Trader View - June 7, 2018

OSL Trader View - June 07, 2018

A lot of pots stirred in the mining space of late. Two crypto miners have decided to list in Hong Kong, GMO Group of Japan will be launching ASICs with state of the art chips on 7nm geometries and Bitmain has allegedly started to sell their flagship Antminer S9i’s at fire sale prices. Additionally, $BTC hasrate has jumped 5 exahash in the past two weeks. It took 8.5yrs to get to 5 exahash.

The fact that the spike in hashrate has coincided with the Bitmains’ fire sale has led to wide speculation of the manufacturer expected to rollout the next version. And 7 nanometer geometries in ASICs? very few PCs have CPUs equipped with chips with those specifications. We’ve heard how positively mining has impacted profits for the likes of Nvidia, AMD, TSMC et al… The arms race is on.

The playing field is equally intense if not more so for players trading the assets in seeking a channel to fiat. This is undoubtedly the biggest bottleneck as the banks grapple to stay relevant and consequently leading to some pretty creative solutions. There are outfits that ‘bank’ for you but won’t accept third party payments in their solutions. In Europe, a plethora of new smaller crypto friendly banks have sprouted up to fill in the vacuum and in the US, mid/small sized banks are following Silvergate’s lead as they began to notice what they were missing out on. Goldman backed Circle has decided to cut out the middle man entirely and launch their own bank by acquiring a US banking license. They were recently minted as the first unicorn in the space so can’t imagine shortage of coin being an issue.

More efforts integrating crypto with traditional finance have emerged. Coinbase decided to seek a solution by acquiring a broker-dealer license (albeit indirectly by acquiring Keystone Capital), Fidelity seeking ways to launch a crypto exchange, Hypothekarbank Lenzburg (Switzerland) is now offering business accounts to crypto companies and Malta continues to cement their reputation as the go-to crypto island by opening a bank account for Binance.

Then there’s Susquehanna that just came out of the closet. They’ve been trading the asset class for the past two years and are now feeling comfortable enough to admit it.

Surprisingly it is Japan that is bringing the hammer down. Ironic as they were literally the first country with an official ruling to legalize the asset class, they just shut out FSHO, a Yokohama based company for the second time from acquiring a crypto-exchange. The Coincheck scandal has clearly shaken them.

May trend be your friend… Happy trading!

SJ Oh
Trader
Vice President
[email protected]

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