Bear Market ‘Largely Over,’ Crypto Fund Manager Claims
Timothy Enneking, managing director of Crypto Asset Managment, LP, said Monday that the winter in cryptocurrency markets is “largely over.”
Crypto Asset Management, which was founded last year and has roughly $20 million in assets under management, saw its CAMCrypto30 cryptocurrency index fall by 69 percent since its high in January. Enneking sees four reasons for the collapse.
Asset consolidation, regulatory concerns, massive liquidation by the Mt. Gox trustee and startups’ selling crypto assets to pay salaries and expenses are all factors in the market’s overall decline, he wrote.
“Consolidation after the amazing 2017 increase” drew back some of the funds invested in cryptocurrencies, he said.
Invsestors are also likely wary due to recent regulatory actions. While he did not cite any specific events, the report comes just weeks after the U.S. Securities and Exchange Commission subpoenaed startups with initial coin offerings.
It remains unclear what exactly the SEC is looking for, though an official confirmed “dozens” of investigations were underway.
The other two reasons likely had less of an impact, Enneking said.
These factors have mostly been priced into the cryptocurrency market already, which, despite the recent rout, is still up by over 600 percent in the last 15 months, he wrote.
Enneking also noted that bitcoin’s share of the overall cryptocurrency market has fallen from 45.7 percent on Dec. 20 to 44.3 percent. This decline in “BTC dominance” has coincided with a decline in correlation between bitcoin and other cryptocurrencies, he wrote.
While the note does not comment on what declining correlation means, it could indicate that the quality of individual cryptocurrencies is beginning to have a greater influence on their market prices.
The combination of these factors indicate that the market should begin rebounding soon, he indicated in his report.
Bear image via Shutterstock
Written by CoinDesk.com
China And Blockchain: Most Patents And More Governmental Fund
China already has the largest number of Blockchain patents in the world, beating global economies such as the US and Japan. Moreover, the Chinese government has just funded another $1.6 bln Blockchain fund to finance more projects in the cryptocurrency space.
Chinese government funds $1.6 bln Blockchain Initiative
On April 9, Chinese publication Sohu reported that the government of Hangzhou has decided to invest more than $400 mln in a Hangzhou-based venture capital firm known as Tunlan Investment, to facilitate the growth of Blockchain startups and projects.
Tunlan Investment, in cooperation with the Chinese government launched the Blockchain Industrial Park in Hangzhou, in an effort to spend over $1.6 bln on Blockchain projects, 30 percent of which will be funded by the local government. The initiative has already attracted advisors such as Zhenfund founder Xu Xiaoping, who has invested in projects like the Ethereum-based content distribution platform Steem and Lino.
The funding of the Blockchain Industrial Park in Hangzhou is the latest effort by the Chinese government to fund and grow Blockchain projects.
In Sept. 2017, the Chinese government imposed a complete ban on cryptocurrency trading and investment, terminating the relationship between financial institutions and cryptocurrency exchanges, and requesting local exchanges to move out of the country after seizing their services.
Consequently, Huobi and OKCoin rebranded to Huobi Pro and OKEx, as they relocated to Hong Kong. In April the two exchanges, which were formerly the two largest cryptocurrency exchanges in China prior to the cryptocurrency trading ban, expanded into South Korea, a market that has been rapidly growing over the past six months.
The recent initiative introduced by the Chinese government to finance Blockchain projects within China directly contradicts its decision to ban cryptocurrency trading seven months ago. At the time, the Chinese government stated that it considers cryptocurrencies like Bitcoin and Ethereum as a threat to the central bank and the current financial system of China.
People’s Bank of China (PBoC) researcher and Central University of Finance and Economics professor Huang Zhen explained:
“The sovereign state is still the fundamental player in global politics, and carries with it the characteristics of the world financial system. Cryptocurrencies and other virtual currencies attempt to challenge the sovereign state’s right to issue currency, requiring the nationalization of currency issuance. China has a clear understanding of digital forms of money, and is actively engaging in relevant work. The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money.”
China is positive towards Blockchain technology
Despite the government’s acknowledgement of decentralized cryptocurrencies as a threat to its financial and monetary system, the Chinese government is leading efforts to fund local Blockchain projects because they have embraced the technology behind Bitcoin. The Chinese government emphasized on several occasions that Blockchain technology has potential to disrupt the global financial structure.
A recent paper released by state-owned newspaper The People’s Daily noted:
“The mainstream Blockchain technology platforms all originated from abroad. The domestic Blockchain technology service providers should patiently start from the ground floor to make technologies independent and controllable, and strive to lead global Blockchain technology development.”
Over the past year, the Chinese government has followed the roadmap by allowing domestic Blockchain projects to start from the ground floor to commercialize the Blockchain. This positive stance towards Blockchain technology also explains the recent effort by the government of Hangzhou to provide $400 mln to Blockchain projects.
According to Thomson Reuters and the World Intellectual Patent Organization, China has about 400 Blockchain-related patents, which it has garnered within the past two years. The US and Australia have the second largest number of blockchain patents with 110 and 40 respectively.
As Cointelegraph reported on April 1, Chinese companies have been utilizing Blockchain technology to lead pilot tests and process data in real-time and in a decentralized manner. AliPay and TencentPay, two of the biggest FinTech applications in China, have expressed their optimism towards implementing Blockchain-based payment systems, and some insurance companies have already started to use Blockchain.
JD.com, a major Chinese retailer is currently using Blockchain technology to track the shipping of domestic and international beef products, and insurance firm ZhongAn have been utilizing Blockchain-based systems to trace and monitor the life cycles of poultry.
“[JD.com plans to] partner with innovative Blockchain startups to build new businesses and create and test real-world applications of their technologies at scale. We are excited to work with some of the world’s most innovative startups to explore ways we can scale these cutting edge technologies for the future of retail and other industries, as well,” said JD.com in a statement.
The Chinese government is undergoing a learning curve. It has acknowledged that the Blockchain is a disruptive technology that could revolutionize a wide range of industries including finance. The government’s positive viewpoint towards Blockchain technology could potentially lead to friendlier cryptocurrency regulations.
Written by CoinTelegraph
Indian Government Turns to Blockchain to Crackdown on Fake Drugs
An influential Indian government think tank is reportedly working on a blockchain proof-of-concept (PoC) solution to crackdown on the country’s chronic counterfeit drug supply.
The National Institute of Transforming India (NITI Aayog), the country’s foremost policy-making body and think tank, is looking to complete the PoC by the year’s end ahead of a real-world rollout in 2019, according to local publication Factor Daily.
According to a 2017 report released by the World Health Organization (WHO), approximately 20% of medicines sold in India are found to be sub-standard or falsified. The report also suggests that 35% of counterfeit drugs sold globally come from India, underlining the significant problem at hand.
An anonymous NITI Aayog official told the publication:
We are all taking those [counterfeit] medicines and I am sure people are dying. One way to reduce that is put the entire supply chain on the blockchain.
The trial, the official claims, will see unique identification codes or numbers allocated for every single medicine which can then be tracked through the entire supply chain using blockchain technology. At every stage of the supply chain, the unique ID ensures the medicine is tracked immutably. Consumers will also be able to scan the QR code or a barcode on the medicine at the time of purchase on a smartphone app to verify the manufacturing source and the entire history of the supply chain process.
When the medicine is sold, the unique code “gets irrevocably audited on the blockchain” to ensure that the same ID isn’t duplicated to be used with spurious drugs, the official added.
India’s $28 billion pharmaceutical industry is supposedly throwing its support behind the trial, although there is some apprehension over costs.
“Fake drugs are a concern and if blockchain can help the industry get rid of the problem we are up for it,” DG Shah, secretary general of industry lobby Indian Pharmaceutical Alliance said of the trial. “If the government is willing to consider it that is an additional cost and compensate it, they industry will have no objection,” he added.
The official also pointed to short-term concerns over implementing blockchain technology for the country’s entire drug inventory. Additional barcoding will result in a production loss of 25% in the short term at least,” Shah added, citing an inadequate packaging capacity.
Meanwhile, another senior NITI official revealed the think tank has already identified a technology partner for the PoC trial. The body is currently on the lookout for a partner to implement and carry out the endeavor on a blockchain.
As reported previously, the NITI is already partaking in a number of blockchain PoC trials across a number of sectors including education, healthcare, and agriculture. The Indian government’s numerous blockchain endeavors, both federally and in number of states, falls in line with mandate by India’s prime minister who recently called for the “rapid adaptation” of “disruptive technologies such as blockchain” in society.
Featured image from Shutterstock.
Written by CCN.com
Bank of England Eyes Regulatory Oversight of Private Blockchain Data
The Bank of England, the U.K.’s central banking authority, is developing a proof-of-concept (PoC) examining how to maintain privacy over a distributed ledger-based network while still allowing a regulatory overview of the data.
Partnering for the project with Chain, a blockchain startup that develops infrastructure protocols, the Bank of England released a paper on Wednesday setting out how it is exploring how to maintain a high level of data privacy among participants over a distributed network, while at the same time facilitating transactions of different financial assets.
The ideal scenario, as pictured by the central bank, would be to design “a distributed ledger system in such a way that transactions remain private whilst keeping all data shared across the network, and at the same time maintaining a regulatory view of all transactions.”
The PoC – which is aimed to build academic understanding, not as a practical solution – offers a window into the thinking of the U.K.’s central bank in advancing distributed ledger technology (DLT) development for existing business functions, while avoiding complete concealment of transactions from the authorities.
The paper comes just several days after the Bank of England released a plan to push a DLT solution as the basis for the next generation of its real-time gross settlement system, and for which the bank is currently testing a proof-of-concept.
That said, the primary difficulty, according to the central bank, is the scalability, which is one of the top trade-offs as the institution considers its move towards DLT system.
While admitting the ideal scenario is “theoretically possible,” the Bank of England stated that technology of cryptographic solutions which aim to protect privacy of data shared across the network is still at a very nascent stage.
“The trade-offs would still need to be further explored, especially with respect to scalability, speed of transaction processing and risks around the security of the cryptographic techniques employed,” the bank concluded.
Bank of England image via Shutterstock
Written by CoinDesk.com