South Korean cryptocurrency exchange Bithumb has joined the league of exchanges diversifying their international offerings by setting up a US securities trading platform.
Preempting ‘Global’ Blockchain Asset Tokenization
Through a partnership with blockchain fundraising platform SeriesOne, Bithumb seeks to speed up its growth into a “global financial firm” by cornering the securities token market, local South Korean media outlet Yonhap News Agency reported Nov 1.
The announcement comes days after US exchanges Bittrex and Coinbase announced they were preparing to launch international versions of their exchanges catering to non-US residents in a bid to bypass the country’s complex regulations.
“SeriesOne actively sought to strike a deal with Bithumb after assessing it as the most suitable partner,” Yonhap quotes an unnamed Bithumb official as saying.
Bithumb will ramp up efforts to develop into a global financial firm as the blockchain-based asset tokenization is expected to spread globally down the road.
Platform To Launch By Q3 2019
The partnership will leverage SeriesOne’s license to operate as an environment for trading cryptocurrency tokens deemed to be securities by US regulators. The joint platform, Yonhap says quoting anonymous “sources,” should debut “during the first half of next year.”
In a tit-for-tat move, SeriesOne has already expanded into the South Korean market, where it also plans to trade securities.
The country continues to modify its stance on the cryptocurrency industry, authorities nonetheless opting not to end the country’s fourteen-month-old ban on ICOs.
“Although many people call for the government to allow initial coin offerings, there are still uncertainties related to such a move as well as the possibility of serious fallouts,” Financial Services Commission (FSC) Chairman Choi Jong-ku said during a parliamentary meeting earlier in October.
At the same time, Bithumb saw a change of ownership place it in the hands of Singapore investor BK Consortium, which purchased the exchange for $353 million.
What do you think about Bithumb’s US exchange? Let us know in the comments below!
Amid market turbulence and general cryptocurrency uncertainty, some speculate fast-growing exchanges may be manipulating — or outright lying about — their trade volumes.
Questions about inflated exchange volume have long plagued the cryptocurrency world.
Outcry is now intensifying as once-unknown exchanges are enjoying seemingly smashing success in the midst of market slowdowns and uncertainty.
Reporters from Bloomberg recently wrote about the curious case of the BitForex exchange. Once relegated to obscurity, the platform has now been busy reporting about days where transactions exceed $5 billion dollars.
BitForex Vice President Garret Jin said the trading surge was just due to its transaction mining system, a practice some say is just a set up to inflationary wash trading activity.
Overall trading volume across the industry is expected to grow by 50% in 2019, but some are starting to wave a red flag while scrutinizing the alleged astronomical growth of once-small exchanges.
Scattered discourse on this topic has swelled in the past few months as more people in the industry believe exchanges are dramatically overstating their trading volume. This is done by offering incentives to inflate, or by simply turning a blind eye to blatant abuse on exchange platforms.
Allegations about fake trading volume are certainly not new. Just a few days ago, the popular exchange Coinbase fired back at New York Attorney General Barbara D. Underwood regarding its trade volume.
Bitcoinistreported that Attorney General Underwood alleged Coinbase “[…] disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.” Coinbase Chief Policy Officer Mike Lempres wrote:
Coinbase does not trade for the benefit of the company on a proprietary basis
In a March Medium post, trader and investor Sylvian Ribes noted his belief that the volume of fabricated cryptoassets was more than $3 billion dollars.
Ribes specifically called out OKEx, claiming 94% of its volume was nonexistent after allegedly reviewing publicly available data.
Others like EverMarkets Exchange CEO Jim Bai, see the problem of fraudulent volumes as just an ecosystem immaturity issue, asserting how legitimate exchanges will eventually pop up that
Provide enough real, beneficial structural incentives so that people won’t be misled into trading on questionable venues.
A Secret Brought To Light?
In August, the Blockchain Transparency Institute released a sweeping report alleging that 70% of the top 100 exchanges on sites like CoinMarketCap are “likely engaging in wash trading by at least 3x their stated volume.”
There are people who see these types of shady trading practices an instance of “everyone’s doing it, so I’m doing it,” according to Neil Woodfine of Clavestone.
According to Woodfine and Eterna Capital’s Asim Ahmad, inflated volumes from exchanges are likely due to automatic high-frequency trading strategies — a practice that has been regarded as concerning by the New York Attorney General.
How big of an issue do you think exaggerated or fraudulent exchange trade volumes are? Let us know your thoughts in the comments below!
Images courtesy of Bitcoinist archives, Shutterstock.
XP Group, owner of the largest investment firm in Brazil, XP Investimentos, confirmed it would launch a cryptocurrency exchange this week – despite its CEO saying he wished it “didn’t exist.”
Benchimol: ‘We Felt Obligated’
As Bloombergreports quoting Guilherme Benchimol at an event in Sao Paulo, XP will finally give in to investor demand and begin a Bitcoin and Ethereum trading operation after six months of rumors.
“I must confess, this is a theme I’d rather didn’t exist, but it does,” the publication reports him as saying.
We felt obligated to start advancing in this market.
Like many South American markets, Brazil has seen a palpable uptick in Bitcoin 00 trading activity. While its figures do not match those of markets such as Chile, Argentina and Venezuela, weekly volumes for P2P platform Localbitcoins alone regularly top 1.5 million reals ($367,000).
XP Investimentos had been planning its entry into the market since at least April, insiders telling the press at the time a crypto trading platform was incoming. The company registered an entity called XP COIN INTERMEDIACAO in August last year.
The final product will go by the name of XDEX – perhaps a nod to the decentralized exchange phenomenon – and involve a team of around 40, Bloomberg adds.
Bitcoiners Bite Back Against Banks
Brazil’s extant exchange and wider cryptocurrency business sector is meanwhile struggling with an increasingly hostile landscape involving banks.
Similar to complaints in Poland in recent months, a government agency is now investigating claims that those businesses are subject to account shutdowns by institutions which would rather not deal in crypto-related transactions.
“…It does not seem reasonable for banks to apply restrictive measures a priori on a straight-line basis to all cryptocurrency companies, without examining the level of compliance and anti-fraud measures adopted by individual brokerage firm,” the agency told Reuters when the news surfaced this week.
What do you think about XP Group’s exchange announcement? Let us know in the comments below!
Arbitrage exists as a result of market inefficiencies and would therefore not exist if all markets were perfectly efficient. How does one capitalize on this market phenomenon?
A trader who, in 1970, pioneered a computerized trading system once said:
The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.
This is, of course, Ed Seykota, a former commodities trader. A lot has changed since he first introduced this system, with the onset of blackbox and algorithmic and high-frequency trading, it is harder than ever for point and click traders to make money.
The market has evolved and the inefficiencies that it suffered from in the 70s are unlikely to return. However, while the capital and debt markets are now highly efficient and, for the most part, very liquid, the same cannot be said for cryptocurrency markets. For one, the dissemination of information to the trading community is highly inefficient. The systems that aggregate volume and other data from various exchanges are still in their infancy and most importantly, the size of the trading community is growing every day.
Nobody Knows If a Stock Is Going to Go Up, Down, Sideways or in Circles
Those that have seen the film “Wolf Of Wall Street” will remember the scene with Matthew McConaughey and Leonardo DiCaprio, where Matthew McConaughey goes on to say “Nobody knows if a stock is going to go up, down, sideways or in circles.”
Is trading an art, a science, or is it no different than gambling and simply requires a degree of luck? Whatever camp you side on, crypto markets provide a unique opportunity to make very good returns on your investment. You don’t always have to be a trend follower or a contrarian, the smart way to approach crypto trading is by applying arbitrage models. The problem, of course, is standardizing the API data from the exchanges. While it is not an impossible task, it can be very laborious and requires a great amount of checking to ensure consistency between the different data feeds.
Despite the fact that the cryptocurrency markets are trading with extremely high-volume levels, they are not nearly as liquid as we might think. This market is still highly fragmented in a web of exchanges under very different jurisdictions. The liquidity is spread through various more or less trustworthy exchanges all over the world. The emergence of more trustworthy regulated exchanges has boosted the overall liquidity but has not yet delivered the desired effect of lowering spreads and slippage costs. Furthermore, increasing liquidity would definitely encourage significant institutional investments and promote mainstream adoption.
Volatility is something that has discouraged this much sought after mainstream adoption. This measure is related to uncertainty with regard to the extent of price changes. High volatility is evidenced in sharp and unpredictable price swings, while assets with low volatility will see little or minimal fluctuation in prices over a short-term horizon.
There are various strategies one can follow to capitalize on the potential arbitrage opportunities that currently exist across crypto markets. No one can tell for sure how long these opportunities will remain available, as the broader adoption of these assets by the general public will invariably reduce bid/ask spreads and increase trading volumes. However, for now, one can simply make comparisons between different exchanges to understand the magnitude of potential returns on capital.
The following numbers should be taken as an indication, these are not fixed levels and are subject to change. The price of Bitcoin on HitBTC is 2.55% higher than the price of the same asset on Exmo. Nowhere in capital markets can such discrepancy occur with what is said to be a leading asset in the digital economy and the spread on altcoins can sometimes be even greater.
There are different ways to trade the same markets, directional, technical, contrarian, fundamental – or you can utilize a combination of the above and create a strategy that works for you.
What do you think of market structure and is regulatory uncertainty to blame for such fragmented markets? Let us know in the comments below.
The global unbanked have been frozen out of most economic ecosystems, but Paxful is changing this through the selling of gift cards on their cryptocurrency exchange.
The rich and elite have a lot of options when it comes to economic decisions. They can invest in gold, stocks, bonds, precious gems, artwork, real estate, automobiles, and cryptocurrency. The only snag they face is the wait to convert the value of one asset into another, but such a problem is a minor one indeed. By contrast, the unbanked are essentially locked out of most economic ecosystems due to having to physically hand over fiat for goods and services. Even getting involved in cryptocurrency is an issue for the unbanked, but Paxful is offering an unexpected gateway: gift cards.
Even Cryptocurrency Has Obstacles for the Unbanked
The number of individuals with a bank account has increased over the last few years, but the problems facing the unbanked and underbanked still exist. In the United States alone, there are 10 million households that are either underbanked or unbanked. Worldwide, the total number of the unbanked is two billion souls. As such, they do not have access to a financial institution in any manner.
As one can imagine, this puts severe limitations on an individual’s economic freedom. All transactions have to be made face-to-face and in cash. This situation puts the unbanked at the mercy of those who would economically exploit them as they have no other options. What good is it to know that an item costs 60% less online if you’re unable to purchase anything online?
Cryptocurrency is viewed as an outlet of economic freedom for people, but even this has some obstacles for the unbanked to face. Almost every cryptocurrency exchange requires the use of a financial account (checking account, debit card, credit card, etc.) as well as identifying documents in order to use it. The unbanked do not have access to these items, which means they would normally be locked out of engaging in the cryptocurrency sphere. Fortunately, Paxful is working hard to make a difference by offering the unbanked hundreds of options to engage in the virtual currency sphere without the need of a bank account.
Gift Cards Offer Economic Access
The humble gift card that a person can buy at any small shop or gas station offers access to the global economy via cryptocurrency. Paxful hosts the fourth busiest Bitcoin wallet by volume, but their status is often ignored due to the low amount of their transactions. People aren’t normally sending hundreds or thousands of dollars per transaction on Paxful, but the p2p network embraces this reality as their goal is to offer an economic lifeline to the developing world.
The number one gift card used by the unbanked on Paxful is iTunes. Last week, a total of $6,635,517 was converted into cryptocurrency via iTunes gift cards, with an average transaction amount of $97. The second most traded card on the Paxful platform is the Amazon gift card. This card featured an average amount of $84 per transaction, and the total volume for the last week was almost $2.5 million. Rounding out the top five payment methods on Paxful are the eBay gift card, the Walmart gift card, and the Best Buy gift card.
Why does Paxful allow so many different gift cards to be used on their cryptocurrency exchange? The answer is that it fulfills their goal of offering economic choices and freedom to people throughout the world, especially in regions that often lack stable financial structures. An unbanked person can easily venture into the crypto sphere and take full advantage of the global economic system just by wandering into a corner store, buying a popular gift card, and then exchanging it on the Paxful platform.
Keeping Opportunity Alive
Gift cards are the doorways to a new economic reality for millions and millions of people across the globe. This is why Paxful works hard to keep them available for conversion on the platform, despite any difficulties they may bring. A particular case is the iTunes gift card. This card chews up a lot of the support staff’s time due to some issues, but Paxful refuses to drop it. As Ray Youssef, the co-founder of Paxful, notes:
We are the only p2p crypto service that deals with iTunes gift cards, why? All the others stopped supporting them because of the absolutely massive headache and near impossibility of proving proper account balances on iTunes gift cards. We have chosen to keep iTunes gift card support because it is still how the unbanked of Africa get their bitcoins. We refuse to abandon these unbanked users as the whole idea of bitcoin and Paxful is to help them.
In the end, it’s often the little things in life that make a big difference. Such is the case with the humble gift card. Paxful allows the selling of such cards on their platform as a means of allowing those with no access to the global financial network a way in. Allowing the unbanked to retain their dignity while allowing them to explore financial opportunities is a tremendous gift.
What do you think about Paxful enabling the unbanked to use gift cards to access the cryptocurrency market? Let us know in the comments below.
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Japanese cryptocurrency exchange Zaif continues to make media headlines in quick succession as of late. The company announced on July 3rd how they had added the XEM cryptocurrency to their trading platform. Keeping in mind how XEM has seen a spectacular value increase over the past few months, this is not entirely surprising.
It is not uncommon for cryptocurrency exchanges to add new coins to their platform. The addition of XEM to Zaif is quite noteworthy, though, considering how the New Economy Movement concept has a huge following in Japan. In fact, Japan is the driving power behind the recent XEM price increase, which is now nearing the US$100m market cap.
Zaif Exchange Expands List of Supported Cryptocurrencies
The reason for XEM’s success can be attributed to Takao Asayama, CEO of the Zaif exchange. He is also the official spokesperson for New Economy Movement in Japan. As a result of his efforts, Asayama has been appointed as NEM Japan Director and represent the movement in the country from now on.
Dragonfly Fintech CEO Lon Wong told the media:
“It is timely that we can engage someone in Japan to spearhead the development and promotion of the NEM blockchain technology. Japan seems quick to jump onto this technology ahead of the rest of the world, although this solution was mooted and developed in the USA and Europe. Given Takao Asayama’s commitment and involvement, we are confident that he will be able to take NEM to the next level in Japan.”
Zaif has become quite a popular exchange platform in Japan, and it is considered to be one of the premier cryptocurrency platforms. Up until this point, only two currencies were supported: Bitcoin and Monacoin. As of July 3rd, users can trade XEM against the Japanese Yen. A Bitcoin trading pair for XEM will be added in the coming weeks.
The correlation between Zaif and New Economy Movement goes much further. The Mijin blockchain solution, developed by Zaif parent company Tech Bureau Corp, uses NEM blockchain technology. All of the pieces of this puzzle are falling into place as we speak. Exciting times are ahead for cryptocurrency in Japan; that much is certain.
What are your thoughts on the NEW concept and Zaif adding this cryptocurrency to its platform? Let us know in the comments below!
Popular cryptocurrency exchange Poloniex is currently affected by an unexpected outage. According to the company’s social media accounts, a datacenter outage is to blame. All coins are safe, though, which is the most important news.
It is not the first time. Bitcoin companies are dealing with downtime these days. Just yesterday, BitGo was dealing with a severe DDoS attack, which made their services inaccessible. Moreover, all of the companies relying on their infrastructure were affected by this attack as well.
Temporary Issue Affects Poloniex Servers
But in the world of exchanges, things are very different. Every time a platform goes down temporarily, there is a significant cause for concern. Cryptocurrency enthusiasts have been burned in the past when exchanges suddenly went down or disappeared.Strangely enough, this usually seems to happen to some of the largest exchanges in the world at that time.
The collapse of Mt. Gox was the first major shock wave to hit the Bitcoin world many years ago. Ever since platforms such as Cryptsy and MintPal were all forced to shut down as well. Smaller exchanges have seen their fair share of data breaches and hacks too, which puts the community on edge every time there is a temporary outage.
Poloniex is the largest altcoin exchange in the world today, as they continue to dominate nearly every alternative cryptocurrency trading market. Especially Ethereum and The DAO tokens are seeing a lot of daily trading volume on these platforms. But now that Poloniex is temporarily offline, a lot of traders are panicking and show concerns over their funds.
Luckily, it looks like these worries are unfounded, as the Poloniex Twitter account states:
There is a widespread datacenter outage affecting connectivity of several servers. Coins are safe.
For the time being, it is unclear as to how long this outage may take, and what the potential consequences could be. While it is good to see Poloniex confirm all user funds are safe, users will remain edgy until they can access their accounts once again. It is positive to see the company warn people on social media, though, to avoid most of the panicking.
Do you have funds stored in Poloniex wallets, and if so, which currencies do you trade? Let us know in the comments below!
An interesting change is taking place in the world of exchanges right now, as many of the major platforms will be added the Standard DAO Framework in the coming months. Moreover, most of these exchanges now include a data field for Ethereum transactions, which opens up a lot of interesting opportunities.
People not versed in the world of Ethereum may have never heard of the Standard DAO Framework, but the concept is rather easy to explain. This new standard would allow any Ethereum user to interact with existing DAOs – as well as create new DAO tokens – through any of the participating exchanges.
What makes this solution so appealing is how all of this could be achieved through the exchange platform directly, rather than having to jump through several hoops. More importantly, DAO tokens can be created without a pre-existing Ethereum account. This would allow for the immediate creation and management of these tokens on that particular exchange.
Right now, this particular “Creation Module” will be integrated by Gatecoin and Bittrex shortly. Additionally, these two platforms want to make all of the DAO tokens on their exchanges tradable sooner rather than later. Users of these exchanges would then be able to create a DAO, and accept all of the supported cryptocurrencies and fiat currencies as payment.
The other main exchanges are looking to integrate the Standard DAO Framework as well over the coming months. Kraken, Bity, and ShapeShift are the other parties who have confirmed support for this open source initiative. By adding a data field to their local exchange offerings, users can directly interact with existing DAOs or call functions within existing smart contracts.
This news will elevate the Ethereum cryptocurrency to more than something that can “only be traded”. Instead, Ethereum becomes completely programmable, which will have a significant impact on future DAOs and Dapps that will be created. Whether additional exchanges will follow this lead by example, remains unknown for the time being.
What are your thoughts on the Ethereum Standard DAO Framework? Let us know in the comments below!
Many people know CEX.IO as a platform to buy and sell Bitcoin in exchange for various fiat currencies. But the company recently announced a new addition to this platform in the form of Ethereum trading. This modern digital currency can be traded against both Bitcoin and the US Dollar as of today.
It is always positive to see digital currency exchange platforms expanding their offerings, and CEX.IO is doing exactly that. The addition of Ethereum to their list of tradeable currencies is quite noteworthy, as users will be able to trade ETH against both Bitcoin and the US Dollar from now on.
In doing so, CEX.IO joins a growing list of digital currency exchange platforms which have added Ethereum trading in recent times. Bitfinex, one of the world’s largest Bitcoin exchanges, gave in and added ETH trading a few weeks ago, which was followed by exchanges in Korea and Japan shortly afterwards.
The CEX.IO exchange is keeping tabs on the current trends and demands by digital currency traders, and the addition of two ETH trading markets seems to be a smart decision. Bearing in mind how platform users can use their plastic cards to buy digital currency, this news opens up exciting opportunities for the Ethereum community.
Keeping in mind how the Ethereum price is currently in a slump, it will be intriguing to see how this decision by CEX.IO will play out in the long run. Digital currency traders have been selling their Ethereum across all exchanges for the past few days, which has lead to a decrease in overall market capitalization. However, Ethereum remains the second largest digital currency in the world, according to its market cap.
The biggest interest in the Ethereum ecosystem comes from developers who are exploring blockchain technology and smart contracts. The Ethereum ecosystem seems to lend itself towards the developer crowd, and CEX.IO decided it would be a good idea to add ETH trading and give everybody a chance to buy some Ether through convenient payment methods.
Based on the information we have received, CEX.IO servers over half a million users to this very date. Although the company has pivoted from their initial cloud mining business model, the exchange side of things appears to be a lot more lucrative for the UK-based company. Moreover, the platform is available in over 95% of the countries around the world, although availability in the US is limited due to FinCEN regulatory requirements.
What are your thoughts on CEX.IO adding Ethereum to their trading markets? Let us know in the comments below!
Bitcoin companies expanding their services across borders will help to get the digital currency into the hands of as many people as possible. Coincheck, Japan’s largest bitcoin exchange which recently added an Ethereum trading pair as well, is expanding their service on a global scale. Anyone living inside or outside of Japan can now trade Bitcoin and Ether for JPY with their credit card or international bank transfer.
Even though the number of digital currency exchanges operating on a global scale has grown significantly over the past few years, very few of these platforms let users trade against JPY. Or to be more precise, it is all but impossible as a foreigner to trade Bitcoin and Ethereum against JPY, but that situation has come to change.
Now that Coincheck is opening their trading market to the public, parent company ResuPress Inc hopes to grow the monthly transaction volume and total user base exponentially. Keeping in mind how this exchange processes close to US$28m per month in trading volume and serves over 16,000 users in Japan, things are off to a good start for this platform.
Digital currency seems to be gaining more popularity in Japan these days, which is a positive trend for Bitcoin and Ethereum enthusiasts. Moreover, there has been a lot of demand from potential international clientele as to when Coincheck would open their exchange to people in countries other than Japan. Digital currency is available on a global scale, and supporting platforms and services should scale to that level as well.
The rise in popularity of digital currency in Japan can be attributed to some recent legislative changes. The Japanese Cabinet approved multiple new bills which will modernize the payments industry, and they even acknowledge bitcoin as a “useful currency”. Such news gave Bitcoin demand a healthy boost and is also part of the reason Ethereum was added to the exchange not too long ago.
But there is a major advantage for people who love arbitrage opportunities, as the BTC/JPY price is usually a lot of higher than any other trading market. Coincheck wants to attract international traders in this regard, as there are opportunities to make a good amount of money from experimenting with these margins.
International Payments Are Converted To JPY
Despite international users being unable to send a wire transfer in JPY, there is no need to despair. All of the wire transfers can be denominated in US Dollar, and the amount will be converted to JPY once it arrives in the Coincheck bank account. This conversion process is done free of charge, which is a nice bonus.
For the time being, Coincheck is running a campaign where 0% trading fees are implemented, which will run until April 14th. This applies to both the Ethereum and Bitcoin trading markets, and should help attract new customers from all over the world. Moreover, the exchange offers a lot of trading features, including leverage trading for both Ethereum and Bitcoin.
What are your thoughts on Coincheck expanding on a global scale? Will you look for arbitrage opportunities/ Let us know in the comments below!