Crypto Research Report I
Similar to the Internet, the blockchain technology is changing the way we do business. Distributed ledgers have the power to ensure the highest level of transparency and accountability in contractual agreements. Cryptocurrencies are an integral part of this newfound provenance, and first-mover investors are eagerly collecting these digital tokens backed by mathematics. However, the future of this technology is uncertain. Technological and legal risks may impede the adoption of the blockchain. On a quarterly basis, the CRR strives to provide a critical and academic perspective on the legal, technical, and economic aspects of crypto assets.
Bitcoin Price Analysis – A perfect storm
Bitcoin has dropped ~USD$400 in the past 24 hours, contributing to a total ~USD$1450 drop over the last seven days. The leading cryptocurrency is down ~US$1150 since its recent high of ~US$4950 on Sept 2nd, or nearly 30%. The lackluster performance can be attributed to both technical and fundamental factors. On September 4th, China announced an outright ban of all ICOs, suggested refunding any collected funds in any ongoing crowd sales, and hinted at the shuttering of exchanges trading ICOs.
Bitcoin Price Analysis – consolidation ending
Bitcoin has essentially remained flat for the week, and it is no coincidence that price action has slowed as a protocol altering event, UASF/BIP148 approaches. The spot price appears stuck in heavy triangular consolidation. Traders will note the descending volume profile, and expect a heavy spike in volume upon resolution of the consolidation.
Bitcoin Price Analysis – PBoC crushes volume
On the People's Bank of China’s behest, the four major Chinese bitcoin exchanges [introduced](news/have-we-just-seen-the-end-of-fake-chinese-bitcoin-trading-volumes/) trading fees this week, causing a significant drop in volume. While the exchanges have been charging for withdrawals, a tiered fee structure incentivised traders to maximize their volume in any way possible. Traders have long since suspected [Chinese exchange volume to be manipulated](https://www.youtube.com/watch?v=VRbgq5hk_bg) through things such as wash trading and “volumizing.”
Bitcoin: Technical Background and Data Analysis
This paper presents the micro-structure of the Bitcoin transaction process and highlights the use of cryptography for the purposes of transaction security and distributed maintenance of a ledger. The empirical analysis is based on publicly available transaction-level data.
