Blockchain Stocks Weekly Update – January 11: China Wants Crypto Operators to Verify Users with IDs

PayPal Holdings, Inc (PYPL) January 2019

If anyone had any doubt about the viability of blockchains in mission-critical applications, The National Aeronautics and Space Administration (NASA), the American space agency, cleared that out this week by proposing to use blockchain for air traffic management.

Governments around the world continue to embrace decentralized database solutions and the Mongolian city government of Ulaanbaatar joined the trend by partnering with Terra, a blockchain based payment company, to use Stablecoin for utility bills and government subsidy payments in the city.

Meanwhile, Japanese financial regulator, the Financial Services Agency (FSA), granted cryptocurrency exchange Coincheck with full permission to operate in the country. Coincheck was hacked last year and lost around $530 million worth of altcoin tokens. Currently, it is registered with the Kanto Financial Bureau in Japan.

While most governments are embracing the new age approach of the blockchain-based applications, the government of China seems to have different ideas. This week, we have learned that the Cyberspace Administration of China (CAC) published new regulation and guidelines for cryptocurrency companies operating in China. According to the guidelines, all firms in the industry need to provide the Chinese authorities access to their stored data. Also, they must to introduce registry procedures and identify users using official ID card or mobile numbers. The regulation will come into effect on February 15, 2019.

Based on our research, we found that the following blockchain stocks demonstrated notable price movements based on shifts in their company fundamentals.

PayPal Holdings, Inc

PayPal Holdings, Inc (PYPL) requires no introduction as it is the largest online payment processing company operating in more than 200 countries worldwide. On December 2018, we learned that PayPal is testing a blockchain based token reward system for its employees. And this week, HP said it has started a strategic collaboration with PayPal.

By partnering with PayPal, HP will provide small businesses with a complete solution of hardware, point-of-sale software, and payment processing to deliver the complete, end-to-end solution that smaller retailers need, the press release said.

PayPal Holdings, Inc (PYPL) January 2019

Since the announcement of the partnership with HP, PayPal’s stock turned bullish and crossed above the resistance near $80.80 per share. It is now slowly moving towards the major resistance around the $92.25 per share level.

One of the Big Four consulting firms, McKinsey, recently published a report saying that the blockchain based payment systems have yet to become the game-changer. We believe this report is another reason why PayPal’s stock price gained bullish momentum this week as investors feel confident about the viability of PayPal’s business model in the long-run.

Hence, if we see PayPal’s stock price going above the resistance near $92.25 per share, it may trigger a fresh start of a new uptrend.

Venzee Technologies Inc

Venzee Technologies Inc (VENZ) runs a Software as a Services (SaaS) based platform that seamlessly integrates the world’s largest retailers and suppliers, bringing products to market faster than ever before. Also, its platform help customers replace manual data entry, which results in a digital supply chain that increases margins and accelerates revenue.

Although Venzee Technologies Inc’s stock remained bearish since July of 2018, by the end of November, it broke above the downtrend line. For the last month, it traded mostly sideways but formed a moderate, 7-degree, the uptrend line.

Venzee Technologies Inc (VENZ) January 2019

While there were no major fundamental news releases regarding Venzee Technologies Inc this week, there some notable technical developments. Jerry Holland from the Holland Review pointed out last week that Venzee Technologies Inc’s Chikou span line has moved above the Tenkan price line, indicating a potential trend reversal.

While the Commodity Channel Index (CCI) of Venzee Technologies Inc has fallen, it has fallen much faster compared to the price, indicating a bullish divergence in the market. Currently, the stock price seems to have found support near the $0.09 per share level. Unless we see the stock trading below this support level, the bullish thesis should remain valid and long-term investors may want to consider increasing their exposure at this price point.

Bottom Line

The latest developments in the public sector this week underlined the fact that investors are not worried about how individual cryptocurrencies are performing at the market.

Also, the regulatory measures around cryptocurrencies are building momentum. While online privacy advocates are worried that increased regulation will make it harder to conduct crypto transactions without revealing the identity of the parties involved, there is a bright side to the story. With regulation, governments are helping cryptocurrencies to become mainstream.


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