Cryptocurrency Revival: 3 Catalysts That Could Help in 2019Apr9

Daily Intelligence Briefing

Identifying Change-Driven Investment Themes

Monday, April 8, 2019

Cryptocurrencies

Bitcoin, BlackRock And The Rise Of Alternatives

As news circulates that indexing giant BlackRock is reorganizing itself with an emphasis on higher-fee alternative assets, a few are beginning to believe that bitcoin could ultimately find its place among these nontraditional assets.

On Tuesday, BlackRock, the largest asset manager in the world with $6 trillion under management, said it would undergo a massive management overhaul, in part reorganizing to focus on alternative investments. And while BlackRock declines to comment on any plans for large forays into crypto assets, it recently hired former Ripple product marketer Robbie Mitchnick to its Digital Wealth team, which uses the firm’s successful Aladdin global asset management software to build institutional portfolios.

Last summer, Mitchnick and Stanford Business School professor Susan Athey published a paper called “A Fundamental Valuation Framework for Cryptoassets,” which essentially laid out a sophisticated model for valuing cryptocurrencies bitcoin and XRP.

As an alternative asset, the appeal of crypto is that its movements are uncorrelated with the rest of the market, says Mark Yusko, CEO of Morgan Creek Capital Management, which oversees $1.5 billion in assets, including a $40 million blockchain-focused VC fund.

Read the full article from Forbes +

Cryptocurrencies

Bitcoin Price Explosion May Have Been Spurred By An April Fool’s Joke

Bitcoin’s sudden and unexpected price rise may have accidentally been spurred on by an April Fool’s joke, analysts have speculated. An article published on 1 April by online cryptocurrency publication Finance Magnates claimed the US Securities and Exchange Commission had made the monumental decision to approve a bitcoin-based exchange traded fund (ETF).

Such a decision by the SEC would be seen by bitcoin investors as hugely positive for the cryptocurrency – the world’s first ETF backed by gold caused a 300 per cent rise in value for the commodity – however the US regulator has consistently failed to make a ruling on the ETF. Unsurprisingly, Finance Magnates eventually updated its article to reveal that it was an April Fool’s joke. But by the time that happened, the surge had already begun.

The bitcoin price shot up by 20 per cent in less than an hour to $5,080 early on 2 April, leading to speculation that the spike may have been caused by rogue bitcoin trading bots.

Some analysts speculated the rally could also be the result of bitcoin breaking above $4,200, which was seen as a key testing point for the market as it was previously bitcoin’s highest price of 2019. Other cryptocurrency experts suggested the jump could have come in anticipation of bitcoin’s next ‘halvening’ – an event that sees the rewards for mining the virtual currency cut in half. Previous halvenings have been preceded by price gains.

Read the full article from The Independent +

Cryptocurrencies

XRP Exchange-Traded Product Goes Live on Swiss SIX Exchange

An exchange-traded product (ETP) tracking the price of the XRP cryptocurrency has gone live on Switzerland’s primary stock exchange SIX. Amun AG, the maker of the product, announced the news on Tuesday, saying that the XRP ETP had started trading on the exchange under the ticker symbol AXRP.

The firm first revealed it would launch an XRP ETP last month. Hany Rashwan, co-founder and CEO of Amun AG told CoinDesk at the time that his firm already had an approval in place from SIX to issue the product.

With today’s launch, Amun AG now has a total of four cryptocurrency ETP products listed on the SIX exchange. Last month, the firm launched an ethereum (ETH)-based ETP (AETH). The month prior a bitcoin (BTC)-based ETP (ABTC) went live, and the firm launched the Amun Crypto Basket Index ETP under the ticker symbol HODL in November.

The HODL product tracks the top 5 cryptocurrencies in terms of market capitalization and liquidity. It currently comprises BTC, XRP, ETH, bitcoin cash (BCH) and litecoin (LTC).

Rashwan told CoinDesk on Tuesday that Amun AG wants to make investing in cryptocurrency “as easy as buying a stock.”“We seek to create an easy, safe, and regulated way for investors to access the crypto asset class,” he said.

Read the full article from CoinDesk +

Cryptocurrencies

SEC Issues First ‘No Action’ Letter To A Cryptocurrency Business

The U.S. Securities and Exchange Commission has issued its first ever letter assuring investors in a startup using crypto-tokens similar to bitcoin to raise capital that it will not take an enforcement action against the company, and in a separate document explained the rationale behind the decision for future companies.

The company that received the precedent-setting letter, called a No Action Letter, was TurnKey Jets, a startup that offers an all-inclusive private jet service including the plane, crew, and pilot. Interestingly, the company’s website has no mention of a crypto-token, which appears to play a role in the actual reservation of the services.

In addition to the much anticipated No Action letter the SEC’s FinHub, established in October 2018 to address issues related to cryptocurrency and other financial innovations, published a lengthy, highly anticipated document explaining its rationale for evaluating such requests.

“It’s not binding on the rest the commission,” says Bill Hinman, the SEC’s director of the division of corporation finance. “But it gives market participants a good idea of how the SEC staff will look at the issue and deal with it.”

Read the full article from Forbes +

LONG

ASEAN Markets

LONG

Electric Utilities

LONG

Lithium

LONG

Obesity

LONG

Solar

LONG

Value Over Growth

LONG

3D Printing

SHORT

Autos

LONG

Gold & Gold Miners

SHORT

Long-Dated U.S. Treasuries

LONG

Oil & U.S. Energy

SHORT

U.S. Housing

LONG

Video Gaming

US Wages Rise 0.1% MoM in March

Average hourly earnings for all employees on US private nonfarm payrolls increased by 4 cents, or 0.1 percent from the prior month to USD 27.70 in March 2019, following a 0.4 percent gain in the previous month and below market expectations of a 0.3 percent increase.

Click here to access the data +

US Jobless Rate Holds Steady at 3.8%

The US unemployment rate came in at 3.8 percent in March 2019, unchanged from the previous month’s figure and in line with market expectations. The number of unemployed persons decreased by 24 thousand to 6.2 million while employment dropped by 201 thousand to 156.7 million.

Click here to access the data +

US Economy Adds 196K Jobs, Beats Forecasts

Nonfarm payrolls in the US increased by 196 thousand in March of 2019, following an upwardly revised 33 thousand rise in February and beating market expectations of 180 thousand.

Click here to access the data +

US Consumer Credit Grows Below Expectations

Consumer credit in the United States went up by USD 15.19 billion in February 2019, down from an upwardly revised USD 17.72 billion gain in the previous month (vs preliminary USD 17.05 billion) and below market expectations of a USD 17.0 billion rise. Year-on-year, consumer credit went up 4.5 percent, as revolving and non-revolving credit increased by 3.25 percent and 5 percent, respectively.

Click here to access the data +

Oil Prices Hit 2019 High

Oil prices rose Monday morning as the escalating conflicts in Libya threatened to disrupt supply, amid US sanctions on Venezuela and Iran, OPEC-led output cuts and growing hopes that a US-China trade deal could be reached. Brent gained 0.6% to $70.7 a barrel around 9:30 AM London time and the US crude oil added 0.6% to $63.4.

Click here to access the data +

Markets

Cryptocurrencies

Bitcoin, BlackRock And The Rise Of Alternatives

As news circulates that indexing giant BlackRock is reorganizing itself with an emphasis on higher-fee alternative assets, a few are beginning to believe that bitcoin could ultimately find its place among these nontraditional assets.

On Tuesday, BlackRock, the largest asset manager in the world with $6 trillion under management, said it would undergo a massive management overhaul, in part reorganizing to focus on alternative investments. And while BlackRock declines to comment on any plans for large forays into crypto assets, it recently hired former Ripple product marketer Robbie Mitchnick to its Digital Wealth team, which uses the firm’s successful Aladdin global asset management software to build institutional portfolios.

Last summer, Mitchnick and Stanford Business School professor Susan Athey published a paper called “A Fundamental Valuation Framework for Cryptoassets,” which essentially laid out a sophisticated model for valuing cryptocurrencies bitcoin and XRP.

As an alternative asset, the appeal of crypto is that its movements are uncorrelated with the rest of the market, says Mark Yusko, CEO of Morgan Creek Capital Management, which oversees $1.5 billion in assets, including a $40 million blockchain-focused VC fund.

Read the full article from Forbes +

Cryptocurrencies

Bitcoin Price Explosion May Have Been Spurred By An April Fool’s Joke

Bitcoin’s sudden and unexpected price rise may have accidentally been spurred on by an April Fool’s joke, analysts have speculated. An article published on 1 April by online cryptocurrency publication Finance Magnates claimed the US Securities and Exchange Commission had made the monumental decision to approve a bitcoin-based exchange traded fund (ETF).

Such a decision by the SEC would be seen by bitcoin investors as hugely positive for the cryptocurrency – the world’s first ETF backed by gold caused a 300 per cent rise in value for the commodity – however the US regulator has consistently failed to make a ruling on the ETF. Unsurprisingly, Finance Magnates eventually updated its article to reveal that it was an April Fool’s joke. But by the time that happened, the surge had already begun.

The bitcoin price shot up by 20 per cent in less than an hour to $5,080 early on 2 April, leading to speculation that the spike may have been caused by rogue bitcoin trading bots.

Some analysts speculated the rally could also be the result of bitcoin breaking above $4,200, which was seen as a key testing point for the market as it was previously bitcoin’s highest price of 2019. Other cryptocurrency experts suggested the jump could have come in anticipation of bitcoin’s next ‘halvening’ – an event that sees the rewards for mining the virtual currency cut in half. Previous halvenings have been preceded by price gains.

Read the full article from The Independent +

Cryptocurrencies

XRP Exchange-Traded Product Goes Live on Swiss SIX Exchange

An exchange-traded product (ETP) tracking the price of the XRP cryptocurrency has gone live on Switzerland’s primary stock exchange SIX. Amun AG, the maker of the product, announced the news on Tuesday, saying that the XRP ETP had started trading on the exchange under the ticker symbol AXRP.

The firm first revealed it would launch an XRP ETP last month. Hany Rashwan, co-founder and CEO of Amun AG told CoinDesk at the time that his firm already had an approval in place from SIX to issue the product.

With today’s launch, Amun AG now has a total of four cryptocurrency ETP products listed on the SIX exchange. Last month, the firm launched an ethereum (ETH)-based ETP (AETH). The month prior a bitcoin (BTC)-based ETP (ABTC) went live, and the firm launched the Amun Crypto Basket Index ETP under the ticker symbol HODL in November.

The HODL product tracks the top 5 cryptocurrencies in terms of market capitalization and liquidity. It currently comprises BTC, XRP, ETH, bitcoin cash (BCH) and litecoin (LTC).

Rashwan told CoinDesk on Tuesday that Amun AG wants to make investing in cryptocurrency “as easy as buying a stock.”“We seek to create an easy, safe, and regulated way for investors to access the crypto asset class,” he said.

Read the full article from CoinDesk +

Cryptocurrencies

SEC Issues First ‘No Action’ Letter To A Cryptocurrency Business

The U.S. Securities and Exchange Commission has issued its first ever letter assuring investors in a startup using crypto-tokens similar to bitcoin to raise capital that it will not take an enforcement action against the company, and in a separate document explained the rationale behind the decision for future companies.

The company that received the precedent-setting letter, called a No Action Letter, was TurnKey Jets, a startup that offers an all-inclusive private jet service including the plane, crew, and pilot. Interestingly, the company’s website has no mention of a crypto-token, which appears to play a role in the actual reservation of the services.

In addition to the much anticipated No Action letter the SEC’s FinHub, established in October 2018 to address issues related to cryptocurrency and other financial innovations, published a lengthy, highly anticipated document explaining its rationale for evaluating such requests.

“It’s not binding on the rest the commission,” says Bill Hinman, the SEC’s director of the division of corporation finance. “But it gives market participants a good idea of how the SEC staff will look at the issue and deal with it.”

Read the full article from Forbes +

Bonds

Fund Told to Sell Emerging Market Bonds

Norway’s $1 trillion sovereign wealth fund got the go-ahead to cut government and corporate bonds from emerging markets in an overhaul of its $310 billion fixed-income holdings. The decision, announced on Friday by the Finance Ministry, comes after more than a year of deliberation. The fund will cut bonds from 10 emerging market countries in its index, including Mexico, South Korea, Russia and Poland, and will also be limited in its investments in emerging markets outside the index, such as Brazil and Indonesia.

The fund will still have leeway to invest up to 5 percent of its bond portfolio in emerging markets, or about $15 billion. It currently owns about $28 billion in such investments, with the biggest holdings in South Korean and Mexican debt.

The move doesn’t go quite as far as the initial 2017 proposal from the fund, which called for whittling its bond holdings down to just three currencies: the euro, the dollar and the pound. Big currencies such as the yen, the Australian and Canadian dollar and the Swedish krona were spared. The ministry also rejected the fund’s wishes to cut developed market corporate bonds.

The proposal was made after the fund got approval to lift its stock holdings to 70 percent of its portfolio. It has argued it makes little sense in owning government bonds across the world since they have become more correlated and that it’s also exposed to a wide array of currency risk through its ballooning stock holdings.

Read the full article from Bloomberg +

FX

Saudi Arabia threatens to ditch dollar oil trades to stop ‘NOPEC’

Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.

They said the option had been discussed internally by senior Saudi energy officials in recent months. Two of the sources said the plan had been discussed with OPEC members and one source briefed on Saudi oil policy said Riyadh had also communicated the threat to senior U.S. energy officials.

The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom’s annoyance about potential U.S. legal challenges to OPEC.

In the unlikely event Riyadh were to ditch the dollar, it would undermine the its status as the world’s main reserve currency, reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.

Read the full article from Reuters +

Construction & Real Estate

China Belt and Road

China’s Construction Binge Spreads to Americas, Rattles U.S.

China’s expansion in Latin America of its Belt and Road initiative to build ports and other trade-related facilities is stirring alarm in Washington over Beijing’s ambitions in a region that American leaders since the 19th century have seen as off-limits to other powers.

China is hardly a newcomer to the region, but now it’s focusing on countries in Central America such as Panama. It’s a country of just 4 million people but its canal linking the Atlantic and Pacific oceans makes it one of the world’s busiest trade arteries and strategically important both to Washington and Beijing.

As American officials express alarm at Beijing’s ambitions in the U.S.-dominated Western Hemisphere, China has launched a charm offensive, wooing Panamanian politicians, professionals and journalists.

The Chinese ambassador, a Spanish-speaking Latin American veteran, has been talking up the benefits of Belt and Road on TV and Twitter. Beijing has flown professionals and journalists on junkets to China. It seems to be paying off. “We see a big opportunity to connect Asia and America to Panama,” Panamanian President Juan Carlos Varela said during a visit to Hong Kong this week. He is due to attend a “Belt and Road” forum in Beijing with other foreign leaders this month, according to the Chinese government.

Read the full article from Manufacturing.net +

China Real Estate

Green shoots of recovery in China’s property market but don’t pop the champagne yet, caution market observers

Signs of a recovery emerged in China’s property market in March as first-tier cities saw a strong uptick in sales on the back of pent-up demand and lower prices. But market observers say it is too early to tell if the rally can be sustained after a similar rebound unravelled last year after a strong start.

According to Centaline Property Agency’s March data, 16,051 pre-owned homes in Beijing changed hands, up 43.9 per cent from a year ago; Shanghai registered 50 per cent year on year growth to 25,932, while sales in Shenzhen hit a six-month high, but it was 19 per cent lower than a year ago.

“We did see some green shoots of recovery in the property sector in March, especially in tier 1 and 2 cities,” said Lu Ting, chief China economist with Nomura Securities. He said that the new home market also recovered as contracted sales by 23 listed developers surged 26 per cent in March after falling 20 per cent in the first two months of 2019.

Read the full article from South China Morning Post +

China Real Estate

China’s banks defy Beijing by pumping loans into property, despite economic slowdown

Despite Beijing’s push for state-owned banks to lend more to private companies, half of new loans issued by China’s big six banks last year went to individual property buyers.

Data retrieved through a South China Morning Postanalysis of the banks’ reported annual results underscores the challenges faced by Beijing in guiding more money into the real economy, amid mounting worries about higher household debt and a new housing bubble. It also illustrates the problems facing China’s private sector, which, at a time of economic downturn, continues to be starved of bank capital.

In total, China’s six largest state-owned banks issued 2.53 trillion yuan (US$376.1 billion) in new personal housing mortgages in 2018, accounting for 49.4 per cent of total new loans (5.13 trillion yuan).

By contrast, just 29 per cent of total loans issued last year went to private businesses, a sharp drop from 57.5 per cent in 2017. Within that, almost one-third of new business loans were for real estate enterprises, which borrowed 8.7 per cent of all new loans in 2018. In absolute volume, new loans granted by the six mega-banks to companies slumped by more than half in 2018, to 1.49 trillion yuan.

Read the full article from South China Morning Post +

Services

Burials

China embraces eco burials as plot prices outstrip housing

This week, seven families laid the remains of their loved ones to rest in the Tianshou cemetery on the outskirts of Beijing. But these were burials with a difference. The families rode in golf carts made to look like hearses and scattered flower petals over a small plot of grass where biodegradable jars containing the ashes of their relatives were buried.

The area reserved for the green burials can fit more 2,000 of the jars, buried in layers in the ground, without any especially delineated plots. The same area would only hold about 500 to 600 traditional grave plots, according to Tianshou.

Officials have been trying to promote “eco burials” like these as Chinese cities run out of land to bury their dead and the price of grave plots continues to soar, often surpassing the price per square metre of an apartment. There’s a common saying: “Can’t afford to die, can’t afford to be buried.”

“Public acceptance of eco burials is improving. In the beginning, people were very resilient, but after two years of promoting it, every year there are people willing to take part in it,” says Sun Ying, director of marketing and planning at Tianshou. “I think in the future, there will be more and more people joining this land-saving way of burial.”

Read the full article from The Guardian +

eCommerce

Luxury Brands Snub Amazon but Cozy Up to Alibaba

Despite being fussy about their image, luxury brands are teaming up with mass-market Chinese e-commerce giants Alibaba and JD.com. Don’t expect them to act as friendly toward Amazon.

Luxury brands have mostly steered clear of Jeff Bezos’ internet sites despite their growing clout with consumers. LVMH ’s finance chief said in 2016 that “the existing business of Amazon doesn’t fit with luxury, full stop.” Most brands don’t like the idea of being listed alongside less glamorous goods such as secondhand books and cleaning fluid.

Yet they are warming to Alibaba and JD.com. Valentino, Bottega Veneta and Burberry are all available on the Luxury Pavilion section of Alibaba’s Tmall website, and participation is growing. In 2018, 26% of luxury fashion brands tracked by digital research outfit Gartner L2 had a store on Tmall, up from 21% a year earlier.

Online luxury stores are also teaming up with the Chinese tech giants: Farfetch merged its China business with JD.com’s luxury platform in February, while the parent company of Yoox Net a Porter agreed to a joint venture with Alibaba last year.

Read the full article from The Wall Street Journal +

Video games

Streaming to subscriptions: Video games enter new frontiers

The video game industry is entering new frontiers. Now, you’ll increasingly have the choice of subscribing to games, playing for free or possibly just streaming them over the internet to your phone or TV.

“We’re in an environment where people want content and media when they want it, how they want it,” CFRA analyst Scott Kessler said. “You can play a great video game with a console or on a computer or with a mobile device and you might not have to pay anything. That’s a dramatic departure from even a few years ago.”

Of course, people will still buy and use traditional video games and consoles for years to come. But as games have become more accessible online and on mobile, it is becoming harder to convince people to spend a chunk of money upfront, said Joost van Dreunen, co-founder of research company SuperData. Game retailer GameStop’s shares fell Wednesday, a day after it projected a revenue drop of 5% to 10% in 2019. And major video game publishers Electronic Arts and Activision Blizzard have announced layoffs.

Big players are entering the arena: Google announced Stadia , a console-free game streaming service due out this year. The platform will store a game-playing session in the cloud and let players jump across phones, laptops and browsers with Google’s software. And Apple announced a subscription service that some are calling the “Netflix of Games .”

Read the full article from The Washington Post +

Technology

3DP

Relativity, the 3D printed rocket manufacturer, inks multi-year contract with Telesat

Relativity, the Los Angeles-based manufacturer of 3D-printed rockets, has signed its first public commercial contract with Telesat, the longtime vendor of satellite services for telecommunications and business information. The deal marks the first agreement between a major satellite operator and an entirely venture-backed company in the “New Space” industry and is a huge win for Relativity’s low-cost rocket manufacturing platform.

Relativity’s first launch of its Terran 1 rocket, the first fully 3D-printed rocket built using Relativity’s proprietary printing technology, is slated for the end of 2020.

The company already has a launch site at Cape Canaveral in Florida and a test facility at NASA’s Stennis Space Center right on the Mississippi-Louisiana border. It’s currently in the process of acquiring a launch site in California that will expand its launch capabilities for customers, according to Relativity chief executive, Tim Ellis.

Relativity’s launch services come in at around $10 million for a 1,250 kilogram payload to low Earth orbit, Ellis said. That’s about $10 million to $20 million less than it would cost to launch a similar payload on the Indian PSLV rocket or European Ariane rocket.

Read the full article from Tech Crunch +

Biometrics

Facial recognition to be trialled at Bristol and Dublin airports

The SelfPass technology, developed by United Technologies Corporation subsidiary Collins Aerospace, verifies a passenger’s identity at the first touch point in an airport, whether that be check-in, bag-drop or security. From that point onwards, the passenger’s face acts as their identification and boarding pass as they journey through the airport, negating the need to provide the documents at duty free, airport lounges, border control or at the plane’s boarding gate.

“Dublin and Bristol Airports are changing the way passengers travel and making the process easier and more efficient,” said Christopher Forrest, vice president of Global Airport Systems for Collins Aerospace.

“For example, it takes less than one second to capture and process a passenger’s facial image and eliminates the need to repeatedly present travel documents. We see this as another leap forward for our biometric technology to play a key role in making the connected aviation ecosystem a reality.”

Read the full article from TheEngineer +

Satellites

Now Amazon plans to launch a massive constellation of more than 3,000 internet satellites

The company is joining firms like SpaceX and OneWeb, which all want to send huge numbers of satellites into low Earth orbit to connect underserved areas with broadband.

The plan, dubbed Project Kuiper, will send satellites up into orbit at three different altitudes. There will be 784 satellites at 367 miles (591 kilometers), 1,296 satellites at 379 miles, and 1,156 satellites at 391 miles, according to a filing with the International Telecommunications Union, which oversees global telecom satellite operations. Combined, these satellites will provide internet access to more than 95% of the global population, according to Amazon.

A spokesperson said, “This is a long-term project that envisions serving tens of millions of people who lack basic access to broadband internet.” It’s not yet clear if Amazon will manufacture or buy its satellites, or when it will start to provide satellite broadband services. Before it does, it will need to obtain approval from the US Federal Communications Commission, and it will need to show how it plans to decommission its satellites and manage its role in the growing problem of space debris.

Amazon is one of several companies planning to provide broadband in this way. SpaceX, OneWeb, and Facebook are all working on internet satellite projects.

Read the full article from MIT Technology Review +