Blockchain

THE HALVENING IS UPON US.

Yes, after much hype, the infamous bitcoin halvening has come and gone. The next 210,000 blocks will now yield 6.25 bitcoins per block reward.

Does this call for a hooray? Not Yet. Before we get too excited, we need to see how this will impact the market, and only time will tell.

Our analysts will be glued to their monitors sifting through the candlesticks to find new trends to bring to you. So make sure you tune in next week for our post-halvening analysis. Until then, enjoy this week’s volume 6 of ‘The Digital Asset Digest’. As always, we will be touching on all things crypto. Enjoy!

market summary

Bitcoin – Bitcoin closed at $9,895 on Friday morning, up 12.4% for the week just days before the third halving. The surge seemed to have been constrained to Bitcoin alone as opposed to the cryptocurrency market as a whole. Ether was completely unmoved for the week and XRP closed down 0.18%.

Indices – The S&P 500 was up 3.5% for the week as increased optimism surrounding the coronavirus and U.S. – China trade relations drove returns. These returns were largely driven by gains in energy and information technology, with WTI futures rebounding a stellar 25.1%.

Commodities – Gold was up slightly, again crossing the $1,700/oz mark. Silver, on the other hand, boasted an impressive 5.9% return.

Bonds – Treasury yields were more or less unmoved for the weekend, with the 10-year yield rising 5 bps for the week. Despite the rally in equity markets, fear continues to be the prevalent sentiment, and the market will be watching coronavirus figures closely as the U.S. and countries in the EU begin to lift lockdown restrictions.

Billionaire Paul Tudor Jones: ‘My bet is it will be bitcoin’ as the best inflation hedge
Source: MarketWatch

“Billionaire investor Paul Tudor Jones made a prescient call on bullion in 2019; now he’s saying that bitcoin, the controversial digital currency, reminds him of gold in the 1970s, and may be the best hedge against inflation in the age of coronavirus. The famed hedge-fund investor, writing in a recent research note, cited unprecedented money-printing and stimulus measures by the Federal Reserve and the U.S. government amid the COVID-19 pandemic as key reasons behind his newfound appetite for the world’s most prominent cryptocurrency.”

Bitcoin mining markets heat up: Ebang’s $41M deficit, Bitmain’s alleged 2020 revenue
Source: Bitcoin.com

“Bitcoin mining is feverishly hot these days, especially just before the great Bitcoin reward halving that will take place on or around May 12, 2020. During the last six months, there’s only a handful of ASIC mining rig manufacturers and all of them stem from China. This includes companies like Bitmain, Ebang, Strongu, Innosilicon, Microbt, and Canaan. There are a few other manufacturers, but the firms are not nearly as sizable as these six businesses. Just recently, the company Ebang filed for a $100 million initial public offering (IPO) in the U.S. and the company will await a decision from the SEC. Although, the firm’s prospectus shows that Ebang suffered from some losses in 2019, and it may reflect the IPO’s initial raise.”

Bitcoin miners sell BTC months after halving, on-chain data suggests
Source: CoinTelegraph

“Bitcoin’s third halving is less than a day away and the cryptocurrency community remains divided on whether the price will rise or drop after the event. Interestingly, on-chain data from previous halvings suggests that after the halving Bitcoin price may not see an immediate drop. Google Trends data shows that searches for the halving have already surpassed previous all-time highs, and the crypto community has been issuing a variety of price estimates for the post halving price.

ExtStock is a cryptocurrency exchange based in the U.K. founded in 2018. The company boasts over 20,000 traders and claims that its API can process up to 1,000 applications per second, making it a useful platform for high-frequency traders and scalpers. XT is ExtStock’s proprietary cryptocurrency that fuels the exchange. It’s an ERC-20 token whose main use is to pay for trading commissions on ExtStock. ExtStock also pays 100XT for every trader that registers through a referral link after passing KYC verification.

XT went through the first stage of its IEO on January 15, where it sold 100 million XT tokens in less than a minute. The token went through the second stage of its IEO in March, although they were unable to offload all of its tokens (92% of tokens offered were sold). The company claims that this was caused by a sharp collapse of quotes. A third and final stage is in the works, although for the time being, it has been postponed indefinitely.

Despite the success of its token, the company suffers from several allegations of fraudulent activity. No record of a founder can be found on its website, nor can any employees be traced on LinkedIn. Lisk reported in a tweet that several of its users had issues withdrawing funds from the exchange and cautioned users to be cautious. ExtStock has also been accused of inflating volume by quoting a higher price on BTC to induce transfers from users. In May, Cointelligence reviewed the exchange and rated it a scam.

XT currently trades at $0.27 with a market cap of $164.9 million. Please note that these token highlights are not a recommendation. We highly encourage readers to engage in their own due diligence before purchasing tokens.

Top Gainers


Top Losers


Cryptocurrency Weekly Market Performance

Indices and Commodities

The Security Trilemma and the Future of Bitcoin
Source: CoinDesk

“The imminent halving of the “block subsidy” exposes a fundamental threat to Bitcoin. Whenever a new block is added to the blockchain, a quantum of new bitcoins is created and paid to the miner adding the block. As miners compete for this subsidy, they drive up the system’s difficulty, making it harder for so-called 51% attacks to succeed. But the subsidy is set to diminish over time, halving very soon to 6.25 bitcoins per block, so that the total supply of coins will eventually reach 21 million. And as the subsidy shrinks, Bitcoin could fall victim to 51% attacks, just as smaller cryptocurrencies already have.”

Technical Review and Market Summary

Indicators are pointing towards a bearish continuation this week. During last week’s Technical Review, we forecasted that indicators were pointing towards a bearish reversal and cautioned traders to watch for when BTC’s RSI crossed below 70. On Saturday, RSI finally crossed, triggering our prediction. Optimism surrounding the halving was clearly short-lived, as traders pushed BTC down from 9.5K to almost 8K in the span of a single day. Now that Bitcoin is in freefall, we predict that it’ll be a while before BTC finds support. In the meantime, we are bearish and will be sitting on the sidelines until a more positive signal starts to emerge.

Finally, a week of sustained gains in the non-crypto markets! Last week we said it was comfortable to see traders adjusting to operating in a COVID-19 world. Now, after last week’s market performance, I think they might be getting more than comfortable. However, the bearish sentiment towards Bitcoin, even in the midst of the halvening is troubling. Is the market truly disinterested, or are retailers just slow to react? 

Make sure to check out our post-halvening analysis next week to find out!

Welcome back to GDA’s official industry newsletter. Today we’re going to be talking about the GDA ecosystem, but if you didn’t get the chance to read the latest edition of our financial-focused newsletter, The Digital Asset Digest, we encourage you to. You can also sign up to receive your own weekly market insights here.

Our goal as North America’s first blockchain-focused merchant bank is to provide projects with the financial, technical and strategic resources they need to address real-world problems through blockchain, and ultimately bring their tech to the market at scale. 

To do this, we have been expanding the GDA ecosystem by consistently adding to our partnership network. This gives us a full suite of technical and financial capabilities across all key geographies. This week we will be summarizing all of these key partnerships and explaining how we plan to leverage these relationships as we move into the month of May.

In this era of misinformation, some of our client’s most critical needs are reliable media channels. Scarce media regulation has caused a lot of for-profit entities to jump into the crypto space, completely disregarding factual reporting and journalistic integrity.

Originally GDA planned to circumvent this by cultivating strong relationships with ethical publications. However, it organically blossomed into so much more. With the singular goal of bringing objectivity to crypto, Timestamp Magazine was born. As an online-only publication, Timestamp Magazine is a blockchain-agnostic magazine that reports on all blockchains and decentralized projects.

Timestamp in no way receives any direction or oversight from the rest of GDA, it operates as a completely separate entity. What Timestamp provides GDA, is the same thing it provides every other company in the industry; peace of mind. From now on, GDA no longer needs to spend hours on discovery and due diligence on new media partners. We are now working with the industry’s most reliable publication.

If you are interested in exploring any media opportunities with Timestamp Magazine, kindly reach out to the editor here.

In early May, GDA and Accubits Technologies launched a joint venture. Accubits is a blockchain and artificial intelligence systems integration firm, specializing in enterprise and large-scale businesses. Based in the United States, this joint venture greatly expedites the speed at which Accutbits can bring their technology to new markets such as Canada and Europe. Moreover, this joint venture creates a phenomenal opportunity for GDA clients to get access to some of the industry’s best integration services.

If you have a decentralized application or blockchain project that needs third-party expertise, let’s get in touch here.

Back in April, we announced a partnership with MarkChain. A France-based marketing firm focusing on blockchain and decentralized application projects in Europe. 

The partnership creates natural synergies as each firm can tap into each other’s investor network and expand their respective operating regions. With the combined capabilities, GDA can provide a global umbrella of marketing, capital markets, and product development services.

If you are interested in how we can help your project from the ground up, let’s get in touch here.

gda ecosystem

Last, and arguably the most exciting announcement was last week’s partnership with DigitalBits (XBD)

DigitalBits is a protocol layer blockchain built to support consumer digital assets, specifically branded currencies. As technology continues to innovate the way brands interact with users, GDA thinks it is critical that blockchain is at the forefront of this disruption.

Considered the 2nd generation of stablecoins, XBD’s branded currencies create a new form of engagement between brands and consumers, improving market intelligence, allowing companies to create more targeted marketing campaigns and develop stronger insights into consumer needs.

We are particularly proud to circle back to this announcement because DigitalBits has just secured funding from Alpha Sigma Capital (ASC) to help increase the institutional adoption of branded cryptocurrencies, a huge milestone on their strategic roadmap.

Concluding Remarks

Although COVID-19 has been a tumultuous time for everyone around the world, we have taken this time to buckle down and work on our business. We now boast the internal capabilities, and external relationships to work with founders from any part of the world to help them realize their decentralized dreams. 

If you or anyone you know is ready to take their project to that next level, let’s get in touch.

Market assessment as we move into May

Welcome back to the fifth edition of ‘The Digital Asset Digest’. Last week, we provided our network with an exclusive halvening analysis, ensuring all of our readers have the information they need to make educated decisions about the upcoming halvening and how it relates to their portfolio. As we jump into a new month, our focus today will be to provide a complete market assessment and look into how various asset classes have performed over the past few months. 

Digital Assets – Bitcoin closed at $8,800 Friday morning, surging 17.6% for the week and reaching a two-month high after a month of consolidation. Much of the week’s gains were driven by a steep rally Wednesday where the coin rose 12.7%. Ether trailed slightly, posting gains of 13.0% while XRP rose 11.8% over the same period.

Indices – The S&P 500 closed down 0.21% for the week following the biggest monthly gain in more than 30 years in April, driven by tech earnings and the reemergence of trade tensions between the US and China. This is somewhat contrasted by the S&P/TSX Composite, who managed to scrape by with a 1.4% return over the same period.

Commodities – WTI crude jumped 16.8% in one of its most volatile periods in history as the recent agreement between major oil producers to cut production officially came into play. Gold fell slightly as investors sold risk-off assets to catch the rally in the equity markets.


GDA joins DigitalBits Ecosystem to bring Branded Cryptocurrencies to Enterprise

Source: CoinSpeaker

“Global Digital Assets (GDA), the first merchant bank in North America with a specific focus on blockchain and digital assets, announced today that it will be joining the DigitalBits ecosystem to further enterprise adoption for branded cryptocurrencies. GDA, in collaboration with other ecosystem participants, will provide the infrastructure necessary for consumers, merchants, brands and payment providers to benefit from branded cryptocurrencies, inclusive of the emerging subcategory of branded stablecoins.

Argo Blockchain sees revenues soar 11x after mining 1,300 Bitcoin in 2019

Source: CoinDesk

“Argo Blockchain, a bitcoin mining firm listed on the London Stock Exchange, reported stellar 2019 earnings Wednesday. The company attributed its success to cutting off its consumer-facing arm and focusing on mining some 1,330 bitcoin (BTC) on the year. In its full-year results, Argo said 2019 revenue was up 11-fold from the year before, a dramatic spike from $948,000 to $10.7 million. Argo’s earnings before interest, tax, depreciation and amortization (EBITDA) came to $1.74 million, compared to a $4.56 million loss in 2018.”

China’s cyberspace regulators approve 224 blockchain ventures

Source: CoinTelegraph

“China’s Office of the Central Cyberspace Affairs Commission (OCCAC) has announced its third round of blockchain projects to receive approval from the country’s regulators. 224 distributed ledger technology (DLT) ventures have been added to the commission’s registry, which includes major tech firms Alibaba, Baidu and China Mobile. The news appears to have been broken by Twitter user ‘AliceolaCrypto’, who posted a screenshot of the OCCAC’s announcement on April 27. She wrote that of the 224 approved projects, approximately 40% hail from Beijing. Roughly one-quarter of projects will target the fintech sector.”

Older mining machines turn profitable again as Bitcoin rises ahead of halving

Source: CoinDesk

“With bitcoin’s price jumping to a two-month high above $9,000, even mining equipment thought obsolete is becoming profitable again, at least for a short time. According to the miner profitability index, tracked by mining pools PoolIn and F2Pool, older mining rigs, such as Bitmain’s AntMiner S9 or Canaan’s Avalon A851, can now generate a 10% to 20% gross margin at an average electricity cost of $0.05 per kilowatt-hour (kWh). For those that have adopted miner efficiency improvement methods, such as merging two S9s into one or lowering voltage to boost efficiency, gross margin could increase to as much as 30% to 40% at bitcoin’s current price.”

Ethereum 2.0 staking upgrade can trigger ETH price rally

Source: CoinTelegraph

“Ethereum 2.0 has dragged its feet. But when it does finally ship, it could provide the “largest economic shift in society” — or so it’s believed. The launch of ETH 2.0 is tentatively penned for July, transforming Ethereum from a no-frills proof-of-work protocol to a fully-fledged staking platform. After that, instead of competing against each other to solve puzzles, users who accrue the most wealth, or stake, will be in charge of validating transactions. It’s this fundamental development that some experts believe could catalyze a bull run for Ether (ETH).”

DigitalBits™ is an open-source project supporting the adoption of blockchain technology by enterprises. The technology (commonly known as branded cryptocurrencies) enable enterprises to tokenize assets on the decentralized DigitalBits blockchain; transfer & trade those tokenized assets on-chain; and enable fast payments & remittances.

Considered the 2nd generation of stablecoins, branded currencies create a new form of engagement between brands and consumers, improving market intelligence, allowing companies to create more targeted marketing campaigns and develop stronger insights into consumer needs. 

Forked from the Stellar Protocol in 2017, DigitalBits introduces key modifications to support brand and enterprise adoption and currently trades at $0.02 with a market capitalization of $7.8 million.

market assessment

Top Gainers

Top Losers

Cryptocurrency Weekly Performance

Indices & Commodities

market perspective

Opinion: A business crypto is dangerous and inevitable

Source: CryptoVantage

“It is only a matter of time before there exists a cryptocurrency that serves the interests of business. In early 2019, Facebook announced that it will be deploying a cryptocurrency called Libra. The mission statement of libra is to “Provide people everywhere access to safe and affordable financial services”. This is a noble goal, with 25% of the world living without reliable access to financial services. The problem though, is who has control over the financial system, and what sort of implications that has.”

Source: Trading View

Indicators on Bitcoin are signalling a bearish reversal over the upcoming week. In our Technical Review two weeks ago, we correctly forecasted that there was slight upwards potential as BTC traded between an ascending channel. Since the rally on Wednesday, BTC broke out and closed above the upper channel line. Along with the breakout, RSI closed above 70, indicating that BTC rallied too much too soon and that it may be overbought. Traders will be watching RSI closely given that the last time BTC crossed under 70 in February, the coin dropped 53%. We caution traders to trade diligently this week as the upcoming halving may skew the applicability of technical analysis.

It’s clear that COVID-19 is a long-term economic event. Its distress on the economy is clear, but markets can’t bleed forever. This week we saw some capital crawl back into the market and fight against the fear and uncertainty that plagued commodities and other key sectors in weeks past. Although we still have a long way to go, it is comfortable to see that traders and institutions alike are getting used to operating in a COVID-19-impacted economic environment. 

TORONTO, CANADA, May 1, 2020 — Global Digital Assets (GDA), the first merchant bank in North America to focus on blockchain and digital assets, announced today that it will be joining the DigitalBits ecosystem to further enterprise adoption for branded cryptocurrencies.  GDA, in collaboration with other ecosystem participants, will provide the infrastructure necessary for consumers, merchants, brands and payment providers to benefit from branded cryptocurrencies, inclusive of the emerging subcategory of branded stablecoins.  

GDA and its subsidiaries have worked with fortune 500 companies, such as Toronto Dominion Bank, governments in North America, the Caribbean, Africa and Asia, as well as some of the world’s largest digital ecosystems, such as TRX and the ONT networks.  Founded through the combination of MLG Blockchain and Secure Digital Markets, GDA bridges enterprise solutions with digital markets to accelerate the adoption of blockchain technology within mainstream society.  GDA will facilitate and support select enterprises focused on the generation and deployment of branded cryptocurrency solutions, inclusive of capital for the procurement of DigitalBits’ XDB tokens.    

Sharing a common vision with DigitalBits to introduce blockchain to the average user, GDA seeks to introduce the skew of branded cryptocurrencies to existing clients and enterprises alike, generating further support for the emerging asset category of branded stablecoins.      

“Brands and corporations may spur the next wave for banking the unbanked, and we believe that branded currencies may be the first glimpse of achieving this.” said Michael Gord, GDA CEO.  “With DigitalBits, we intend to bring this emerging asset category together with today’s digital banking solutions.”

Global Digital Assets

Global Digital Assets (GDA) is a global blockchain & digital assets focused merchant bank based in Toronto & New York City founded during the combination of MLG Blockchain and Secure Digital Markets. GDA offers a full-suite of services spanning from ventures and capital to markets and liquidity in order to provide end-to-end solutions to disruptive and cutting-edge blockchain projects. 

Global Digital Assets and its experienced management team has experience that spans the entire blockchain industry. This includes venture capital, capital markets, trading, blockchain technology, token development and issuance. Our team has played a significant role in taking dozens of tokens to market for clients around the world; having led million dollar marketing and activation campaigns, and completing over three billion dollars of private placement or OTC transactions. We have worked with a variety of firms ranging from family offices and HNWI, Fortune 100 enterprises, startups and global governments looking to accelerate their countries’ adoption of the blockchain.

DigitalBits

DigitalBits is a blockchain protocol and network layer designed for consumer digital assets, specifically branded currencies. DigitalBits is focused on supporting innovators with driving enterprise adoption of cryptocurrency and its use in enhancing the consumer experience and corporate social responsibility initiatives. For more information, please visit www.digitalbits.io.

The Halvening, What You NEED to Know

If you have been following our previous DAD issues or just regularly follow the crypto market, you’ve probably heard of “the halvening” and its supposed impact on the price of Bitcoin starting in May. This is a unique event that happens every four years, and barring extreme circumstances, Bitcoin’s halvening is scheduled to occur on May 11th-12th of this year. Today, we want to give an overview of the halvening and offer an evidence-based view of its impact on Bitcoin’s trading economics.

An unfortunate amount of online commentary centered around the halvening borders on lies, speculation and pure myth. Our goal in this edition of The Digital Asset Digest is to separate the facts from fiction, so you can make an educated decision in your own portfolio.

Before we jump into the halvening, we need to talk about mining. Mining is the process by which cryptocurrency transactions are anonymously verified, and new cryptocurrency enters circulation. Mining follows the verification protocol known as Proof-of-Work (POW).

Every day, hundreds of thousands of Bitcoin transactions are performed and broadcasted to the Bitcoin Network. These transactions are bundled together into what we call blocks. Bitcoin is effectively thousands of blocks linked together in a chain, which is where the term blockchain comes from.

For a block to be accepted by the rest of the network, each miner must submit a proof-of-work along with the block. To generate a proof-of-work, a miner must input the block’s contents into a hash function and generate a hash that is smaller than a target set by the network. Miners do this by adding a number to the block (called a nonce) that changes the block’s hash. Since miners are competing against each other to submit a proof-of-work and earn the block reward, they will spend substantial amounts of capital on equipment and electricity, so they can have a faster throughput and be the first to submit the proof-of-work. If/when a miner successfully accomplishes this, the miner announces it to the network, who verifies this by trying the nonce themselves. If the nonce is valid, the miner is rewarded with Bitcoin, which is how new Bitcoin is put into circulation.

The elegance of the proof-of-work protocol speaks to the elegance of bitcoin and decentralization. Proof-of-work creates a dollar value on the securitization of the network. To compromise a blockchain you need to control 51% of the miners hashing power. So, based on how much each miner spends on electricity and equipment to mine, you can determine what the dollar cost attached to their hashing power is. From this, you can calculate how much it would cost to control 51% of the network’s hashing power. For advanced networks such as Bitcoin though, this is a near-unimaginable sum.

An important figure with respect to mining is Bitcoin’s hash rate. In short, the hash rate measures how many hashes are being performed over a set period. The higher the hash rate, the higher the mining activity across the Bitcoin network. Currently, the standard unit for measuring hash rate is terahash per second, or TH/s. One terahash is equal to a billion hashes, so if the hash rate on a certain date is 20 TH/s, there are 20 billion hashes being performed on the Bitcoin network every second. As expected, given the lower reward for mining, the hash rate tumbles as miners’ incentives drop. As such, there is a direct correlation between the hash rate and price and the hash rate is often used as a key indicator for market performance.

What does any of this have to do with the halvening? When we talk about the halvening, we really mean that the number of Bitcoins a miner receives for submitting a proof-of-work is going to be halved. Bitcoin was designed so that a halvening would occur every 210,000 blocks. Since a block is mined approximately every 10 minutes, a halvening should occur every four years. The halvening this May will be the third halvening in Bitcoin’s history. Currently, miners are rewarded 12.5 BTC for successfully mining a block. Post-halvening, this reward will drop to 6.25 BTC.

The reason for instituting a halvening mechanism is to limit the total number of circulating Bitcoins, creating artificial limits on supply, and preventing miners from owning a disproportionate percentage of all Bitcoins. As you may be aware, Bitcoin’s supply is capped at 21 million, and as of today, over 18.3 million Bitcoins have already been mined. This means more than 87% of all Bitcoins have been mined into existence. With over 620,000 blocks mined, had there been no halvening mechanism in place, we would have surpassed Bitcoin’s supply cap by 10 million.

The impact of Bitcoin’s halvening this May is highly contentious. We have two prior halvening’s to analyze, but the crypto landscape has changed significantly over the last four years and it’s debatable whether we should expect the same to occur this time around.

The traditional argument is that Bitcoin’s price should rise as the halvening approaches. Proponents of this argue that while the demand for Bitcoin remains the same, the incoming supply will shrink, boosting Bitcoin’s price. They point to rallies before previous halvening’s as evidence of this.

“Imperium Investments is a Private equity fund focused on monetizing energy. We use Bitcoin, via one of the largest mining operations in North America, as the arbitrage vehicle to convert energy to cash. We maximize results by being the lowest cost Bitcoin producer. We achieve this through our expertise in international capital markets, financial products, and large scale industrial operational excellence. 

Imperium Investments believes Bitcoin miner capitulation is likely to occur given the current macroeconomic backdrop (COVID-19). We believe it is unlikely that retail investors prop up Bitcoin’s price, in the form of speculation, as free cash flow is contracting for the global consumer. The majority of the middle class no longer has the ability to put more money to work in the form of financial investments and this free cash flow is being used to pay monthly expenses. Instead, the driver for future Bitcoin price increases will be from real supply-side shock both from the guaranteed 50% decrease in block rewards as a result of the halvening (12.5 to 6.25 Bitcoin per block), as well as the intentional decision of industrial-scale miners with strong cash balance sheet positions not to sell. 

Imperium Investments believes there will be a multi-month capitulation effect that will come into play post-halving as the majority of Bitcoin mining businesses are forced to liquidate their holdings to weather the storm of depressed prices. Therefore It is the opinion of Imperium Investments that there is a high likelihood of bankruptcies and consolidation to occur across the global landscape of Bitcoin mining. However, after this large consolidation event occurs our team believes that we will be seeing Bitcoin reach all-time highs 6-18 months after the end of the capitulation event. This will result in significant opportunities for well-positioned mining firms to capitalize on in the form of distressed asset purchases.”

halvening

The sheer existence of the halvening will undoubtedly have a psychological impact on the market. The irreversible decrease in block-rewards has attracted corporate and retail entities to Bitcoin, and we expect those adoption trends to continue in the wake of the third halvening.

Moreover, the halvening is an event that creates a lot of attention around bitcoin. No matter the spin, this is a positive for the asset. Like in any industry, promotional/marketing activities are key for growth so the more focus the news-cycle puts on the halvening, the larger the audience and the greater the chance someone will hear about bitcoin and decentralization for the first time, so we view the upcoming halvening as an excellent growth opportunity for Bitcoin. 

We expect this year to be no different, forecasting that hash rates will tumble post-halvening. However, we expect the 2020 halvening to be notable as the mining landscape has become increasingly competitive. Hobbyist miners have long been pushed out and large-scale operations have had mixed results due to Bitcoin’s volatile performance over the last year. At current levels, transaction fees make it difficult for miners to scale their operations and compete with the larger firms, so post halvening we expect the consolidation of the mining industry to continue.

There are some experts that think  the market has already accounted for retail excitement and that this anticipated influx in trading volume is already priced into current figures.

All this being said, we are still bullish on Bitcoin as the halvening approaches, albeit cautiously and with a skeptical eye. We expect increased volatility similar to prior halvening’s and warn against letting fear dictate trading decisions. Since the halvening is a catalyst for Bitcoin alone as opposed to the broader cryptocurrency market, we expect Bitcoin’s dominance in the market to improve (as of today, BTC accounts for 64% according to CoinMarketCap).

For investors with a higher tolerance for volatility, increasing exposure to Bitcoin over the next few weeks is a sensible manoeuvre in our view. However, with the crypto markets ubiquity and accessibility, bull & bear runs happen quickly. Therefore, we encourage readers to find a reliable liquidity on-ramp ahead of the halvening.

With just under 2-weeks left until the halvening, GDA will be focusing its resources on analyzing the market to make sure our readers are as well-positioned as they can be. Make sure to tune in next week and to follow our twitter to stay updated on all halvening news and analysis!

Welcome to Volume #3 of The Digital Asset Digest. The last two weeks have been a whirlwind for crypto and if you did not get a chance to read last week’s edition of the Digital Asset Digest feel free to get caught up here.

This week both the fiat and digital asset markets underwent extremely volatile trading periods, hopefully creating some lucrative opportunities in the market which we address below: 

MARKET SUMMARY

Digital AssetsBitcoin closed at $7,110 on Friday, seeing low levels of activity as it continued its consolidation within the $6,500 to $7,500 range for the third week in a row. Ether saw comparatively higher levels of growth, closing up 8.4% for the week at $172. XRP trailed Bitcoin, ending up 1.3% over the same period.

Commodities – WTI crude closed at a staggering -$13.10 on Monday. On the heels of OPEC’s announcement that demand for crude will fall to its lowest level since 1989, coupled with the lack of storage cause from this demand drop-off, the market spoke volumes about current consumer sentiment. In other commodities news, Gold rallied earlier in the week before selling-off on Friday, closing down 1.2%.

Indices – The S&P 500 continued its rally this past week, rising 3.0% for the week as President Trump unveiled a three-stage process for states to end the coronavirus shutdown. Conversely, U.S. jobless claims rose to over 22 million for the month and China’s Q1 GDP contracted 6.8%, the first decline since the country began publishing quarterly data in 1992.

NEWS OF THE WEEK

Binance Chain releases white paper for a smart contract-enabled blockchain
Source: CoinTelegraph
“Binance Chain developers have proposed specifications for a new blockchain that would enable complex smart contract functionality within the Binance Coin (BNB) ecosystem. The specifications are available in its white paper, released on April 17… The Smart Chain will thus allow projects in the Binance ecosystem to build complex DApps based on Ethereum’s Virtual Machine. The team said that this was an often requested feature from projects in its ecosystem.”

Facebook-backed association revamps Libra following regulatory concerns
Source: TechCrunch
“The Libra Association, the consortium created by Facebook to oversee all things Libra, has updated its white paper to make some changes. The association is abandoning its original plan to create a global stablecoin directly tied to a basket of fiat currencies and securities. The Libra Association now plans to release several stablecoins — each of them will be backed by a fiat currency, such as USD, EUR, GBP or SGD. There will be a multi-currency Libra “coin,” but it won’t be a cryptocurrency per se — it’ll be a digital composite of those single-currency stablecoins.”

Grayscale now holds 1.7% of Bitcoin supply after record $500M quarter
Source: CoinTelegraph
“Almost 2% of the world’s Bitcoin (BTC) supply is now under the control of a single company: Grayscale and its Bitcoin Trust (GBTC). In its latest quarterly report on April 16, Grayscale revealed that GBTC now contains 1.7% of the circulating supply of Bitcoin. In terms of assets under management as a proportion of the total cryptocurrency market cap, Grayscale controls 1.2% of the world’s crypto… Overall, Grayscale’s ten crypto funds attracted over $500 million in investments, making it its best quarter on record.”

TOKEN HIGHLIGHT:
ENIGMA (ENG)

Enigma is a decentralized, open-source protocol specializing in privacy for DApp development. Smart contracts on traditional blockchains are public and cannot use data that must remain confidential. Enigma circumvents this issue by introducing the concept of a secret contract. The Enigma protocol does this by breaking up encrypted sensitive data and distributing it across “secret nodes” on the network. This way, nodes perform computations on seemingly random pieces of data, but never the data in its entirety, so the raw data is never exposed.

The concept behind Enigma was first described in 2015 by CEO Guy Zyskind’s MIT thesis. The firm has an ongoing R&D partnership with Intel to improve privacy preserving computation technologies using Intel SGX (Software Guard Extensions). As of today, ENG trades for $0.16 with a market capitalization of $11.7 million.

MARKET MOVERS

TOP GAINERS

TOP LOSERS

Source: CoinMarketCap
*Only includes top 100 cryptocurrencies

BITCOIN ANNUAL PERFORMANCE

Source: CoinMarketCap

CRYPTOCURRENCY PRICES

Source: CoinMarketCap

INDICES & COMMODITIES

digital asset digest
Source: S&P CapitalIQ

WEEKEND READING: OPINION

First mover: Coronavirus trillions get Bitcoiners wondering if halving still matters
Source: CoinDesk
“Before the coronavirus hit, bitcoiners were looking forward to next month’s “halving” – a once-every-four-years reduction in new supplies of the cryptocurrency – as the primary factor that would drive prices higher, potentially even a 13-fold increase from current levels. Since the coronavirus pandemic hit, however, the market’s focus has shifted instead to the trillions of dollars of emergency aid and money injections pledged by the world’s governments and central banks. Those are seen as enhancing bitcoin’s appeal as a hedge against inflation, similar to the traditional arguments for buying gold.”

TECHNICAL REVIEW

Indicators on Bitcoin are neutral for the upcoming week as the cryptocurrency continues to consolidate within the $6,500 to $7,500 range. An ascending channel has clearly formed and as Bitcoin trades near the lower bound, this may be an indicator of some upwards potential. However, with the ADX near its low YTD, we find this trade uncompelling. A breakdown in the lower end of the channel may indicate a reversal and confirm our bearish sentiment from last week.

QUOTE

“The Web as I envisaged it, we have not seen it yet. The future is still so much bigger than the past.”
Tim Berners-Lee

The market seems to be going green, red and everywhere in between. What is happening across commodities borders on unprecedented. However, we have never been in a situation where a natural disaster has prevented mass amounts of people from being on the road for this long, so the sell-off was expected. Like everything else, once we start to see normalcy in our lives, so to will we see it on the balance sheets and trading dashboards.

Want us to cover a specific market or digital asset? Reach out to us here.

Welcome back to the second volume of ‘The Digital Asset Digest’, Global Digital Asset’s official market newsletter.

Last week we narrowed our focus onto COVID-19 and its impact on the equities and crypto markets. If you missed the release you can catch up here. This week, we will be broadening our scope and taking a glimpse into the crypto & equity markets at large. 

Market Summary

Digital AssetsBitcoin closed at $6,470 Friday, up 4.4% for the week after Congress passed a historic $2.2 trillion stimulus package to fight the devastating economic impacts of COVID-19. Ether was relatively unmoved, rising 0.90% while XRP closed up 12.3% over the same week.

Equities – The S&P 500 rose 12.1% last week, driven by gains in real estate, materials, and financials as new COVID-19 cases in the US and key European regions have seemed to level off. Treasury yields rose slightly in response. 

Commodities WTI Crude dropped 19.7% for the week as analysts debated whether Saudi Arabia and Russia’s deal to cut oil production would sufficiently offset the lack in demand caused by the coronavirus pandemic. Gold is up 6.5% as deflationary fears linger.

News of the Week

Bitcoin Cash halving met with 11% price surge; BSV follows with 19%

Source: CoinTelegraph

“Bitcoin Cash (BCH) went through with its first block reward halving this past Wednesday, with the coin price gaining 11.2% on the day. Those gains were exceeded by Bitcoin SV (BSV), which gained 19.4% over the same period. Bitcoin SV scheduled its own block reward halving on Friday, April 10th, the excitement around this protocol change was most likely the catalyst for the coin’s price surge last week.

Both Bitcoin forks were the only cryptocurrencies in the green as the market came to a close this past week. However, those gains look to be short-lived, as the market is already trading a few points below Friday’s price.

Crypto trading volumes rise in India after the banking crisis, COVID-19 lockdown

Source: CoinDesk

“India, the world’s second-most populous country, is increasingly embracing cryptocurrencies amid domestic economic issues and the nationwide coronavirus-related lockdown. It started on March 4 when the country’s highest court quashed a Reserve Bank of India (RBI) order dated April 6, 2018, which prohibited banks from providing services to entities dealing with cryptocurrencies. Activity on exchanges immediately picked up… Crypto banking services platform Cashaa noted a spike of 800 percent in trading volumes in the 48 hours following the decision. “The platform also registered a volume of 600+ BTC in the first 24 hours,” said Cashaa CEO Kumar Gaurav.”

Cryptocurrency investors sue exchanges, issuers in New York

Source: Bloomberg

“A group of investors sued four cryptocurrency exchanges and seven issuers claiming they sold billions of dollars of unregistered digital tokens and other securities in violation of U.S. securities laws. The lawsuits name exchanges Binance, Bibox, BitMEX and KuCoin, and issuers Block.one, Tron, Bancor, Civic, Kybercoin, Quantstamp and Status, according to attorneys for the plaintiffs. The suits, filed late Friday in Manhattan federal court, seek to represent classes of cryptocurrency investors.”

China will ‘undoubtedly’ pursue digital Yuan, central bank says

Source: CoinDesk

“China’s central bank has sent one of its strongest signals yet of a commitment to creating a digital version of the yuan. “The People’s Bank of China (PBoC) will undoubtedly further its research and development of the national digital currency with enhanced top-down design,” the bank said in an April 4 notice. The notice is a summary of the 2020 National Currency Gold Silver and Security Work Video and Telephone Conference, convened on Friday by Yifei Fan, the central bank’s vice governor. One of the annual meeting’s goals was to lay out top priorities for the bank in this coming year.”

Token Highlight: Seele (Seeletech)

Seele is a token developed by SeeleTech that describes itself as blockchain 4.0, building on top of previous advances in Bitcoin, Ethereum, and the lightning network. The team’s priorities in building the token are scalability, security, and efficiency. To accomplish this, Seele developed a Matrix-Proof-of-Work consensus algorithm, which forces miners to solve for determinants of matrices constructed with hashes rather than the brute-force hashing methods used by Bitcoin. The algorithm is designed to prevent ASICs and GPUs from dominating the entire network.

Seele completed their ICO in April 2018. Two weeks ago, the team released its Seele Stem subchain beta 1.0, which enables unlimited groups of users to build their own blockchain and interact with the Steele mainnet. As of April 10, SEELE traded at $0.065 with a market capitalization of $45.6 million.

MARKET MOVERS

TOP GAINERS

TOP LOSERS

BITCOIN ANNUAL PERFORMANCE

Source: Yahoo Finance, CoinMarketCap

CRYPTOCURRENCY PRICES

Source: CoinMarketCap

INDICES & COMMODITIES

Source: S&P CapitalIQ

WEEKEND READING: OPINION

The pandemic couldn’t have provided a better environment for crypto

Source: CoinTelegraph

“Had anyone presented the current situation to a crypto enthusiast in December, they likely would have said that they couldn’t have imagined a scenario more conducive to crypto’s macro narrative. That scenario may not be all sunshine and rainbows, though… We may be witnessing a fundamental shift in legacy market sentiment — specifically, the cozy relationship between the government and corporations. The stimulus package revealed that corporations were woefully unprepared for any type of supply/demand shock and had abused low-interest loan rates to buy back their own shares.”

Technical Review

Source: TradingView

Indicators on Bitcoin are bearish heading into the new week after a month-long rally, as BTC broke below the 50-day EMA on Friday. Though RSI seems to signal that there’s still room to rally, MACD convergence paints a bleaker picture, along with weakening momentum signaled by a tumbling ADX. A new high for the month was established at the $7,500 mark, so if resistance is confirmed, this would be a strong indicator of a potential reversal.

QUOTE

“The chief value of money lies in the fact that one lives in a world in which it is overestimated.”

– H.L Mencken

Although the market sentiment is still somewhat bearish, the unprecedented levels of fear and uncertainty from previous weeks have subsided, and so too have the aggressive sell-offs. We hope that the continued perseverance we have seen on a global scale will continue as COVID-19’s economic uncertainty remains. 

We are excited to announce that GDA Capital and Accubits Technologies have formed a joint venture to expand Accubits operations in the United States and launch in Canada. 

Accubits Technologies is a full-service software provider, offering product development services to governments, start-ups, fortune 500 companies, and other commercial businesses. 

​The joint venture allows Accubits to launch a Canadian subsidiary, greatly accelerating the injection of IP, capital, products, and strategic partnerships into new territories.

This corporate structuring allows Accubits Canada to be owned entirely by GDA Capital and Accubits Technologies.

accubits

With GDA’s corporate offices in New York and Toronto, coupled with Accubits offices in Washington, UAE, India, Australia, Indonesia, Switzerland, Singapore, Hong Kong & Norway, this joint venture creates significantly more geographical coverage for both firms. 

CEO of Accubits Technologies Jithin VG commented on the joint venture by saying “Global Digital Assets’ expertise in venture capital, capital markets, trading, blockchain technology, token development, etc is remarkable and that makes me excited about this joint venture. I believe this new initiative will enable both Accubits as well as GDA to better tap into the Canadian market for Blockchain development services.”

A primary reason for choosing Accubits as our strategic development partner is that they are aligned with our corporate values. During this COVID-19 crisis, Accubits has launched the application Break the Chain, to provide governments with better technology to track the spread of the virusBreak the Chain is a blockchain-based tracking network for governments, hospitals and citizens to get access to real-time info on COVID-19 threats near them.

With digital identity cards, shared databases for healthcare & governments, and real-time alerts of people with COVID-19 moving in and out of their areas, the platform creates a complete digital footprint of the virus’s impact. If you know of a government or corporate entity that could benefit from this technology please contact us here.

Over the next few weeks, GDA will be working with Accubits to get their technology in front of governments, corporations and health care agencies to help flatten the curve and reduce the impact of the Coronavirus.

If you want to learn more about GDA’s JV with Accubits, or if you have a business opportunity that is aligned with GDA’s service offerings please reach out at info@gda.capital.

Welcome to The Digital Asset Digest, GDA’s official market newsletter! The Digital Asset Digest will be providing curated insights about the crypto and equities market, amongst other macroeconomic trends. While this newsletter will typically provide a holistic overview of the market, we wanted to narrow our focus today. Therefore, the first volume of The Digital Asset Digest will cover COVID-19, and the grip it currently has on the world’s socio-economic fabric.

With all of that being said, we would like to share some unique insights about COVID-19’s impact on the cryptocurrency markets and how we expect the industry to evolve during these tumultuous times. The sell-off in March was certainly aggressive, but there are a few positive identifiers worth addressing.

BITCOIN VS. COVID-19

Figure 1: Bitcoin YTD Performance

Source: CoinMarketCap

1. As the only true “free market” crypto should be praised, not criticized for its bear run.

Cryptocurrency, in the purest sense, is a ‘free market’; trading desks operate all over the world and stay open 24 hours a day, 7 days a week. Given this context, the sell-off could have been much worse.

Let’s contextualize the crypto markets’ performance by comparing it against conventional equities markets such as the S&P 500 index. Unlike crypto markets, equity trading can be halted by circuit breakers after intraday trading deficits of 7% or more. Even with these preventative measures, the S&P 500 was down 12.5% in March.

Figure 2: S&P 500 1-Month Performance*

Source: Yahoo Finance

*Annotations indicate days on which a circuit breaker was triggered

Comparatively, Bitcoin (BTC) the largest cryptocurrency by market capitalization was down [22%] over the same period. Although on the surface, this disparity is high, when considering crypto operates in an unregulated 24/7 market and equities trade in a highly regulated market with 8-hour trading periods, crypto’s sell-off could have been much worse.

Moreover, if we dive deeper, crypto actually has some positive performance metrics worth highlighting:

  • The sell-off is fuelled by what we at GDA are calling strategic necessity. Mining firms and other institutional entities in the crypto space receive a substantial amount of their revenue in cryptocurrency. But like any other business, they have overhead expenses (rent, salary, equipment) to pay in fiat. So this aggressive sell-off is the direct by-product of firms liquidating their crypto assets to protect their businesses as COVID-19 continues to sink its teeth into the world’s socio-economic treads. We know crypto’s institutional players have a fiduciary responsibility to their stakeholders to sell off their assets and protect their business. But what about on the retail side? Our analysts show that retailers’ long-term sentiment is actually quite bullish.
  • A recent study found that Coinbase users bought 67% more than they sold, which shows that the market sees this sell-off as overly reactive, and retailers are trying to increase their position.

Figure 3: Bitcoin vs. S&P 500 March Performance

Source: CoinMarketCap, Yahoo Finance

2. The argument that Bitcoin is no longer a ‘non-correlated’ asset is untrue.

Another conversational note our anaylsts have seen across headlines is that Bitcoin is no longer an uncorrelated asset. This is simply untrue.

Bitcoin and other altcoins have been in a bear trading period, just like the rest of the securities and equities markets. However, this is not indicative of crypto no longer being an uncorrelated asset or a hedge against traditional investments. Instead, crypto’s market performance is a product of one thing, fear. When traditional fear arises, there is only one asset that goes up, cash. When fear takes a grip on society, people lose interest in growing their portfolio and instead focus on purchasing essentials like food and water, which can only be done with cash. So the main catalyst for Bitcoin’s bear run is not because it is suddenly correlated to traditional equity markets. Rather, Bitcoin’s bear run is a product of people liquidating their non-cash assets because of rising levels of fear as people race to purchase essential goods.

In the graph below, analysts have plotted the 30-day rolling correlation between Bitcoin and the S&P 500. The correlation between Bitcoin and the overall equity market is clearly in a constant state of flux and our analysts are unconvinced that the sell-off in cryptocurrency and equity markets this month is indicative of their future relationship.

Figure 4: Bitcoin vs. S&P 500 30-Day Rolling Correlation

Source: Yahoo Finance

Although the socio-economic factors affecting the international economy are obvious, we have seen a more aggressive resistance by the market then what could have been expected. We can only hope that this is a sign of continued perseverance by the global economy against the uncertainty of COVID-19. 

At GDA we encourage everyone to be diligent and follow the market. Although the outlook is grim now, we anticipate some lucrative entry points in the near future.

Until then, practice social distancing, isolate whenever necessary, and stay safe.

Warm regards,

Global Digital Assets

Quote:

“The risk of a wrong decision is preferable to the terror of indecision.”

– Maimonides

This article was originally posted on BusinessWire and can be found here: https://www.businesswire.com/news/home/20200130005502/en/

TORONTO & NEW YORK — MLG Blockchain and Secure Digital Markets have reached a definitive agreement to launch their new joint venture, GDA Capital Corporation. This joint venture will be the blockchain industry’s leading capital markets business and combines businesses that have:

● Advised on more than two dozen digital asset launches for some of the largest blockchain networks in the world;
● Have advised on over $400M in capital raised;
● Brokered over $1B in digital asset transactions;
● Worked with Fortune 500 companies and government organizations in North America, Asia, Africa, Australia and the Caribbean;
● Brokered several M&A transactions and Reverse Takeovers with collective financings of over $100M
● A footprint of three offices around the globe and over 20 team members

Under the terms of the agreement, executives from MLG Blockchain and Secure Digital Markets will own 100% of GDA Capital Corporation, the capital markets business which will focus on digital asset offerings, mergers & acquisitions, capital formation and payments. MLG Blockchain will continue to focus on the ongoing enterprise activities the firm is doing involving consulting and development for large companies and governments to accelerate their blockchain roadmap. Secure Digital Markets will continue to focus on trading and liquidity.

MLG Blockchain and Secure Digital Markets will each distribute each other’s products and services and each organization will maintain a narrower area of focus to ensure the teams are executing at a world class level of performance. The firms will also benefit from the transaction by streamlining several shared expenses such as legal, finance and human resources.

Michael Gord, Founder & CEO of MLG Blockchain, said, “By bringing together MLG Blockchain and Secure Digital Markets’ strong revenue-producing businesses, we are creating a new industry-leading blockchain firm. GDA Capital will become the first choice for issuers and high-quality blockchain advisors by offering the broadest range of financial products and solutions in the blockchain industry, as well as the market intelligence and investment opportunities from both MLG Blockchain and Secure Digital Markets global networks. This joint venture is an important step forward in our mission to make blockchains and digital assets mainstream by building a group of blockchain companies with the resources to cater to the highest level of clients as we enter this next wave of blockchain adoption.”

Secure Digital Markets and MLG Blockchain will benefit from this joint venture by increasing the monetization potential from their capital markets business while continuing to benefit from both of their multi-year earnings streams as they streamline their organizational structure. The joint venture expands both firms’ access to global institutional asset management firms and capital partners which will, in turn, provide more access to financing opportunities and liquidity for clients.

Secure Digital Markets Co-Founder and GDA Capital Co-Founder & Executive Chairman, David Shafrir commented on the launch by saying:

“A rising tide lifts all boats, and we are wholly committed to injecting capital, technical tools and contributing strategic advice to founders that are pushing innovation in the industry forward. Michael, Joaquim and Zachary bring complementary insights and thought-leadership and share the same values and vision about GDA’s potential to expedite market adoption and facilitate liquidity on a global scale. By offering our clients a curated suite of financial services such as Tier-1 banking solutions, structured lending products, and secure custodial services we hope to usher in the new wave of institutional capital. With the launch of Global Digital Assets, we will also have the infrastructure to support founders & projects from ideation, to capital formation, project launch, and into secondary market liquidity and trading.”

HIGHLIGHTS

  1. The combined firm, to be called GDA Capital, will be comprised of executives from MLG Blockchain and Secure Digital Markets and will have more than 100 partners in 45 countries.
  2. New industry leader will offer issuers and investors an unmatched global platform with a global footprint in Toronto, New York City, Montreal & Barcelona
  3. Transaction will create significant value for both MLG Blockchain and Secure Digital Markets – with significant cost savings and additional revenue potential

About Global Digital Assets
Headquartered in Toronto, Canada, Global Digital Assets is a full-suite advisory firm with a focus on merchant banking services for the fintech market with a specialization in blockchain. GDA’s mission is to ignite the blockchain revolution by stimulating demand for digital asset offerings by originating and matching innovative companies with strategic capital partners to create global synergies.