Crypto.IQ Daily Digest July 16, 2018

THE MARKET • INSTITUTIONAL INVESTORS • BITCOIN • ADOPTION

BLACKROCK: ‘We’ve created a crypto team to evaluate opportunities in crypto futures and other crypto assets…”

IQ THOUGHTS

We’ve all seen the small spike in cryptocurrency prices across the board over the past 24 hours, and it’s likely got a lot to do with the news from Blackrock, the world’s largest asset manager, with $6.3 trillion under management.

According to Financial News, Blackrock is looking into crypto in a big way, specifically Bitcoin futures and other crypto assets. And Blackrock is just the latest in series of big players, including JPMorgan, Fidelity, and CME, among others, that have stepped into the crypto mix.

We’ve been saying for some time that institutional investors like Blackrock will be the rocket fuel that will take cryptocurrency to next level in value. That spike will create a feedback loop of FOMO as prices rise, and a public — even more aware of Bitcoin et al than it was in the December frenzy — is already primed to jump in and drive the market even higher. That will draw even more media attention to the space and more first time investors.

And so on..

BITCOIN • BITCOIN CASH • CENTRALIZATION • SCALING

Bitcoin Cash Stress Test Results Spark Centralization Concerns

IQ THOUGHTS

In June, the anonymous developer BitPico announced a stress test of the BCash network, and this developer claims the results of that stress test show a worrying level of centralization.

He (she, they) says that’s likely the case because a significant number of full nodes are operating off the same server rack.

There are doubters who say this stress test isn’t as legitimate as it seems, especially in light of the same anonymous developer making claims last year that the Segwit 2X would go forward no matter what. We all know it did not.

Even so, we have significant concerns about BCash and don’t like the idea of scaling with bigger blocks rather than greater efficiencies offered by second layer solutions such as Lightning Network. And we suspect future and perhaps a more legitimate stress test might reveal the truth about BCash centralization.

It’s worth remembering that the majority of miners who forked the Bitcoin chain to create BCash are located in China and that evidence gathered by software architect Sondre Bjellås in December 2017 showed that more than half of BCash nodes were being hosted by China-based Alibaba