Dogecoin Woofs at Moon with a Billion Dollars

Anything goes in the cryptoland, so much so that an altcoin created as a parody has just reached a billion dollar market capacity. Dogecoin was created in 2013, its mascot is a Japanese Shiba Inu dog made popular by an internet meme dating back eight years.

The dog it seems has broken off its leash after being largely left behind last year as other altcoins too center stage. Defying its creator’s belief, DOGE has risen 900% in the past six weeks from $0.001 to its current high of $0.01. What is more astounding is that it has surpassed the billion dollar market capacity which puts it just behind Russian crypto platform Waves in the market cap charts. Over $120 million has been traded in DOGE in the past 24 hours according to Coinmarketcap.

Jackson Palmer, the founder of the cryptocurrency who left the team in 2015, is concerned;

“The fact that most conversations happening in the media and between peers focus on the investment potential is worrying, as it draws attention away from the underlying technology and goals this movement was based on. I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over 2 years has a $1B+ market cap.”

Current Dogecoin developer Patrick Lodder was equally surprised and told Coindesk;

“To me, this proves that we don’t need shiny features or a ton of innovation and even with a conservative – and in my own case completely distracted – development team for a boom,”

The sentiment was shared by another developer on the team, Max Keller;

“It’s a little scary when you work on software that powers a billion dollar network. This is quite the responsibility. And also one of the main reasons why we are so reluctant to just slap any ‘innovative’ tech into the reference client. Still, I am proud of what we achieved and thankful to be part of such a great community.”

Dogecoin does not really have a grand purpose aside from being a simple internet currency. Its appeal could just be its low cost. There is a psychological barrier to overcome when a single digital coin such as Bitcoin is worth $15,000, new traders would be more comfortable owning several thousand smaller altcoins than a fraction of a Bitcoin. Digital assets trading house Octagon Strategy managing director Dave Chapman told CNBC;

“The two most well-known cryptocurrencies (i.e. bitcoin and ethereum) are considered too expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety,”

DOGE is currently traded the most on Bittrex and Poloniex which have 23% and 20% of the volume respectively.

Subscribe to our newsletter

When most people think about high-tech innovation, the former Soviet bloc is probably one of the last places on Earth that springs to mind. However, Belarus is making efforts to change that. Thanks to a progressive piece of legislation that was signed into law last Thursday, President Alexander Lukashenko is hoping that the brightest minds and most innovative companies from the fintech and blockchain space will choose to call his nation home.

The law legalises cryptocurrency transactions amongst other provisions. It’s hoped that these will drive private sector growth in a State that has been burdened with an overbearing bureaucracy that was left behind after the fall of the communist regime in the early 1990s. By liberalising the economy, it’s thought that the nation will be able to attract greater levels of foreign investment. In somewhat poetic language, Lukashenko spoke of his plans to create an environment suitable for technological innovation earlier this month:

“All smart and intelligent people know what stability and order are… They’re all trying to reach that shore. We’re prepared to arrange a dock and even a harbour.”

The presidential decree will make it legal for citizens to participate in initial coin offerings, as well as for companies planning them to run their operations from Belarus. It will also legalise all cryptocurrency transactions, as well as giving those making them a tax break for the next five years.

In addition, provision is being made to allow companies relief from the often-confusing Belarusian legal system. Instead, they will partially be governed by English law. Denis Aleinikov, a partner at a Minsk-based law firm and main author of the law, spoke to Reuters about the hurdles foreign companies encountered, prior to the change in legislation:

“We regularly faced legal problems. When a Western company buys a Belarusian company they try to structure the deal outside Belarus… Investors don’t want to deal with Belarusian legislation.”

It’s hoped that the decree will provide a haven for fintech companies who are often trying to innovate in unsure legal climates around the world. The security provided by a friendly legislative will surely prompt greater innovation. This will be mutually beneficial to the companies, their employees, the industry at large, and the government of Belarus. Anton Myakishev of Microsoft Belarus elaborated:

“It gives the industry the possibility to make a leap forward in its development and allows foreign capital the possibility to come to Belarus and work in comfortable conditions.”

 

On CNBC’s Rundown, respected researcher, and financial analyst Ronnie Moas from Standpoint Research stated that in the long-term, the bitcoin price will likely reach $400,000.

“Bitcoin is already up 500 percent since I recommended it in the beginning of July, and I’m looking for another 500 percent move from here. The end-game on bitcoin is that it will hit $300,000 to $400,000 in my opinion, and it will be the most valuable currency in the world,” said Moas.

In July, Moas predicted the price of bitcoin to surpass the $5,000 mark by the end of 2017, when bitcoin was trading at below $2,600. As of December 18, the price of bitcoin remains above $19,000 and its market cap has surpassed $317 billion.

$400,000 Long-Term Target

Essentially, a $400,000 long-term price target of bitcoin would require the market valuation of the cryptocurrency to achieve exactly $8.4 trillion, a market cap that is larger than that of gold.

In 2013, Thompson Reuters GFMS revealed in a report that there exists 171,300 tons of gold in supply. That estimate placed the valuation of the gold market at $7 trillion. For the price of bitcoin to surpass $400,000, its market cap will have to surpass that of the gold market.

Previously, NewsBTC reported that JPMorgan global markets strategist Nikolaos Panigirtzoglou explained the potential of bitcoin penetrating into the gold market and establishing itself as the premier store of value through a drastic increase in liquidity and adoption.

Panigirtzoglou stated that the launch of bitcoin futures contracts and integration of the cryptocurrency by major financial institutions would allow bitcoin to compete against traditional asset classes such as gold. He stated:

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class. The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

Bitcoin Already Penetrating Into Offshore Banking Market

As many analysts including Blocktower co-founder Ari Paul noted, bitcoin is already penetrating into the offshore banking market at a rapid pace, an industry which major banks such as JPMorgan and Goldman Sachs dominate.

The offshore banking market is estimated to be worth over $40 trillion, with the majority of holdings and wealth of large-scale investors and traders stored overseas. Paul emphasized that as a robust and decentralized store of value, Bitcoin is capable of serving the offshore banking market in orders of magnitude better than centralized financial institutions, as it provides financial freedom, privacy, and independence.

Over the next few years, if bitcoin can sustain its current growth rate as a store of value and a currency, the market cap of the cryptocurrency will likely enter the trillion dollar region.

In April, ShapeShift CEO Erik Voorhees, who has always been extremely optimistic in regards to the mid to long-term growth trend of the cryptocurrency market, explained that he would be satisfied if the cryptocurrency market cap surpasses $300 billion by 2021.

The bitcoin market cap has surpassed the $300 billion cryptocurrency market cap prediction by Voorhees, and the market valuation of all of the cryptocurrencies in the market combined has surpassed $587 billion.

Litecoin has outperformed bitcoin in 2017, demonstrating a staggering 8,000 percent increase in price. While it still remains as the fifth largest cryptocurrency behind Bitcoin Cash and Ripple, it has solidified itself as a leading digital currency.

Since January 1, the price of Litecoin has surged from $3.63 to $302, as its market cap increased from below $177 million to $16.4 billion. The market valuation of Litecoin is currently larger than that of bitcoin in the beginning of 2017.

Potential Factors Behind Rally

Over the past 12 months, the bitcoin dominance index has decreased from above 80 percent to 56 percent. Several analysts have attributed the decrease in the bitcoin dominance index to the migration of users from bitcoin to alternative cryptocurrencies (altcoins) such as Litecoin and Ethereum that have significantly lower transaction fees than bitcoin.

At the time of reporting, the median transaction fee of Litecoin is around $0.065, while Ethereum’s remain above $0.5. Due the high transaction fees of bitcoin, many users have started to utilize Litecoin to process cheaper and small transactions.

Bitcoin Fees, a bitcoin transaction fee prediction platform developed by Earn.com (formerly 21 Inc) show that the fastest and cheapest transaction fee is 430 satoshis per byte, or 97,180 satoshis for median-size transaction. That is, a recommended fee of around $18.

When the size of the bitcoin mempool is below 50 million bytes or is relatively low, transactions can still be confirmed by miners with lower fees. But, when the size of the bitcoin mempool is larger than a hundred million bytes, without high fees, it is difficult to have transactions confirmed within 24 hours.

More users have begun to utilize Litecoin and other alternatives like Ethereum to process small transactions with cheaper fees, while relying on bitcoin as a robust store of value and safe haven asset.

Still, Litecoin creator and former Coinbase director of engineering Charlie Lee emphasized that it could take at least five years for general consumers to utilize bitcoin and litecoin in the real world.

“I think we’re still maybe five years away before people actually start using bitcoin and litecoin in real world use as a currency,” said Lee.

Where Does Litecoin Price Go in 2018

In consideration of the recent surge in the price of litecoin, Lee stated that he would be satisfied if the litecoin price stays in the $300 region by the end of 2018. That is a rather conservative prediction from Lee, as litecoin has increased by more than 83-fold year-to-date.

“I would be happy if litecoin stays at around $300 by the end of next year. It’s still very surprising how much it has grown this year. I never like to speculate on prices because I’m always wrong. If I tell you it’s going to go up and it doesn’t, you’ll be upset,” said Lee.

If more users continue to utilize litecoin for cheaper transactions and small payments, the user base and market valuation of litecoin will likely increase at a rapid rate throughout 2018.

The top brass at one of the UK’s leading financial regulators has given a stark warning to those investing in Bitcoin. Andrew Bailey of the Financial Conduct Authority said that people who had bought Bitcoin better be prepared to “lose all their money”. Presumably, he meant just the portion that they’d invested in cryptocurrency, however.

For Bailey, without central banking, or government backing, there was nothing at all to suggest that Bitcoin was a secure investment. He likened the level of risk posed to proponents of digital currency to gambling. He told a BBC reporter on their Newsnight program:

It’s not a currency, it’s actually not regulated in its Bitcoin form.

He commented on the volatility of the market in terms of pricing, citing the last year’s gains as reason for caution. He even suggested that there was no evidence to determine what informs the current price of Bitcoin.

Continuing, he highlighted that the supply of Bitcoin is fixed, but for a supposed financial expert, failed to acknowledge that huge increases in demand versus a fixed supply can result in a price going in one direction, and one direction only – up. His summary of Bitcoin’s finite number was simply, “odd”.

Spoken like someone who is absolutely clueless about the Bitcoin and the wider cryptocurrency space, he neglected to acknowledge either of the main driving forces behind the current price of digital assets like BTC, ETH, and LTC. Firstly, there was no recognition that they represent a growing resistance to a toxic banking system that has kept people in servitude to non-elected actors for all of the current century, and most of last. Secondly, he failed to acknowledge the less noble reason behind the surge in price, that is the “get rich quick” folk.

Bailey is just the latest of a long line of critics of decentralised digital currency. We’re sure that there were people who were opposed to every other game-changing technology that has ever been created. The motor car was faced opposition from people who thought there’d be bedlam in the streets and that people wouldn’t be able to drive across town without mowing down at least three children on the way.

Meanwhile, perhaps the most democratising innovation mankind has ever known, the internet, also met fierce resistance. I mean, who would want to use it apart from drug traffickers and child pornographers? The notion of ordering a pizza, or buying your Christmas shopping online was one that early naysayers couldn’t compute, just as the blockchain-based, digital democracy we’re rapidly moving towards is today.

 

Teenagers to middle-aged investors in South Korea are engaging in cryptocurrency trading, investing in bitcoin, Ethereum, Bitcoin Cash, and a wide array of cryptocurrencies and assets.

Government Steps In To Regulate Bitcoin

In the beginning of 2017, the South Korean government, local financial authorities, and the ministry of strategy and finance remained neutral to bitcoin and declined to regulate the space because any sort of regulation would provide legitimacy to the cryptocurrency market.

The South Korean government was hesitant towards regulating bitcoin and business merely 6 months ago because it believed that the imposition of strict regulatory frameworks and policies would further lead the South Korean finance market and general consumers into the bitcoin market.

Since South Korean prime minister Lee Nak-Yeon’s public statement in early November about his concerns over teenagers and students jumping into cryptocurrency trading, the South Korean government has formed a task force operated by the South Korean Ministry of Strategy and Finance, Financial Services Commission, Ministry of Justice, Fair Trade Commission, and Financial Supervisory Commission to create regulations around the cryptocurrency market.

Earlier today, on December 13, leading South Korean cryptocurrency exchange Bithumb noted that the imposition of regulations in the South Korean cryptocurrency market would further legitimize and validate the industry, given the rapid increase of demand from local investors for bitcoin and other cryptocurrencies in the market.

”A right set of regulations will rather nurture the (virtual currency) market, and we would welcome that,” Bithumb told Reuters.

South Korean cryptocurrency trading platforms such as Bithumb, Korbit, and Coinone, which have a daily trading volume that is larger than KOSDAQ, South Korea’s main stock market, are already equipped with well-structured Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.

The rigorous verification and approval process of cryptocurrency trading accounts by the three abovementioned exchanges are well recognized. The exchanges require traders and investors to submit a wide range of documents such as government-issued IDs, proof of income, bank account information and carry out face-to-face interviews.

Why is Government Regulation Necessary?

Middle to high school students, college students, middle-aged investors, and grandparents are investing in bitcoin. As Isaac Chung, a college student turned bitcoin enthusiast told CNN Tech, “First, it was just tech people. Now, literally, everyone is interested in bitcoin.”

In an interview with Nathaniel Poppers of the New York Times, Tony Lyu, the co-founder and CEO at Korbit, the South Korean cryptocurrency market’s third-largest exchange which was recently acquired at a $140 million valuation, emphasized that the South Korean finance sector tends to overheat quickly, as investors desperately move to follow the recent trend.

“Word just spreads really fast in Korea,” said Lyu. “Once people are invested, they want everyone else to join the party. There’s been this huge, almost a community movement around this.”

In South Korea, literally, investors of all ages are starting to invest in bitcoin and the cryptocurrency market, and the demand for cryptocurrencies has reached a point in which the government deemed regulations for cryptocurrency business and investors are necessary.

The combined market valuation of every cryptocurrency in the market has recently surpassed $500 billion or half a trillion dollars, because of the strong performance of bitcoin, Ethereum, and Litecoin.

Since earlier this week, the price of leading cryptocurrencies including Litecoin, Ethereum, Bitcoin, and Bitcoin Cash has increased by more than 20 percent. Litecoin in particular recorded a staggering 80 percent weekly gain, as its price spiked to more than $300.

Widespread Adoption

As a decentralized cryptocurrency and financial network, bitcoin was specifically designed to provide users with financial independence, freedom, and privacy by eliminating intermediaries such as banks and financial service providers.

Bitcoin has already begun to penetrate into multi-trillion dollar markets in gold and offshore banking, which by some estimates amount to nearly $50 trillion in market cap. The offshore banking industry remains dominated by leading banks and financial institutions like the $360 billion JPMorgan and $97 billion Goldman Sachs.

According to Ari Paul, a prominent venture capitalist, bitcoin analyst, and the co-founder at Blocktower Capital, bank executives such as JPMorgan CEO Jamie Dimon have expressed their opposition against bitcoin over the past few years, because they have considered bitcoin a threat to their existing ventures and dominance over the offshore banking industry.

The vast majority of large-scale investors prefer to store their wealth in offshore bank accounts and gold because those two systems provide financial freedom and privacy. But, Paul noted that bitcoin and other cryptocurrencies in the market serve the offshore banking industry significantly better and more efficiently than banks. Hence, for many years, bankers have condemned, criticized, and dismissed bitcoin as a major asset class and a competitor to gold.

Recently, bitcoin and the entire cryptocurrency market have become a big challenge for big banks, because as several analysts have stated, bitcoin is beginning to eat away at the gold market and the offshore banking industry.

“If you add up all the cryptocurrencies and the liquid gold that’s in the market right now, the cryptocurrencies in market cap are now 23 percent of the liquid tradeable gold,” said Larry McDonald, the head of U.S. macro strategy at ACG Analytics. “That’s up from 2 or 3 percent a year ago, so cryptocurrencies are definitely eating into the gold play.”

The listing of bitcoin futures by the Chicago Board Options Exchange (CBOE) and CME Group, two of the largest options exchange within the global finance sector, have further solidified bitcoin’s presence in the market as a leading asset class, premier store of value, and settlement network.

Government Recognition

Due to the rising demand from the traditional finance sector and widespread adoption of bitcoin, the cryptocurrency market cap has surpassed the $500 billion mark. Currently, South Korea, India, and other leading governments are preparing to regulate their respective bitcoin and cryptocurrency markets, to facilitate the demand from both institutional investors and general consumers.

Recognition and legalization of cryptocurrencies by governments will allow bitcoin and the cryptocurrency market to grow at a faster rate, exponentially, over the next few years.

According to ACG Analytics US macro strategy head Larry McDonald, investors have begun to sell gold to invest in bitcoin through the newly launched bitcoin futures exchange of the Chicago Board Options Exchange (CBOE).

Bitcoin is Penetrating into the Gold Market

Since September, the value of gold miners ETF (GDX), the largest gold exchange-traded fund (ETF) in the market, has fallen by nearly 15 percent. In the past, McDonald noted that the value of gold ETFs were correlated to the price trend of bond yields. But, this week, McDonald explained that the decline in the price of gold ETFs was triggered by the rapid increase in demand for bitcoin.

On CNBC’s Power Lunch, McDonald explained, “Over the last two years, every time rates have come down, and this week rates have moved lower, you had gold go up. Almost every time, there has been an 82 percent correlation between gold and bonds. This week, for the first time, that correlation broke down, and I do think it has something to do with bitcoin.”

Earlier this month, JPMorgan global markets strategist Nikolaos Panigirtzoglou stated that the listing of bitcoin futures by CBOE and CME, two of the world’s largest options exchanges in the global finance market, will provide the cryptocurrency with sufficient liquidity and robust infrastructure to become a major asset class.

Given bitcoin’s decentralized nature, transportability, fixed supply, and divisibility, Panigirtzoglou emphasized that in the long-term, bitcoin will be able to compete with traditional stores of value such as gold.

McDonald offered a similar viewpoint as Panigirtzoglou, as he stated that bitcoin and cryptocurrencies in the market are already eating into the multi trillion dollar gold market. He said:

“If you add up all the cryptocurrencies and the liquid gold that’s in the market right now, the cryptocurrencies in market cap are now 23 percent of the liquid tradeable gold. That’s up from 2 or 3 percent a year ago, so cryptocurrencies are definitely eating into the gold play.” 

Currently, the price of bitcoin is $16,600, with a market cap of over $279 billion. The market valuation of bitcoin accounts for less than 5 percent of that of the global gold market. But, according to McDonald, bitcoin will likely sustain its exponential growth rate in the long-term, while gold continues to decline in value against bitcoin.

Long-Term Price Trend

At the current phase, in which institutional investors and large-scale hedge funds are rushing to invest in bitcoin even with high premiums, it is highly unlikely that the price of bitcoin will be negatively impacted by bitcoin futures. In fact, over the past 24 hours, the price of bitcoin increased by more than 20 percent, after the launch of CBOE’s bitcoin futures exchange.

As analysts including BitMEX business development head Grey Dwyer noted, the market cap of bitcoin could reach a trillion dollars by the end of 2018, as tens of billions of dollars in institutional money flow into the bitcoin market in the upcoming months.

Earlier this week, some of the global finance market’s largest banks including Goldman Sachs, Morgan Stanley, JPMorgan, and Citigroup opposed the launch of bitcoin futures, claiming a lack of transparency and regulation.

The open letter submitted by the Futures Industry Association (FIA) representing the abovementioned banks read:

“While we greatly appreciate the CFTC’s efforts to receive additional assurances from these exchanges, we remain apprehensive with the lack of transparency and regulation of the underlying reference products on which these futures contracts are based and whether exchanges have the proper oversight to ensure the reference products are not susceptible to manipulation, fraud, and operational risk.”

Goldman Sachs Changes Stance, JPMorgan Claims Bitcoin Futures Will Grant the Cryptocurrency Legitimacy

According to Bloomberg, Goldman Sachs, the $95 billion investment bank, is planning to clear bitcoin futures on behalf of its clients upon the launch of the bitcoin futures exchanges of CBOE and CME, two of the world’s largest options exchanges.

A source familiar with the matter stated that Goldman Sachs will clear client trades on a case-by-case basis, to ensure the process remains secure and efficient for clients.

Goldman Sachs spokeswoman Tiffany Galvin also stated:

“Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process.”

Previously, on December 1, JPMorgan global markets strategist Nikolaos Panigirtzoglou, told the bank’s clients that the launch of bitcoin futures exchange by CME and CBOE will add legitimacy to the cryptocurrency, and allow it to evolve into the next gold.

“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors,” said Panigirtzoglou, emphasizing the expected flow of tens of billions of dollars into the bitcoin market over the next few weeks.

Leading financial institutions and major banks have opposed the launch of bitcoin futures primarily because the listing of bitcoin futures will likely trigger a massive inflow of institutional money. Coinbase CEO Brian Armstrong estimated the amount to be $10 billion, which is expected to move into the bitcoin market by the year’s end.

Listing of Bitcoin Futures Threatens Major Banks

As Ari Paul of Blocktower noted, the rapid and exponential growth rate of bitcoin, and the entrance of tens of billions of dollars into the bitcoin market will lead to the cryptocurrency penetrating into the multi-trillion dollar offshore banking industry, which brokerages such as JPMorgan and Goldman Sachs dominate.

If bitcoin continues to grow at the current rate, which will likely be the case with the listing of bitcoin futures by large-scale exchanges, it will begin to challenge the industries and markets controlled by the global financial sector’s leaders, such as JPMorgan.

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class,” Panigirtzoglou stated, adding that  “the value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

Square, one of the most widely utilized financial applications globally founded by Twitter founder and CEO Jack Dorsey, has started to expand its pilot integration of bitcoin across its user base.

According to the official announcement made by the Square Cash App team, the company’s bitcoin brokerage services will be provided to more of the Square Cash App’s most active customers. In the upcoming weeks, more users will be able to purchase, sell, and store bitcoin directly on the Cash App.

The Square team said that it believes bitcoin empowers its users to participate in the global financial system. “We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system, and we’re excited to learn more here,” said the company.

Square Will Compete With Coinbase and Existing Companies in Cryptocurrency Industry

By market valuation, revenue, and profit margin, Square is significantly larger than financial service providers within the bitcoin and cryptocurrency market. Coinbase, the US-based bitcoin brokerage, and wallet platform, became the first and only billion-dollar startup in the industry, achieving a $1.6 billion market valuation.

Square’s market cap remains at around $15 billion, nearly 10 times larger than that of Coinbase, the largest bitcoin and cryptocurrency company in the global market.

Given Twitter CEO Jack Dorsey’s optimism towards bitcoin, it is highly likely that Square will continue to provide bitcoin services to its users. With a full roll-out of its bitcoin integration, the Square team will be able to compete against existing companies in the cryptocurrency sector, such as Coinbase.

Researchers at Credit Suisse, a Swiss financial service company, and the country’s leading commercial bank stated that the integration of bitcoin could lead to tens of millions of dollars in additional revenues in the short-term. As the cryptocurrency market continues to grow at an exponential rate, Credit Suisse analysts Paul Condra and Mrinalini Bhutoria explained that the revenues could increase rapidly.

“Despite these [regulatory] risks, the upside could be significant if cryptocurrencies become more mainstream,” wrote Condra and Butoria.

Although the two analysts emphasized that there are regulatory risks in integrating bitcoin, such risks have become non-issues in the global cryptocurrency industry, considering that the US and Japan, two of the largest markets, have imposed strict regulations for businesses.

The two Credit Suisse analysts added, ”given Square’s tendency to move judiciously into new technologies, we expect it will do the same with bitcoin purchases. We believe the largest risk is regulation, which could limit its ability to provide the service or outright ban it. Square is also exposed to liquidity and counterparty risk as it must source bitcoin for users either by pre-buying or using an exchange.”

More Financial Institutions Will Provide Bitcoin Support

The cryptocurrency market has evolved into a  $370 billion industry, with the daily trading volume of all cryptocurrencies in the market combined surpassing $20 billion. In the mid to long-term, every financial company will try to penetrate the market and provide support for the emerging asset class.

In South Korea, the third largest bitcoin exchange market behind Japan and the US, Shinhan, the country’s second biggest commercial bank, has started testing bitcoin wallet and vault services. A Shinhan spokesperson told Naver News, a media publication of the nation’s most widely utilized search engine, that it intends to serve users and traders on exchanges, considering that major South Korean cryptocurrency exchanges such as Bithumb were hacked multiple times this year.