Ripples Partners with 3 Crypto Exchanges for Cross Border Payments
August 17, 2018
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Ripple has added three cryptocurrency exchanges to its cross-border payments settlement product, according to a press release published August 16.
Ripple has partnered with U.S.-based Bittrex, Mexican Bitso, and Philippine Coins.Ph cryptocurrency trading platforms within its initiative to build a “healthy” ecosystem of digital asset exchange.
The new partners will enable Ripple’s xRapid payments solution to move between XRP and U.S. dollars, Mexican pesos, and Philippine pesos respectively. Ripple explained the operational principle like this:
“A financial institution (FI) that has an account with Bittrex would initiate a payment in U.S. dollars via xRapid, which instantly converts into XRP on Bittrex. The payment amount in XRP is settled over the XRP Ledger, then Bitso, through its Mexican peso liquidity pool, instantly converts the XRP into fiat, which is then settled into the destination bank account.”
XRapid is a liquidity solution for Ripple’s blockchain-based real-time gross settlement system, which is developed to facilitate international fiat transfers between financial institutions. Ripple Chief Market Strategist Cory Johnson said:
“We’ve seen several successful xRapid pilots already, and as we move the product from beta to production later this year, these exchange partners will allow us to provide financial institutions with the comfort and assurance that their payments will move seamlessly between different currencies.”
In May, financial institutions who participated in the pilot of xRapid platform, which tested payments between the U.S. and Mexico, reported transaction savings of 40-70 percent. Additionally, the participants noted an improvement in transaction speed from 2-3 days to “just over two minutes.”
Although the testing showed solid product performance, Ripple chief cryptographer David Schwartz claimed that banks are unlikely to deploy blockchain to process international payments, citing low scalability and privacy problems.
Earlier this week, Ripple is considering breaking into the Chinese market to speed up international payments with blockchain technology. Jeremy Light, vice president of European Union strategic accounts at Ripple, said that “China is definitely a country and region of interest.”
In the past 24 hours, despite the strong downtrend of major cryptocurrencies, the crypto market demonstrated a quick recovery from this week’s losses.
On August 14, as the BItcoin price dipped below the $6,000 mark, the valuation of the crypto market plummeted below the $200 billion mark. At its lowest point of this year, the valuation of the crypto market reached $194 billion, led by the poor performance of Ethereum, Ripple, and Bitcoin Cash.
What Drove the Corrective Rally?
If the market does not see a strong spike in volume or momentum, its losses will continue throughout the week.
“Based on the analysis of Woo, a likely scenario for Bitcoin and the rest of the crypto market is to record another major drop in the near future, bottoming out at a lower range of prices, and demonstrating stability before initiating a proper mid-term rally”
A major drop of the crypto market in the short-term is still a possibility, given that the corrective rally of the market was not as strong as investors hoped it would be, but as of current, the sentiment of investors is generally positive.
Some analysts, including CNBC’s Fast Money contributor Brian Kelly, suggested that the quick recovery of the crypto market recorded on August 16 was caused by the closure of the US Bitcoin futures market, creating a short squeeze.
He explained that in the Bitcoin futures market, investors are incentivized to intentionally bring down the price of Bitcoin to cash out their short contracts and the simultaneous movements of a large number of retail traders to dump BTC on the market may have caused the previous drop.
Kelly added that if the price of BTC can increase 10 to 15 percent in the near future, possibly to the $7,000 region, the price of other major cryptocurrencies and tokens will follow. He said:
“They (altcoins) are still quite correlated (with Bitcoin). Over the last 60 days or so, Bitcoin has really been the leader — a lot of that had to do with the speculation about an ETF. But what you did see today is stuff like Ethereum almost 10% off yesterday’s lows, stuff like Stellar Lumens — still holding up quite well. So yes, if you get a 10 or 15 percent run on Bitcoin on a short squeeze, it should bring everything else back up.”
Strong Performance by Tokens
Last week, CCJ explained that in a bear market or downtrend, investors are reluctant towards taking high-risk high-return trades. Consequently, the global crypto market has seen the rise of the Bitcoin dominance index to 53 percent, as investors moved their capital out of tokens and small market cryptocurrencies to Bitcoin.
As BTC recovered to $6,400 from $5,950, the price of tokens such as Ontology and VeChain increased by 20 to 30 percent against the US dollar, becoming the best performing currencies in the market on the day.
Over the past 12 hours, Bitcoin and Ethereum have risen by more than 9% percent in value, but some analysts are still not convinced about the short-term trend of the crypto market.
Generally Positive Sentiment
The quick recovery of Bitcoin and Ether, the native cryptocurrency of the Ethereum network, has led the general sentiment of the market to become more positive.
Ether, which plunged by nearly 20 percent on August 14, showed strong movements today, increasing from $250 to $280.
However, the corrective rally recorded today was not as strong as investors expected it to be. In consideration of the steep drop in value the crypto market recorded over the past 72 hours, investors predicted a more strong bounce from previous levels. But, Bitcoin, Ether, and Bitcoin Cash, which recorded solid gains in the last 12 hours, have started to demonstrate a downward trend once again.
Willy Woo, a well respected cryptocurrency investor and analyst who predicted the price of Bitcoin to drop below the $6,000 mark since May of this year, recently said that the market will likely experience another drop before its next mid-term rally.
Woo specifically said that Bitcoin will likely test the $6,000 support level once again in the near future, even if Bitcoin recovers beyond the $7,000 mark and the market sees a convincing rebound.
“Leveraged short positions now near all time high. Anyone got a spare $35m in their trade account? Should be enough to trigger all those stops for a payday,” Woo said, referencing his previous statement made on August 13:
“The 3rd dead kitten. Fractally speaking, I’m framing this last down leg as an oscillation around the main move. The green line is just magic crayons for short range TAs to determine, the retest target and rate of decline are the things I’m watching. NVT only mildly supports this.”
Where Does the Market go Next?
Based on the analysis of Woo, a likely scenario for Bitcoin and the rest of the crypto market is to record another major drop in the near future, bottoming out at a lower range of prices, and demonstrating stability before initiating a proper mid-term rally.
The lack of momentum, volume, and stability in the market has decreased the probability of a mid-term rally in the near future, and as BitMEX CEO Arthur Hayes stated before, the market will not be able to support a huge spike in price with its current price trend.
More to that, the increasing dominance index of Bitcoin, the most dominant cryptocurrency in the market, shows the lack of confidence of investors in high-risk high-return investments, which generally means the market is unstable and hugely volatile.
It is possible that Bitcoin continues its corrective rally towards the $7,000 mark and records a strong bounce before the next fall, but it is also possible, if BTC fails to secure momentum in mid-$6,000, that it falls below $6,000 once again.
Bitcoin (BTC) prices fell below $6,000 for the first time since the end of June Tuesday, August 14, as the cryptocurrency community remains resilient.
All major assets in the red as Bitcoin falls almost 5 percent in 24 hours. Top ten coins are seeing as much as 17 percent losses on the day, with top fifteen coins are down as much 20 percent over the same period.
At press time, BTC/USD traded just above the significant barrier around $6,100, capping weekly losses of 14 percent.
The pair has come full circle since mid-July, when a sudden bull market took over to bring prices to a peak around $8,450 across major exchanges.
Progress then reversed as August began, meaning investors have seen monthly gains to date of just 3 percent.
The figures nonetheless set Bitcoin apart from altcoins, and specifically Ethereum (ETH), losses of which extend to 16 percent on the day and almost 35 percent on the week.
Over the past 30 days, ETH/USD has slipped almost 40 percent.
On social media, commentators were eyeing the knock-on effect Bitcoin prices volatility traditionally has on altcoin markets, producing higher moves both up and down in those assets.
As Bitcoin dominance –– or the percentage of total crypto market cap that is Bitcoin’s –– hits highs not seen since December 2017, Twitter analysts are similarly calling for a repeat of the altcoin bull market which began in the latter half of that month.
Higher Bitcoin market dominance, they claim, is apt to produce a U-turn in altcoins’ downtrend.
Others were altogether less sure. In comments Monday, Xapo president Ted Rogers considered current conditions conducive to producing an “extinction-level event” for cryptocurrencies en masse.
“90%+ of CoinMarketCap list will disappear eventually – might as well happen now,” he warned Monday.
Elsewhere, other major assets have shed 10 to 15 percent of their value
Within a period of two weeks, from August 1 to August 14, the price of Ether, the native cryptocurrency of the Ethereum network, dropped by 44 percent.
In 14 days, the price of Ethereum plummeted from $470 to $260, reaching its lowest point in 2018 by falling below the $300 mark for the first time since early November, 2017.
The entire cryptocurrency market experienced a steep decline in valuation, losing nearly $150 billion of its valuation in a month. But, Ether, which performed particularly well against the US dollar amongst other major cryptocurrencies like Bitcoin and Bitcoin Cash, quickly became one of the worst performing digital assets in August.
What Fueled the Drop of Ether?
Today, on August 14, even after suffering such a large drop in price, Ether dropped 18 percent of its value against the US dollar, declining from $300 to $260 within a 12-hour span.
While other cryptocurrencies did experience major drops in value, Bitcoin for instance, only lost 6 percent of its market cap against the US dollar.
Throughout this week, many analysts including Eric Wall, a lead cryptocurrency researcher at fintech company Cinnober, stated that blockchain projects which raised hundreds of millions of dollars in Ether in the past 12 months dumped the digital asset on the public cryptocurrency exchange market, creating a domino effect across major exchanges.
“The problem when you give millions of ETH to ETH competitors is that they can unload the ETH on the spot market and short ETH on the futures market before that, so they’re not only securing the funding but also manipulating the underlying spot market in favor of their shorts,” Wall said.
It is important to acknowledge that the amount raised by ICOs in their token sales do not necessarily mean new capital coming into the market but rather existing capital stored in major cryptocurrencies like Bitcoin and Ether moving to ICOs.
Hence, if ICO participants allocate millions of dollars in Ether to token sales, and the developers conducting the token sales dump the capital raised in Ether on the cryptocurrency exchange market, it indirectly becomes a massive sell order.
Consequently, the Ethereum exchange market has suffered in the last three months, as ICOs continued to dump large amounts of Ether on the market.
BitMEX Shorts All-Time High
This week, Arthur Hayes, the CEO of cryptocurrency exchange BitMEX, revealed that in merely a week, BitMEX became the largest exchange for ETHUSD trading, as its 50x leveraged ETHUSD swap has evolved into the most liquid Ethereum trading pair in the global market.
Given the overly strong downtrend of Ether and the rest of the market, it is evident that the increase in the activity of ETHUSD trading pair hosted by BitMEX demonstrates a rise in the number of shorts placed by investors that have lost confidence in the short-term trend of Ether.
While it is difficult to conclusively state that ICOs led the price of Ether to crash, it is obvious that the liquidation of the capital raised by token sales played a major role in creating a strong downtrend for Ether.
Tether (USDT) has issued new tokens worth $50 million on August 11, according to block explorer OmniExplorer.
In late March, Tether had released 300 mln USDT tokens priced at $1 per token.
Over the past 30 days, Tether’s market capitalization lost around $300 million, down from $2.7 billion in mid-July to the current $2.4 billion, according CoinMarketCap.
Tether is now in second place after Bitcoin (BTC) in terms of highest daily trading volumes, seeing $4.2 billion in trades a day or 28.16 percent of all crypto trades, while Bitcoin’s average 24-hour trading volume is $5.7 billion, or 38.62 percent.
Yesterday, August 11, the price of Bitcoin surged by $300 over the course of just a couple of hours, following a drop to as low as $6,118. As of press time, Bitcoin is trading at $6,357, up just under one percent on the day.
Crypto exchange Bitfinex, which is the seventh ranked crypto exchange by 24 hour volume on CoinMarketCap, shares leadership with Tether. Both companies have come under fire for lack of transparency, as Tether’s USDT tokens claim to be backed one-to-one by USD, yet the company has yet to submit to a public audit.
On June 13, Tether again faced criticism following a study that blamed the company for Bitcoin price manipulation back in 2017. According to the research, Tether’s transaction patterns show it was “used to provide price support and manipulate cryptocurrency prices.”
It’s not entirely clear what exactly is going on in Facebook’s nascent cryptocurrency division, but several reports suggest that something is afoot.
Facebook Meets with Cryptocurrency Project Stellar
The first comes from Business Insider, who reports that Facebook’s blockchain research group recently met with Stellar to discuss how the social media conglomerate could leverage distributed ledger technology (DLT) as it explores potentially building out a payments network.
According to unnamed sources, the two parties discussed how Facebook could fork the public Stellar blockchain, much as chat app Kik did after it decided to create an independent blockchain for its Kin cryptocurrency rather than piggyback on the main Stellar network. The task force is also said to have met with other unnamed cryptocurrency projects.
The publication also reports that Facebook has rapidly been expanding its blockchain division. One job posting said that the endeavor “is a startup within Facebook, with a vision to make blockchain technology work at Facebook scale and improve the lives of billions of people around the world.”
Facebook’s Crypto Lead Steps Down from Coinbase Board
Further stoking the coals of the rumor mill is the announcement, first reported by CoinDesk, that David Marcus, a Facebook vice president and the former head of its Messenger division, has stepped down from his post on Coinbase’s board of directors, a role he originally took on at the cryptocurrency exchange giant last December.
Marcus left his role at Messenger in May to lead Facebook’s blockchain division, where he reports directly to Facebook CTO Mike Schroepfer.
A Coinbase spokesperson told the publication that Marcus had stepped down to avoid the appearance of a conflict of interest, leading to speculation that Facebook is preparing to make a major announcement regarding its cryptocurrency plans.
Earlier this year, financial news outlet Cheddar reported that multiple sources had said that Facebook is “specifically interested in creating its own digital token, which would allow its more than two billion users to facilitate transactions without government-backed currency.”
Cryptocurrency has also been on the mind of Facebook CEO Mark Zuckerberg, who said that one of his personal challenges for 2018 is to learn more about technologies “like encryption and cryptocurrency.”
U.S. satellite service provider DISH has announced it has added Bitcoin Cash (BCH) as a payment option and migrated to the BitPay payments provider, according to an official press release August 9.
The DISH Network Corporation was among the first satellite service providers in the world to accept Bitcoin (BTC) payments back in 2014.
John Swieringa, the executive vice president and chief operating officer at DISH, said in the press release that the company has “a steady volume of customers paying with cryptocurrency each month”, adding:
“We’ve added Bitcoin Cash just as we chose to accept Bitcoin to serve customers who have adopted a new way of doing business.”
According to the press release, DISH customers will be able to pay with both BTC and BCH for monthly subscriptions and pay-per-view movies by sending the exact amount of cryptocurrency in a push transaction to the company.
Sonny Singh, the chief commercial officer with BitPay, noted in the press release that they aim to have a “seamless transition” from DISH’s old payment service to the new one. Singh added that cryptocurrency purchases are becoming more popular both because they reduce the chances for credit card fraud, as well as provide a cheaper payment service option for merchants.
The CEO of cryptocurrency trading platform Binance Changpeng Zhao announced a demo of the platform’s decentralized exchange in a tweet today, Aug. 9.
In a six-minute video attached to the tweet, Zhao presented a “casual, early, pre-offer” demo of the decentralized exchange. The CEO said not “to expect too much” for now, adding that it currently does not have a graphical user interface:
“A first (rough, pre-alpha) demo of the Binance Decentralized Exchange (DEX), showing issuing, listing and trading of tokens. All cli based, no GUI yet. A small step for #BinanceChain, a big step for Binance.”
Zhao showed three essential features of the planned exchange, those being the creation, listing, and trading of tokens. As Zhao did not disclose the launch date, it remains to be seen when the exchange will be marketed and what volumes it will be able to handle.
Decentralized exchanges are lauded as more secure than their centralized counterparts, which are more vulnerable to hacks. Decentralized platforms are set up in a manner which allows users to retain ownership of their coins using private keys. This solution reportedly prevents cryptocurrencies from being accumulated in one centralized “honeypot,” or point of attack.
Earlier this month, Binance bought Trust Wallet, an open source, anonymous, and decentralized wallet that supports Ethereum and over 20,000 different Ethereum-based tokens. Zhao then said that Binance plans to list Trust Wallet as a default wallet on its decentralized exchange.
Binance, which moved its operations to Malta this spring, is the number one crypto exchange by trade volume, according to Coinmarketcap. In July, the exchange supported plans to create a blockchain-based bank with tokenized ownership. The future “Founders Bank” will reportedly be owned by digital token investors and be based in Malta, known for its robust and transparent crypto regulatory climate.
The U.S. Securities and Exchange Commission (SEC) is set to make final decisions on nine proposed bitcoin exchange-traded fund (ETF) in the next two months.
As first reported Tuesday the U.S. Securities and Exchange Commission (SEC) delayed a decision on a proposed rule change from the Cboe BZX Exchange that, if approved, would allow for the listing of an ETF backed by blockchain startup SolidX and investment firm VanEck.
Yet the SolidX-VanEck proposal – first put forward in June – is just one of four filings in waiting.
Combined with past submissions from firms ProShares, Direxion and GraniteShares, a total of 10 bitcoin-related funds are being weighed by SEC officials, according to public records, although the VanEck/SolidX bitcoin ETF is the only “physical” ETF among all the proposals.
Those deadlines are set by the time at which the proposals are published in the U.S. Federal Register, with an initial decision due 45 days after that time. The agency can then punt those decisions to as many as 240 days following publication in the Register.
The deadline for a decision on two funds from ProShares is August 23, is just over two weeks away. The rule change paving the way for those products was submitted by NYSE Arca on December 4, 2017.
September will see a series of deadlines for bitcoin ETFs, starting on September 15, the date by which two funds by GraniteShares will receive a thumbs-up or thumbs-down. The funds were initially proposed on January 5.
The deadline for Direxion’s four funds is September 21, as indicated by public records, after being first submitted on January 4.
As CoinDesk reported, the SEC punted its decision on the SolidX-VanEck proposal to September 30. However, given the way in which the agency considers such proposals, additional time may be carved out, pushing a final decision deadline to as far as late February of next year.
To be sure, the agency could release its decisions ahead of its prescribed deadline (as the SEC did this week). But past examples indicate that the SEC will wait until closer to the deadlines, all but ensuring additional nail-biting by the crypto community.
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