China Spooks the Market, Again: Inshareeb's Week in Review February 13.
China spooks the markets once again. But this time, BTC-USD regains $1000 much more quickly than previous interventions. However, bitcoin has see-sawed around this psychological level, currently trading at $995.94, remaining in equilibrium within the Ichimoku cloud, as illustrated below, while the market decides on the next direction and waits for fresh news to emerge.
Bitcoin exchanges are facing greater scrutiny; traders and investors are moving to decentralized methods such as LocalBitcoins which registered a phenomenal increase over the week beginning February 11. 917 bitcoin were traded over the peer-to-peer platform in a single week. In terms of Chinese Yuan, this is the highest ever volume on LocalBitcoins in a single week for China, shown below.
Regulation of cryptocurrency was a main theme in the past week, with Japan warming to bitcoin, giving the cryptocurrency legal tender status and the emergence of a cryptocurrency ‘whitelist’ to protect consumers, give the sector greater credibility and positively affect bitcoin exchanges in the country. However, the regulations may slow innovation and hamper ‘blockchain 2.0’ projects. Also, in the Philippines, regulation was announced that was praised as a ‘positive step for Bitcoin firms and users’ by CEO of Satoshi Citadel Industries, John Bailon.
This week’s review is compiled from contributions by Alexander Lielacher, Christoph Bergmann, Evan Sixtin, and Nigel Dollentas.
China continues to enforce regulations on Bitcoin. The large exchanges suspend withdrawals of bitcoin and litecoin while implementing anti-money laundering rules, which is announced to need at least a month of time. Also, the central bank meets the other exchanges and gives orders. On February 8, shocking news hit the wires; both Huobi and OKCoin announced that while they implement AML procedures, all withdrawals are suspended for one month. All bitcoin on exchanges are, more or less, frozen.
With China long being a hub for Bitcoin operations and trading, it was not long until other countries in Asia started to take notice. Japan is the latest country to make headlines with their new Bitcoin regulations, making the cryptocurrency, along with others, legal tender by a 'whitelist,' which will frequently be updated. While welcomed with strong optimism by Bitcoin enthusiasts and media outlets, the regulations are touted by Koji Higashi, Co-founder of IndieSquare, as potentially “worse than the BitLicense.”
Bitfury and the Georgian NAPR have already built the software and tested it on more than 20 land title registrations. The new MOU will expand services to offer the following capabilities; to register new land titles, demolition of property, mortgages, and rentals, to conduct purchases and sales of land titles, and to do notary services. Bitfury eventually plans to also add notary services and smart contracts for escrow and other services.
When Bitcoin blocks reach its size limit of 1MB, there is a prediction of doom and gloom. Most prominently Bitcoin developer Jeff Garzik forecasted in December 2015 the so-called “fee event” that should occur when blocks are at least 95 percent full over at least seven days. According to Garzik, this will trigger an economic change. Now, more than one year later, the conditions are still not entirely met, but it is very close to Garzik’s fee event.
John Bailon, CEO of Satoshi Citadel Industries, said the BSP’s new set of rules are supportive of entities dealing with virtual currency, “The circular is a positive step for Bitcoin firms and users. It provides a framework wherein Bitcoin companies such as ours to operate legally and in compliance with rules and regulations set forth by the BSP. I believe it is crucial for the BSP to keep such an open line of communication with companies like ours as the industry and the technology further grows.”
The London-based FinTech startup Tramonex Labs, which focuses on international payments for SMEs has been granted a Small Electronic Money Institution License by the UK’s financial regulator, the Financial Conduct Authority (FCA). Tramonex's approval marks the first time that a FinTech startup has obtained permission to issue a digital currency.