Summary:
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YoBit wants to pump random coins to attract investors
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Cryptocurrencies slump with equities proving that they are not efficient hedge against stock market turmoils
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India may consider launching state-backed cryptocurrency
Probably everyone heard crypto enthusiasts say that digital currencies are “new gold” or “safe haven assets” at least once. That view was put to test today and the outcome of this test paints a different picture. Just as stocks all around the globe plunged so did cryptocurrencies. The capitalization of the whole crypto market slumped 7% since yesterday wiping out as much as $15 billion. Among news covered today one can find unusual idea of one of the cryptocurrency exchanges as well as surprising shift in the Indian authorities towards digital assets.
YoBit exchange announces pumping of 10 random coins. Source: Twitter
YoBit is a cryptocurrency exchange popular among Russians as it offers trading with cryptocurrencies against not only the US dollar but also against the Russian ruble. It is one of many cryptocurrency exchanges and it seldom makes it to the top of news outlets outside Russia. However, sometimes all it takes to change it is one tweet. The company announced yesterday that it wants to make cryptocurrencies more attractive to investors. While this is a glorious goal when it comes to boosting price efficiency the way in which YoBit want to achieve it is questionable. Namely, the exchange announced that it will randomly select one coin and pump it with a single Bitcoin. With Bitcoin price of around $6200 at press time it may not seem to be a big deal but keep in mind that there are hundreds of cryptocurrencies, some with market cap as small as $1000. One can imagine what would be an impact on the price in case those particular coins were selected. The exchange aims to perform the operation 10 times spending a total of 10 Bitcoins. According to the timer on the exchange’s website the process will begin at 2:00 pm BST and one coin will be pumped each 1 or 2 minutes until the scheme is repeated 10 times.
BITCOIN joined the worldwide sell-off of the riskier assets and broke below the short term upward trendline. Price moved as low as $6000 but bulls managed to push the valuation higher from there. Nevertheless, this situation shows that Bitcoin is not a perfect hedge against stock market turmoil as some claim. Source: xStation5
At the early days of the cryptocurrency frenzy the Indian authorities, including the Reserve Bank of India (RBI), were ones of the biggest opponents of the digital assets. However, as it was later unveiled RBI conducted its own study of “fiat cryptocurrency” that could serve as an alternative to Indian rupee at the same time. The true U-turn came after report by Quartz, the news website, surfaced. Quartz citing unidentified Indian senior government official claims that the work group under the Indian finance ministry may recommend government issuing of the state-backed cryptocurrency. Apart from digital currency the work group is said to recommend lawmakers conducting research on potential use of blockchain technology. While state-backed coins are an interesting development the real hurdle lies in convincing citizens to use it.
ETHEREUM is one of the coins that took the biggest hit during today’s rout. Price plunged over 10% and left the recent consolidation ranging between 38.2% and 50% Fibo levels of the slump started in early September. The coin slumped to the vicinity of 23.6% Fibo level ($193) and managed to halt sell-off there. Source: xStation5
Last but not least, South Korean government will once again decide on the fate of ICOs within the country. After funding through ICOs was banned the Korean lawmakers will make another decision in November whether to re-allow it. The stance of the government will be based on the results of survey conducted by the Financial Services Commission, the country’s financial watchdog. The survey and investigation on the matter is scheduled to finish by the end of October.
