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The Hard Fork – Weekly Market Commentary

This Week’s Topics:
1) Exchange claims it lost access to $190m of funds after founder passes away
2) Bitcoin Google search interest falls to lowest level since 2017
3) Fidelity targets March launch for digital currency custody solution


Indices Round-Up

TradeBlock Index Asset1 Price ($) 7d∆2
LTX Litecoin 33.36 3.35%
EOSX EOS 2.36 -0.07%
XRX XRP 0.30 -1.92%
XBX Bitcoin 3425.60 -3.39%
BCX Bitcoin Cash 117.34 -4.13%
ZCX Zcash 47.95 -6.10%
ETX Ethereum 106.58 -6.12%
XMRX Monero 42.60 -6.40%
ECX Ethereum Classic 3.87 -6.96%
XLMX Stellar Lumens 0.08 -15.56%
1. Underlying asset sorted in descending order by 7 day price movers.
2. 7 day price movers monitored from 01/27/2019 17:00 UTC thru 02/03/2019 17:00 UTC.

7 day price movers

Digital currencies broadly traded flat to down this week, amidst low levels of price volatility. Bitcoin prices have now entered the longest correction in history, surpassing the 2013-2015 bear market, that lasted 410 days. Bitcoin is still a relatively nascent asset class, first coming into existence 10 years ago when its genesis block was mined.

Despite Twitter CEO Jack Dorsey offering bullish statements on bitcoin this week, describing it as the internet’s new money, bitcoin traded down to just under $3,500. Among our indexed assets, Litecoin was the only riser gaining 3.35% on the week. Conversely, Stellar Lumens traded down the most, shedding 15.56% on the week.


Exchange claims it lost access to $190m of funds after founder passes away

Canadian based digital currency exchange QuadrigaCX has filed for creditor protection, in Nova Scotia Supreme Court this past week. The exchange has claimed that access to clients’ funds has been lost after the founder passed away while in India this past week. The founder is said to be the only person with access to cold wallets which stored clients’ assets.

A sworn affidavit by the founder’s wife – who did not maintain a position with the company – states that the cold wallets contain sizable positions in several digital currencies. Notably, the wallets contain 0.41% of all outstanding ether, 0.33% of all outstanding litecoin, and 0.15% of all outstanding bitcoin, as well as smaller percentages of other digital assets.

There has been skepticism across social media platforms as to whether the exchange truly does not have access to its main wallets. On Feb. 2nd, Kraken Exchange CEO, Jesse Powell, stated on Twitter that Kraken has thousands of wallet addresses known to belong to QuadrigaCX and that they are “investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys.”


Bitcoin Google search interest falls to lowest level since 2017

We tracked Google search results for “bitcoin” to identify how social media interest in the space has changed over time. Our results show that Google search interest has declined to its lowest level since May of 2017.

In the figure below, we diagram Google search interest over time. Search results included the keyword “bitcoin,” on a worldwide basis. Search interest is delineated on a numerical scale in which each value represents search interest relative to the highest point for a given time period and for a given region (worldwide). For example, a value of 100 represents the peak popularity for the term while a value of 50 means that the term is half as popular as at the peak.

Figure 1: Bitcoin Google Search Interest Over Time

Bitcoin Google Search Interest Over Time

Data for chart sourced from Google Trends


Fidelity targets March launch for digital currency custody solution

Fidelity Digital Assets is said to be targeting a March launch date for its digital currency custody business. In October 2018, Fidelity initially announced the firm would be seeking to provide a custody solution for the digital currency space in addition to various other business lines, such as execution services. An institutional grade custody solution has been long sought in the space as inadequate custody platforms have been considered one of the main bottlenecks preventing a greater flow of institutional capital into the space.

The move could help propel rival firms to begin providing digital currency solutions to their clients. Fidelity is currently one of the largest asset managers in the world with more than $7.2 trillion in client assets under administration.

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