Daily market review for 20.06.2018

2018-06-21 08:35:03

A group of interested industry participants has developed a blockchain platform for transferring collaterals to central counterparties (CCPs) during the securities trading. On Tuesday, the operator of the Nasdaq Stock Exchange announced that its clearing company, in cooperation with the financial conglomerate ABN AMRO Clearing, as well as financial companies EuroCCP and Euroclear, had developed a joint proof of the blockchain platform concept (PoC).

According to the press release, the goal of the development is to cover margin requirements - the need to deposit funds or securities to cover potential losses - through a distributed network for mortgagors, recipients and intermediaries.

According to the announcement, Nasdaq has developed PoC for a distributed network, while ABN AMRO Clearing and EuroCCP created an input interface and were managing integration into services. In turn, Euroclear, one of the largest settlement organizations in the world, was responsible for processing of the basic transfers of collateral, providing a final settlement and monitoring compliance with regulatory requirements.

The existing collateral processing process has faced several market changes, for example, such as increased official trading hours on the stock exchanges and the need to centralize the clearing of derivatives within OTC trading in accordance with the European Market Infrastructure regulation (EMIR), the press release said.

Due to the increase in the number of market participants involved in the purchase - managers of funds in hedge funds and institutional firms that want to clear their derivative transactions - the need to implement an effective security solution has become very acute. In particular, these companies need to ensure coverage of margin requirements, despite the fact that they work in different time zones.

Innovative development using PoC will allow market participants “to ensure margin requirements, delivery of collateral securities and to carry out a refund process within a few minutes”.

EuroCCP Executive Director Diana Chan said that PoC can be “extremely useful” for this reason. She explained:

“Thanks to this decision, we will be able to effectively ensure the protection of counterparties during trading after the closure of the exchange, reducing the number of operational problems. Today we are limited to working hours of the European banks or arrangements in other time zones”.

It is not the first time when the exchange giant Nasdaq demonstrates an increased interest in blockchain technology and cryptocurrencies. In spring, it became known that in June of this year Nasdaq plans to launch a new cryptocurrency exchange called DX exchange, which will be built on the company's platform. And in May this year, the head of the exchange said that cryptocurrencies are “the next step in the currency industry”. Therewith, at the beginning of this year, there was again information that Nasdaq was considering the possibility of launching derivatives on bitcoin.

Now, let's move to the technical analysis of bitcoin (BTC):

Bitcoin tried to grow above the level of $6,670, but bulls could not hold the initiative. As a result, bitcoin went to correction. We expect that it will reach the level of $6,450. After that, more than likely it will push away and continue its growth. The first resistance level is at $6,640. The next resistance level is at $6,740. But, judging by the chart, we can not expect the rapid growth of bitcoin.

Technical analysis of Ethereum (ETH):

Ethereum also went to correction, because bears took the initiative. We expect the correction to stop at a level no deeper than $505. Deeper correction should not be expected for now. There are no good reasons for this yet. We can expect a turn of ethereum not below a level of $505. The next resistance levels of $530 and $590 are waiting for it.

Technical analysis of Ripple (XRP):

Ripple seems to be weaker than bitcoin and ethereum. It went to correction, dropping to the level of $0.51. We think that bulls will not allow to push the price below the level of $0.49. There is a strong resistance level, and there are no strong negative reasons for this. In the process of its growth, resistance levels of $0.54 and $0.60 are waiting for ripple.

Disclaimer. This review is only for information purposes and cannot be considered as a proposal or an indication to perform certain transactions in the financial and commodity markets. The estimates and recommendations in the review are the personal opinion of the company's analysts. The company's view on the prospects for individual financial instruments is valid as of the date of the report. The Company does not assume any liability and liabilities for compensation for damage that may result from the use of this report.
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