The Wall Street Journal published an eye-opening article this week, citing how the major cryptocurrencies are traded with a high correlation to traditional raw materials and precious metals in the last week. The WSJ article cited the research data of Excalibur Pro Inc which claimed that the bitcoin was trading with a correlation of 0.84 on gold. While more institutional money pours into the encrypted space, the correlation will probably become stronger in the coming days.
The third largest cryptocurrency provider in the world of cryptocurrency spot platform Huboi launched its Derivatives Market (DM) just last month. On December 25th, Huboi said its DM platform reached the $ 1 billion daily trading volume. The renewed interest in cryptographic derivatives has reaffirmed the growing interest of institutional investors in the cryptographic sphere.
When Facebook social media giant banned cryptocurrency advertising on the platform, most analysts believe it would have a negative impact on the growing popularity of digital currencies. However, last week, Bloomberg reported that Facebook is actively developing a cryptocurrency of its own stablecoin that will be anchored to the US dollar and will be used for payment transactions in WhatsApp. Sources close to the company said that Facebook Stablecoin will initially focus on remittance services in India.
In the public sector, the National Bank of Kuwait (NBK) announced the use of Ripple's blockchain-based payment network to facilitate cross-border money transfers. Currently, NBK will use the blockchain remittance system only with Jordan, but sources said it will soon extend the service to other countries.
Meanwhile, the holiday season put more downward pressure on cryptocurrencies across the board and bitcoin made a new low of $ 3686 before Thursday. However, it rebounded on Friday and traded just below the resistance near the $ 4000 level at the time.
Based on our research, we have found that the following blockchain stocks have demonstrated substantial price movements based on changes in their corporate fundamentals.
GMO Internet Inc.
GMO Internet Inc. (9449) started operating in 1995 and is one of the IT giants in Japan. In recent years, GMO Internet Inc. has begun to develop and manufacture bitcoin mining hardware. However, as the price of bitcoins has plummeted in the last year, their cryptocurrency division has lost $ 321 million.
Of the $ 321 million loss in the fourth quarter of 2018, $ 217 million loss came directly from their hardware division. As a result, this week, GMO Internet Inc. announced to abandon the cryptocurrency operation.
"After taking into account the changes in the current business environment, the company expects it to be difficult to recover the accounting values of the company activities related to internal mining activities," the company said in legal documents.
While GMO Internet Inc. will no longer manage their cryptocurrency division, the news has had a bullish effect on the price of its shares. The fact remains that the market has already discounted the huge loss of $ 321 million and when the company announced to discontinue its cryptocurrency division, it has provided investors with a signal that losses from the hardware vision will be reduced. at a minimum in the first quarter of 2019.
As a result, the stock has become bullish and closed above the exponential moving average. In addition, the Stochastics indicator shows a strong bullish momentum in the market. If the shares of GMO Internet Inc. will close above the resistance level close to $ 1.80 per share, they will confirm an uptrend and present long-term investors an opportunity to increase their exposure to this company Japanese IT.
DataMetrex AI Ltd
DataMetrex AI Ltd. (DM) is a publicly traded blockchain stock that is working to develop Artificial Intelligence and Machine Learning technology through its wholly owned subsidiaries, Nexalogy and Canntop AI. In addition, it is implementing Blockchain technology for secure data transfers through its investee company, Graph Blockchain.
At the beginning of last week, DataMetrex AI Ltd announced that it has successfully identified several sources of false news on social media surrounding the recent federal government equalization plans using its new Fake News Detection Filter.
Subsequently, a stock research company called Fundamental Research updated its rating to DataMetrex AI Ltd to "buy" and set a new price target of $ 0.28 per share.
Commenting on the new detection technology of Fake News, the president of Nexalogy, Claude G. Théoret, said that their "software NexaIntelligence has identified 2299 posts on social media shared by 1284 sources of foreign misinformation known only on this topic".
As this new product will contribute to opening another revenue channel for the company, we believe that the $ 0.28 price target can be achieved in the short and medium term. Furthermore, we see a divergence between the Stochastics and the price of DataMetrex AI Ltd which signals an accumulation of potential bullish momentum in the market. So if we see that the share price remains above $ 0.04, it will continue to offer investors an opportunity to increase their exposure.
With the prolonged slowdown in the cryptocurrency market, many companies involved in blockchain and encryption are facing a new reality that must tighten their belts and increase operational efficiency to stay in business.
The closure of the cryptographic division of GMO Internet Inc. is a perfect example of how the decline in cryptocurrency prices has a negative impact on some blockchain stocks. However, this week, we also learned how both private-sector companies like Facebook and central banks such as NBK are pursuing blockchain technology, which keeps the industry optimistic about the long-term application of decentralized database.
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