Chileans are turning to cryptocurrencies as protests escalate View in browser

“Bitcoin is becoming the Internet’s national currency.” ~ Jack Dorsey, CEO of Twitter

Market State

Bitcoin is back over $9000 again. The price of Bitcoin has skyrocketed. It surged from $7500 to over $10000 within 24 hours. This was 42% gain which was the fourth largest gain percentage wise in the history of Bitcoin (if comparing against daily returns). The price has since settled around $9450. Major altcoins such as Ether, Litecoin, Bitcoin Cash has surged between 5% and 24%, adding billions to the value of the entire cryptocurrency market. The overall cryptocurrency market capitalization recover from $206 billion to $252 billion. Many attribute this price surge to several reasons. The first one is a statement by China’s President Xi Jinping with regard to blockchain technology. President Xi Jinping commented that the country should seize the opportunity of blockchain technology. The bullish sentiment in China proved to be a trigger for the rise in price. All Chinese altcoins such as NEO, Ontology, Tron, Qtum are still pumping up followed by the positive news. The news itself doesn’t provide much justification to the price action. As there is a difference between blockchain and Bitcoin. The blockchain use case for China is more towards corporate use case and tracking and recording data. China had previously made it clear that they don’t like Bitcoin and even banned Bitcoin. 

Another reason that has driven the prices to go up has to do with Bitcoin futures market. Futures contract for Bitcoin on Chicago Mercantile Exchange (CME) has expired last week. Traders who think Bitcoin is overvalued expects Bitcoin price to drop. During this bear market many have predicted Bitcoin to fall further and took short positions. This means traders borrow Bitcoin and sell them on the market, planning to buy back when prices go down and profit from price drop. When Bitcoin price started to rise traders bought back Bitcoin to minimize their loss, which is called short squeeze. Bitcoin short squeeze effect on futures market might pushed the prices even higher as even those who bet that Bitcoin price to fall bought Bitcoins too.

Check the latest Bitcoin Price
Quiz of the week

What are Bitcoin Futures?

  1. A price prediction horoscope for Bitcoin
  2. A financial instrument that requires you to buy or sell Bitcoin at a predetermined price and at a given date
  3. A financial instrument giving you the right to always buy Bitcoin at a cheaper price

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

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Top stories of the week
Chileans Turn to Cryptocurrencies as Protests Escalate

Chileans have been protesting against government corruption, economic inequality, and injustice. The protest began when the state run subway operator Metro de Santiago, increased the price of metro tickets by 3%. The public anger is the product of decades of injustice and inequality. Chilean government has privatized the most basic social services including health care, education, water, electricity and pensions which only enriched a few but reduced the standard of living for most citizens. The situation has intensified in the streets. At least 19 people have been killed by the military. Chileans have claimed that they have issues accessing their funds. ATMs are not operational. Supermarkets are running out of food. Chilean residents have resorted to barter and the use of cryptocurrencies. On Reddit a desperate Chilean user named Cactoos asked people of the internet to share information on best apps to use, best ways to buy, best ways to explain how crypto works to a non educated people. The post received nearly 300 comments within a week. People in Chile are now finding the benefits of cryptocurrencies as it allows people to control one’s own money even in situations where their access to fiat currency is severely restricted.

Chinese Interest in Blockchain and Cryptocurrency Rapidly Increasing

Chinese President Xi Jinping publicly stated that the country should regard blockchain as a core technology for important innovative breakthroughs and should commit to accelerating the development of the technology. After the statement cryptocurrency market had its one of the best performing weekend in the history of Bitcoin in terms of daily percentage change. Chinese crypto assets such as NEO, Tron, Ontology, Qtum are surging at the moment. WeChat searches for Bitcoin and blockchain skyrocketed more than ten fold. Meanwhile China Merchant bank has just announced that it has invested in BitPie, a local Bitcoin wallet with the longest history and most users. China’s most popular app, Xuexi Qiangguo (study and make the nation great) now has a recommended course focusing entirely on blockchain, which contains Bitcoin & Ethereum lessons. Also reports claim that articles saying blockchain technology is a scam are now banned in China.

Crypto Capital President Arrested for Money Laundering

Polish authorities have arrested Ivan Manuel Molina Lee, the president of Panama-based payments processor Crypto Capital on accusations of drug money laundering. Crypto Capital provided banking services for crypto exchanges including Bitfinex, Binance, Kraken, BitMex and now defunct QuadrigaCX. Polish authorities claim that Molina Lee laundered up to 1.5 billion zloty or about $390 million from Colombian drug cartels through a cryptocurrency exchange. $360 million was seized from Crypto Capital’s accounts in a Polish bank as part of the investigation. It was the company with which Bitfinex allegedly entrusted $850 million. The funds were blocked by authorities due to criminal mismanagement by Crypto Capital and taken out of Bitfinex’s assets. Following Lee’s arrest, Bitfinex has been trying to get back some of its fund that are still frozen and thus not usable by the exchange.

Opera Adds Support for Bitcoin and Tron to Browser Wallet

Opera has announced that it has added support for Bitcoin, Tron and Tron’s TRC10 tokens to its Android version of browser. Until now Opera had only supported Ether and Ethereum’s ERC tokens. The new feature now allows the browser’s claimed 350 million users to send and receive Bitcoin and Tron directly from its built in cryptocurrency wallet. Beyond enabling Bitcoin and Tron transfers, Opera is also making it possible for its users to interact with decentralized apps and pay for goods and services with cryptocurrencies. Opera’s Web 3 initiative is already available for Android smartphones, Windows, Linux and Mac. While Bitcoin and Tron support is currently only applies to Android users, iOS users can expect the same functionality in the future.

Mark Zuckerberg warned Congress: delaying Libra risks losing financial leadership to China

Facebook CEO Mark Zuckerberg testified before the House Financial Services Committee last week where he discussed the role of Facebook on Libra the global digital currency project. He faced questions whether Facebook can be trusted to protect its user data. Zuckerberg told lawmakers that Libra is essential to maintain American financial leadership around the world. He warned that delaying Libra risks losing that leadership to China. He said “If America doesn’t innovate our financial leadership is not guaranteed.” 

He admitted that he wasn’t sure if Libra would be successful and added Facebook would not participate in launching Libra anywhere in the world unless US regulators approve. Regulators are still not in favor of Libra project. Many believe that Libra is not going ahead any time soon. Zuckerberg also pointed out that the Libra Association is an independent organization that leads the Libra project which can still move forward without Facebook. He said Facebook would quit the Libra Association if the consortium launched its currency without regulatory approvals.

Tweet of the week
Meme of the week

Bitcoin price in the past few weeks

Quiz answer

What are Bitcoin Futures?

The correct answer is “B”.

Thank you for reading :) 

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