Summary:
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Fidelity Investments develops trading platform for institutional investors
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BITCOIN moves closer to the previously broken upward trendline
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Tether a possible reason before yesterday’s morning surge on the cryptocurrency market
Cryptocurrency markets are much calmer than they were yesterday. Moreover, some more informations are available on the potential cause of the yesterday’s morning surge on the market. We will elaborate on this topic in the later part of this analysis. Elsewhere, the cryptocurrency market holds firm above the $211 billion mark with Bitcoin being responsible for around 54% of that.
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Bitcoin's share in the cryptocurrency market holds above 50%. Source: Macrobond, XTB Research
Fidelity Investments, one of the World’s biggest financial service providers, is taking a step into the cryptocurrency sphere. The company announced that it is developing trading platform for cryptocurrencies. The platform will be targeted at institutional investors. Apart from trading execution services customers of Fidelity will receive cryptocurrency custody as well as dedicated client service. The custody will be conducted via cold storage that will be additionally boosted by “multi-level physical and cyber controls”. Fidelity’s reputation as well as enhanced storing security are probably the biggest incentives offered to institutional investors as threat of cyber attacks and thefts was one of the major backstops making institutions stay reluctant towards investing in cryptocurrencies. At the launch the platform will cover Bitcoin, Ethereum as well as other coins not named in the press release. Fidelity Investments maintains around $7.2 trillion of its clients assets.
Bitcoin gave back some gains accounted in the yesterday’s morning surged but still trades above the levels since in the previous week. The coin has moved close to the previously broken uptrend line and may be eyeing a break higher. Source: xStation5
Stablecoins received increasing attention as of late. Digital currencies of this type are pegged to fiat currency what is a feature aimed at boosting their price stability. One of the earliest such coins was Tether, the cryptocurrency pegged to the US dollar at the ratio of 1:1. Having said that, it is highly unlikely that one will profit on speculating with this coin alone as deviation from the 1 USD price are unlikely to happen. Because of this characteristic stablecoins are used as effective means of exchange on the cryptocurrency exchanges. However, Tether case shows that it is not always so simple. As Tether was not backed by any government some concerns were raised that the company behind Tether may not have enough funds to cover USD-peg. Moreover, reports claiming that Tether has lost its partner bank exaggerated this concerns and led to the Tether sell-off. In turn Tether price fall to as low as $0.93. Because of that transactions in Tether became cheaper than in the USD what led to price appreciation on many exchanges offering only crypto-crypto transactions. This price appreciation was the surge we observed on yesterday morning.
Ethereum managed to bounce off the support zone ranging $186.6-188.6. The coin has been grinding higher after post-surge pullback and may be set to test the resistance zone ranging $206.1-209 in the near term. Source: xStation5
Even despite Tether announcement saying that all Tether coins are sufficiently backed by the US dollar holdings investors’ confidence was stretched. In turn it is likely that we will see funds flowing from Tether to other stablecoins that surfaced lately. These stablecoins, including Gemini Dollar, PAX or TrueUSD, are more transparent than Tether and are audited and regulated. Because of the aforementioned uncertainties surrounding Tether more exchanges are now listing other stablecoins and some are even removing Tether.
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