Hillstone Finance Weekly Update (Jan 2~6)
Welcome to the weekly update from Hillstone Finance. We have brought two news for this week:
1. Rayol Hwang participated in the NBN news
2. Duk-hyun Hong participated in the NBN news
NBN News (Jan 2, 2023)
Q. What do you expect for the digital asset market in 2023?
A. There’s a first FMC scheduled in February. There are some flows in that the market economy is not unstable as we thought comparing the interest rate increase, and so we can expect the directional point of Bitcoin between January and February. The market will stabilize when traditional financial institutions join the cryptocurrency, but it’s hard to expect a big price rise.
Q. Will the domestic exchange’s trend of attention items continue this year?
A. Korean Blockchain companies are focusing too much on the domestic market. We have to get on with the trends oversea. People using overseas exchange increases, and we think it’s better to widen the investment range. We’re preparing the introduction of the overseas market’s trend flow.
Q. Why do domestic coin projects proceed after establishing overseas subsidiaries?
A. Existing domestic blockchain companies have carried out projects with corporations overseas. This is not good for blockchain in Korea, but it can’t be helped at the moment. Most of them started establishing subsidiaries in Singapore, but now it became difficult due to Singapore’s regulations becoming more severe. Therefore, many blockchain companies are turning to Dubai.
Q. What is the UAE’s policy direction?
A. For Dubai, they keep trying to provide benefits for enterprises moving into Dubai. The Dubai International Financial Center opened in 2004 and is still the biggest financial hub in the middle-east. As the blockchain become the trend in 2017, Dubai started supporting the blockchain and immersed many blockchain companies. Massive exchange services like Binance, Crypto.com, and OKX are moving to Dubai. Crypto-Center of Dubai DMCC is becoming the center of crypto.
Also, I invited the DMCC chairman to Busan Special Blockchain Zone while visiting Dubai. Talking with him, we felt that many oversea projects want to enter Korea. We wish many Korean companies to enter Dubai, and place the infrastructure for overseas projects to settle in Korea this year.
Q. Any advice for domestic companies dreaming of entering Dubai?
A. Hillstone had many occurrences before establishing a corporation in Dubai. Dubai is optimistic about getting enterprises, but there is a lack of trustworthy agencies, and cultural difference happens. Therefore, Hillstone is planning to be the mainstay of helping domestic companies move to Dubai. I hope Hillstone will be a greats help to domestic blockchain companies.
Q. Exchange, NFT, DAO, and De-Fi. What are the events that could leave a much greater advantage when entering Dubai?
A. Large exchanges and companies such as Binance are not moving their bases to Dubai for no reason. Analyzing how would Dubai’s restrictions and policies will become manageable and figuring out the limitation in Singapore and Korea will help to get objective sight into the future of projects and the related coins.
NBN News (Jan 3, 2023)
Q. In the face of continuing unfavorable factors about cryptocurrency, What do you think about the opinion that the floor price hasn’t come out yet?
A. If you’re going to assess macro factors, There are quite a few opinions that it is an appropriate price to purchase only when it is about -10% lower than the 22-year low. However, the number of Bitcoin holders has been increasing recently.
Q. Do you mean that more and more forces are buying Bitcoin?
A. Not only Mark Sailor, but Microstrategy has also been collecting Bitcoin steadily in the past. They seem to be confident that Bitcoin will replace gold and dollars rather than profits. Microstrategy is getting criticized, but from the perspective of asset preservation, the global economic market seems to have made a not-so-bad choice compared to falling rates such as interest rates, difficulties for companies, and falling stocks. More and more institutions are indeed buying Bitcoin, but I think the rise in bitcoin holders has a close impact on mining companies.
Q. What is the correlation between bitcoin mining companies and cryptocurrency prices?
A. When analyzing 10 large companies among Bitcoin mining companies, 40,300 of the 40,700 mined Bitcoin were sold. Most of the bitcoin inventories of mining companies are likely to have been sold. The decrease in mining volume and sales volume can be said to be a green light for investors.
Q. What do you think about the opinion that cryptocurrency may be a Ponzi scheme, including the recent Luna Terra and FTX incidents?
A. I think there are many tokens that have a Ponzi structure. Value occurs only when there is real demand, and scarcity must also exist. The bad news of 2022 has informed the public that it should always be suspicious and cautious, no matter how big a company is. But not all cryptos are ponzi. Cryptocurrency definitely has a use case. Representative examples are the means of value exchange, overseas remittance and fund exchange, smart contract, and Yield. In 2023, we hope that various projects that create demand through use cases that are close to our lives will draw attention.
NBN News (Jan 6, 2023)
Q. Will there be a rising market in 2023?
A. Determining the rise of cryptocurrency is the price of Bitcoin. Altcoins’ prices eventually have no choice but to follow Bitcoin’s price moves. Even if new technologies or new updates change the price of altcoins, it eventually shows the same pattern as Bitcoin’s move again, so the rise of Bitcoin can lead to the rise of the entire coin.
Additionally, when various financial institutions collate for cryptocurrency, they invest in Bitcoin or Ethereum, not in altcoins. In the end, large inflows of funds occur in Bitcoin and Ethereum, and it is hard to see an upward trend without a new flow of funds. So we need to focus a little bit on bitcoin miners who are closely affected by bitcoin prices.
Q. Do you mean we should focus on the miners?
A. 2022 was the worst year for miners. In the first and second quarters of this year, many miners are likely to leave the mining market or go bankrupt. As mining costs rise, companies will no longer be able to withstand them, and the decline in mining volume is a green light for investors.
Q. Is it effective using the on-chain data?
A. Because the transaction data are written on every node publicly, There can’t be any hiding or manipulation. On-chain data works as an overwatch, we can filter out indiscriminate information. Looking at the on-chain data we can see that prices fluctuate within a few minutes after the transfer of funds. If on-chain data is used for existing charts and market analysis, more accurate price fluctuations can be confirmed.
That is all for this weekly update.
Thank you and Happy New Year.
See Hillstone Finance on Twitter:
https://twitter.com/hillstoneFin
