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The Hard Fork – Weekly Market Commentary

This Week’s Topics:
1) Coin Ninja CEO arrested, spurring broader industry concern
2) Steemit set to migrate to the Tron blockchain
3) Crypto Google search interest hits high

Indices Round-Up
TradeBlock Index Asset1 Price ($) 7d∆2
ETX Ethereum 248.05 12.79%
XRX XRP 0.28 2.01%
XLMX Stellar Lumens 0.07 -1.04%
XBX Bitcoin 9,734.77 -1.07%
XMRX Monero 83.33 -1.93%
LTX Litecoin 70.17 -4.25%
EOSX EOS 4.15 -13.55%
BCX Bitcoin Cash 377.93 -14.64%
ZCX Zcash 57.60 -15.54%
ECX Ethereum Classic 8.96 -24.30%
1. Underlying asset sorted in descending order by 7 day price movers.
2. 7 day price movers monitored from 02/10/2020 06:00 ET thru 02/17/2020 06:00 ET.

7 day price movers

Digital currencies posted mixed results on the week as a mid-week rally fizzled out, resulting in some of our indexed assets heading into the red. Ether traded up the most this week, gaining 12.79%. Conversely, ether classic traded down the most, losing 24.30%. In traditional markets, US equities closed near all time highs with the S&P 500 recovering gains lost earlier in the week.

Concerns over increased regulation may have played a part in halting some of the positive price momentum that has occurred in digital currencies over the past few weeks. On February 12th, US Treasury Secretary Steve Mnuchin indicated that increased digital currency regulations would be announced soon.


Coin Ninja CEO arrested, spurring broader industry concern

This past week the CEO of Coin Ninja was arrested on charges of conspiring to launder money and operating a money transmitting business without a FinCEN license. The individual allegedly laundered more than 354,468 bitcoins (worth ~$310 million) by allowing users to mix their bitcoins using a privacy tool named Helix. If convicted, he faces up to 30 years in prison.

The arrest has broader implications for the digital currency space as bitcoin mixing tools have seen increased interest in recent months. Mixers or tumblers allow for greater anonymity in bitcoin transactions by breaking the sending and receiving addresses thereby reducing the traceability of transactions. Given the recent move by US federal prosecutors, it is now unclear to what extent mixing services are legal. Additionally, the arrest dealt a blow to financial privacy in digital currency transactions and in the broader context raises questions as to the legality of privacy oriented coins which allow for enhanced anonymity between sending and receiving addresses.


Steemit set to migrate to the Tron blockchain

In an announcement this past week, Tron and Steemit confirmed that Steemit would migrate its dapps and users to the Tron blockchain. Currently decentralized applications in the network are built on Steemit’s proprietary blockchain, powered by the steem token. After the migration is complete, Steemit products and dapps as well as the steem token will be on top of Tron’s blockchain.

Steemit was co-founded by Dan Larimer who went on to found EOS and has built a new social networking site, VOICE, on the EOS blockchain. VOICE is currently in beta testing. Steemit functions similarly to Reddit but allows posters to receive payment for their content and because of its more decentralized nature is also less censored than Reddit.

Over the past month, Steemit received nearly eight million website viewers which places it as one of the highest visited websites associated with blockchain/digital currency. Despite its modest successes, the platform has not gained nearly as much traction as Reddit which saw more than one billion website viewers in the past month.


Crypto Google search interest hits high

Google searches for the key word ‘cryptocurrency’ hit the highest level seen in six months this past week. Search interest accelerated recently as digital currencies traded higher the past few weeks. In the figure below, we diagram worldwide search interest over time.

Figure 1: Google search interest over time

Data for chart sourced from Google

Google trends are often times a quick indicator to see where retail momentum stands. The highest levels for bitcoin were in late 2017/early 2018 when the largest digital currency by market cap reached its highest price ever, trading around $20,000 per coin for a brief period of time.

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