Cryptocurrency Newsletter November 28th, 2018
Despite a tough week in the markets, there was some uplifting cryptocurrency news about taxes, Nasdaq, and Starbucks.
Ohio businesses can now visit OhioCrypto.com to pay their taxes using Bitcoin. Through OhioCrypto.com businesses will use Bitpay, a payment processor, to convert Bitcoin into dollars to be payable for taxes.
Takeaway: The Bitcoins would be converted into dollars so the government is not directly accepting Bitcoin. However, Ohio’s “tacit approval” of Bitcoin as referred to in the article, shows how Bitcoin is growing as a legitimate currency in the eyes of the public and certain government officials.
Nasdaq is planning to launch a Bitcoin futures market in Q1 2019.
Takeaway: Now the Intercontinental Exchange (Bakkt) plan on launching a Bitcoin futures market in the Q1 2019. It is hard to say what the impact of those trading markets will be and if Nasdaq will have an additional impact after Bakkt’s release. Nasdaq has a more recognizable brand name than “Bakkt” so BlockWolf expects to hear some hype about Nasdaq’s futures near their release. The pitfall of the futures contracts is that they do not trade actual Bitcoin, so it is possible the new trading platforms will not affect adoption. However, if the futures markets for Bakkt and Nasdaq go well, the SEC and CFTC may act more favorably toward Bitcoin and other cryptocurrencies in the future.
Bakkt CEO, Kelly Loeffler, said that Bakkt is working with Starbucks to give its customers more option in their ability to pay, specifically with Bitcoin.
Takeaway: Loeffler’s statement is vague. BlockWolf’s take on the matter is that Starbucks will not use Bitcoin’s network anytime soon. If Starbucks were to accept Bitcoin, it would be some sort of transferring within a database of a third party, like Bakkt. For instance, perhaps Starbucks and customers could have a wallet monitored by Bakkt and Bakkt could transfer BTC from one account to another without dealing with the Bitcoin blockchain nor miners.
If such a system were to be established there would be an interesting dichotomy in the cryptocurrency community. On one hand, there would be increased adoption for “Bitcoin” usage and it would be exciting to use Bitcoin to buy coffee, but on the other hand, a central party would be controlling transactions, which some would argue defeats the whole purpose of Bitcoin in the first place.
It would be very hard for Starbucks to adopt the traditional use of Bitcoin in its current form. Transactions simply take too long and cost too much to reasonably used to buy coffee with. Additionally, Starbucks would have to educate its employees about how Bitcoin works, which would be expensive. Another faster and feeless cryptocurrency like Nano for example would make more sense.
Some ICOs are selling massive amounts of Ether.
Takeaway: The entire point of an ICO is to raise money and to eventually sell/make payments with Ether so this should not come as a surprise, but massive selloffs can be alarming. Tough markets force a lot of pressure on smaller projects. Projects that raised money with an ICO that did not manage it properly may cease operations if they do not have sustainable finances. If you are worried about a cryptocurrency project that you invested in, you may want to reach out to their staff and see how their financial plan is going. BlockWolf expects some smaller projects to no longer have the funds for payroll and may have to close shop.