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Bitcoin Makes Gains Despite Further Bitcoin ETF Rejections and Chinese Crypto Crackdown: BTCManager’s Week in Review

Reading Time: 6 minutes by on August 28, 2018 Altcoins, Bitcoin, Blockchain, Business, Ethereum, Finance, News

Bitcoin investors were able to sleep easier these past seven days, as the price of bitcoin managed to remain firm for the second consecutive week, gaining four percent week-on-week.

Crypto Market Gaining Traction

Bitcoin booked gains this week despite the SEC rejecting several newly proposed Bitcoin ETFs. SEC Commissioner Heather Pierce’s recent bitcoin-positive statements suggested that an ETF may be approved sooner than later. However, the SEC has made it clear that unless specific criteria are met, there will be no Bitcoin ETF. Typically, this would cause the price of bitcoin to stumble. This week, this negative news only caused some short-term volatility.

Moreover, the Chinese government’s decision to double down on its crypto crackdown from last year seems to have left bitcoin holders unfazed due to the decreasing relevance of the Chinese markets on the price of bitcoin even though many large-scale bitcoin mining operations are still located in the People’s Republic.

The altcoin market, which has suffered tremendously since the start of the year, has fared less well this week, with most major alternative digital currencies and tokens closing the week slightly in the red.

In light of a recent report that suggests that more than half of cryptocurrencies have no real purpose, it should not come as a surprise that most altcoin projects are dialing to attract buyers as their lack of real-world value becomes more and more apparent.

This week’s contributions have been provided by Cindy Huynh, Eric Czuleger, Jefferson Nunn, Nuno Menezes, and Priyeshu Garg.

SEC Rejects Three More Bitcoin ETF Applications

After eight months of review, the US Securities and Exchange Commission (SEC) rejected the NYSE Arca’s application for two Bitcoin ETFs and the Cboe BZX Exchange’s application for a similar financial tool on August 22, 2018, further clouding the pioneer cryptocurrency’s future listing on major stock exchanges.

The SEC continues to reject Bitcoin ETF applications, even ones filed by large exchanges such as NYSE Arca that has more than 8,000 U.S. listed securities. In a 26-page rejection order, the SEC cites that the NYSE Arca did not meet the listing requirements for the ProShares Bitcoin ETF.

In a similar 24-page order, the SEC cited that the NYSE Arca did not meet the listing requirements for the Direxion Bitcoin ETF. In another 33-page denial, the SEC cited that the CBOE BZX Exchange did not meet the listing requirements for the GraniteShares Bitcoin ETFs. In all three orders, the SEC reported:

“The listing exchange must enter into a surveillance sharing agreement with a regulated market of significant size because such agreements provide a necessary deterrent to manipulation.”

Chinese Social Media Platform WeChat Block of Crypto and DLT News Media Accounts

Chinese instant messaging app and social media platform, WeChat has barred a vast array of cryptocurrency and distributed ledger technology (DLT) startups from the platform, according to a local news source Lanjinger on August 21, 2018.

Per sources close to the matter, several WeChat accounts belonging to digital currency platforms in China have been shut down.

Tencent, the multi-billion dollar Chinese conglomerate that’s in charge of WeChat, claimed that the owners of the blocked accounts published information promoting initial coin offerings (ICOs) and cryptocurrency trading against the “interim provisions on the development of public information services for instant messaging tools.”

It worth noting that the Cyberspace Administration of China introduced the “interim provision” on which the WeChat team is reporting. The regulation mandated all instant messaging apps as well as social media platforms to refrain from spreading information that is against national interests and public orders.

According to Lanjinger, most of the blocked accounts are owned by the top 50 blockchain-focused media outlets in the region, some of which include Huobi News, Firecoin Information, Cannon Rating, Coin World Express Service, Deep Chain Finance, Daily Currency Reading, Wujie Block and others.

Indiegogo Allows Companies to Sell New Asset-Backed Digital Tokens

Indiegogo, one of the largest global fundraising websites, is looking to expand its cryptocurrency offering by allowing companies to sell new asset-backed digital tokens. The tokens are classified as securities, and will be issued by a real estate investment trust (REIT) called Aspen Digital.

According to CNBC, Indiegogo’s leap into cryptocurrency comes after the company’s push into the initial coin offering (ICO) market in December 2017.

The luxurious St. Regis Aspen Resort is one of the first major real estate properties in the U.S. to test out tokenization after its owner abruptly scuttled an investment trust IPO it had planned for February.

The hotel owners attributed their sudden shift to the world of blockchain to the technology’s potential.

“We think we have a once-in-a-lifetime opportunity to create a benchmark for what real estate tokenization looks like,” said Stephane De Baets, founder, and president of Elevated Returns, owner of the St. Regis.

Kin Launches the Kinit in iOS App Store and Google Play

Kinit is a messaging app that allows its users to earn cryptocurrency just by using the app. It is the first app developed by KiK, a messaging service which also launched its cryptocurrency called Kin in the fall of 2017.

The messaging service is now announcing that it has launched its Kinit app on iOS App Stores making it available for all iOS users.

On August 23, 2018, Kinit launched its iOS version allowing iOS users to access all the benefits the app has to offer. The Android Kinit app was released last month and launched its Android version. Now the company is making the app available to iOS users.

Kik states that at the moment Kin is growing exponentially and is now becoming the most active cryptocurrency running on Ethereum. Kik claims that its messaging service along with its Kinit App from Android users alone accounts for roughly 8,600 active users while all of the other decentralized apps (dApps) on the Ethereum blockchain only account with 7,700 active users.

Report: Less than Half of Existing Digital Currencies Have a Useful Purpose

According to cryptocurrency analysis website Invest in Blockchain, less than half of the top 100 digital currencies serve a useful purpose by providing real value to the public.

According to the website, only 40 cryptocurrency projects were found to have working products. The study was conducted by evaluating each project status, release history and comparing completed features versus features which were expected to come online. In this case, the definition of “working product” meant that it was active and available to the public.

This study comes as the market corrects after the meteoric rise of cryptocurrency prices in 2017. The surge was met with an equal increase in Initial Coin Offerings (ICOs) many of which were indistinguishable from cryptocurrencies with a utility to the casual investor. This propagated the rise of the so-called “shit coin,” a useless cryptocurrency created for the sole purpose of parting fools with their money.

Since June 2018, the cryptocurrency market has been in freefall. While its longtime utility has buoyed Bitcoin, it has still suffered a drop of over 20 percent. Ethereum has dropped over 30 percent, leaving the rest of the market struggling to maintain value in the face of growing concerns that crypto is in a bubble which will pop soon.

Russian Company Opens Country’s Largest Cryptocurrency Farm in Former Soviet Fertilizer Laboratory

A Russian company known as the Kriptoyunivers Center opened the nation’s largest cryptocurrency mining unit on Monday, August 20, 2018. According to the South China Morning Post, the mining farm is currently located in a former Soviet fertilizer-producing laboratory. The 44,000 square foot Kriptoyunivers center mines Bitcoins and Litecoins.

The center emerged as a result of Russian Authorities who are keen to regulate the growing and booming cryptocurrency industry.

“This is the largest and so far the only farm in Russia that offers the full cycle – not just producing cryptocurrency but also offering services to those who do the mining,” said Alexei Korolyov, the co-founder of the Kriptoyunivers center.

The cryptocurrency farm is located in Kirshi, which is 180km South East from Saint Petersburg. It was built on the land that was once previously a Soviet fertilizer laboratory. The laboratory was unoccupied for approximately 20 years. The investment for the site cost the company 500 million Roubles ($7.4 million).

Controversial ‘Bitcoin Jesus’ Can’t Seem to Win over New Believers for Bitcoin Cash

Roger Ver, the controversial virtual currency advocate and current CEO of, seems to be having a hard time garnering support for Bitcoin Cash, despite preaching about the second coming of the world’s largest cryptocurrency.

According to the latest analytics from Chainalysis, Bitcoin Cash is barely being used in commerce, despite it being the fourth largest cryptocurrency by market cap.

Chainalysis reviewed payments received by the world’s 17 largest merchant processing services, such as Coinify, GoCoin, and BitPay, and found that Bitcoin Cash payments totaled $3.7 million in May 2018. A sharp contrast from its $10.5 million high in March, the slump in Bitcoin Cash usage in commerce comes as no surprise to experts.

“There are fewer users of Bitcoin Cash, fewer holders,” Kim Grauer, a senior economist at Chainalysis, told Bloomberg.

Grauer argued that the currency’s adoption in commerce could be a result of concentrated ownership. According to Chainalysis, about 56 percent of Bitcoin Cash is controlled by 67 wallets. None of the wallets are located on exchanges, and two of the 67 hold between 10,000 and 100,000 Bitcoin Cash.

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