Weekly Recap: Tron, Litecoin Emerge from Crypto Purgatory; CBOE Puts Bitcoin ETF Debate to Rest for Now

Crypto Winter was in full effect this week, as digital currencies failed to break out of their mundane trading range. Along the way, investors learned of CBOE’s plans to shelf its application for a rule change with the Securities and Exchange Commission that would pave the way for the first U.S.-listed bitcoin exchange-traded fund. The decision had virtually no impact on the market, which means investors don’t care about the ETF or simply haven’t absorbed its implications yet.

The technical tug-of-war between the bulls and the bears has produced mixed results over the past three weeks. A strong start to the year from the bulls has quickly evaporated despite a large influx of bitcoin and other virtual currencies into circulation.

Tron, Litecoin the Standout Performers

With most major cryptocurrencies registering slight declines this week, Tron and Litecoin emerged as the clear standout performers. Tron, the ninth largest cryptocurrency by market cap, climbed 7.1% over seven days to reach $0.0268. Optimism surrounding the launch of BitTorrent Token (BTT), which can be used to buy downloadable media on the peer-to-peer network, has underscored TRX’s recent strong performance.

ICO Analysis: BitTorrent Token

Litecoin, which is ranked seventh by market cap, strung together a gain of 13% over four days. As of Friday, it was trading at $32.62, where it was up 4.3% during the week. As Hacked recently noted, Litecoin may be benefiting from excitement surrounding its logo change following its successful sponsorship of UFC 232.

After a volatile weekend, bitcoin has failed to make any progress over the past five days. For the week, it was down 1.8% to trade below $3,600. On Feb. 2, the leading digital currency will cross its longest-ever bear market, highlighting the extent of the price collapse since Dec. 2017.

The overall cryptocurrency market drifted down nearly $2 billion this week. At the time of writing, the total market capitalization was below $120 billion.

VanEck-SolidX Bitcoin Fund on Hold for Now

The U.S. Securities and Exchange Commission confirmed Tuesday that CBOE had withdrawn its application to list the VanEck-SolidX Bitcoin Fund. Specifically, the exchange is no longer pursuing a rule change that would pave the way for the first-ever U.S.-listed crypto ETF.

Gabor Gurbacs, VanEck’s digital currency chief, announced via Twitter that the application was on temporary hold to explore “appropriate market structure frameworks for a bitcoin ETF…” The SEC was scheduled to deliver a verdict on the hotly-debated product by the end of February. The general consensus among industry players was that the application would be rejected.

The ongoing government shutdown in Washington has also been cited as a reason for the withdrawn bid. The application clearly wasn’t getting the attention it deserved amid the furlough of roughly 800,000 federal workers. The longest shutdown in U.S. history is expected to continue for the foreseeable future unless President Trump invokes a national security to unlock his border-security funding. This would mean that any budget proposal presented to Congress wouldn’t require border-wall appropriations.

U.S.-China Trade Talks: No Deal Yet

Optimism that a U.S.-China trade agreement would soon materialize was shot down Thursday by Commerce Secretary Wilbur Ross, who told CNBC that both sides remain “miles and miles apart” on a new deal.

“We would like to make a deal but it has to be a deal that will work for both parties,” he said. “We’re miles and miles from getting a resolution.”

Negotiations have progressed favorably this month after China agreed to up its purchase of U.S. energy and agricultural commodities. The Trump administration is reportedly considering eliminating tariffs on Chinese goods to incentivize Beijing to make bigger concessions elsewhere. China has also said it is willing to eliminate its $323 billion surplus with Washington by purchasing an additional $1 trillion worth of U.S. goods over six years.

The Week Ahead

Amid crypto purgatory, investors next week will shift their focus to traditional markets. Corporate earnings, Federal Reserve meetings, nonfarm payrolls and U.K. Parliament’s Plan B Brexit vote are all on the docket between Jan. 28-Feb. 1. These events could have major implications on stocks and foreign exchange markets.

Bitcoin’s longest-ever bear market is also over the horizon, which will spark a new debate over the future of digital currencies. Long-term investors can expect fear, uncertainty and doubt to creep back into the market as analysts once again proclaim the ‘death of bitcoin.’

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi