Crypto Update: Some struggle, others expand Crypto Update: Some struggle, others expand Crypto Update: Some struggle, others expand

Crypto Update: Some struggle, others expand

Cryptocurrencies 6 minutes to read
Picture of Jacob Pouncy
Jacob Pouncey

Cryptocurrency analyst, Saxo Bank

Summary:  Prices and volume continue to fall, but low volatility periods have preceded major moves in the past.


This week the entire crypto market cap fell by 2% to around $110 billion. Bitcoin and Ethereum fell by 1.5% and 5% respectively. The ongoing “crypto winter” is putting pressure on all service providers in the cryptocurrency sector as prices continue to slide.

Low volumes across exchanges

January 2019 was the worst month for exchange volume since 2017. Leading cryptocurrency exchange Binance has seen its volumes reduced by 40% compared to December 2018. This could be due to the low-volatility period that Bitcoin has entered in the month of January. However, periods of low-volatility in Bitcoin have often preceded big moves in the cryptocurrency. A big move downwards to test the previous low is more likely than a move back to the $6,000 level, given the negative market narrative.

Death of CEO cause losses of $150 million

The big story in crypto this week concerns the number-one exchange in Canada, QuadrigaCX. The exchange claims to have lost access to user funds after the death of CEO Gerald Cotten while he was in India opening an orphanage in December. There are several suspicious facts in the case, such as how late the exchange reported the death considering the CEO passed away in December, as well as blockchain forensics that suggest the exchange never had the funds they claim to have lost, to name a few. The lawyers working the case may sell the exchange to pay its creditors. The incident highlights the danger of centralised exchanges that do not implement best practices in storing customer funds.

Kraken to launch futures in Europe

This week, cryptocurrency exchange Kraken announced a nine-figure deal to acquire Crypto Facilities, a firm specialised in derivatives. Kraken plans to use the infrastructure to offer futures on the most popular cryptocurrencies such as Bitcoin and Ethereum with up to 50x leverage. Offering more products with higher leverage is one way to try to increase revenues during a decline in volumes. The service will be available to clients outside of the US. Kraken looks to gain market share in the cryptocurrency futures market presently dominated by BitMex, which has a +90% market share in Bitcoin Futures trading.
XBTUSD

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.