Cryptocurrency Newsletter October 17th, 2018
In this weekly cryptocurrency news update, we discuss stories about Fidelity adding services for institutional investors, Bitfinex freezing deposits, Coinbase adding ZRX, and Tron’s new partnership.
Bitfinex unexpectedly froze deposits and stated that the freeze would last a week. This caused a craze within the cryptocurrency community in fears that Bitfinex was insolvent and that Tether would be exposed as a coin without a true 1:1 USD reserve. The price of Tether dropped to $.92 despite its supposed pegged valuation at $1.00. Tether was sold to buy Bitcoin and other cryptocurrencies, which led the price of Bitcoin to increase.
Takeaway: There is reasonable doubt that Tether does not have a 1:1 USD reserve but Bitfinex freezing deposits does not mean that Tether does not have a proper reserve nor does it mean that Bitfinex is insolvent. BlockWolf is not jumping to conclusions about Bitfinex nor Tether but we believe the best practice is to not hold Tether for extended periods of time and to not hold cryptocurrencies on exchanges for an extended period of time. The risk/reward is simply not there. We are excited for new stable coins that are not bogged down by mere rumors.
Fidelity will open up services for institutional cryptocurrency investors in early 2019. The services will include custody solutions as well as trading solutions. Fidelity manages $7.2 trillion in customer assets.
Takeaway: Fidelity is the 5th largest asset manager in the world. Its cryptocurrency trading and custodial solutions will open the doors for big investors to come into the space. Additionally, it will encourage other major asset managers to enter the space if they see that Fidelity is earning high profits from their cryptocurrency services. BlockWolf sees Fidelity entering the market as very bullish news.
Coinbase added ZRX, the first ERC-20 token to its trading platform.
Takeaway: Coinbase is the premier cryptocurrency exchange. It is great news for ZRX and for the industry as a whole because it should lead to more exposure for altcoins. It is also a good sign for currencies like BAT, which may have a good chance of getting listed on Coinbase in the future.
Justin Sun tweeted “Finally, first time partner with tens of billions USD valuation industry giant.” On October 12th. On October 16th, CoinTelegraph reported that the partnership focuses on the use of Baidu’s basic cloud computing resources, rather than being a connection with blockchain.
Takeaway: “Partnerships” can be a bit misleading. Tron is using Baidu’s product, but does that qualify as a partnership? It is tough to say. When researching cryptocurrencies, try to find the details surrounding partnerships instead of just identifying who the participating partners are.