Welcome back everyone to this week’s update to my Bitcoin - Forex Combo Strategy. Bitcoin has become a bit boring as far as price action is concerned, which is a great thing! I have mentioned several times that the three lower highs in Bitcoin have been a bit of a concerns as it suggests that bullish momentum is exhausted. The good news is that there is not a lot of bearish momentum either and price action is trading above and beyond the $10,000 level. I continue to watch the $8,870 - $9,927 support area which has held up rather nice as bullish momentum depleted and it could serve as a great resting place for bulls. A breakdown below it would most certainly takes us down to the $6,380 - $6,550 narrow support area which would not be a concern for my bullish outlook.
During last week’s update “Bitcoin - Forex Combo Strategy: The Lightning Network” I discussed the flaws in Bitcoin’s attempt to become a viable player in the global remittance market. Bitcoin has metamorphosed more into a commodity than a currency and I compared Bitcoin to gold last week when I pointed out that “It’s great to have gold, but you wouldn’t use it to pay for groceries or to pay bills. The same is true for Bitcoin.” Now there are plenty of other cryptocurrencies which are great as an alternative to fiat currencies and one major missing piece of the puzzle for wider adoption was the lack of banks which cater to cryptocurrency projects and offer a bridge to traditional financial institutions. Switzerland just took a major step by approving two crypto banks, but with strict anti-money laundering provisions.
Before taking a five into the two banks, let’s take a quick look at what happened to my own cryptocurrency portfolio. As I mentioned earlier, Bitcoin has become boring and I happily hodl my 500 Bitcoin at an average entry price of $8,500. Ripple has been trading sideways as its is trying to convince bulls that its current support level is valid. I hodl my 40,000,000 Ripple at an average entry price of $0.3388, but would add more below $0.2500 if the chances opens up again after the drop in August 14th 2019. Litecoin has joined Bitcoin’s boring phase, might be a coincidence since they share the same hash algorithm, and I currently hodl 20,000 Litecoin which I bought at $77.00. The three charts below show my Bitcoin, Ripple and Litecoin holdings.
Switzerland Approves Two Crypto Banks
The Swiss Financial Market Supervisory Authority (FINMA) approved banking and securities dealers licenses for two banks in Switzerland which created the first ever pure-play blockchain service providers. Sygnum AG is registered in Zurich and SEBA Crypto AG is registered in Zug. Switzerland has taken the lead role when it comes to cryptocurrency regulation as well as banking innovation. The two licensed banks can now offer cryptocurrency banking services to institutional clients which will further increase demand and drive prices higher in select assets.
SEBA Crypto AG has previously signed a partnership agreement with private bank Julius Baer which raised CHF100 million in a funding round completed in September of 2018 and currently employs 60 individuals. The partnership is expected to commence operation in October of 2019 at which time SEBA Crypto AG is planning to launch its services. The Chairman of the Board of SEBA, Andreas Amschwand, stated “The banking licence of the Swiss Financial Market Authority FINMA is not only a milestone for SEBA, it sets a new standard for banking in the Blockchain and digital asset economy. This moment has significance far beyond the Swiss financial industry.”
Sygnum AG Partners With Swisscom and Deutsche Boerse
Sygnum partnered with Swisscom and Deutsche Boerse and created a banking solution which allows regulated banks to implement digital assets. Their solution is built on an institutional-grade digital custody and fiat-digital asset gateway. One key feature is that it allows clients to raise new tokens by using existing financial assets as collateral. The Co-Founder and Chairman of Sygnum AG, Luka Müller-Studer, added “To date, a lack of institutional-grade custody and a truly integrated banking solution has slowed the adoption of digital assets by institutional investors. Today’s licence announcement is a game-changer. By methodologically incorporating digital assets into traditional banking, and injecting much needed DLT-driven agility, Sygnum is accelerating the development of an important new asset class.”
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Switzerland the Crypto Nation
Switzerland has attracted plenty of cryptocurrency firms from around the globe so it makes perfect sense that the first true cryptocurrency banks have been licensed there. FINMA outlined rules how it intends to regulate the two banks and how it will apply its strict AML guidelines to blockchain technology firms. In essence, the regulator vowed to use a “technology-neutral” approach while warning that firms active in cryptocurrency won’t be allowed to circumvent AML protocols intended to combat criminal activity and terrorist financing.
Despite this, Switzerland is open for banking innovation which shows that the country is striking the right balance between light regulation and burden free innovation. Switzerland has a long history of attracting foreign capital thanks to its banking secrecy laws. After the country caved to international pressures and eased those laws, foreign capital outflows followed. It now views the evolving cryptocurrency market as an opportunity to become the global financial center for digital finance. This is why Facebook chose Switzerland as the home for its Libra project. Switzerland also became the first country to list an exchange trade product which tracks Bitcoin Cash on it main stock exchange.
Switzerland has now earned the nickname “Crypto Nation”, not only due to its overall friendly approach by government and regulator, but also due to its adoption by the population. Inside Switzerland, the Canton of Zug is now known as “Crypto Valley” as it has attracted plenty of companies. A low tax rate and existing infrastructure which used to cater to hedge funds have made it the top location for innovation. Zug used to be home to over 30,000 companies which roughly totals the population of it. It is now proud to be the home of over 400 different cryptocurrency firms. Expect plenty of innovation to hit the cryptocurrency sector from Crypto Valley!
Forex Portfolio Updates
Now let’s take a look at my forex portfolio and see what happened over the past week. My 100 lots long position in Silver which I took on July 26th 2019 at 16.400 for a margin requirement of $82,240 with a pip value of $5,000 remains open and unchanged. We pushed above the $18 barrier and I think we could extend those gains, but I will take profits if a price action reversal forms. On August 26th 2019 I closed my 600 lots EURUSD long position at 1.1145 for a profit of $250,000. The two charts below show my open Silver position as well as my closed EURUSD trade.
On August 22nd 2019 I bought 200 lots in the AUDJPY at 72.000 for a margin requirement of $26,979 with a pip value of $1,890.77. I acted on this trading recommendation “AUDJPY Fundamental Analysis – August 22nd 2019”. On August 26th 2019 I added 400 lots at 70.000 for a margin requirement of $53,958 with a pip value of $3,781.54. Yesterday, on August 27th 2019, I closed my position at 71.75 for a profit of $614,501. On August 26th 2019 I bought 200 lots in the EURJPY at 116.750 for a margin requirement of $44,363 with a pip value of $1,890.77. I acted on this trading recommendation “EURJPY Fundamental Analysis – August 26th 2019”. The two charts below show my closed AUDJPY trade as well as my open EURJPY position.
Here is the summary of my Bitcoin - Forex Combo portfolio: I hodl 500 Bitcoins worth $5,036,800, 40,000,000 Ripple worth $10,316,000 and 20,000 Litecoin worth $1,428,400 plus a total cash portfolio worth $6,074,039. In addition I have the following forex positions in my portfolio: a 100 lots Silver long position worth $1,048,240 and a 200 lots EURJPY long position worth $155,918. My total Bitcoin - Forex Combo portfolio is worth $24,059,397, up $1,680,306 from last week’s balance of $22,379,091 and off of my all time record high of $24,651,811. The calm and boredom of Bitcoin at support is a great development and I am monitoring price action in Ripple. My forex portfolio delivered and Silver made my performance shine. Are you ready to polish your trading results? Open your own PaxForex Trading Account today and follow my Bitcoin - Forex Combo Strategy, just comment below with any questions you may have and I will be happy to help you get started!
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