Crypto Market Forecast: 13th October

The crypto asset markets enjoyed a welcome price bounce last week, effortlessly shrugging off two bearish news events. Market benchmark BTC rose ~4% over the last 7 days, while the number 2 and 3 crypto assets on Brave New Coin’s market cap table, ETH and XRP, rose 6% and 8% respectively. The total crypto market cap rose ~5% over the last week.

The markets were able to sustain these gains despite an announcement by the SEC on Friday that it had filed an emergency action and temporary restraining order against two offshore entities conducting an ‘ongoing and unregistered’ digital token sale associated with the Telegram Open Network (TON) and the Gram token. Telegram’s Gram token event has so far raised US$1.7 billion, with a quarter of that amount, approximately $424.5 million, raised through investors inside the USA.

The TON/Gram private sale is one of the largest token raises in history. The Telegram group had previously announced plans to launch its main network and enable token utility on October 31st. This date is now in jeopardy. The Gram token sale was initially open to Accredited Investors only under a SAFT agreement. However, because investors were able to resell tokens on secondary marketplaces, the tokens violated 506(c) exemption they applied for in 2018, and therefore the SEC views the tokens as non-exempt securities. The Gram sale was also charged under a Rule 506(b) exemption violation, for false marketing of a security to non-sophisticated and non-accredited investors.

The size of Telegram’s potential liabilities has created concerns around whether Gram tokens will ever achieve utility, or if the development of its blockchain network can even continue. This has left the sizable pool of Gram token holders in a position where their tokens may never activate because of legal pressure and costs associated with the SEC actions.

In more bearish news over the weekend – Mastercard, Ebay, Stripe, and Visa have followed Paypal’s lead and pulled out of the Libra consortium. Heightened pressure from regulatory bodies that have adopted an adversarial stance to Libra is the key reason for the series of withdrawals. With U.S. regulators making it clear they won’t stand by and allow a private company (whether Facebook or Telegram) to launch a new currency outside of U.S. influence, the odds of either project launching as planned are fading by the day.

The market resilience and a lack of sell pressure despite the bearish Libra and Telegram news suggests that the potential collapse of the two projects may have already been priced in. Facebook and Telegram are high profile successful brands with large user bases, however, it was clear to many in the market that they would face a string of legal and operational challenges before launch.

Upcoming events in crypto markets

15th-17th October- The Next Web Hard Fork Summit (London)

Leading players in the European blockchain technology space gather in London this week to discuss infrastructure, security tokens, and regulation. Speakers include Wikipedia co-founder Larry Sanger, and Michael Colletta, the Head of Blockchain Technology and Strategy at the London Stock Exchange Group. Announcements at the recently concluded Osaka Devcon were potential drivers of ETH’s recent price pickup. Traders will hope for similar bullish sentiment emerging from Hard Fork.

16th October- QTUM 2.0 hard fork

One of the biggest altcoin winners of 2017’s bull run, QTUM, launches a 2.0 version of its blockchain this Wednesday. Much of the QTUM 2.0 upgrade revolves around improving the functionality of smart contracts within the ecosystem, by giving them more functionality and making them cheaper. The price of QTUM tokens has risen ~7% over the last week in anticipation of the sale.

It was a predominantly green week for most large-cap crypto assets, with most assets in the top 10 enjoying steady gains. Binance-Coin (BNB) was one of the week’s big gainers rising nearly 20%. Markets were buoyed by the news that Binance is set to launch a peer-to-peer fiat-to-crypto service targeted at traders in mainland China.

The Bitcoin markets were again able to strongly defend the $8000 price level this week, with prices at one point hitting the $8500 price level on the BLX, before eventually settling around the $8300 level as the week closed. BTC/USD markets had a somewhat bearish weekly close because of the price drops on Sunday, pushing some market analysts to urge caution for the week ahead.