• Bitcoin ultimately unable to break out, with a high of USD 7,226 on Friday morning trade
  • Fidelity Digital Assets sees custodial companies as supermarkets doing sub-custodian services
  • Iran proposes a Muslim crypto to defy US economic hegemony

Bitcoin was fighting to break out past its resistance level of USD 7,000 but ultimately failed yesterday, although that line has now turned into the crucial support price in the space of a day.

Today’s high is only USD 7,226 so far and there is still Friday trading yet to take place in Europe, but wild gyrations are at least slightly higher than the previous weeks, with about 2% price value in volatility. A bull reversal is not yet invalidated, but USD 8,000 would be required to confirm this.

One of the important updates today is more movement on the crypto custodial front. Christine Sandler, who heads the marketing unit at Fidelity Investments, was at a Hedge Fund Association conference in New York when she likened the vision of Fidelity Digital Assets (FDAS) to a future where digital asset custodians were protecting crypto for the clients of other firms the way supermarkets sell third-party brands on shelves. She explained:

“The way we think about it is, you can build your own infrastructure but that’s really expensive… To do it really well, you have to have geographic diversity, a staff that understands the underlying technology.”

The former Coinbase employee said that she expected both Fidelity or Coinbase to be acting as sub-custodians to others, partnering with institutions to custody assets while institutional entities manage the client experience. She said:

“I expect that custodians that do really well at this–whether it’s Fidelity or Coinbase–they will act as sub-custodians to other custodians. It means they partner with other institutions and say, ‘I’m happy to custody this and you manage the client experience.'”

Sandler denied announcing any new FDAS plans, although it has been widely known that they are working on improving custodial services for over-the-counter (OTC) traders and institutional investors. The OTC market, one that is frequented by big money traders, continues to be popular with big volume Bitcoin users, but the one thing preventing their increased use is the lack of protective custodial services. FDAS and Coinbase are two of the most anticipated providers with a reputation trusted and established enough as a crypto and financial services provider.

Just last week, FDAS already announced a new European entity, while a month earlier obtaining a trust company charter from the New York Department of Financial Services (NYDFS), which gives it the ability to custody Bitcoin for institutional investors in New York.

Currently, OTC is its main business but it does intend to open its first crypto exchange before 2020. Sandler spoke of 2020 clients wanting Bitcoin exposure and that it would be a big lift in liquidity access but also “a big lift in terms of how they are incorporating that into their portfolio, what evaluation tools are being used…”.

Meanwhile, Iran is now defiantly proposing to create a Muslim crypto to challenge the US dominance in economy. Iranian President Hassan Rouhani addressed Muslim nations in a conference in Malaysia, urging them to strengthen financial and trade cooperation, while reducing US dollar reliance.

Rouhani pointed out that US economic sanctions are the “main tools of domineering hegemony and bullying” of other states, suggesting that a special banking and financial system among Muslim nations could use local currencies for trade.

Malaysian reports say Rouhani even proposed the creation of a cryptocurrency to help achieve this. He was quoted as saying:

“The Muslim world should be designing measures to save themselves from the domination of the United States dollar and the American financial regime.”

The Malaysian prime minister Mahathir Mohamad, seems to agree it would be a good idea, saying simply: “We can use our own currencies or have a common currency.”

 

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