Crypto Market Forecast: 16th December

The crypto markets continued to pull back this week, with market benchmark Bitcoin (BTC) now hovering near the ~US$7000 price level. The price of BTC fell ~6% across the week while the number two and three crypto assets on Brave New Coin’s market cap table, ETH and XRP, fell 5% each. The overall crypto market cap slid ~5%.

The market to offer services to institutional crypto traders is increasingly competitive and this week prime brokerage software startup Tagomi announced plans to cut its fees to less than 0.1% per trade. The new rates are available on trades over $10,000 and are up to 70% less than those offered by exchanges such as Coinbase and Gemini. Tagomi has raised US$27.5 million to fund its solution. Tagomi’s business model compensates for the lower trading fees by upselling prime brokerage features like large scale crypto lending and borrowing services.

One of last week’s most bizarre news stories was the announcement of a US$146 million ICO by Russia’s largest darknet marketplace, Hydra. Participating in the sale is almost certainly illegal, not just because it is an unregulated ICO but also because of the nature of the Hydra platform. Hydra works using couriers, who drop off illicit goods at concealed public spaces where clients can pick them up. This means buyers, sellers, and couriers never end up coming face to face. Hydra claims that thousands of deals are made every day on the platform involving illicit substances such as cocaine and cannabis, through to fake passports, and even access to protected government databases.

The Hydra investment memorandum states that the funds will help “start a new era in the West. The scale of expansion is hard to imagine.” Reports by Russian investigative researchers The Project suggests that the website has a user base of 2.5 million, with over 390,000 making at least one purchase.

Hydra’s plans for global expansion are dubious at best, and investors are advised to steer well away from the project despite the size of the raise and active usage of the platform. Many in Russia also claim that the sale is likely an exit scam or attempted cash grab by the Hydra creators.

This week in crypto events

19th December- Fetch.ai Mainnet Launch

On Thursday the Fetch.ai blockchain token, which ran a successful IEO on Binance, will transition from an ERC-20 token to its own native blockchain. The new Fetch.ai network will launch with its own MetaMask style web application for easy access to tools like a staking dashboard. The price of native FET tokens fell ~27% in the last week, suggesting a lack of market interest in the mainnet launch.

20th December- Komodo network-wide upgrade

On December 20, 2019, at block height 1670000, the Komodo blockchain will launch a network-wide update. The update will include improvements to the cross-chain Antara framework, a proof-of-stake implementation, and new modules designed to allow the platform to offer DeFi services. In the last week, the price of the native KMD token has slid ~11%. Like FET the Komodo network update has failed to create pre-event buying pressure so far.

Most assets in the Brave New Coin market cap top 10 traded red last week, apart from the new entrant to the top 10, Tezos (XTZ). Tezo has had a strong end to the year, outperforming the rest of the large-cap assets in the last month, rising an impressive 46% in the last month during bearish market conditions. Last week Ledger and Kraken announced support for Tezos staking services on their platforms, allowing holders to access passive income streams from the network.

The BTC markets were bearish last week as prices in the BTC markets trended down having begun the week above the US$7,500 price level. There appear to have been few fundamental triggers for the slide and most analysts are looking for technical triggers to plot the direction of the next big move. Popular twitter analyst, TraderSZ, suggests that this week’s close below $7300 could indicate prices falling as low as US$6000 in the coming week.