by Jamie Holmes
The Bitcoin ETF, COIN, was denied on March 10 by the SEC, sending crypto markets into a frenzy. Altcoins across the board initially fell sharply in value only to rebound as BTC-USD made a remarkable recovery, ending the week around $20 lower than where it started. Ether cemented its place as the second most valuable cryptocurrency, with the market capitalization of Ethereum passing the $2 billion threshold and ether's price hits new all-time highs above the $30 handle.
While the negative outcome has not produced a long-lasting slump in bitcoin, the disapproval is perceived to be a positive step for the emerging asset class of cryptocurrency. For instance, the SEC's statement leaves the door open for a bitcoin ETF in the future, citing that " significant, regulated spot markets — significant, well established, and regulated futures markets that were associated with the underlying commodity,” could make the regulatory body reconsider.
With the ongoing rift between Bitcoin Core and Bitcoin Unlimited, altcoins may be making gains based on the fact that friction between cryptocurrencies is minimal and bitcoin fees are becoming larger and larger.
— John Lilic (@JohnLilic) March 7, 2017
Also, the dynamics playing out in the market seems to concur that it is too early for an ETF for bitcoin, as well as other cryptocurrencies, but the SEC leaving the door open suggests that once we have a bitcoin ETF, others will follow, chiefly Ethereum, and the market is pricing in the eventual acceptance of cryptocurrency as a genuine asset class. For instance, Tim Zagar, co-founder of ICONOMI stated in the past week:
"The odds are that once investors understand the true value and future potential of bitcoin, coupled with the fact that people like to have options within their financial portfolios, we see an ethereum ETF."
The scalability issues surrounding bitcoin and the reluctant acceptance of cryptocurrency as a legitimate asset class seemed to have pushed ETH-USD to fresh highs, currently trading just around $28.58 at the time of writing.
This week's review is compiled from contributions by Alexander Lielacher, Christoph Bergmann, Evan Sixtin, Farzana Begum, and Jamie Holmes.
The United States SEC denied an almost four-year old proposal for the first-ever bitcoin ETF. The whole bitcoin and cryptocurrency world sat on the edge of it's seat on March 10 waiting for the SEC to make a decision on the Winklevoss twins' COIN ETF proposal. The SEC had been putting off the decision for years but the deadline had come. At about 4PM EST, the "Order Disapproving a Proposed Rule Change" was released, stating that the bid had been denied along with the reasons for disapproval.
In our cryptocurrency report March 6, we anticipated that ether would approach the all-time high and called for limit buy orders just above $21.48 with a target of $34.30. After breaking the all-time high, ETH-USD has surged more than 20 percent on March 13, posting a fresh high at $30.67. The Fibonacci levels for the long-term swings in the ether market suggest that the current bullish run could extend to $34.30 or even as high as $55.02.
When AntPool released the first Bitcoin Unlimited block, it was unclear, if this was just a test. By March 7, it became apparent that it was not just a test, but also that AntPool only partially mines BU blocks. Only a part of the blocks of the pool have the BU tag. According to the coinbase transaction, the blocks found by the Beijing-based nodes of AntPool are BU, while the US-based nodes still mine neutral blocks. At the time of writing, the situation has unravelled further, with AntPool devoting their entire pool to Bitcoin Unlimited.
Bitcoin Core released version 0.14 of the reference client of Bitcoin. This release contains some significant improvements in the performance, especially when building a node. Also, it changes the mempool management, enables users to retrospectively increase the fee for a transaction and many more things. While the performance of the whole system is improved, the most notable effects might be when it comes to starting a new node.
A recent Bloomberg article argues bitcoin is neither a commodity nor a currency, not even a hedge against inflation. While there are some merits of arguig that bitcoin is not a currency, the cryptocurrency definitely possesses characteristics of a commodity, and should be viewed as a new type of commodity. A digital one.
A report outlining the 'Roadmap for Blockchain Standards,' has been published by Standards Australia in March, to support the development blockchain and distributed ledger technology (DLT) and to clarify international standards.Australia’s non-governmental body is in charge of managing the Secretariat of an international technical committee for the development of blockchain standards, ISO/TC 307, by the International Organisation for Standardization (ISO). The first international blockchain standards meeting for ISO/TC 307 is scheduled for April 2017 with insights and recommendations to be presented from the report of blockchain standards.
To understand RarePepes better, we should consider a definition put forth by Chris DeRose. DeRose expounds, "RarePepes have a weird property in that they are designed to fit into the opposite of whatever you value." This quality of RarePepes to challenge the politically correct Zeitgeist might be what makes them popular. Although some might feel that Pepe has the qualities of a nihilist, it seems more likely that the real value, and what makes RarePepes an asset (besides their Pepe Cash price tag), is their ability to force us not to take ourselves too seriously.