supported by more than 100 technical team members focusing exclusively on blockchain technology.
September 3
North Korea vehemently denies the UN report which alleged that the country raised $2 billion to fund its nuclear projects by hacking cryptocurrency exchanges. The ostracized nation released a statement through its state-funded propagandist news outlet KCNA by recriminating against the UN, accusing the organization of calumniating with an intent to tarnish the nation’s image,
“Such a fabrication by the hostile forces is nothing but a sort of a nasty game aimed at tarnishing the image of our Republic and finding justification for sanctions and pressure campaign against the DPRK.”
September 5
Bitcoin wallets holding at least 10 bitcoins reaches an all-time high. According to data from blockchain analytics firm, Coin Metrics, 157,000 Bitcoin wallet addresses were found to be holding at least 10 bitcoins and 614,500 addresses held between 1 and 10 bitcoins, signifying a healthy distribution of coins and democratization of market leverage within the network. Another data firm, TokenAnalyst, found that fewer people were sending Bitcoin to major exchanges – down from 670 million in June to a mere 71 million, despite on-chain activity continuing to flourish, pointing to a growing tendency for retailers to take control of their coins.
September 6
The largest single transaction involving a move of 94,505 bitcoins makes waves. The transaction, worth just over a billion dollars at the time, followed a similar movement of $780 million worth of bitcoins at the end of August, leading to speculation that the transactions were deposits into the newly established Bakkt Warehouse. Blockchain analysis firm TokenAnalyst traced input addresses in the transaction to Singapore-based Huobi exchange, noting that a third of the bitcoins, swept largely from a dozen different addresses, directly originated from addresses which belong to Huobi.
September 8
Twitter co-founder and Square CEO, Jack Dorsey endorses Bitcoin as the best bet to be the native currency of the Internet. While conceding that Bitcoin is not yet adequately function as a currency, Dorsey categorically ruled out the possibility of launching a self-styled cryptocurrency to rival Facebook’s Libra, stressing the importance of pushing forward open internet standards,
“Open internet standards serve every person better than ones controlled or started by companies. Bitcoin is the best bet because it’s been the most resilient, it’s around for 10 years, it has a great brand and it’s been tested a bunch.”
September 9
SEC Chair, Jay Clayton outlines criteria for approval of Bitcoin ETF. Clayton said that while the US Securities and Exchange Commission recognized the progress that was being made in the maturing cryptocurrency markets, there was still some work left to be done before the agency could approve an ETF, raising concerns over price manipulation and custodial practices,
“They trade on largely unregulated exchanges. How can we be sure that those prices aren’t subject to significant manipulation? People need to answer these hard questions for us to be comfortable that this was the appropriate kind of product.”
September 11
Iranians’ use of Bitcoin to evade US economic sanctions is revealed in a survey conducted through Persian Telegram groups. Over a third of 1,650 respondents reported earning their income in cryptocurrency, largely through mining, trading and providing local exchanges with liquidity in Iranian rials. Over 70 percent of respondents expressed an interest in learning more about local mining operations. Having been excluded by KYC compliant exchanges abroad, the respondents felt the community needed easier access to exchanges in order to grow. The study also found that Iranians were holding a high concentration of wealth in cryptocurrencies.
September 12
Another country beset with US sanctions, Cuba also seizes new economic opportunities afforded by Bitcoin. The roll-out of mobile internet in Cuba less than a year ago opened the doors for easier access to cryptocurrencies, and enthusiasm for Bitcoin has quickly soared as the currency enables Cuban citizens to skirt around US sanctions and engage with foreign markets. The Cuban government said it was starting to explore the potential use of cryptocurrency in foreign trade, following in the footsteps of other countries under US sanctions such as Venezuela and Iran.
September 14
Finance ministers of France and Germany vow to block Libra’s proposed launch in Europe. The two ministers issued a joint statement firmly rebuking the Facebook project at a meeting of Eurozone finance ministers in Helsinki,
“France and Germany consider that the Libra project, as set out in Facebook’s blueprint, is a threat to monetary sovereignty of states in the EU and fails to convince that risks to consumers will be properly addressed.”
Both ministers said they would back the development of an alternative public cryptocurrency instead and recommended plans for a cryptocurrency devised by the European Central Bank (ECB) to make the likes of Libra redundant.
September 16
Percentage of Segregated Witness (SegWit)-spending Bitcoin transactions crosses 50 percent for the first time. Originally aimed at solving transaction malleability to allow for Lightning network implementation on top of the Bitcoin blockchain, SegWit also offers scaling advantages by economizing block size and enabling a greater number of transactions to fit in a block. Since its activation in August 2017, adoption of SegWit addresses was slow to come by but has now reached an all-time high of 52 percent, which besides significantly improving Bitcoin’s scaling, allows for various second-layer protocols to be readily adopted by the network.
September 19
North Korea begins work on developing its own cryptocurrency to avoid crippling international sanctions and circumvent the US-dominated global financial system. Alejandro Cao de Benos, the official in charge of North Korea’s cryptocurrency conferences, said that while the project was still in the very early stages with deliberation ongoing regarding what type of goods it would be backed by, the digital currency will be
“more like bitcoin or other cryptocurrencies,” and that there were no plans to digitize the North Korean won.
September 20
South Korean exchange Upbit delists all privacy coins to comply with the new Financial Action Task Force (FATF) regulations. A month after Coinbase UK delisted Zcash and just days after OKEX Korea announced delisting of its privacy coins, Upbit became the latest custodial exchange to end support for privacy-centric cryptocurrencies, including leading altcoins Monero and DASH. Making the announcement on the website blog, Upbit said money laundering and the possibility of inflows of funds from unidentifiable sources to the exchange were the main reasons for delisting.
September 22
Research carried out by YouGov, British market research and data analytics firm, finds that 81 percent of Americans today are familiar with cryptocurrencies. Bitcoin was found to be the most well-known by far, with three-quarters of US adults saying they’ve heard of it, while only 17 percent, less than one in five, were familiar with Ethereum. Among those familiar with cryptocurrencies, 18 percent said that they had purchased cryptocurrency in the last year. The figure nearly doubled among millennials, with 35 percent having bought at least one type of cryptocurrency within the past year.
September 23
Bakkt makes an underwhelming debut, with merely 73 contracts being traded on launch day. After facing multiple delays spanning 18 months and running into dogged opposition from regulators, the first physically settled Bitcoin futures contracts inspired little interest. While some observers pointed to a similar muted early response before CME’s contracts became popular, the market seemingly responded to the sluggish start by immediately slumping below 8,000, to register a 3-month low. Interest in Bakkt futures is expected to rise as brokerages become equipped to handle contracts settled in physical bitcoins.
September 24
25,000 retail venues in France will be ready to accept payments in Bitcoin by early 2020. The announcement was made during Paris retail week by point-of-sale technology provider Global POS, in partnership with mobile wallet app provider EasyWallet and alternate payment services provider Easy2Play. While payments can be made by consumers in bitcoins, the fund’s funds will be automatically converted into Euros at the moment of sale through exchange platforms Deskoin and Savitar. The solution will not affect the payment process for consumers and retailers and is within the legal framework defined by the newly defined PACTE law.
September 25
Controversial stablecoin Tether (USDT) leapfrogs Bitcoin Cash to become the fourth-largest cryptocurrency by market cap. Having closely trailed Bitcoin for reported daily volume over the past six months and even briefly surpassing the world’s leading cryptocurrency, Tether also comfortably topped Bitcoin for daily volume, setting a worrying new trend. Tether’s volume had been steadily on the rise since the company’s general counsel, Stuart Hoegner revealed in an affidavit filed in May that the stablecoin was only 74 percent backed by cash and equivalents.
September 26
Online lender SoFI (Social Finance) announces cryptocurrency trading integration on its SoFi Invest platform. The San Francisco-based startup best known for refinancing student loans takes after other fintech companies like Square, RobinHood and eToro. CEO Anthony Noto noted in a statement that the ability to buy cryptocurrency has long been the most requested service from SoFi’s existing customers who are mostly millennials. SoFi will begin its new offering with three major cryptocurrencies – Bitcoin, Ethereum and Litecoin, for which it enlisted Coinbase to provide liquidity.
September 28
Venezuela’s central bank, Banco Central de Venezuela (BCV) runs internal testing to figure out if it can hold cryptocurrency among its foreign reserves. Faced with US sanctions, a three-decade low of $8 billion in international reserves, and having tried and failed with their quest to establish the Petro as a sovereign cryptocurrency, Maduro’s regime was said to be seeking new ways to access the global financial system. Venezuela’s state-owned oil company, Petroleos de Venezuela SA (PDVSA) has now asked to be able to send bitcoins to the central bank and have it be used to pay foreign entities that are owed money.
Author’s Take
The highly anticipated launch of Bakkt, widely expected to usher in a new era of institutional interest in Bitcoin, propelling the price to new highs hasn’t quite materialized yet and the market reacted to the dour debut with a violent sell-off. For those who believe Bakkt, or an ETF approval for that matter, is vital to Bitcoin’s success, there’s solace in the fact that derivative offerings for new assets have always taken time to cajole the punters.
But isn’t that such a tragic irony that somehow so many people have bought into the idea that the future of a monetary revolution endued by the power of the Internet which seeks to dethrone the established order hinges on approval from the outmoded establishment?
The big story in September outside the crypto bubble was the climate strike movement, which inspired tens of millions of common folk around the world to march across major cities in protest against fossil fuel companies and governments failing to make earnest efforts to curb their emissions.
For all the rousing remonstrance, the movement may not lead to any appreciable action, since it requires leaders and major corporations reliant on the fossil fuel industry to look beyond economic considerations.
Unlike the climate strike movement, Bitcoin needs the approval of no leader or government. However, like the climate strike movement, it simply requires tens of millions of common folk to come around to the idea.
Governments are only too aware of this reality, which is why, despite unanimously rebuffing the Libra project, they’ve at once put their noses to the grindstone working on centralized fiat iterations of a tameless decentralized monster.
The success of Bitcoin’s mission to usurp the system and democratize the creation and distribution of wealth lies in the hands of the many, not the few who’s interest it serves to demonize this existential threat.
Trading Insights
After three weeks of sideways trading, BTC/USD slumped towards the end of the month to close out September at $8298, a 14 percent drop from August’s close price.
A decisive breakdown below .38 Fibonacci level, which was also the neckline of a 3-month descending triangle pattern, resulted in strong bearish momentum, taking the pair as low as $7714 before recovering to consolidate around .5 Fibonacci level.
Couple of things to note in the daily chart. 50 DMA is on a downward curve and converging bearishly towards 200 DMA for the first time since the golden cross in April. A death cross, cross below 200 DMA, would confirm a bear trend.
However, a bullish stoch divergence from the price curve indicates that the uptrend still has some legs. Look for other confirmations, such as price breaking above 200 DMA or similar RSI divergence. If there’s further breakdown here, the next support level below is around 6974.
For the first time this year, the monthly chart looks pretty bearish. September’s close completed a three crows bearish reversal pattern, while RSI has slipped below monthly bull cycle low of 60. Further, MACD is shaping to complete a bearish crossover of the signal line if downward momentum persists.
Despite Ethereum failing to retain gains against USD, ETH/BTC clawed back plenty of ground in September after breaking out from a falling wedge and rising nearly 40% to close out the month at 0.0218 BTC.
Although other altcoins likewise posted gains off the back of Ethereum’s surge, they were relatively modest and short-lived, enabling Bitcoin to retain a healthy two-third dominance of total crypto market cap at 67%.