Welcome to the fourth edition of Weekly Financial News Digest series. This series provides a quick overview of the weeks key financial news with a special emphasis on bitcoin. Shortened links to all the resources are provided below if you want to read about a covered topic in more detail.
This week’s financial news digest covers China’s currency devaluation, Vaultoro’s new plan to raise working capital and the deadening effect of New York’s BitLicence. Please check out the previous edition of the Weekly Financial News Digest in case you missed it. This weeks bitcoin video of the week is a TED talk by Nicolas Cary showing in practical yet empathetic manner why “It’s time to reimagine money”. Check it out.
Crucial shift for yuan
On Tuesday, the People’s Bank of China, the central bank, made a significant shift by allowing markets to play a larger role in valuing the yuan.
This has resulted in the largest two-day decline in decades and the value of the yuan against the dollar declining precipitously.
Before the change, the PBOC had almost complete control over the currency, although it still retains significant control now. Yuan can still only trade 2 percent above or below the fixing level for example, even after the shift.
The reason behind this move seems to be China’s desire to be included in the IMF’s basket of reserve currencies, known as Special Drawing Rights, which it uses to lend to sovereign borrowers.
However, Bloomberg reports that the decision was taken because of weakening exports which suffer under a strong yuan.
For bitcoin, this meant a price divergence between USD and CNY exchanges as renmimbi -holders fled to bitcoin as a store of value.
According to xbtc.social, despite this additional high, the bitcoin chart should continue to decline to the $250 and 1550CNY mark before a larger upside reaction can be expected.
Continued collapse in oil prices
Profits of petroleum giants ExxonMobil and Chevron have been battered by the continued decline in oil prices. Exxon, which is usually considered protected from the crude price crash, has reported its worst quarterly profits since 2009.
Chevron, its largest competitor in the U.S., is suffering equally, reporting a $2.2bn loss in production and exploration.
For Brave New Coin, this decline in oil prices hints at the unpredictability of the traditional commodities markets, while bitcoin distinguishes itself by its mathematical predictability. “Unlike Gold, Oil, Bonds, or Stocks, one thing we can rely on with Digital Currencies is trust in it’s mathematics.”
BitLicence claims more victims
Kraken and Bitfinex, two key players in the bitcoin exchange space, have signalled an end to services in New York, due to the much-maligned BitLicence.
“Regrettably, the abominable BitLicence has awakened. It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big pointy teeth. It’s at least a 40-man, bro” the Kraken blog stated.
New Yorkers will be shut out from the two major exchanges, in a move that may have a detrimental impact on bitcoin and innovation in the state. Kraken, which trades around 8,697 BTC a day, and Bitfinex will join the countless other bitcoin companies which have been forced out of the market by the legislative noose.
This news was followed by the announcement that Genesis Mining, LocalBitcoins and BitQuick will also be halting operations in New York, following the BitLicence deadline.
Have a look at the image below for a clearer picture on what applying for the BitLicence actually involves.
Vaultoro to raise $700,000
Vaultoro, the gold trading platform, has turned to BnkoftheFuture to raise additional working capital. The young start-up allows users to store their wealth in Gold, while spending it in bitcoin. Below you can see there pitch to investors and follow this link to invest.
Visa begins research on blockchain tech
Rajat Taneja, Visa’s executive vice president of technology, has stated that Visa is actively looking at the possibilities of the blockchain. “India will soon have teams that will jointly work with our research labs in US and Singapore in studying the many aspects of blockchain”
This news is indicative of the innovative power behind bitcoin tech and mainstreams’ gradual realisation of that fact, with Bitcoin Magazine reporting in June that American Express and Visa are exploring blockchain technology.
BitFlyer raises $4 million
Mitsubishi UFJ Capital Co, Venture Labo Investment and Mitsui Sumitomo Insurance Venture Capital, have invested around $4 million into bitcoin exchange bitFlyer.
You’re All Set On Financial News!
Thanks for reading the fourth instalment of the Weekly Financial News Digest. For any forgotten topics, comments or suggestions, please message me @grundy_10. If you have any other questions, would like to find out more about bitcoin, or want to take out a loan, simply go to Bitbond
Worth checking out: the latest Let’s talk bitcoin podcast
and Vitalik Buterin on Public and Private Blockchains