Coin News

This week’s BTC-USD price recap:

Following a $700 drop, BTC-USD managed to find a bottom around $4200 before entering into a 4-day long consolidation pattern. During the consolidation pattern, the price climbed $400 on decreasing volume before ultimately dropping back to $4200. So, where does this leave us and what can we expect in the coming days in the BTC-USD markets?

Figure 1: BTC-USD, 1-Hour Candles, GDAX, Bear Retracement Values

A common continuation pattern during bear markets is a step-by-step series of tests along the Fibonacci Retracement set. One by one, the Fibonacci values are tested before the retracement ultimately tops out around 61%. During the climb to 61%, a bearish continuation is supported by a decreasing volume trend. In the figure above, we can see the BTC-USD market managed to retrace up to the 61% values before dropping to the 0% retracement values in the $4200s. The drop to test the $4200s was sudden and violent: It took place over a few short hours, and the volume propelling the drop was massive.

Figure 2:  BTC-USD, 6-Hour Candles, GDAX, Macro Bear Flag

Prior to the breakout, the BTC-USD market spent a week forming a bearish continuation pattern called a Bear Flag (the details regarding a Bear Flag was discussed earlier in this week’s ETH-USD article). The price target of this Bear Flag is an approximate $700 move and is projected to touch the $3900s. However, our current price level is sitting right on top of historic support along the macro trend’s 23% Fibonacci Retracement values:
Figure 3: BTC-USD, 6-Hour Candles, GDAX, Macro Trend Fibonacci Values

Our current price level is sitting on an historically significant support level so whether or not we manage to break this support remains to be seen. When trading this pattern, it is important to confirm the movement with volume. When testing historic support or resistance values, it is common to see multiple tests before ultimately breaking through. To date, this represents our third attempt to break this support and it is currently testing it on a volume that is peaking on the 6-hour candle’s volume trend.

Summary:

1. Following a $700 drop to $4200, BTC-USD managed to climb $400 before ultimately retesting the $4200 support.

2. On the macro bear trend, BTC-USD broke out of a multi-day long Bear Flag. This Bear Flag has a price target of approximately $3900.

3. BTC-USD is currently testing the macro 23% Fibonacci Retracement. This support has strong historic significance and will need to be broken in order for the Bear Flag’s price target to be realized.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

The crypto market, especially in China, has been in a panic in these past few days, largely because of an official notice on Preventing Risks of Fundraising Through Coin Offering, jointly issued by the People’s Bank of China (PBOC), the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Commission and the China Insurance Regulatory Commission.

There seems to be a general fear that China’s attack on Initial Coin Offerings (ICOs) and tokens, often used to fund blockchain innovation and open up investment in blockchain technology to the masses, will stifle blockchain development and the industry as a whole in one of the world’s largest markets.

At first glance, the harshness of the statement seems to be comparable to the Chinese government’s 2013 warning that made bitcoin prices plummet immediately. However, those in the West who suspect that China is stifling Chinese innovation are underestimating the political wisdom of the Chinese government. Meanwhile, those in East critcizing China’s ICO policy for being too harsh as the government moves to protect the interests of private investors are ignoring the Chinese government’s history of decisiveness in tackling “illegal public funding” in recent decades.

Western critics should think about China’s economic development and gains during the past decades since a policy of openness was initiated in 1978; in this context, the government’s latest statment can be read for its underlying message. Eastern critics should understand that the Chinese government has zero tolerance for any activities that will jeopardize its financial stability.

The second-largest economy in the world managed to weather the financial crises of both 1997 and 2008: This was not simply chance. China’s economy is both innovative and ambitious. Since blockchain technology is acknowledged as the next-generation technological powerhouse, with the potential to reshape the way value is exchanged, there is no reason for China to do anything to harm blockchain innovation. China is not cracking down on blockchain technology: It is actually poised to lead blockchain development not only in its own country, but also around the world.

Breaking Down the Language

First, though the original text is subtle, it is crucial to note that PBOC’s statement on September 4 only targets illegal ICOs instead of targeting blockchain companies as a whole. The translation of original text is: “No organizations or individuals shall conduct any illegal token financing activities (ICO).” The underlying interpretation is that where there are illegal ICOs, there will also be legal ICOs (or “token financing atctivities”), which requires the introduction of new regulations.

Besides avoiding the use of the word “blockchain” itself, the statement also reveals another subtlety: It uses the term “virtual currencies” to refer to all ICO tokens. This word choice is particularly telling. In the past, when People’s Daily, the party-run newspaper, described bitcoin as “digital gold” ― for instance, in an article published in May ― it used the term “digital currency.” It is important to interpret the Chinese language, especially specific word choices made by official sources, very carefully. By choosing to use the word “virtual,” a word implying “unreal” and “insubstantial” in Chinese, the legitimacy of ICO tokens has already been undermined.

Second, what happened in the Chinese crypto market in the past few months has impacted the government’s bottom line: Its financial stability has been threatened. Although many Westerners in the crypto space are familiar with a few Chinese projects like NEO and Qtum, the Chinese crypto market has actually witnessed the recent advent of more than 65 ICO projects, with around $400 million raised, according to a report issued by National Committee of Experts on Internet Financial Security Technology.  

The absolute number is not enormous, but the key is that most of these projects are unreliable and even fraudulent, with no open-source codes and sometimes without any white paper. Some projects even provide huge discounts to pre-ICO investors ― thereby dooming those who joined the official ICO to lose money, even after building up hopes of 10x returns. It is this sort of irresponsible behavior that compelled the government to step in before anything more extreme happened.

Furthermore, any financial activities involving financing from the public are particularly suspect in the eyes of the Chinese government. Wu Ying, once China’s most successful businesswoman, was sentenced to life in prison in 2014 for “illegal funding from the public.” Also, E Zubao, once the country’s biggest online lender, was condemned by Chinese authorities as a Ponzi scheme after the company was found to have squandered the money raised from the public (which should have been used to match investors to potential borrowers). The losses can be considerable: Around $7.6 billion was involved in the E Zubao case, for instance.

Past transgressions like these are chiefly to blame for China’s current suspicion of ICOs. It is perhaps no surprise, in other words, that the government is declaring ICOs to be illegal, while requiring the return of all tokens to investors. China is being characteristically cautious regarding anything posing potential risks to its financial stability.

Third, while China still encourages innovation within the blockchain industry, it needs a regulated crypto market. It may regulate ICOs, the exchanges, and information disclosure channels. But the reason behind this regulation stems from a need to create a sound environment for blockchain development in China.

According to China’s Premier Li Qeqiang last year ― in the government’s 13th Five-Year Plan for Economic and Social Development ― blockchain technology has been listed as an important area of development for Chinese endeavors. This overtly positive support of blockchain technology will not be changed easily. Other evidence of official support of blockchain technology abounds. For instance, a news program on CCTV stated that China is only pausing ICOs, not banning them outright. And the news section of the official site of the Chinese government also reposted an article stating that “China can potentially become the leader in blockchain industry.” (See image below.) These are all subtle signals that China is preparing for a better blockchain world.

In the blockchain session of the Global Digital Marketing Summit, held by the Guiyang government in western China in July this year, the government also mentioned that a “sandbox mechanism” will become an important step for investors to invest in projects without worrying about policy risk (as the sandbox will allow for a more open space for qualified projects to be promoted and financed).  

An article on the official website of the Chinese government: China can potentially become the leader in blockchain industry

ICOs are among the first experiments for the blockchain industry to explore its own business and financing models. It is normal that a new industry and its encumbent business model will find itself in conflict with the existing laws of a given country at some point. To make some corrections and to embrace compliance guidelines will not harm the industry in the long run.

China’s attitude toward blockchains and ICOs has had such an impact on the global token price that it has actually affirmed the importance of China’s role in the industry. Its recent policy is an attempt to maintain financial stability and set the tone for the future of the industry in China.

Fears that China will confine or even kill the blockchain industry are not tenable. Furthermore, China has a large and solid foundation of internet and mobile device users, and a world-class level of infrastructure. If the blockchain industry really has the potential to further improve human commerce and civilization, China’s market will serve as the best test case.

Even if in the end, the new policy makes it harder for blockchain projects to be financed in China, when one considers that internet giants like Alibaba, Tencent and Jingdong have all based their businesses in China but found financing mainly outside the country, there is really no need to worry about the development of blockchain in China ― let alone the rest of the world.   

ConsenSys, an Ethereum production studio based in Brooklyn, NY, is launching a $50 million venture arm, and it has picked Kavita Gupta to run it. Gupta’s job will be to oversee the new venture and help structure deals with the startups.

It is not uncommon for companies with investment capital to form their own investment arm. For the most part, the goal is to fund startups that could drive value for the parent company down the line. And, as a strategic investor, ConsenSys Ventures will be actively involved in developing startups from an early stage.

Bitcoin Magazine spoke with Gupta on the phone earlier this week. She was in New York getting ready to dash off to San Francisco. ConsenSys has offices in Brooklyn and in San Francisco, and Gupta will be splitting her time between both of those offices.

She explained she will be working closely with Joseph Lubin, the founder of ConsenSys and one of the early founders of Ethereum. And, she added, naturally, ConsenSys Ventures will be looking to invest in Ethereum-based startups.

“We are looking at companies already, and we are going to deploy this as soon as we get green signals from a lawyer on the structure. Everything else is place,” said Gupta, who will be talking more about the fund at Women in STEM in San Francisco on Monday.

When asked about the overall goals of the venture, she responded, “I think, to Joe, being one of the co-founders of Ethereum, what really matters is how to basically accelerate this revolution. He wants the smartest entrepreneurs to create applications on it, to use it and start ingraining that work into our ecosystem to create companies.”

To that end, ConsenSys Ventures will be looking to invest in pre-seed, seed, and equity stage companies, she explained, adding that the fund will also be investing in pre-token sales, if the entrepreneurs decide to go the initial coin offering (ICOs) route.

Gupta described her role as overseeing the entire process while also being deeply involved with structuring deals. “Like any managing partner, I will be basically doing due diligence, looking at the companies, and structuring the deal. And, at the same time, making sure all the fiduciary duties are done,” she said. “With respect to making the decisions, it is going to be me and Joe working very closely.”

She indicated, finding good startups to invest in would not be an issue. “Once you are in ConsenSys, which is pretty much the center of the blockchain space, you don’t really have to go out looking for great companies,” she said, adding that the team was currently “looking deeply” at four to five startups, but nothing had been finalized yet.

She said she will leave the decision as to whether or not a startup should launch an ICO, up to the entrepreneurs themselves. “We help them create a business. We help them create an idea. I don’t think we are really pushing or saying that every company has to go for token sales. It makes sense for some companies, and for others, it doesn’t make sense. We want to support the entrepreneurs in whatever they do.”

Strategic funding is different than straight venture capital funding, she emphasized. “We want to believe that it is different than the traditional investment because it is sort of like a VC hedge fund. All of the companies are coming to you at a very early stage, and we want to be involved in shaping the company, with respect to business, operations, hiring, and how they are going to make money.”

As part of that, the ConsenSys Ventures will offer a range of support. “We also work as a strategic investor, helping you out both with respect to the technology solutions, because we have access to the ConsenSys ecosystem, and also to deliver the company, because a lot of people forget they have to deliver the company after that.”

She also pointed out that ConsenSys Ventures was part of a natural evolution. Two years ago, ConsenSys launched as a way to build out ideas on top of the Ethereum network. Earlier this year, ConsenSys launched ConsenSys Academy to start training engineers in how to do that work on their own. Now, ConsenSys Ventures is sort of a middle ground, offering support, but still letting entrepreneurs do their own thing.

“Now across the world, entrepreneurs are capable of building and designing — coding their own systems on Ethereum. They don’t necessarily need ConsenSys 100 percent, so how do we collaborate with them? I think Consensys Ventures is the best way to do it.”

A native of India, Gupta is a 2015 recipient of the U.N. Social Finance Innovator Award. In addition to working at the World Bank, where she headed the organization's youth innovation fund, she has more than 10 years of experience in impact investment across a variety of companies, including McKinsey, HSBC and International Finance Corp.

She has worked in the U.S., the Middle East, South Asia and Africa. She most recently led mission investing for the family foundation of Alphabet Inc. executive Eric Schmidt.

Stellar has announced a new initiative called the Stellar Partnership Grant Program. The program aims to “promote the development of high-impact projects in the Stellar ecosystem,” Stellar explained in a statement.

Jed McCaleb, Stellar co-founder and CTO, told Bitcoin Magazine, “Our overarching mission is to use the Stellar network to increase financial access globally and in particular to the more than 2.5 billion unbanked people in emerging markets across the world. The Stellar Development Foundation (SDF) works mainly with licensed and regulated partners, such as banks, fintech startups and remittance companies. However, the Stellar protocol is a foundational and open technology usable by anyone.”

As for the partnership program, itself, Stellar will be accepting proposals from “leading organizations that are interested in building upon Stellar's technology to improve the financial landscape and promote financial inclusion,” Stellar stated. Stellar will then grant select partners up to $2,000,000 USD per grant. This sum will be paid in Stellar Lumens coin, XLM, “ensuring the recipients are co-beneficiaries of network growth.”

As for who the program’s target will be, McCaleb said, “We are currently working with corporate entities like Deloitte and ICICI Bank, but with our partnership grant program, we’re really excited about tech-forward money transfer operators, and more generally, tech-forward non-bank financial institutions.”

“We’re looking to bring on quality long-term global partners that provide low-cost financial services, such as banking, micro-payments, and cross border payments and remittances to underserved markets that have large remittance flows,” McCaleb said. “These partners will be oriented around using the Stellar network as an integral part of their payment structure.”

Stellar has a history of encouraging development on its platform. The Stellar Build Challenge has been actively seeking out and funding new developments using their technology including wallets, ICOs, remittance applications, and much more. So far it has held four Build Challenges and awarded prizes to dozens of projects. Submissions for the final Build Challenge of 2017 are due on November 15.

A rapidly developing project known as Cappasity, and its ARToken (ART) are igniting a new world for 3D content creators and distributors.

Its aim: to provide these creatives with a means of monetizing and sharing their work through a tokenized network. It is driven by a blockchain-centric platform powered by ART, a virtual currency now available via a $50 million token crowdsale that allows for content trading inside of the ecosystem.

This fast-moving initiative reflects the emerging intersection between augmented reality (AR), virtual reality (VR) and 3D content creation. With growing numbers of cheaper, more powerful mobile devices entering the global marketplace, AR/VR is no longer a novelty. 

As companies like Google, Apple, Samsung and Facebook embrace these technologies, more disruptive AR/VR possibilities are gaining traction, providing massive opportunities for creatives seeking to leverage the vast potential of this space. The AR/VR world is rapidly expanding and the need for 3D images is on an exponential growth trajectory.

Fostering New Possibilities

Cappasity is at the forefront of this rapidly developing landscape. Launched as a computer startup in 2013, the company later shifted its focus to e-commerce. Today it is a cloud-based platform fueling the seamless integration of 3D content into e-commerce solutions, including product digitizing and 3D/VR shopping visualization.

The company is the brainchild of Kosta Popov who now serves as its CEO. He founded his first venture in 2005 and has over 10 years of experience in 3D technology and IT business development.

Bolstered by over $1.8 million in venture capital, Cappasity has made major inroads in the development of cutting edge innovations for the 3D world, including the easy 3D Booth, an affordable and simple-to-use full body 3D scanner for 3D printing, and the Cappasity Easy 3D Scan, which allows merchandisers to scan and easily upload their products into a 3D image. The latter game-changing solution provides consumers with a visual representation of items they may be seeking to purchase. 

As a part of its expansion efforts, Cappasity has forged collaborative relationships with a number of large retailers and top luxury brands while continuing to expand its presence through Plug And Play Retail accelerator Batch 7. 

While the focus has been the creation and integration of content into online shops, Cappasity has plans to pursue a number of other industry spaces with the goal of developing a comprehensive, global platform for everything AR/VR related. Fashion brands are just one example of a niche industry where Cappasity promises to make a mark.

All of this will require the expansion of the Cappasity ecosystem. In its present iteration, the ecosystem is comprised of two layers. The first, an infrastructure layer, powered by a blockchain, software toolkits and decentralized storage, is the setting where content creators and moderators are able to manage content directly.

The marketplace, the second layer, is for content exchange. It also serves as a testing ground for AR/VR and 3D content, a place where businesses and consumers will have access to a variety of 3D images and data.

There is also a unified solution for the creation and optimization of 3D content. Known as “3D View,” this tool provides a person with the ability to easily create quality 3D renderings of real objects and put them up for sale.

In addition, a 3D modeling module for large objects such as buildings and landscapes is currently under development. This software, which will be adapted for drone 3D shooting, requires very little in the way of computing power, allowing it to easily work with laptops and smartphones. 

Cappasity’s ecosystem also features a marketplace which functions as a buy-and-sell area where 3D and other AR/VR content exchange happens. There will be two main categories of goods: AR/VR and 3D content, as well as AR/VR and 3D apps.

The company will also deliver a powerful, analytic Cappasity AI to handle customer interactions. The Cappasity platform is compatible with AR/VR devices, empowering content creators with tools like SDK and plugins to produce high-quality AR/VR and 3D content.

Token Sale

The Cappasity crowdsale will begin on the September 27 and last for four weeks with a target of $50 million. To cater to the AR/VR/3D community, two endowment entities have been established. The first is the AR/VR Innovation Fund and the second is the Reward Fund. Following a successful token sale, 20 percent of the raised funds will be dedicated to the first and 10 percent will be dedicated to the second.

Cappasity will also provide all developers with the SDK/API to work on the platform. The company is also working on a mobile application that will make the site content compatible with the Cappasity platform and Apple ARKit.

Cappasity leaders believe that the token sale is, first and foremost, an opportunity to create a community of people enthusiastic about 3D tech, forming the basis for a global network of content creators and consumers. The belief here is that a token sale represents a great tool for the fair distribution of tokens among early adopters.