Major Crypto Exchange Valued At $4B, Prepares For Private Listing

One of the most prominent cryptocurrency exchanges in the industry, Kraken, is reportedly preparing for a private share offering to its most momentous clients.

Making The Cut

The company has sent out an email to prospective clients, inviting them to complete a survey before they’re granted access to additional information pertaining to the offering.

The aforementioned survey needs to be completed by December 16th, 2018, and the exchange has made it clear within the email that each investor will be evaluated before being accepted to make share purchases:

“The transaction process will be done by a 3rd party service, who will run accredited investor checks, facilitate the execution of transaction documents, and the funding of your investment,”

The exchange is listing the shares at a valuation of $4 billion USD, with a minimum investment requirement of $100,000.

$4 Billion Valuation: Explained

Despite the so-called “crypto winter”, Kraken has remained a profitable company. In November alone, the exchange traded over $1 billion USD worth of Bitcoin and is currently ranked 20th on Coinmarketcap.com in terms of trade volume. Website cryptotrafficrank.com posts the exchange at 35th on its list of most popular cryptocurrency related websites.

Whilst Kraken has been noted to be much cheaper in comparison to its competition, with an impressive list of altcoins available for purchase, the demand for said altcoins has been dwindling. If this declining demand for alts continues and Bitcoin dominance prevails, the exchange would see volumes traded drop, meaning they could lose out to competition, rendering their business unprofitable.

Building Solid Foundations

In an effort to improve its services following last year’s technical drawbacks, Kraken has looked to optimize its staffing, recently firing 57 employees to reduce costs as the industry growth slows. CEO and co-founder of the exchange, Jesse Powell, commented on the recent sacking-spree, stating that it would not hinder the company’s performance:

“The cost-saving measure will have zero impact on the quality of our service.”

Earlier in the year, Kraken closed its services for 48 hours in order to update its trading engine in response to technical issues experienced during the frantic 2017 crypto-boom.

It’s clear that 2018 was a year for Kraken to tighten its operations, improve efficiency and quality of services, to improve (include another word) sentiment surrounding the company for the upcoming private share offering.

Valuation Being Questioned

Some investors are concerned over the $4 Billion valuation. One investor speculated on the company’s yearly revenue, estimating the exchange would turnover $54 million a year. If operating costs were likely to be at 60%, it’s calculated that the company would be pulling in an estimated annual profit of $32 million.

One key calculation used to measure a company’s value is the P/E Ratio. To utilize this ratio, we would divide the total price of shares (in this case $4,000,000,000) by the total earnings of available shares ($32,000,000). In this case, the P/E ratio based on Kraken’s valuation would be 125 – deemed by some as hugely overvalued, considering the historical average P/E ratio for a company being between 15-20.

The P/E ratio cannot be solely relied upon to truly indicate the value of a company – many other calculations are required to be involved in the valuation process, including the PEG ratio.

Investors Looking Optimistic

In spite of the concern surrounding Kraken’s valuation, the private share offering could be seen as a risk worth taking to many crypto-fanatic investors.

Many people are predicting the crypto markets to bottom out soon, following the 2018 price massacre. Analysts have pointed out that Bitcoin has ventured into oversold territory on the weekly RSI (Relative Strength Index), similar to the scenario at the beginning 2015, which saw bitcoin consolidate before rallying to the 2017 highs.

Amun’s Cryptocurrency ETP, which trades on the Swiss SIX Exchange (SIX:HODL) tracks the price performance of the top, most liquid digital assets including Bitcoin, Ethereum, XRP, and Litecoin. Recent data shows the trade volume of the ETP shares increased as the prices of BTC and ETH declined, insinuating that traders are anticipating a bottom for crypto prices.

Major South Korean Bank Taps Blockchain, Improving Efficiency

As reported by The Korea Times on December 10th 2018, South Korea’s second largest bank, Shinhan Bank, are to implement blockchain technologies. The initiative comes as the bank wish to improve efficiency and decrease human error with regards to internal processes.

Improving Efficiency

The bank, who was recently named as South Korea’s Best Wealth Management Bank at the Korea Country Awards 2018, has been exploring cryptocurrency and blockchain for some time and is now applying the technology to operations including financial record-keeping. Their mission is to reduce mistakes made by humans & improve efficiency overall.

A spokesperson for the bank stated how they intend to improve reliability and efficiency in regards to their services:

“Prior to the blockchain-based process, there had been no standardized rules governing keeping and managing financial records, a reason why market participants had to rely on their own records which often times led to errors despite the cross-checking process requirement,”

Adding:

“The new system helps remove such human errors and helps improve work efficiency through clearer, task-related communications rather than wasting time on correcting mistakes. The program will be expanded after it proves to be stable. We will continue to develop new technology that can be put in place for various departments.”

The bank has also enrolled over 400 senior staff on blockchain training courses, between March and November this year, in an effort to enhance knowledge of the nascent technology and how it can be applied to create innovative applications to improve banking services.

According to The Korea Times, the bank announced it had implemented interest rate-swaps based on blockchain tech — citing this development as a “first” for a South Korean lender.

In November 2017, the bank, who back two of South Korea’s largest crypto exchanges — UPbit and Gopax — released plans of potentially offering cryptocurrency wallets to its client base.

US Crypto Exchange Coinbase Looking To Add More Assets

Major US cryptocurrency exchange Coinbase announced on Friday they’re exploring the possibility of listing over thirty new digital assets on its platform.

List of Potential Additions

The exchange, who have recently announced the support of privacy-based cryptocurrency Zcash (ZEC), have now stated they will begin to review the addition of new digital assets including:

Cardano (ADA)
Aeternity (AE)
Aragon (ANT)
Bread Wallet (BRD)
Civic (CVC)
Dai (DAI)
district0x (DNT)
EnjinCoin (ENJ)
EOS (EOS)
Golem Network (GNT)
IOST (IOST)
Kin (KIN)
Kyber Network (KNC)
ChainLink (LINK)
Loom Network (LOOM)
Loopring (LRC)
Decentraland (MANA)
Mainframe (MFT)
Maker (MKR)
NEO (NEO)
OmiseGo (OMG)
Po.et (POE)
QuarkChain (QKC)
Augur (REP)
Request Network (REQ)
Status (SNT)
Storj (STORJ)
Stellar (XLM)
XRP (XRP)
Tezos (XTZ)
Zilliqa (ZIL)

Although this news is exciting for many crypto-fanatics, Coinbase have made it clear that they will only list new digital assets if they meet the company’s standards and if the assets are compliant with local law:

“as per our listing process, we will add new assets on a jurisdiction-by-jurisdiction basis, which allows us to add assets efficiently and responsibly.”

The exchange also noted that they cannot give a specified date or timeframe in which they’ll be listing new cryptocurrencies, but state that users can keep updated via their blog.

Pushing Crypto Forward

Coinbase are showing to be one of the most innovative companies in the crypto industry. It’s clear that the leading US crypto exchange aim to promote mass adoption of this nascent digital-based asset class.

Earlier this year, the exchange made the additions of other cryptos including Ethereum Classic (ETC), 0x (ZRX), Basic Attention Token (BAT), and their own US Dollar-pegged stable-coin — USD Coin (USDC).

A spokesperson for the exchange recently exclaimed the company’s ambitions for the future:

“As part of our mission to be the easiest and most trusted crypto wallet, we plan to add support for even more blockchains in the future.”

In November, the company revealed the opening of its over-the-counter (OTC) trading service for institutional investors, due to increasing demand for the service.

ICO Regulation Incoming, Malaysia To Lead The Way

Malaysia’s Finance Minister, Lim Guan Eng, recently announced that the government is set to implement its new regulatory policy regarding cryptocurrencies and ICOs in early 2019.

Building Trust

Speaking at the FinTech Conference 2018, the minister stated that the country’s Securities Commission (SC) has outlined a timeframe in which they’ll implement the new regulations for cryptocurrencies and ICOs.

The minister went on to stress the importance of protecting investors with the implementation of a solid regulatory policy:

“While some parties might still be sceptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors,”

Lim’s words are sending a clear message – trust in the cryptocurrency and ICO sector will be attained following the enforcement of clear regulations.

Hopefully this will entice more government officials to be open-minded about the use of new financial technologies, where previously MPs had voiced concerns over the anonymous nature of cryptos.

Progress So Far

Since late 2017, the Malaysian government have been planning their regulatory policy surrounding the domestic cryptocurrency sector. With the country’s SC warning against ICO investments back in September 2017, huge signs of progress are being shown to date.

In the meantime, the country has looked to closely monitor and control the industry. The Finance Minister suggested that companies wanting to issue cryptos must first consult the country’s central bank (Bank Negara Malaysia):

“I advise all parties wishing to introduce Bitcoin (style) cryptocurrency to refer first to Bank Negara Malaysia as it is the authority that will issue the decision on financial mechanism,”

Earlier this year it was reported that Bank Negara Malaysia had published its Anti-Money Laundering and Counter Financing of Terrorism Policy for cryptocurrencies, in an effort to expose potential risks of digital assets and improve transparency of cryptocurrency activity in the country.

Although Malaysia may be making positive steps forward in terms of regulation, the idea of consulting a central bank to use decentralised currencies will be a concern to many crypto enthusiasts; decentralisation being a core fundamental property of the nascent asset class. Despite this, the country is showing efforts to pioneer a new era of finance. Hopefully this will have a long term beneficial impact on the economy, in turn boosting adoption of digital currencies.

Leading The Way

Malaysia is showing huge signs of progress in adopting new financial technologies, as well as embracing blockchain technology. In November, the country’s Education Ministry set up a NEM based university degree verification system to help eliminate fake degrees.

Your Thoughts

Do you think Malaysia’s policy implementation will provide a boost for the crypto industry?

Let us know in the comments 🙂

7 Leading EU Member States To Support Blockchain Adoption

Seven EU member states have recently released a declaration calling to promote the use of Distributed Ledger Technology, citing the trust-based tech as a “potential game changer”.

Transforming The Mediterranean 

The declaration, signed in Brussels on December 4th 2018, was proposed by Malta, aka the “Blockchain Island”, and has now seen six other Mediterranean countries sign the document: France, Italy, Cyprus, Portugal, Spain and Greece.

The document states that implementing blockchain technology could help the Southern European Union countries to “expand their digital ecosystem”:

“We believe that Distributed Ledger Technologies, along with other emerging technologies like 5G, Artificial Intelligence and Internet of Things could be a strong contributor that will help Southern European countries transform the way that we experience as well as to expand their digital ecosystem including Research & Development and innovation”

The application of smart contracts to government-based services could potentially “transform” how specific services are delivered and help reduce administrative burdens: “..smart contracts in areas such as certifying product origin, education, transport, mobility, shipping, land registry, customs, company registry, and healthcare amongst others to transform the way that such services are delivered.”

The “Blockchain Island”

Silvio Schembri, Malta’s Junior Minister for Financial Services, Digital Economy and Innovation, recently tweeted how proud he was to see his country (the EU’s smallest state) becoming a trailblazer in terms blockchain technology adoption:

Malta have been championing cryptocurrency and blockchain technology for some time. In November the island granted Bitstraq exchange a Virtual Financial Asset (VFA) license, setting a precedent for other crypto-friendly nations to adopt a solid regulatory stance when it comes to growing their domestic crypto industry.

Also this year we’ve seen the nation attracting many other crypto companies, including Binance, to start setting up base on the Mediterranean island.

Blockchain Across Europe

Many blockchain based entities now want to see Europe as a whole become a pioneer in the application of Distributed Ledger Technology. Ripple, NEM, EMUGRO/Cardano and Fetch.AI have recently set up a lobbying group to help push the blockchain industry forward in the EU. In a press release, the group stated their vision is to “create a unified voice for the blockchain industry at European level.”:

“The association’s goals are to foster the understanding within EU- and member state institutions on the true nature and potential of the distributed ledger (DLT) and blockchain technology, and to ensure that upcoming regulation promotes and boosts innovation in Europe,”

Major US Crypto Exchange Coinbase Adds Zcash (ZEC)

Following the launch of Zcash (ZEC) support on its Pro trading platform on November 29th, Coinbase has now added support for the privacy-based cryptocurrency, making it available to retail customers on coinbase.com and their respective Android and iOS apps.

The Low Down

Coinbase users will now be able to purchase, transact, sell and store ZEC starting December 5th. However this service isn’t yet available in the state of New York or in the United Kingdom. The exchange also noted that other jurisdictions “may be added at a later date.” 

Stated in their recent blog post announcement, Coinbase makes it clear that although customers may send Zcash to their Coinbase wallet address from both of the protocol’s shielded & transparent addresses, users will only be able to send off the Coinbase platform to transparent ZEC addresses.

The exchange added: “In the future, we’ll explore support for sending ZEC to shielded addresses in locations where it complies with local laws.”

More To Come?

After Coinbase announced its new Asset Listing Process we’ve witnessed the exchange push forward in terms of growing its list of available cryptocurrencies including:

  • 0x (ZRX) (announced October 16th)
  • USD Coin (USDC) – a new digital stable coin linked to the US Dollar, launched by Coinbase and Circle (announced October 23rd)
  • Basic Attention Token (BAT) (announced November 8th)

After launching wallet support for ETC on their platform, a spokesperson for the exchange declared their ambitions to include many more digital assets:

“As part of our mission to be the easiest and most trusted crypto wallet, we plan to add support for even more blockchains in the future.”

With some governments voicing concerns over the use of privacy-based coins, hopefully the addition of Zcash to one of the worlds’ most popular cryptocurrency exchanges will dampen any fears when it comes to investing into privacy-based digital assets.

Expanding Services

Financial news network Cheddar recently reported that the major US based crypto exchange has introduced over-the-counter (OTC) trading for institutional investors, thanks to increasing demand for the service.

OTC Trading is where parties (such as institutional investors) are able to trade between each other, as opposed to over a formal exchange.

Coinbase’s head of sales, Christine Sandler, spoke on the launch of the service:

“We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading…We felt this was a huge benefit to our clients to actually leverage both our exchange and our OTC business.”

Coinbase seem determined to bring crypto to the masses. The company’s continuous efforts to innovate the nascent industry speaks volumes; they’re an entity that wants to help boost adoption of alternative currencies by making them easily accessible and helping improve understanding of digital assets through education.

The Journey Begins

Thanks for joining me! This blog is dedicated to all the people who want to become healthier, wealthier and happier! If that’s you then you’re in for a treat.

I’ll be discussing ideas on how to improve your life in general that will help all of us on our individual journeys.

The blog will serve as a so-called online ‘Mastermind’ group, so feel free to discuss ideas in the comments on how to become happy, healthy & wealthy.

“A rising tide lifts all boats”. — John F Kennedy

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