State of the Blockchain: A bullish rally in sight while NEO bounces back

Photo credit: unkreatives / 123RF Stock Photo

Clear skies overhead in the cryptocurrency market this week—a sign that investors and traders will certainly find delightful. Nearly every cryptocurrency in the market has broken the downtrend. Some of them have even experienced double-digit growth rates over the last seven days.

What is causing the bullish trend? And which social networking giant just raised nearly US$100 million through an ICO? Welcome to State of the Blockchain, where we look at the biggest events that shook the blockchain scene in the past week.

Bullish rally ahead

In the last week, the total market capitalization of all cryptocurrencies grew by 17 percent to about US$143.8 billion—not far off from the all-time high of US$179.5 billion.

The price of bitcoin continues its upward trend, breaking the 50-day average (US$4,123) to reach about US$4,160. This seems to suggest that the criticisms of Jamie Dimon, John Hathaway, and other critics will have little effect on the digital currency’s price.

The gloom and doom surrounding the market appears to have suddenly lifted. Even a recent statement by Jordan Belfort, more infamously known as the “Wolf of Wall Street,” supporting JP Morgan Chase CEO Jamie Dimon against bitcoin and decentralized cryptocurrencies did little to shake market confidence.

What will China do next?

Perhaps, the most uplifting news of the week came from an interview with NEO founder, Da Hongfei, published by Dutch financial news outlet Het Financieele Dagblad.

NEO, previously known as Antshares, is an open-source blockchain created by a China-based team. When Chinese authorities announced the ICO ban, investors became skeptical of NEO’s potential to rise in value in a similar way that Ethereum did earlier this year. This led to a massive sellout of NEO tokens, causing the value to fall from an all-time high of US$50 in August to about US$13.40 two weeks ago.

However, in this interview, Da revealed that Chinese government officials had contacted him prior to the ICO ban. More importantly, he seemed optimistic about their potential collaboration with the government to facilitate ICOs and weed out fraudulent ones. This is telling of China’s long-term stand on cryptocurrencies.

Devising a system to regulate and enable legitimate blockchain companies to raise funds and protect Chinese investors from falling prey to fraudulent ICOs or Ponzi schemes at the same time will certainly prove to be the right way to move forward for Chinese innovation.

In another interview with International Business Times, Da said that his team is working with lawyers on an ICO resource toolkit, a legal framework for startups to abide by when executing ICOs on the NEO blockchain.

This optimism has affected investors, allowing the NEO token to rise in value by 30 percent. Will NEO be the one to legitimize the Chinese cryptocurrency market? Only time will tell.

Other top news

• Job openings for blockchain companies have doubled in the last six months. Large sums of funding from ICOs have given startups the ability to attract talent, as shown by a report from AngelList which showed that these jobs are paying 10 to 20 percent higher than industry rates. (Coin Telegraph)
• About 10 blockchain companies in Singapore have had their corporate bank accounts closed without reason. (Bloomberg)
• Japanese banks are looking to launch a cryptocurrency tied to the Japanese Yen that can be used to make payments and transfers through a mobile app. (CNBC)
• Ex-hedge fund manager Mike Novogratz is starting a US$500 million hedge fund to invest in cryptocurrencies and blockchain companies, despite calling this boom “the largest bubble of our lifetimes.” (Bloomberg)
• Ethereum founder Vitalik Buterin has co-authored a whitepaper detailing a new protocol for ICOs to become more inclusive. (Coindesk)
• US retail company Overstock is launching an alternative trading system (ATS) to facilitate ICOs and the exchange of cryptocurrencies, even if the cryptocurrencies are defined as securities. This ATS will be regulated by the SEC and the Financial Industry Regulation Authority. (Cryptocoins News)
• Gaming giant Nexon has acquired a 65 percent stake in South Korean cryptocurrency exchange Korbit for US$80 million. (Tech in Asia)
• South Korea’s Financial Services Commission just announced a ban on fundraising through token sales or ICOs. “Stern penalties” will be issued to any firm or party involved in ICOs. (Tech in Asia)

ICOs this week

• Monetha, a decentralized payments solution for merchants, raised US$37 million (95,000 ETH) in 18 minutes.
• The Kin cryptocurrency has finally concluded its public token sale, raising a total of about US$48 million (168,732 ETH) from 10,026 contributors in 117 countries. Add this to what was raised in a private token sale and the cryptocurrency has raised nearly US$100 million in total.
• ALIS, a decentralized social media network aimed at providing trustworthy research reports and news pieces for the Japanese market, successfully concluded their ICO, raising a total of about US$3.7 million. Even though the company only reached 10 percent of their target, the total contribution met the minimum target of 11,666 ETH.

For your weekend reading pleasure