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Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 24 January 2018 at 17:08 GMT

Can cryptos continue to perform with tighter regulations?

Cryptocurrency Analyst / Saxo Bank
Denmark
  • Chipmakers see increased demand thanks to crypto
  • South Korea releases regulations
  • Blockchain ETFs launched this week
crypto
 Blockchain technology requires massive processing power and 
at least one chipmaker has seen its sales boom. Photo: Shutterstock


By Jacob Pouncey

Last Thursday the entire cryptomarket cap saw a steep decline that continued the trend from the previous day. The entire market cap rose 53% from its weekly low on Thursday to its weekly high on Saturday, and now trades slightly down from its peak. Ethereum closely followed the market rising about 50% to now trade marginally down from its weekly peak as well. 

However, Bitcoin only rose 40% and now trades below its peak, just above the critical $10,000 price level. Consecutive daily closes below this price level could signal further decline. 

Chipmakers see increased demand thanks to crypto

Taiwan Semiconductor Manufacturing Company (TSMC), Apple’s primary chip supplier, saw its fourth quarter revenue rise 5.9 % y-o-y to USD 9.2 billion. Lora Ho, CFO of TSMC, was quoted saying “we expect the strong demand for cryptocurrency mining will continue while mobile product seasonality will dampen our business in this quarter [1Q18]." NVidia, another chip company that has seen revenue growth from crypto mining demand, was reported encouraging retailers not to sell their GPUs to cryptocurrency miners.

South Korea releases regulations

South Korea has released details of its upcoming cryptocurrency regulation for the elimination of virtual currency speculation. The regulation will require strict identity standards from customers in order to deposit and withdraw money from an exchange. The government also posted AML guidelines for banks providing services for cryptocurrency exchanges. The South Korean government has been inspecting banks and fining crypto currency exchanges for breaching data compliance.

Blockchain ETFs launched this week

Last week two blockchain based ETFs launched on the NASDAQ. Reality Shares launched its NextGen Economy ETF (BLCN) while Amplify Trust ETF launched its Transformational Data Sharing ETF (BLOK). BLCN follows the investment returns of the corresponding NASDAQ Blockchain Economy index which tracks companies that are best positioned to benefit from the rise of blockchain technology. Similarly, BLOK is an actively-managed basket of companies positioned to capitalize on blockchain technologies.
 – Edited by Clare MacCarthy

Jacob Pouncey is a cryptocurrency analyst at Saxo Bank.

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