Testadex Group News: 08/27/18

Coinbase Hits 500 Employee Mark, Partners with Portfolio ‘Rebalancing’ Application

On the heels of declaring Coinbase a “cryptocurrency company” instead of a tech/finance firm, Natalie McGrath, head of people and operations, revealed that the startup reached 500 employees, Aug. 24.

Coinbase Hits 500 Employee Mark

In a tweet, McGrath stated the company has hired more than 500 employees, indicating the fast growth of the self-stylized “Google of Cryptocurrencies” and proving to world governments that the digital asset ecosystem could create significant employment and industry for the broader economy.

On the same day, CEO Brian Armstrong shared an email with employees about Coinbase’s segmentation in the startup world, reportedly after being posed the question.

Armstrong laid out his reasoning in a detailed post, stating the company prides itself in product creation, has a dedicated engineering team and features a knowledgeable legal and compliance team.

The aforementioned fixtures, according to Armstrong, make Coinbase a technology company “driving a ton of innovation and growth in the world today.” However, the CEO concluded by stating the firm fits in the newly-developed “crypto” category instead of a “fintech” organization.

Armstrong further elaborated:

“We’re not satisfied with the limitations of either technology or finance industries. We don’t want to move fast and break things — that doesn’t work when you’re handling people’s money. We also don’t want to become so conservative that more risk-tolerant organizations outrun us.”

Plunging Trading Volumes

Despite its rise to relevance, 2018’s prolonged bear market has caused Coinebase’s trading volumes to plunge substantially.

According to a report by research firm Diar, the San Francisco-based exchange has experienced an 83 percent decline in daily trading volume since January 2018. The report further calculated the company’s value at 3.9 billion dollars in July, compared to over $21 (1h 24m) billion in January.

Related: Bitcoin Achieving 14-Month Record Stability is ‘Extremely Healthy’ [INTERVIEW]

For investors, the data shows a definite lack of market sentiment from retail buyers, who typically turn to Coinbase for their first cryptocurrency investments due to the platform’s ease-of-access and relatively developed legality.

Crypto-exchanges like Bitstamp and Kraken have seen similar drops in fortune, with trading volumes decreasing over 40 percent. However, Malta-based Binance continues to enjoy its stronghold over the global cryptocurrency market. The Changpeng Zhao-led exchange registered $17 (1h 8m).5 billion in trades last February, dropping to $9 (0h 36m).4 billion dollars in June.

Meanwhile, Hong Kong-based OKEx experienced a rather uncanny increase in volume throughout June and July, with trading volume increasing from $2 (0h 8m).8 billion to $2 (0h 8m).9 billion.

Portfolio ‘Rebalancing’ Comes to Coinbase

Additionally, Coinbase has partnered with the portfolio rebalancing application Shrimpy, according to an official blog post. The partnership will be specific to Coinbase Pro and will aim to “rebalance” the portfolios of both retail and institutional investors once a year.

Related: Research Finds Hodling Isn’t the Best Way to Invest in Crypto

A traditional market strategy, rebalancing involves tracking an asset’s performance over a particular period and increasing one’s investment, divesting and distributing profits to other portfolio holds. As reported by CryptoSlate, the strategy is proven to triumph over merely holding one’s investment over an extended period.

Via the partnership, Coinbase Pro customers can now rebalance their portfolios across four other crypto exchanges and 100-plus different cryptocurrencies.

Cover Photo by Gordon Mak on Unsplash

Israel May Adopt Cryptocurrencies to Prevent Tax Evasion say a Report

Despite Bitcoin’s plummet to $6,600 (440h 0m) (at time of writing), world governments and emerging economies remain invested in the idea of a blockchain-powered ecosystem supplemented with a decentralized currency framework.

Crypto-Shekel?

While countries like China, India and the U.S. are limiting the cryptocurrency sector, smaller countries like Singapore, Venezuela, Colombia and Malta are creating optimal regulations and infrastructure for the burgeoning digital asset ecosystem.

Now, Israel is apparently toying with the idea of a state-backed cryptocurrency, according to the Jerusalem Post.

The Bank of Israel (BOI) and Israel’s Finance Ministry are exploring the digital token version of a physical shekel, the country’s official currency.

The move is said to prevent tax evasion by using the prowess of blockchain technology–e.g. tracking a citizen’s transactional data in real-time while enabling faster transactions. The report also indicates that such an application could solely work on mobile phones.

While the development may surprise some outside of Israel, the country reportedly has a vibrant cryptocurrency ecosystem, even boasting a dedicated blockchain association.

In 2017, Bloomberg ranked the country as the No. 10 most-innovative economy in the world based on technology adoption and patent creation–two fundamental factors for cryptocurrency growth.

Banks Favor Crypto Growth

The country’s largest banks have also forayed into cryptocurrencies in their own capacity. Tel Aviv-based Bank Hapoalim is working toward tokenizing its financial assets under a blockchain though a partnership with Microsoft Azure, a cloud computing platform that allows developers to share, store, test and collate information on rising technologies including blockchain.

Related: Israeli Central Bank Considering Issuing Digital Currency

Even the country’s judicial system avoids baseless decisions against cryptocurrencies. In February, Bank Leumi banned customers from interacting with cryptocurrency businesses, citing AML concerns. However, the Israeli supreme court swiftly intervened and stated the decision was redundant, calling for an immediate retraction of the ban.

Furthermore, the supreme court allowed more access to cryptocurrencies and related businesses, such as crypto-gambling and casinos, for the citizens, spurring significant adoption among citizens and institutions.

Cryptocurrency transactions are reportedly recognized in the country as well, despite the lack of a well-defined framework.

Taxation Concerns

However, a high tax caveat remains, as cryptocurrency capital gains are charged at a mammoth 46 percent for institutions and 25 percent for individuals.

The move is in line with other governments around the world that want their share of the multi-billion dollar sector. And while high taxation and government intervention go against the ethos of digital currencies, regulation is an inevitable feature of any rising industry, and states like Israel may propel growth and set an example for a sustainable crypto-economy–with both state-backed and typical cryptocurrencies operating simultaneously.

Bitcoin May Hit $3,000 According to Prominent Investor

Bitcoin is still in a bear market with its price stable in the mid-$6,000 (400h 0m) range. While the majority of experts see the price of the dominant cryptocurrency recovering in the months ahead, one investor sees Bitcoin price going down to $3,000 (200h 0m).

Anthony Pompliano, a widely recognized face in the global cryptocurrency community and the founder of Morgan Creek Digital better known as “Pomp,” recently stated in his daily newsletter, Off The Chain, that he personally sees the price of Bitcoin suffering another 50 percent loss in the short-term before ultimately recovering to $10,000 (666h 40m). Pomp wrote:

“The final data outputs left me with a few uncomfortable conclusions. The most notable one is that we are likely to see Bitcoin near $3,000 (200h 0m) before we see Bitcoin at $10,000 (666h 40m) again. If this is true, that means we still have ~50% price decrease to go. Things may get really, really ugly if this happens.”

Technical Analysis Suggests Otherwise

As CryptoSlate reported last week, Bitcoin has achieved a 14-month record low monthly volatility rate in August 2018, as its price remained stable in the $6,300 (420h 0m) to $6,700 (446h 41m) region for around three weeks from Aug. 6 to Aug. 26.

In an interview with CryptoSlate, Mati Greenspan, a senior market analyst at major multi-asset trading platform eToro, said that the stability of Bitcoin is a positive sign of long-term growth, as it will contribute in the formation of a strong foundation to support the next large mid-term rally.

Most investors in the market including ShapeShift CEO Erik Voorhees have shared a similar sentiment, adding that while the bear market is still in play, the low price range of Bitcoin presents a decent opportunity to accumulate the dominant cryptocurrency. Voorhees said on CNBC Crypto Trader,

“I don’t expect it (bear market) to end soon, although I do think that the rate of collapse has slowed considerably. Generally in these bubbles, after you go through several months of a downtrend you hang out in a range for a while… But I think we are done with a majority of the collapse.”

More importantly, technical indicators like the GTI VERA Convergence Divergence Indicator that have been successful in spotting major trend reversals in the past have demonstrated strong oversold conditions in the market, signifying a buying opportunity.

The last time the GTI Vera Convergence Divergence signaled a trend reversal, the price of Bitcoin jumped 39 percent, as Bloomberg reported.

But, Pomp did emphasize in his letter that the model he has incorporated in forming the $3,000 (200h 0m) short-term price target for Bitcoin was not based on technical analysis or market indicators. Pomp explained,

“Obviously I can’t promise the model I’m using is accurate, nor can I promise that my conclusions will stand the test of time. In fact, I was wrong just 9 months ago so everything I say about price targets should be taken with a grain of salt. Nothing I do professionally requires me to read charts, understand price movements, or predict future potential — this is probably a good thing.”

2014 vs 2018

Some investors like Pomp have evaluated previous corrections in Bitcoin’s history and compared their multiple year corrections to the 2018 correction. While it is accurate that Bitcoin has entered a major correction in January 2018, more technical analysts like Willy Woo have said that the correction of Bitcoin in 2018 is significantly healthier than its slump in 2014.

Woo raised an important point about the dominance of the now-defunct cryptocurrency exchange Mt. Gox over the global cryptocurrency exchange market when it processed 90 percent of all Bitcoin trades.

The cryptocurrency exchange market has matured exponentially since then with companies like Coinbase, UPbit, Bitfinex, BitMEX, Binance, Huobi, OKEx, and many more competing against one another to remain at the forefront of cryptocurrency adoption.

Willy Woo [beware of imposters]@woonomic

· Aug 17, 2018

An alternative view on long term price recovery, unbiased, devoid of hopium. Worth a read. https://twitter.com/BTCBehaviour/status/1030374028027092993 …

Willy Woo [beware of imposters]@woonomic

Another view on a long recovery. Worth bearing in mind ‘14-‘15 was detoxing from a MtGox collapse; traded 90% of world volume. Plus 1/8 of all BTC stolen plus Willybot pumping prices. Systemically, Bitcoin 2018 is much healthier than Bitcoin 2014. https://twitter.com/kunaldasen/status/1029016530640625664?s=21 …

Kunal Sen@KunalDaSen

Bitcoin long term price prediction, with the 'halving' effect factored in. What do you think ?

11:25 AM - Aug 18, 2018

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It is certainly possible that the Bitcoin price falls and stabilizes in the lower price range before rebounding to $10,000 (666h 40m) and major resistance levels beyond that. But, as Voorhees and Woo suggested, the worst part of the Bitcoin correction is most likely over, as evidenced by most technical indicators that suggest strong oversold conditions.

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