MaiCoin Digital Asset Weekly, Nov 15


MaiCoin Digital Asset Weekly, Nov 15



Commentary

Digital Assets ended the week -2%. Trading slowed to a daily average of US$64B across the space -18% WoW. BTC -7% continued to lag this week — leading declines across major coins and thematic groupings. Selling in BTC and modest outperformance in select alt coins saw a pickup in USDT trading. Average Daily USDT Turnover in November is now tracking a record high of US$25B/day. Month to date volume also active in BTC, TRX, BNB and BCH.

Headlines this week were mixed. Top stories included: 1. Rumors that the Royal Bank of Canada could launch a crypto platform, 2. Tether discussing tokenizing physical gold, 3. Renewed reports that China could launch a digital currency in the next 2 to 3 months, 4. Facebook possibly taking a step back from Libra (with the launch of their new payment platform) and 5. Bakkt announcing both New York regulatory approval and a full roll out of its custodial solution.

After spending the week drifting lower on decreasing volatility, BTC looks to be setting up for another big move. That said, the direction of the near-term move is hard to call. We’re teetering on the edge of 50 day moving average support and sentiment feels negative, but historically performance in November has been strongly skewed to the upside with 4 of the previous 5 years being up months. The 5 year median November gain is +11.6%. That implies a November finish of around $10,200. Given we’re currently -5.5% from where October ended — we’ll need to see a strong month end finish for the normal seasonal pattern to stay intact.



Thoughts

China’s DCEP and ‘Unrestricted Warfare’

Interesting comments this week from Binance’s CEO at BlockShow Asia 2019.

CZ thinks China’s new digital currency — DCEP — is going to be a blockchain-based version of the RMB.

“The Chinese government wants to push RMB’s influence globally. They want RMB to be competitive with the US dollar. In order to do that they really need to push this currency to have more freedom.”

Could China issue a relatively unfettered blockchain based currency as part of a broader effort to chip away at US reserve currency status? It’s unconventional — but is also very much inline with the 1999 classic Unrestricted Warfare. Written by 2 PLA Officers the book argues that while China is unable to challenge the US in a direct conflict, it could be successful on other fronts: economic, legal and cyber.

What’s happening with ETH’s Dec 4 Istanbul HF?

As usual, it’s difficult to find a concise summary of what’s happening with the Istanbul hard fork. After discussing it with our engineering team, it looks like there are 3 major improvements expected:

1. Privacy: Improved by allowing atomic swaps and greater chain interoperability with privacy coin ZCash as well as by lowering the cost to implement zk-SNARKs (zero knowledge proof). This should help with scaling and with the implementation of privacy applications.

2. Security: Done by adjusting opcode prices which will help prevent attackers from launching DoS attacks. It will also reduce the threat of reentrancy attacks on smart contracts.

3. Functionality: Introduction of new functions for smart contracts — mostly Ethereum Virtual Machine support features (EVM is a protected sandbox for smart contract execution).



News

Charts

Chart 1. BTC Seasonality
- November is typically one of the best months of the year
- BTC has been up in Nov 4 of the past 5 years


Chart 2. Weekly performance, subsector


Chart 3. Major coin performance


Chart 4. Price vs Volume
- Almost everything buried in the bottom left — price and volume both down
- LINK, NEO, XTX, DASH and ETC the major outliers


Chart 5. Historical price performance
- BTC, LTC, BNB and TRX at historic highs for this point in November


Chart 6. Volume, top coins and tokens
- BTC and USDT dominating volume
- Accounting for ~ 70% of trading in major coins over the previous 5 days


Chart 7. BTC vs Alts
- BTC underperforming month to date as Alts relatively unchanged


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