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Crypto Market News Highlights
1) Bank of China uses Blockchain to issue $2.8B worth of financial bonds
There has already been 10-15 bond issuances on the Ethereum blockchain. This one is bigger, but this is probably the one case where bigger isn’t better. Just using the blockchain to issue a bond is not significant. Streamlining the process – that would be news.
2) Richard Heart’s HEX token raises concerns in the crypto community
Kevin met Richard in person and liked the guy. Now, onto his HEX token — it’s a money grab. But to be honest, Richard himself says it’s a money grab, at least if you’re paying attention.
Richard is just copying something that already worked. From a legal standpoint, Kevin wouldn’t touch it with a 10 foot pole but he thinks Richard is a smart guy and wishes him luck. Maybe one day they could meet again and have a debate about this and publish it on YouTube.
3) Cryptocurrency Is Still the World’s Best Performing Asset Class This Year
“Best performing asset class” is ridiculous, because the vast majority of movement in crypto is currently tied to nefarious activity. You don’t have to believe that if you don’t want to, but why do you think Bitcoin went to $20,000?
A lot of badly managed ICOs, some scams — and because $4 billion of it went to one scam in China, called OneCoin. Another few billion went to another scam. There are penny stocks that outperform crypto every day. They also have no liquidity, like crypto. They also go to the moon really hard, like crypto.
These types of headlines make us look less legitimate to people in the know.
4) ING bank wants to give clients a compliant way to store cryptocurrency
Kevin had a meeting with ING over a year ago. They were already in the crypto space, they hadn’t made it official. They’ve been waiting for legality, and some precedence to do it. Not because they need to believe in Bitcoin, but because there’s money to be made in it.
The banks are looking at BitGo and other custody companies and see that these guys are making tons of money, charging fees that can’t be charged in other markets. So – why not.
5) Tron CEO Justin Sun Has His Account Shut Down on Chinese Twitter
Tron. What else do you have to say? Except for maybe, Justin Sun.There’s a soapbox in crypto, wrong people sit on it. We should kick them off and replace them with other people. It would do much more for crypto, and help bring it mainstream.
Would you like to read about more market news? Check out our Medium post!
Live Questions
Any update on market makers?
The market maker company is planning to be live on December 27th. This is the date they gave us. The first stage is to get market makers on all our other markets, meaning our tokens (outside of XCM), and the top 5 (Bitcoin, Litecoin, Ethereum, etc).
Marketing update?
The first step is to build our marketing team. We had a board meeting yesterday, deciding budgets, timelines, who we’re going to hire, and so on.
Step two is to get the team together, and then it’s up to Head of Marketing to decide how they will be focusing on marketing. Right now, we have a short term marketing strategy which includes a lot of different promotions, both for internal marketing and external. That’s really just padding as we move forward these 60-90 days from funding, to get into the real marketing.
Why do you think exchanges like Nauticus, DX and others that looked healthy, are now out of the market?
A lot of them overpromised. A lot of them assumed exchange-only business would be able to turn a profit. Lack of experience. Not just experience from finance, but experience from running a startup, or any type of business — you need to be ready for a lot of hassle. And a lot of people can’t handle it. Others just underestimate what they’ll need in order to turn a profit.
Reaching profitability takes time. Getting there usually takes money-raising a few times. Money-raising is hard. A lot of startups are forced to shut down because of a combination of these. We’ll see many more of these closures.
How is the CSD going?
It’s still ongoing and in development. January 20th is the date for the launch of an MVP (Minimum Viable Product).
What’s next for CoinMetro after TraM and Margin Posting?
For January and February, our primary focus is going to be on:
- Dashboard, wallet transfer capabilities — SimplEX in the Dashboard;
- Easier onboarding, a 1.5 Tier on KYC;
- Redone Deposit/Withdraw UI — to make it much easier to make deposits, and especially recurring deposits.
That’s the focus for January and February as it’s when we’re going to be putting together marketing and promos. Shortly after that, we’re going to be pushing things live.
After that, we may start putting focus on challenger bank aspects. Cards, outward payments, payments to merchants.
Who is CoinMetro’s biggest competitor right now? (Regulated exchanges, so not Binance etc).
A good question. It’s a mix of competitors. In the US, we have Gemini, Coinbase. In Europe, we have Bitstamp, BitPanda, Kraken (even though they’re US-based). Coinfloor in the UK.
That’s about it. But almost all these guys, except maybe BitPanda and Kraken, are only focusing on exchange.
Any status on the DigiByte listing?
We will submit it to LHV (our banking partner), but we haven’t done so yet.
Is there far out plans to be a chartered bank?
No, we most likely will not pursue a banking license. It would restrict us more than it would allow us to grow. Payment Institution/E-money license are much better options. Much more flexible, and less capital heavy, and we can do everything we can do, including providing crypto loans, with loans being the real place banks make money.
Why can’t CoinMetro act as a market maker? Wasn’t that the purpose of the liquidity pool?
The liquidity pool is there in extreme circumstances when we absolutely need to inject liquidity. Think of that liquidity pool as a central bank. We’re not there actively trading the currency, but if it came to a point where we actually needed to inject liquidity, we will do it.
Market making isn’t easy. Those who say that it is, are the guys who don’t know what it is. Market making induces risk — not only on a financial standpoint, but also on a regulatory standpoint. It’s very easy to cross the line from being a legitimate market maker to washtrading or frontrunning.
Pulling that risk away from CoinMetro — especially now in the beginning — is not a bad thing. What would help us more than trying to market make, is bringing in more volume, to a point where we won’t need much market making.
Do you agree with the action that was taken on the user that dump-bought XCM?
Yes. There are two arguments here — the free market argument, and the argument on paper, like democracy, socialism. Free market sounds awesome to many — just let the market do what it wants. In reality, everybody with less money loses. The money flows control the market entirely.
Basic ground rules need to be in play. Some countries are free, but if you break the law, you’ll go to jail. There has to be rules. If not, one player will control the market, and everyone else will lose.
It’s always a tough decision when you look at a market play. You can take an argument, and you’ll be right. The guy looked at the book, saw that it was thin, saw that he could sell X amount and reach the price floor, then buy back 5 times as much. The guy was smart enough to see that. But, other people that weren’t smart enough to understand that, got hurt.
If you have one guy making the profit on the back off dozens of people losing, you have to make a decision. Do you set a rule in place that takes that power away from one individual? Kevin thinks that is the right move.
More liquidity and more people trading in this market, will lessen the ability for people to actually trade in that manner. But for now, we as the governing body of XCM, need to protect the majority.
With CoinMetro setting a precedence of being the judge of what is allowed when trading on the exchange, how do we as traders navigate?
What we applied to this specific incident is, basic norms according to ESMA, and other directives and bodies in the EU, in terms of what market manipulation is.
We have to look at whether we are siding with the minority, or majority. Had that price move been caused by 30 traders, and 3 people were hurt by it, we wouldn’t have reversed it. (It would have been a different story if they corroborated together and there was evidence of that).
When one particular market participant works in a way to manipulate price — basically to show an artificial price, based on working within the book rather than what would be considered more of a speculative trade, and that one person is looking to profit off the backs of other individuals, that’s by definition stop hunting. Stop hunting is not illegal but it falls very closely in line with what would be considered market manipulation.
Just like any law – laws are never black and white. There is always room for interpretation. We have the burden on us to interpret it sometimes. You have the burden on you that we may interpret something differently than you do.
At the same time, Kevin would say CoinMetro is a rather open and flexible organization. If you ever find yourself on either side of an issue like this, feel free to reach out to us and explain your reasoning.
“Kevin Explains Crypto” Term: Mnemonic
It’s basically just a pattern — words, images — that helps you remember something much more complicated. This pertains to crypto with seed phrases. For example, if you are going to set up a hardware wallet, and you want to back up your private key, you’re given a list of words. You write those words down.
Those words are actually a mnemonic phrase, which helps you recover your private key if you lose it. Not a crypto specific term.
Interested in learning more? Have a look at the video where Kevin explains “Mnemonic”:
Listen to Last Week’s TWiC on the Go
Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!
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That’s a wrap for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channel at 1 PM (UTC) for another round and make sure you submit your questions to the CoinMetro subReddit! As always, we’re available to answer any questions you may have on our Telegram Group 24/7.