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December 14, 2015- In This Issue:

 

 

  
The One Chart that Tells the True Story of Bitcoin this Year 
Much has been made this week of the news that combined trading on bitcoin exchanges has reached a record high. As the BTC/USD exchange rate has climbed towards $400, so exchange volume has risen to close to 4 million bitcoin a day. As this Coindesk article points out, there are some who believe that the reported numbers are questionable and may be inflated by "fake trades" designed to give some exchanges the appearance of liquidity but, as with price, trading volume is not the metric to which those who believe in the future of bitcoin should be paying attention.

I will freely admit that what first drew me into the world of crypto currencies was the volatility of bitcoin's exchange rate and therefore its potential as a trading instrument. I make it a point not to trade anything that I don't understand though, and as I dug deeper into the subject the whole concept began to intrigue me. Bitcoin is not just another commodity, it is something that has the potential to fundamentally change the way we think about money and could ultimately be a huge force for good in the world.

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Indian Investors Begin to Recognize Bitcoin as an Asset
Since the beginning of 2015, the Indian Bitcoin industry has seen an emergence of payment services platforms and cryptocurrency exchange services providers.

Startups including Zebpay and Coinsecure have begun to gain popularity among Indian investors and corporations in search of alternative assets and properties.

Bitcoin exchange and wallet service provider Zebpay's CEO Sandeep Goenka stated in a recent interview that an increasing number of investors and companies are gearing toward Bitcoin as an asset and as an investment.

"One can park money in the wallet in the hope that the value of bitcoins would go up.

So in a way, it is like an asset class," said Goenka.

Unlike many other countries, bitcoin's legality in India is still left undecided. Their law enforcement and regulators have not implemented or drafted any policies to regulate the circulation of the digital currency in the economy.

"In fact, the law firm headed by Nishith Desai-who is also an advisor to several big companies, and to us-has published a white paper on it explaining that no regulation in the country point out that it is illegal," Goenka added.

Investors have also started to recognize Bitcoin as a stable and profitable investment. According to Goenka, many companies and investors considered Bitcoin as a financial bubble since the Mt. Gox incident and the price surge in 2013. However, the Bitcoin industry and ecosystem in India changed significantly, and an increasing number of merchants, businesses and investors are shifting toward Bitcoin.

Goldman Sachs Files "SETLcoin" Patent for Securities Settlement 
Goldman Sachs has applied for a patent for blockchain technology that it is developing, aimed at streamlining the way securities are settled.

The patent (application# 20150332395) is titled "Cryptographic Currency For Securities Settlement" and its stated inventors are Paul Walker and Phil Venables.

Bitcoin's blockchain and the distributed ledger systems inspired by it are being increasingly explored by banks to automate the settlement of securities trades and fiat money transfers. Banks have been developing their own cryptocurrency equivalents (e.g. Citicoin) as part of their in-house testing.

Goldman's proposed scheme involves what it calls a SETLcoin (a very similar branding to SETL.io, which is also working on a permissioned blockchain system for securities settlement) that can be labelled to represent, for example, shares of a stock. It appears to be its own cryptocurrency, not dependent on Bitcoin, though Bitcoin is mentioned 20 times in the document. Litecoin is mentioned as well. In several instances, SETLcoin's interaction with bitcoin, such their exchange, is mentioned.

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CFTC Commissioner Sees Blockchain's Potential to Revolutionize the Financial Industry
A commissioner of the Commodity Futures Trading Commission (CFTC) has spoken about the inadequacies and inefficiency of the current "closed ledger" banking system. He adds that distributed open ledgers could revolutionize financial ecosystems while noting certain "disruptive" implications for the current financial industry and those who are a part of it.

Commissioner J Christopher Giancarlo spoke about bitcoin and the blockchain in a wide-ranging lecture on Fintech and international finance at the Harvard School of Law on December 1 st.  In a guest lecture that began with a disclaimer that his views did not constitute those of the CFTC, a CFTC commissioner the potential of Bitcoin's underlying technology - the block chain.

In early 2014, it was revealed that the CFTC was considering bitcoin regulation to increase oversight into the cryptocurrency and other virtual or digital currencies. Come September 2015, Bitcoin was officially deemed a commodity by the CFTC.

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No Sign of Bitcoin Slowdown Through 2016 
The uptake and dollar value of Bitcoin has grown rapidly over the last three months and the indicators suggest that this is only going to continue in 2016.
 A leading UK based coupon code website has been experiencing an increase in searches for merchants who accept Bitcoin as a payment method. They have since compiled 33 indicators that show that usage of the cryptocurrency is indeed widening and its value is also experiencing a steady increase.

On August 24th the dollar value of BTC hovered around $209, by November 4th this had climbed to $408. Although there have been some ups and downs, it has generally been increasing since mid January. But will this be sustained? Key indicators seem to suggest so.
Perhaps the strongest indicator of the currency's broadening appeal can be found at the leading bitcoin exchanges. Between October 2014 and October 2015, Singapore based OK Coin saw a staggering 847% growth. High growth was recorded across the board in Asia, but even Western favourite Bitstamp grew by 160%.
While the likes of Visa and MasterCard still swamp bitcoin in terms of daily transaction value, the network has reached roughly $289 million, surpassing Western Union at $216 million, and hot on the heels of PayPal who record transactions worth $397 million each day.
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