TR 10.08

// THIS IS NOT OKEX - NO ETFS

The market crashed this week, partly due to a ‘negative’ verdict from the SEC on the Vaneck/SolidX proposed Bitcoin Exchange Traded Fund - even though the verdict was simply standard notification of a 45-day extension to consider the 1300 comments received and deliver its verdict.

Why does the market care? An ETF simplifies the purchase of bitcoin as investors have only to purchase a share traded on a normal exchange, in this case, the CBOE BZX Equities Exchange. It eliminates all the hassle associated with bitcoin wallets, addresses and storage, instead allowing investors to invest in the same way they always have in capital markets.

It makes the process much more accessible for institutional capital that doesn’t want to mess with the details - theoretically unlocking a huge injection of capital into crypto. And that’s why the market cares - theoretically, this capital pushes up prices.

Vaneck/SolidX have both been trying for longer than a year to introduce an ETF and there are currently already five dedicated blockchain ETFs (BLOK; BLCN; BKC; KOIN; LEGR), totalling almost $400m in assets under management - but none hold any crypto. The key thing with this new ETF is that it is actually holding the bitcoin - and only the bitcoin, not the share capital of companies innovating in blockchain.

As the innovation isn’t happening in the typically large-cap companies these ETFs are able to purchase holdings in, more direct exposure to the sector is wanted and this is the true significance of the Vaneck/SolidX Bitcoin ETF.

However, “there's too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption”. Hear, hear, Vitalik.

// MUST READS

// DISASTER OF THE WEEK

  • OKEx, the world's second-largest crypto exchange by trading volume, had to “force liquidate… an enormous long position,” to the tune of $420m. When there is a shortfall in margin trades, (where the loss exceeds the collateral), OKEx has an insurance pool to cover such loss. The real disaster here being that OKEx considered an insurance pool of a mere 10BTC appropriate, despite having daily trading volume >$1billion.

  • The actual impact was considerably smaller than most think: OKEx topped it’s pool up with 2500 BTC leaving a final 950 BTC to be covered by the socialised clawback function OKEx implemented - whereby all profitable traders on the platform had to return 18% of their weekly profits to cover the shortfall.

  • This unsurprisingly led to outrage - after all, cry is short for crypto.

// TRACTION

  • West Virginia, USA is testing Blockchain technology for elections.

  • Maersk, IBM, the world’s largest container line, and International Business Machines Corp. have launched a blockchain-based platform for sharing transaction information in real time, to speed up shipments.

  • Tradition’s Australian subsidiary is working on an accord that would reduce the time and effort needed to strike clean-energy agreements between industrial consumers and renewable power producers by using blockchain technology. If successful, the partnership with WePower, a Lithuanian green energy-trading startup, could be repeated around the world, according to Tradition’s Asia unit.

  • ICOs draws increasing attention from institutional investors including venture capitalists, family offices and crypto hedge funds.

  • The World Bank is using blockchain technology for the first time to sell a bond.

  • SEC now has until September 30 to decide on SolidX Bitcoin ETF.

// ROAD TO REGULATION

// PROJECTS

  • Publicly listed Y Ventures launches an Initial Coin Offering. Y Ventures, listed on the Singapore Stock Exchange has become the first publicly listed company to launch a token sale. According to a spokesperson for the stock exchange, public companies must report on their ICO status to ensure stock investors are properly informed.

  • Audius a decentralized music sharing protocol has raised $5.5 million in Series A funding. The project is being back by General Catalyst, Lightspeed Capital & Pantera Capital. The project aims to allow musicians to publish their music and interact with their fans, without third party middlemen.

// EVENTS

CryptoBlockCon New York 2018 - New York, NY, USA - August 14-15, 2018

2018 US China Blockchain and Digital Currency Conference - LA, USA - August 22, 2018

Blockchain Summit - Singapore, Malaysia - August 28, 2018

Token Fest - Boston, MA, USA - September 13-14, 2018

Blockchain in Oil & Gas 2018 - Houston, TX, USA - September 20-21, 2018

BIISUMMIT — Blockchain Innovation & Investment Summit - Dubai, UAE - September 24, 2018

Blockchain Live - London, UK - September 26, 2018

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James Roy PoulterComment