Hong Kong Bitcoin volume reaches all time high on LocalBitcoins. View in browser

“Crypto will take over the world, and we need full banking services.”  ~ Paula Pandolfino, chief investment officer at Founders bank

Market State

The total market capitalization dropped back again last week from $222 billion to $213 billion. Following last week’s price drops some predicted that Bitcoin could drop as low as $6000 range. Fortunately the price of Bitcoin started to recover to $8500 then fell back to where it was last week. Bitcoin is currently trading at $7980. Ether seems to be stabilizing around $175 level. Compared to last week’s price most coins are seeing 1-2% gains or losses. Bitcoin Cash has been trading around $226 level. Despite the bear market Bitcoin still remains the best performing asset of 2019

Meanwhile countries where governments are struggling with economic problems due to sanctions, geopolitical pressure, hyperinflation are pushing their citizens towards cryptocurrencies. According to a local news report  Turkish government has frozen 3.3 million bank accounts of those who haven’t been able to pay their debts or owing money for social security. In India the banking sector has melt down due to PMC Bank of India crisis. The bank had used more than 21000 fictitious accounts to hide loans it made which lead to a loss of at least $616.5 million. 900000 depositors can't get their money out as $100 limit capital controls have been placed on their accounts for six months. Hong Kong residents have reported that ATMs have run out of cash entirely. The Chinese government has been following Hong Kong protestors via their digital payment habits. Hong Kongers fear that the government could freeze their bank accounts or confiscate them so many have been turning to cash and even cryptocurrencies as a result.

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Quiz of the week

How many Bitcoins will be mined per block after the May, 2020 halving?

  1. 12.5 BTC
  2. 6.25 BTC
  3. 3.125 BTC

Scroll down to see the answer at the end of the newsletter.

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Top stories of the week
Hong Kong Bitcoin Volume Reaches All Time High On LocalBitcoins

Data from CoinDance shows that Bitcoin volume has reached an all time high in Hong Kong on LocalBitcoins, the peer to peer exchange. Despite the price fall, the number of Hong Kongers who are turning to Bitcoin is ever increasing. There is an ongoing anti-government protests in HongKong which has lasted for over 4 month and the situation shows no sign of dying down. Last week’s volume of $12.3 million has surpassed even the highest weekly volume recorded during the December, 2017 peak. Usually it is the sanctioned countries such as Iran and Venezuela consider the use of Bitcoin. Whereas Hong Kong is not an underdeveloped country. It is a world financial hub which represents nearly 3% of China’s entire economy. The reason behind the Bitcoin trend in HongKong is simple. People living in tumultuous regions are showing a greater willingness to trust in Bitcoin as a secure store of value.

State Owned German Bank Predicts Bitcoin At $90000 After The Next Halving

75% state owned German bank, BayernLB recently published its latest research according to which the bank predicts that the price of Bitcoin could reach $90000 in 2020. The bank concluded that “Bitcoin was conceived to be an even harder asset than gold.”  According to the bank, unlike gold, which has had to earn its high stock-to-flow ratio the hard way over the course of millennia, Bitcoin will most likely succeed in the next year. The bank believes this will take place around May after the next halving. Bitcoins are going to be increasingly more difficult to produce, their limited supply and growing demand are meant to produce higher price valuation. (The stock-to-flow ratio of a commodity such as gold is the amount of the asset that is held in reserves, divided by the amount of the asset produced annually. )

IKEA Settles Supplier Invoice on Ethereum Blockchain

Nordic Store, a local retailer in Iceland, recently purchased goods from the Iceland branch of IKEA and the transaction was settled on the Ethereum blockchain. The e-invoice was paid using a supply chain payments company, Tradeshift's platform and an Ethereum-based tokenized form of the Icelandic króna created by Monerium, a licensed e-money issuer on blockchains. Monerium and Tradeshift suggested that settling invoices in electronic fiat using smart contracts is a new innovation and is ready for mainstream markets. Gert Sylvest, co-founder of Tradeshift said “Programmable money regulated by governments will become the foundation for e-commerce payments because they enable so-called ‘smart contracts.’ Smart contracts have many use cases. For example, they can be used to generate ‘Smart Invoices’, which are invoices that basically settle themselves.”

Paypal Exits Facebook's Libra Association, Mastercard and Visa May Follow

PayPal has become the first founding member to officially depart from the Libra Association due to regulatory concerns. The Libra Association was created as a nonprofit organization with 28 founding members in June 2019 to oversee the Libra stablecoin. All founding members were expected to invest a minimum of $10 million to fund the launch of Libra. David Marcus who leads the Libra project at Facebook, was previously president of PayPal. Also Facebook’s blockchain team has many former PayPal employees. PayPal said “Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities. We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.”  Other members including Visa and Mastercard are also considering to leave the Libra Association.

EOS Operator Block.one Settles $24 Million Penalty Over An Unregulated ICO

The US Securities and Exchange Commission (SEC) found Block.One in violation of federal securities laws by conducting an unregistered security token sale. Block.One has raised $4 billion over a one-year period sale of EOS ERC-20 token, which is one of the biggest initial coin offering (ICO) in the history of cryptocurrency. The company has settled its charges and paid $24 million in penalties, which represented 0.58% of the total amount raised. In its own press release, Block.One said the settlement only applies to the sale of the original ERC-20 token it sold, which is no longer in circulation or traded, and will not require the token to be registered as a security with the SEC. EOS holders swapped their Ethereum based tokens with the proper EOS tokens when the EOS blockchain went live. The settlement resolves all ongoing matters between Block.one and the SEC.

A New Rating System Launched By The “Crypto Rating Council”

A group of cryptocurrency exchange operators have launched a Crypto Rating Council which aims to assist market participants to comply with U.S. federal securities laws. Founding members of the Council are Anchorage, Bittrex, Circle, Coinbase, DRW Cumberland, Genesis, Grayscale Investments and Kraken. The rating framework is developed to determine which cryptocurrencies are likely to be securities and raise red flags with regulators. The system will help the crypto exchanges to decide which cryptocurrencies to list and not to list for trading. The rating framework is derived directly from case law and SEC guidance and scores cryptoassets from 1 to 5. The higher the score the more likely the asset is considered to be securities in the eyes of regulators. One represents non-security assets such as Bitcoin, Litecoin, Dai. 

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Quiz answer

How many Bitcoins will be mined per block after the May, 2020 halving? 

The correct answer is “B”.

Thank you for reading :) 

Have a great day!



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