CryptoKitties Maker Attracts Warner Music; Ripple Rival Stellar’s $124 Million Airdrop

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Cardi B Warner Music blockchain

Cardi B’s label Warner Music is partnering with Dapper Labs to offer fans assets on a new blockchain.

KEVIN MAZUR/GETTY IMAGES FOR ROC NATION

BLOCKCHAIN IS MUSIC TO WARNER’S EARS

Warner Music, the entertainment powerhouse behind major stars like Cardi B, Ed Sheeran and Bruno Mars, has joined an $11.2 million investment in Dapper Labs, the company best known for creating the viral blockchain game CryptoKitties.

Warner’s blockchain team will work with Dapper Labs to create new digital assets—think unique, tradable, digital merchandise—featuring a roster of superstar talent. The companies will use a new public blockchain called Flow, which is capable of handling much larger transaction volumes than the Ethereum blockchain.

At stake? The success of Dapper Labs itself, and the dominant position in a rapidly escalating competition to build economies that blur the line between digital assets and the real world.

CRYPTO MARKETS

Bitcoin had a quiet August, despite a 20% bump at the beginning of the month after President Trump tweeted his plans to impose additional tariffs on China and the Chinese yuan reached a 10-year low against the U.S. dollar. The most popular digital currency surrendered these gains as the month wore on, falling to as little as $9,326.

“It is not uncommon for crypto markets to react to global developments and news, but such moves are usually short-lived and loosely correlated,” said Joe DiPasquale, CEO of BitBull Capital.

Bitcoin also saw its lowest levels of volatility in four months this week, shedding more light on just how calm the market has become.

crypto price chart

SOURCE: MESSARI. PRICES AS OF 4:00 P.M. ON SEPTEMBER 13, 2019.

STELLAR’S $124 MILLION AIRDROP

As chatter circulates regarding the status of many crypto assets, like Stellar’s XLM and Ripple’s XRP, as potentially unregulated securities, Stellar has decided to give away roughly $124 million in XLM in a partnership with Keybase, a group messaging and file transfer hub. Ripple, on the other hand, has been selling off its XRP holdings.

INSIDE MILLER LITE’S BLOCKCHAIN BEER TRIVIA

Miller Lite jumped on the blockchain train last month, using the technology for its mobile trivia game that rewards of-age customers at certain bars and restaurants with a $5 prize that can be applied to a Miller Lite purchase. While the effort reads like a marketing play, the game uses blockchain and a crypto token to help verify participants and pay out winners of the game.

UPCOMING EVENT

under 30

At this year’s Forbes Under 30 Summit in Detroit (October 27–30), competitors BMW, Ford, GM and Renault will share the stage to talk about how blockchain can help Motor City reimagine itself. Don’t miss it! Get 30% off General Admission tickets here.

ELSEWHERE

France Vows to Block Facebook’s Libra Currency in Europe, Suggests ‘Public Digital Currency’ Instead. [Gizmodo]

Kakao’s Klay Cryptocurrency to Make First Exchange Listing. [CoinDesk]

An exclusive bitcoin ETF-like product just hit the market—here’s how it works. [CNBC]

Tiny Pacific Nation Makes a Go of Its Own Digital Currency. [Bloomberg]

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SFOX moves crypto market index from ‘neutral’ to ‘mildly bullish’

They then analysed the performance of six of the leading crypto-assets – Bitcoin, Ether, Bitcoin Cash, Litecoin, Bitcoin SV, and Ethereum Classic.

It almost feels as if the crypto markets are taking a break. Despite geopolitical pressures that tend to impact Bitcoin’s price such as the US-China trade war and industry news like Bakkt’s Bitcoin futures green light, the world’s largest digital asset has hovered around $10,000 for a while now.

Yet, lack of drastic price movements aside, SFOX – a crypto-assets dealer for institutional traders and investors – has moved its market index from ‘neutral’ to ‘mildly bullish’ for September. But why?

The SFOX volatility report for August

In the SFOX crypto volatility report for August, its research team gathered data on price, volatility, and volume from eight leading liquidity providers and exchanges. They then analysed the performance of six of the leading crypto-assets – Bitcoin, Ether, Bitcoin Cash, Litecoin, Bitcoin SV, and Ethereum Classic.

Based on its findings, SFOX nudged its needle over to slightly bullish for the rest of the month ahead. Before you get too excited though, the crypto-assets dealer clarifies: “It’s worth emphasising that this month’s index reading only slightly favours mildly bullish over neutral.”

So what factors are causing the upswing in the market outlook?

The report focuses on three key areas – market sentiment, price momentum, and the continued advancement of the sector.

SFOX notes that over the last five weeks, the sector has seen continued innovation and interest in Bitcoin from institutional investors.

However, that has also been accompanied by “renewed uncertainty about exactly how cryptocurrencies and other blockchain technology will play into global financial markets”.

A global hedge or a speculative asset?

For example, there’s still a strong and potentially valid argument that Bitcoin provides a hedge against global markets when the outlook is uncertain, and that Chinese investors flock to Bitcoin as a safe-haven asset when concerns over the US-China trade war heighten.

To some extent, this argument was supported on August 5 when the yuan fell to its lowest level against the dollar in 11 years and BTC price spiked by 7% from $10,851 to $11,651. However, the price of gold also increased by 1% during that same period.

In stark contrast, however, when the US Treasury market saw an inverted yield curve, gold price raised again slightly as expected by 0.38% while BTC price fell by 4%.

These price movements, based on the argument that Bitcoin is “digital gold”, led SFOX to conclude that “investors are simply unsure how much of a safe haven BTC is”.

Furthermore, David Martin of Blockforce Capital told Bloomberg that it’s just as easy to make an argument for the fact that Bitcoin is a global hedge as it is a speculative asset.

Major companies investing in the space

While global investors continue to debate over Bitcoin’s role in global markets, major companies are investing in blockchain technology and crypto in general. On August 5, Mastercard posted job positions for a blockchain-based solution the company is developing with R3.

On August 8, Allianz Insurance announced that it is developing a blockchain-based payment system, and on August 26, Telegram finally opened up its testnet for Button Wallet.

All these events appeared to have corresponded with slight price increases. However, it’s unclear “how much news of continued development is really driving the market, especially when these offerings are still in developmental stages”.

Market sentiment appears to be uncertain

From the report’s findings, market sentiment reflects a level of uncertainty for the outcome of crypto. Despite BTC price making returns of 0.61% on August 17, alternative.me’s Crypto Greed and Fear Index plunged to a 244-day low of “extreme fear”.

Hot on the heels of that, Ethereum founder Vitalik Buterin caused a flutter by announcing that the “Ethereum blockchain is almost full” and that’s driving up transaction fees.

Ethereum is “almost full”: The digital ledger behind the supposed better version of Bitcoin is running out of capacity https://t.co/enX8QFkb08

— Bloomberg (@business) August 26, 2019

While ETH devs continue to work night and day on Ethereum 2.0, ETH price has gradually declined since that comment and is currently down some 9% since August 19. Finally, the gargantuan movement of $1 billion worth of BTC from one wallet to another on September 5 is still being theorised over.

🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 94,504 #BTC (1,018,147,922 USD) transferred from unknown wallet to unknown wallet

Tx: https://t.co/VWb8slswa8

— Whale Alert (@whale_alert) September 6, 2019

Despite the continued maturity of the sector, these occurrences still fuel uncertainty about its future.

There is plenty of positive sentiment and investment as well, however. Bakkt began taking deposits in advance of its launch, and the CME is reportedly preparing to launch BTC options trading.

SFOX believes that “this marks the latest step in the continued development of more sophisticated, institution-grade trading instruments in the crypto market”.

What factors to watch out for during the rest of September

As far as the markets go and the factors that could influence crypto volatility, SFOX states various key occurrences to keep an eye on for the rest of the month ahead.

These unsurprisingly include the launch of Bakkt on September 23 and the last-trade date for both CME BTC futures and BitMEX futures on September 27, as crypto volatility tends to move around the time of futures expirations.

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Commodities Remain In Trade War Crossfire

Gregor Spilker is Director of Energy Research at CME Group. He is based in London. The post Commodities Remain In Trade War Crossfire appeared …

Because commodities are globally traded, they have been in the eye of the trade war storm for the past year. As global supply chains and trade flows adjust to the new reality, we look at the effects on metals, agriculture, and energy. Will they have a lasting influence on commodity trade flows?

Agriculture A Prime Target

Of all three asset classes, agricultural markets have arguably been the most affected. This is due both to the export prowess of the US agricultural sector and to its political significance –making the sector a prime target for retaliatory tariffs.

As China responded to Trump’s import tariffs, soybean shipments to China all but disappeared and were replaced by Brazilian product.

The tariffs have had two main effects on the price: US grains suffered as a direct reaction to the loss of Chinese buyers, and the price spread between different growing regions became more pronounced and volatile.

Are trade flows likely to reverse to the old ways once China and the US can agree on a new economic relationship?

History tells us that even a short disruption to the grains trade can have lasting effects. Jimmy Carter’s grain embargo against the Soviet Union in 1980 led to the emergence of new export hubs in South America and Ukraine. The Brazilian soybean industry may have never had a better promoter than the current dispute.

No Tariffs On US Crude

The US-China trade war has caught commodities in the crosshairs

The price impact on crude oil has been less clear as a weakening global economic outlook and higher shale oil output is offset by OPEC production cuts and by increased geopolitical risk in the Middle East. The trade war may not be having a major impact on the price of oil so far, as China decided not to impose import tariffs on US crude. Despite this, US crude exports to China dropped to zero between August and October 2018, after which they recovered.

The country’s leaders are willing to use crude oil imports in the trade negotiations. For US exporters, the good news is that Chinese demand for their products was replaced by higher imports from other Asian nations, notably South Korea. The fact that tariffs were not imposed possibly indicates that crude oil imports are simply too important to the Chinese economy. Unlike in soybeans, it does not have enough suppliers to easily replace US product over long periods.

In the case of LNG, China decided to impose 25 percent tariffs, thereby targeting a nascent US industry seeking to expand to new destinations. Assuming a solution to the current dispute, LNG flows from the Gulf Coast to China are likely to reduce the US trade deficit, one of Trump’s main trade policy goals.

Steel, Copper Sliding

To protect local producers, tariffs on steel imports lifted the US domestic price versus global benchmark values, again accentuating regional price differences. Despite the positive initial price reaction, steel prices have decreased over the past twelve months as the industry suffered from low demand – for example from the oil and gas sector.

Other industrial metals, such as copper, also slid as the trade war generated uncertainty and clouded the global economic outlook. Copper is a widely followed economic barometer.

The future direction of the trade war is unclear: there may be a sudden positive ending or, equally, there may be a further escalation.

Long Term Effects on Trade Flows

Commodity trade flows between Europe and the US have not been significantly disrupted yet, but the EU could be the next target in a round of escalation. The longer the trade war continues, the more profound its effects will be: new trade relationships are formed, and global commodity flows are rerouted to other nations.

As in the case of US steel, which is suffering from low demand, the second-order effects of the trade war are also just feeding through to the real economy. The differing fortunes of commodity asset classes and the increased regional price divergence show that the trade war is also creating trading opportunities.

Currency War?

Beyond commodities, FX markets may become the new frontline in the trade war between China and the US. The renminbi has been pegged just above the psychologically important line of 7 Yuan per US dollar, and financial markets will continue to watch the currency closely. President Trump is already suggesting that the European Union and Japan are engaging in competitive devaluation of their currency. It is possible that currency markets will take center stage in the next phase of the global trade war.

Gregor Spilker is Director of Energy Research at CME Group. He is based in London.

The post Commodities Remain In Trade War Crossfire appeared first on Emerging Market Views.

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Bitcoin Prices Failed To Surge In August Amid Trade War Turmoil

Bitcoin prices did not rally sharply in August, even as trade war concerns intensified. The digital currency did experience some gains during the month, …

As trade-war turmoil burned hotter in August, bitcoin prices did not suffer any wild price swings.

Getty

Bitcoin prices did not rally sharply in August, even as trade war concerns intensified.

The digital currency did experience some gains during the month, rising more than 20% between August 1 and August 6, when its price surpassed $12,300, CoinDesk figures show.

The cryptocurrency started moving higher after President Trump tweeted his plans to impose additional tariffs on China, and received a boost when the Chinese yuan reached a more-than 10-year low against the U.S. dollar.

As August continued, bitcoin surrendered these gains, falling to as little as $9,325.39 near the end of the month, additional CoinDesk data reveals.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Macroeconomic Turmoil

While macroeconomic factors were credited with causing bitcoin’s gains early in August, these variables lost their impact as the month went on, claimed Jeff Dorman, chief investment officer of asset manager Arca.

August began with a 20% rally in Bitcoin led once again by the same macro factors that have supported it for most of this year — endless rate cuts from global Central Banks, declining currencies including the critically important Chinese Yuan, a series of Trump tweets about tariffs and reckless monetary policy, a nasty decline in equities, and, of course, the potentially significant impact of a no-deal Brexit,” he stated.

Unfortunately, the perfect macro storm was erased throughout the rest of the month as these negative correlations broke down and Bitcoin and other digital assets ended the month in the red.”

Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, also weighed in, stating that “while global economic factors have served as precursors to Bitcoin price movements recently, they have not had any lasting impacts.”

It is not uncommon for crypto markets to react to global developments and news, but such moves are usually short-lived and loosely correlated.”

Consolidation Phase

While some pointed to macroeconomic variables to help explain bitcoin’s price movements in August, others provided a simpler account, stating that the cryptocurrency was consolidating during the month.

DiPasquale was of this frame of mind, asserting that the digital currency entered a consolidation phase after enjoying sharp gains earlier this year.

The digital currency climbed more than 300% in 2019, rising from less than $3,400 in February to almost $14,000 in June.

Since reaching its 2019 high of $13,879.24 in June, the cryptocurrency has calmed down somewhat, fluctuating mostly between $9,000 and $12,000.

A perfect example of bitcoin’s relative malaise is its 30-day volatility, which fell to its lowest in more than seven weeks on August 17, when it had a reading of 57, according to figures provided by Blockforce Capital and Digital Asset Data.

This measure of volatility, based on data gathered from multiple exchanges, then bounced back slightly, ending the month at a reading of 60.2, stated David Martin, chief investment officer at U.S. asset manager Blockforce Capital.

Bitcoin is usually the least volatile cryptocurrency, garnering similarities from traditional markets where large-cap stocks are less volatile than small-cap stocks,” he emphasized.

“Over the past year, bitcoin has been the least volatile or second least volatile digital asset 73% of the time. Recently in June, bitcoin was in the top percentile of digital asset volatility where its 30-day volatility hit 123%, but has retreated and has closed the month of August at an eight-week low of 60%, below its long-term average of 78%.”

This relative calm has extended to other cryptocurrencies, noted Martin.

The volatility of top digital assets is down across the board in comparison to recent months,” he stated.

“The rangebound nature of the price and lack of market direction has consolidated both price and the standard deviation of asset moves.”

Market Sentiment

Reviewing sentiment data for the digital currency markets shows that bitcoin’s price movements this year may very well be driven by different factors than the 2017 bull run, which saw the world’s most valuable cryptocurrency rise from less than $1,000 to almost $20,000.

The 2017 bull market, which coincided with several digital currencies experiencing astronomical gains, was largely associated with the surging interest of retail investors.

This time around, it may be different, according to Joshua Frank, cofounder of digital analytics platform TheTIE.io.

We found something pretty interesting when looking at metric we created called NVTweet Ratio,” he stated.

Frank elaborated, stating that “NVTweet Ratio= Network Value/1 Million/30Day Average Tweet Volume. Bitcoin‘s NVTweet Ratio (area chart) hit an all time high of 6.83 on June 25.”

“In other words, BTC was trading at its highest multiple of tweet volume ever recorded. It has since fallen to 5.43 but remains historically high.”

The graph below shows bitcoin’s NVTweet Ratio, illustrated by the orange area, relative to the digital currency’s price, which is depicted by the dark, orange line.

This chart shows bitcoin’s NVTweet Ratio versus its price.

The TIE

As tweet volumes are not rising as fast as market cap, an increasing NVTweet ratio may reflect increasing institutional investment in crypto,” said Frank.

He noted that “2017 was retail driven (over 75K daily tweets), whereas this run is significantly less- we haven’t seen more than 40K daily tweets since 2018.”

The chart below illustrates bitcoin’s 30-day average tweet volume relative to its price.

This chart shows bitcoin’s 30-day average tweet volume relative to its price.

The TIE

Going forward, bitcoin may have the most positive outlook of the top cryptocurrencies, according to a separate analysis by The TIE, which compared the short-term sentiment of a digital asset (conversations over the last 50 days) to the more long-term sentiment (conversations during the prior 200 days).

If we look at the long-term sentiment score of the five largest coins, we can see that Bitcoin’s is the most positive,” said Frank.

Disclosure: I own some bitcoin, bitcoin cash and ether.

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Economist: Calling Bitcoin a Macro Asset is “Mass Delusion”

In 2019, there were several instances that showed Bitcoin is becoming a hedge against the global issues. The trade war between the US and China …
  • Bitcoin reaches a record inverse relationship with China’s currency
  • But it is not yet a macro asset

In 2019, there were several instances that showed Bitcoin is becoming a hedge against the global issues.

The trade war between the US and China turned fruitful for the leading cryptocurrency and then when Chinese Yuan dropped below the important psychological level of 7 against the US dollar, we saw BTC surging yet again.

Record Bitcoin-Yuan Divergence

In the past few months, bitcoin’s correlation with gold, a traditional safe-haven asset, increased from 0.496, over the past year, doubling to 0.837.

The geopolitical and macroeconomic situation is possibly playing a part in this data like the escalating tension between the world’s two biggest economies, against which investor Tim Draper said Bitcoin can offer a

“remarkable hedge.”

Now, another data supports this argument.

Bitcoin has reached a record inverse relationship with China’s currency, in the past week, as per Bloomberg analysis of their 30-day correlation. This suggests the leading cryptocurrency may have “become a refuge for people hedging the yuan’s depreciation.”

The corroborating evidence to this is people in Asia paying more for Bitcoin than elsewhere.

“You can see it in the premium price paid sometimes for Bitcoin in exchanges like Huobi that primarily cater to Chinese,”

said Dr. Garrick Hileman, a researcher at the London School of Economics and Blockchain.com’s research director.

This inverse correlation became evident in April and May when “tensions ratcheted up with the deterioration on U.S.-China trade relations,” he added.

Bitcoin is Not a Macro Asset, Yet!

But economist and trader, Alex Kruger beg to differ.

“Bitcoin is not yet a macro asset,”

he emphasized.

The commentaries of Bitcoin being driven by gold, yuan, stocks, the US dollar or any other asset, to him “feels like mass delusion” which is not different from

“‘this is a new paradigm, not a bubble’ narrative of late 2017.”

Macro assets like stocks indices, rates, FX, copper, crude oil, precious metals, and sovereign bonds are mostly driven by geopolitical and macroeconomic factors.

Unlike non-macro assets like natural gas, grains, single stocks, and bitcoin, they react in real-time consistently to any major news, said Kruger.

Moreover, macro assets move with large market moves and that too in a predictable manner. They also have a relatively constant correlation with risk-assets.

Due to the fact, everything moves together and at the same time, Kruger said a speculator that has multiple positions in a number of these assets has to monitor correlations and portfolio risk.

This, however, is not the case with Bitcoin, which he said is a “wonderful feature.”

Meaning Bitcoin is not a macro asset yet but “it should become one as the market matures” because the flagship cryptocurrency has already been seen as a digital gold and hedge against the tail risk of fiat systems collapsing.

1 BTC/USD =$10,579.7008 change ~ 1.57%

Coin Market Cap

$189.61 Billion

24 Hour Volume

$4.43 Billion

24 Hour VWAP

$10.51 K

24 Hour Change

$165.7810

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