Blockchain Bitcoin & Crypto Weekly CXO Briefing for week starting 29th January 2018

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The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why it is important and link to one expert opinion.

News Item 1: Stripe Ending Bitcoin Support.

Why did Stripe do this?

Official PR from Stripe: “Bitcoin has evolved to become better-suited to being an asset than being a means of exchange.”

Possible reasons not covered in PR. Stripe has an investment in an Altcoin called Stellar. Plus, if Bitcoin does become a means of exchange then it will cause disruption to the credit card model upon which Stripe depends.

Our take is that 2017 was the year that Bitcoin became an asset (one leg of the stool) and 2018 is the year of Lightning Network when the other leg (means of exchange) gets built onto the Bitcoin stool.

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News Item 2: Bitfinex Fails To Perform Promised Audits

On May 5th, 2017 Bitfinex announced that they were undergoing a ‘balance sheet audit’ by Friedman LLP.

Now it looks like the auditor is not wiling to confirm that they are doing an audit.

This matters because Bitfinex runs Tether, which is pegged to USD. Traders use Tether when they want to move from one cryptocurrency and don’t want to trade out via a Fiat currency incurring Fees and Tax liability, If Tether loses credibility, it could cause a systemic crisis of confidence.

Our take is the crisis will be short term and the Tether collapse (if it happens) will simply accelerate two trends:

  • P2P Decentralised exchanges.
  • Crypto tax reporting services; the tax benefit of going via Tether rather than real USD is a loophole that is relatively easily closed.

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News Item 3: Bitcoin Price In Trading Range

Correlation does not equal causation, but since CME introduced Bitcoin Futures the price has moved into a trading range. That range may seem wide by the standards of traditional assets, but this is what counts as low volatility in Bitcoin land. The logic behind the correlation theory is simple – shorting via Futures is a good price discovery method. The old story was that Bitcoin could be worth zero or could be worth $1m, nothing in between. The trading range indicates the market thinks there is a floor and a ceiling, even if there is no good logical explanation for a floor and a ceiling.

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Opinion: Is Robinhood Going To Challenge Coinbase?

There is one simple reason to say yes: the market traction of Robinhood brings a huge millennial customer base that is already inclined to like cryptocurrency.

There is one reason to say no:Robinhood like Coinbase is a centralised broker model, which has proved to fail so many times (most notably with Mt Gox) that the future seems to lie with decentralised P2P exchanges. That makes Robinhood vs Coinbase primarily a branding battle – which one do you trust more to keep your cryptocurrency safe? That leaves both open to attack by bank brands.

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Bernard Lunn is a Fintech deal-maker, author, adviser and thought-leader.

You can reach out directly to discuss our advisory services by sending an email to julia at dailyfintech dot com

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