Ripple Rolls Out XRP Ledger Updates to Boost Software Efficiency

Ripple Labs has rolled out new upgrades to its asset’s ledger to improve functionality. The company continues to deal with the fallout of the SEC’s probe into its affairs.

Top blockchain company Ripple Labs continues to make progress with its XRP asset and other affiliated projects despite the looming lawsuits against it.

In a recent update, the company has announced operational developments that will improve its XRP Ledger’s efficiency.

Improved Speed, Reduced Bandwidth

Yesterday, the Silicon Valley firm published a press release confirming the launch of version 1.7.0 of its XRP Ledger. In the release, Ripple confirmed that the updates would go a long way in bolstering the ledger’s security, efficiency, and operational decentralization.

RippleX, Ripple’s open payment integration platform, has been working to improve the XRP Ledger’s resources and compatibility with various server configurations.

David Schwartz, Ripple’s technology chief, was given the most credit for this, following his work to reduce several caching layers. With his move, the payment platform has reduced execution time and memory by 50 percent.

Along with the optimizations, the latest update will also provide enhanced proposal routing, and transaction validation, and validator manifests, which will improve visibility into operators’ work across the XRP ecosystem.

There is also the introduction of forward ledger replay, which will enhance security on the XRP Ledger and improve server synchronization with the rest of the network. This way, the Ledger can reduce bandwidth and work faster.

On its plans, Bharath Chari, a member of the XRP Ledger Foundation, explained that they would be working to support the broader XRP ecosystem even more. For now, their focus will be on expanding the validator list and enhancing the XRP Ledger’s core code.

MoneyGram Joins the Movement to Ditch Ripple

The recent updates show that Ripple Labs isn’t entirely giving up on XRP yet. The company has had a bit of a rough patch over the past few months, following a lawsuit from the Securities and Exchange Commission (SEC) that accused it of organizing an illegal securities offering in its XRP Initial Coin Offering (ICO) back in 2013.

Since the SEC suit came out, Ripple Labs has been faced with significant industry pushback as exchanges, investment firms, and more distanced themselves from it.

Another pushback came earlier this week as payment processor MoneyGram, one of Ripple’s high-profile partners, suspended trading from its end. In its quarterly outlook, MoneyGram reported that it doesn’t plan to see any benefits from its Ripple market development fees in Q1 2021. Due to litigation from regulators, it has chosen to close all Ripple trades for the time being.

The MoneyGram partnership is one of Ripple Labs’ crown jewels. Ripple purchased 10 percent of the company in 2019, while MoneyGram incorporated its on-demand liquidity (ODL) tool to make quicker and safer cross-border transactions. While the relationship appeared rosy, Ripple did sell off a chunk of its MoneyGram shares last November 2020.

Asides from suspending its asset, the payment processor has also reiterated that it never used the ODL tool for direct customer transfers or forex transactions. With MoneyGram further distancing itself from Ripple amid its SEC lawsuit, the blockchain company is finding itself further in need of supporters.

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Author: Jimmy Aki

Rising Treasury Yields are a Danger to Bitcoin & They Are Soaring Right Now

The ongoing yield debacle is not good for risky assets and gold, and the leading digital currency is still struggling to recover from the losses.

Risky assets are back on the incline as Treasury yields ease off after hitting multi-year highs on Thursday. Also, the Federal Reserve Chairman calmed the nerves by committing to keeping the interest rates low and that it will continue to pump money into the economy.

In the early hours of Thursday, 10-Treasury yields jumped to 1.427%, last seen in March 2020, but ended the day lower at 1.3740%. Yields on 30-year Treasury soared to 2.888%, Dec. 2019 high to end lower at 2.226%. Bond prices and yields have an inverse relationship.

Today, they both are back on the rise by about 0.059%.

“Bonds puking, again… Need this to stop going down (i.e., rates going up) to have nice things,” said trader and economist Alex Kruger.

The 30-year German yield has also turned positive, rising to 0.2% from -0.2% in three short months. German 10-year yields are still negative though at -0.3%.

This spooked the central bank, and now “the ECB is closely monitoring the evolution of longer-term nominal bond yields,” said European Central Bank President Christine Lagarde this week.

Fed, however, is not that concerned when asked about the rise in yields; Jerome Powell said, “It’s a statement of confidence on the part of markets that we will have a robust and complete recovery.”

Rates going up is negative for stock valuations, particularly tech, and assets that benefited from negative real yields the most, gold and bitcoin, Kruger said,

“The thesis is the Fed will intervene to bring rates down.”

“If that trend is not stopped hold on to your horses because risk assets, gold and highly likely bitcoin as well are all in for a very rough ride down. You want to watch interest rates like a hawk.”

Risk On or Off?

This fall in yields, meanwhile, has sparked a rally in stocks. S&P 500 is yet again reaching its peak at nearly 3,935 from Feb. 12.

Tech-heavy Nasdaq, which slid 5.6% this week, is back at 13,600, still in need of a pump to hit its 14,095 all-time high from Feb. 12.

“In institutional circles, corporate treasuries are often looked down on as dumb money,” notes Kruger.

While stocks are clearly enjoying this fall in Treasury yields, the same is not the case for the traditional safe-haven asset.

Gold is not having a good week, and today the spot gold went under $1,790 per ounce. The precious metal is on a downtrend ever since it hit a new high in August at about $2,075.

The US dollar is also not enjoying the increase in yields and is back under 90, aiming to go for fresh multi-year lows at 89.2 in early January.

Coming to digital gold, Bitcoin had a brutal week, losing 23% of its value with a drop under $45k. For now, the market struggles to recover completely despite the price of Bitcoin going above $50,000. Trader Cantering Clark said,

“Rates are rising. Risk-on assets don’t really benefit in that situation. All assets would get hurt with a rapid rise. Saylor purchase and Tether news came out, and we don’t have a very obvious response. Would not get overly bullish.”

However, according to him, this is all just short-term as “Bitcoin has already cleared the runway and is now on its way to further appreciation and adoption.”

Alex Kruger is of a similar opinion as he notes that there’s a chance Bitcoin will do its thing as “institutional penetration remains very low.” This means the institutional inflow may continue, and retail will be busy stacking regardless. Also, corporates may join in and “be more focused on inflation or digitalization than rates.”

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Author: AnTy

Former TD Ameritrade Digital Assets Head Joins Fed Reserve as Chief Innovation Officer

Former TD Ameritrade Digital Assets Head Joins Fed Reserve as Chief Innovation Officer

Sunayna Tuteja has joined the Federal Reserve System as the Chief Innovation Officer. Before heading this position, Tuteja was previously working at TD Ameritrade as the Managing Director, Head of Digital Assets & DLT (Blockchain, Crypto), reads her LinkedIn profile.

TD Ameritrade has been providing its services to cryptocurrency users for some time now. It also made a strategic investment in ErisX, the cryptocurrency spot, and futures exchange during the bear market.

Tuteja joined the broker in 2014 to head its digital strategy department, following which she changed the department that specifically dealt with cryptocurrencies and blockchain technology. Here, Tuteja only spent less than two years.

Under her latest role, she will be working on the Federal Reserve System’s digital innovation strategy. As a CINO, the official is required to stay abreast of the technology industry and market trends to understand their impact on the Fed system. The description for this position reads,

“This role will be responsible for identifying, researching, enabling and evangelizing for innovative new technologies while fostering a culture of technical innovation, encouraging System-wide collaboration and experimentation.”

This is another positive development for the cryptocurrency market, bringing us all that much closer to positive and clear regulations.

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Author: AnTy

Russian Legislators Advance the Crypto Tax Bill Recognizing Digital Assets as Property

Russian Legislators Advance the Crypto Tax Bill Recognizing Digital Assets as Property

  • Russia’s lower legislation house, State Duma, advanced the crypto tax bill, which aims to recognize digital assets as property for taxation purposes.

The world’s largest country is moving closer to setting up crypto taxation laws after the lower representative house. State Duma passed the first reading on the draft bill affecting digital assets. The crypto tax bill, introduced to parliament by the government, aims to recognize cryptocurrency assets like Bitcoin and Ethereum as property to apply the Tax Code, the report reads.

According to Prime Minister Mikhail Mishustin, these new laws will enable crypto owners to have a legal standpoint in court and defend themselves as property.

Additionally, the new amendments to the Tax laws state that income from cryptocurrency transfers and transactions will be liable to property or income tax payments. Citizens and organizations will also have to declare any transfers above 600,000 rubles (~$8,200) per year. However, digital asset transactions will not be liable to VAT and depreciation.

According to the report, non-payment or incomplete payment of the tax on digital assets will attract a penalty of 40% of the required amount. Lack of reporting, untimely submission, or submission of a declaration with inaccurate information will attract a 10% fine on the amount required by the government.

In the second reading, the State Duma plans to release a comprehensive report clarifying which digital asset transactions are tax-exempt, who submits the reports to the tax office, and how to inform authorities on disposing of the assets.

The newly amended bill does not change President Putin’s signed law requiring Russian state officials to disclose their digital asset holdings and maintains digital assets are not a legal means of payment.

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Author: Lujan Odera

Bermuda-based, CrossTower to Launch a Bitcoin Fund for Accredited Investors

Bermuda-based, CrossTower to Launch a Bitcoin Fund for Accredited Investors

  • Digital assets trading and investment firm, CrossTower, launches a crypto hedge fund to compete with Grayscale’s Bitcoin Trust (GBTC) and other institutional crypto hedge funds.
  • The fund gains its competitive advantage by offering a lower management fee and no lockup periods for its client’s assets.

In an announcement on Wednesday, CrossTower, a Bermuda-based crypto investments firm, plans to launch its bitcoin hedge fund at the end of February for accredited investors. The fund will not be tradable in the secondary market but aims to compete with other Bitcoin-based hedge funds such as GBTC in management fees and liquidity.

The fund will only accept accredited investors with the minimum fund requirement set at $100,000. The fund has already raised $20 million in assets under management (AUM) from early-stage investors, most of the demand coming from family offices and high net worth individuals.

Kristin Boggiano, CrossTower co-founder, and president confirms the fund will charge up to 60 basis points (0.6%) in management fees, lower than GBTC’s 2%, and have no lockups for clients’ funds. The fund trades Bitcoin on a Net Asset Value (NAV) basis. Notwithstanding, CrossTower is also planning to include different crypto-based instruments in the future, Boggiano further confirmed.

“This is the most plain-vanilla of the suite of offerings that we expect to be popular.”

“We’re building infrastructure at CrossTower so that entities that want to shape their risk have different instruments whether they want to use an exchange, they want a loan, they want to go short.”

Anchorage, which recently acquired the first license to become a crypto bank, will be the custodian of CrossTower digital assets and Apex as the fund’s legal counsel. Grant Thompson will lead accounting for the firm.

As alluded to, the fund will focus on accredited investors from the U.S. and across the globe. This will allow investors with offshore accounts to easily invest in Bitcoin without the tax implications set in the U.S. However, the fund is limited to a maximum of 99 U.S. investors. Still, it is open to an unlimited number of offshore investors due to the daily liquidity provisions set on the fund.

The fund is starting its journey of a thousand steps (pun intended) towards reaching Grayscale’s GBTC $20 billion AUM and is looking for ways to add more U.S. based investors to its fund. The fund will also be competing with BlockFi who recently filed for a Bitcoin Trust with the US Securities and Exchange Commission (SEC).

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Author: Lujan Odera

Digital Assets Lender, Nexo, Rolls Out Crypto Exchange Platform With Instant Swaps

Digital Assets Lender, Nexo, Rolls Out Crypto Exchange Platform With Instant Swaps

  • Nexo, a Cryptocurrency lending platform, announces its new exchange service that provides 75+ cryptocurrency trading pairs on its mobile application. The exchange comes with a “Smart Routing” system to minimize slippage cases and guarantee the best price swaps.

In an announcement this Monday, leading regulated digital assets lender Nexo launched its in-built Nexo exchange service, offering a broader suite of financial tools to its users. The new swap feature offers users over 75+ cryptocurrency and fiat pairs and supports 17 cryptocurrency assets. It aims to offer no-limit, fast, and cost-effective transfers across assets provided on the exchange.

In a statement, Nexo confirmed traders would have no limits on the number of trades made on the platform with a maximum amount of $50,000 set per trade. Additionally, the exchange will allow direct fiat deposits from bank transfers and wire transfers and allow crypto deposits and withdrawals from any other wallet or exchange.

Speaking on the capabilities that the new exchange offers in onboarding new clients, Nexo Co-founder and Managing Partner Antoni Trenchev said,

“Fast, transparent, and inexpensive transactions are the backbone of fintech, but making them easily accessible and secure in a seamless, intuitive environment is the single most important step towards mass crypto adoption.”

To prevent price fluctuations or slippage cases, Nexo exchange has integrated a “Smart Routing” system, an in-house innovation. The system connects to multiple exchanges and splits your orders according to the available prices and volumes, ensuring the order is executed at the same price as is submitted.

The statement did not mention the exchanges that will execute the trades. Still, a spokesperson from Nexo confirmed that the Smart Routing system would connect to five of the “most trusted and well-capitalized exchanges.”

The exchange is registered and ISO compliant to provide clients with an impeccable risk assessment, data protection, and state-of-the-art cybersecurity of their assets. Users’ assets in custody will be insured up to $100 million by the Lloyd’s of London.

Finally, the exchange is also building a full-suite banking platform announcing a series of product launches, including the Nexo crypto credit card. Furthermore, Nexo is also looking to expand its already broad banking licenses to strengthen its compliance with global regulators.

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Author: Lujan Odera

Gen X Investors Overtake Millennials in Crypto Adoption: Wirex & Stellar Report

Nearly 75% of consumers view digital assets and stablecoins as an alternative to traditional money transfer services. High fees, slower transaction times, and hectic cross-border transfers are some of the reasons leading consumers to digital asset payment systems, joint research from Wirex and Stellar Development Foundation (SDF) states.

The research report titled ‘The Future of Money: Cryptocurrency Adoption in 2021‘surveyed 3,834 respondents from the two companies’ database in the past three weeks. Over 81% of the respondents hailed from Europe and 17% from the Asia Pacific region, 83% of them aged above 35 years.

The research focuses on the adoption rates of crypto across different genders, age groups, and regions and how digital currencies solve problems in the real world.

Older People are Rapidly Accepting Cryptocurrencies

The older generations are gradually accepting cryptocurrencies as a global payment system in cross border transfers, the report states. The appetite for crypto solutions in traditional payment systems is clearly there across all ages. Surprisingly, 30.2% of the respondents aged 45-54 stated they have used (are using) crypto, the largest group in the study.

Furthermore, older women are more likely to use crypto and blockchain-powered payment systems, the report shows. Slightly above a quarter (26.1%) of women respondents aged 55-64 years invested in cryptocurrency, while only 14.3% of men in the same age bracket invested in crypto.

Cryptocurrency is a Global Payment System

According to the research, the younger generation is rapidly moving towards digital assets seamlessly to transact across borders. With nearly 57% of respondents aged 18-24 years having sent money internationally, there is still room for growth as the “digitally-conscious” generation look for seamless ways to transact value across the globe.

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International transfer fees remain the major issue that is pushing respondents to crypto. Despite the respondents adjusting, most complained about the international transfer fees were still too high. Over 40% of the respondents believe that paying 1% fees is still too high, with the number understandably increasing as the fees increased.

Consumers are open to switching to alternative transfer channels so long as the costs and fees drop significantly, the report states. This is a problem that crypto could solve. The authors of the report wrote that 74% of the respondents agree to digital assets as the solution to slow and expensive traditional money transfer systems.

Over 83% of the respondents stated they owned at least one cryptocurrency or stablecoin, with Europeans leading the way at 84.5% while 74.7% of the APAC region respondents owning digital assets. Fewer female respondents hold digital assets than male respondents (70.3% vs. 85.6%), with 65.7% of women who hold digital assets aged over 45 years.

A Haven for Users?

Despite the positive sentiments derived from the report and 86.1% of the respondents claiming that they “feel safe” with crypto payments, the authors still believe there’s more to be done in the industry. Unsurprisingly, younger generations feel most safe using crypto (90.6%) while older generations, those at 65+ years, feel less safe (80.7%) due to digital payments’ tech-savvy nature.

However, the survey showed some shortcomings as it focuses on the customers of Wirex and Stellar, who already have interacted with cryptocurrencies. The authors concluded that crypto converts’ views will definitely differ from those who are yet to use blockchain technology or cryptocurrencies in global money payment systems.

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Author: Lujan Odera

Crypto Assets Are The ‘Poorest Hedge,’ BTC Remains an Investment Vehicle: JPMorgan

Crypto Assets Are The ‘Poorest Hedge,’ BTC Remains an Investment Vehicle: JPMorgan

The bank strategists see crypto investing best to protect against the loss of faith in a country’s fiat currency or payment system.

The cross-asset strategists of JPMorgan Chase say while Bitcoin is the hottest way to diversify portfolios, it has a big valuation risk.

Bitcoin is the “least reliable hedge during periods of acute market stress,” wrote strategists John Normand and Federico Manicardi in a report called “What cryptocurrencies have and haven’t done for multi-asset portfolios” on Thursday.

According to the strategists, Bitcoin has been bad at offsetting short-term drawdowns in big sell-offs. The digital asset’s popularity among retail investors is further increasing its link with cyclical assets. They wrote,

“The mainstreaming of crypto ownership is raising correlations with cyclical assets, potentially converting them from insurance to leverage.”

While Normand and Manicardi said small (up to 2%) allocations to cryptocurrencies improve portfolio efficiency due to high returns and moderate correlations,

“Over shorter infra-month and intra-quarter horizons, crypto-assets continue to rank as the poorest hedge for major drawdowns in Global Equities, particularly relative to the fiat currencies like the dollar which they seek to displace. To the extent that Bitcoin remains an investment vehicle rather than a funding Currency.”

Cryptos’ Role in Portfolio Diversification

The strategists acknowledge the appeal of Bitcoin for investors who are worried about policy shocks and suggest crypto investing might be best to protect against the loss of faith in a country’s fiat currency and its payments system.

However, while trying to find cryptocurrencies’ role in portfolio diversification, the team warned that it wouldn’t be behaving like a traditional defensive asset in the near future.

Normand’s colleague at JPMorgan, Nikolaos Panigirtzoglou, suggested in early January that the price of Bitcoin could hit $146,000 in the long run as it draws investors from gold.

Around the same time, Bitcoin hit an ATH of $42,000 and is currently in a “healthy consolidation” around $30,000.

“Whether cryptocurrencies are judged eventually as a financial innovation or a speculative bubble, Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset,” in comparison to the performance of gold in the 1970s, Japanese equities in the 1980s, tech stocks in the 1990s, Chinese equities in 2000s, and FANG stocks in 2010s, they wrote.

But while Bitcoin had a low correlation with the traditional hedges like gold and treasuries, it recently started moving more with traditional cyclical markets and strategies said, “If sustained, this development could erode diversification value over time.”

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Author: AnTy

Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

The $1.5 Million worth of corporate Bitcoin investments is just the beginning, MOGO plans to buy more BTC next year.

Canadian Fintech company MOGO is investing $1.5 million in Bitcoin. This investment represents the company’s 1.5% assets, as of the end of the third quarter of 2020. But the company is not done with its Bitcoin investment, it plans to do more of it with more of it in 2021. Greg Feller, President, and CFO of Mogo said,

“We plan to initially allocate a modest portion of our capital toward bitcoin investments and will consider additional investments in bitcoin as we monetize some of our existing $17 million portfolios which we expect to begin doing in 2021.”

The company which is publicly traded on the NASDAQ and TSX believe it is “well-positioned to capitalize on the fast-growing demand for bitcoin.”

This isn’t the first time that Mogo has ventured into the cryptocurrency market. Back in 2018, it launched MogoCrypto to enable the buying and selling of Bitcoin in Canada. Recently, it also announced its bitcoin rewards program, an opportunity to earn BTC by engaging with Mogo’s products.

Earlier this month, the company reported a 135% month-over-month increase in the value of Bitcoin traded on its platform from Oct. to Nov. 2020. Feller said,

“We are strong believers in bitcoin as an asset class and believe this investment is consistent with our goal to make bitcoin investing available to all Canadians. In addition, we believe bitcoin represents an attractive investment for our shareholders with significant long-term potential as its adoption continues to grow globally.”

Mogo is just another addition to the long line of companies that have been making corporate investments in the world’s largest cryptocurrency.

MicroStrategy, Square, Ruffer Investment, and many others have jumped on the Bitcoin bandwagon along with the big names like Guggenheim, Paul Tudor Jones, Stanley Druckenmiller, Ben Miller becoming Bitcoiners.

“Most investment banks and private banks will announce crypto offerings,” and “several large public companies will issue BTC-related capital structure instruments,” predicts Su Zhu, CEO of Three Arrows Capital for 2021. He also sees several central banks announcing “substantial stakes in BTC.”

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Author: AnTy

Bitwise Liquidates its XRP Position, Reinvests Proceed in Other Crypto Assets in the Fund

Bitwise Liquidates its XRP Position, Reinvests Proceed in Other Crypto Assets in the Fund

The firm says it “does not invest in assets that are reasonably likely to be deemed securities.”

Bitwise Asset Management has liquidated its just over $9 million worth of position in XRP. “Prior to the sale of the asset on December 22, 2020, XRP was approximately 3.8% of the Fund,” when its AUM was $242 million, says the San Francisco-based crypto fund manager.

The proceeds from the sale have been reinvested in other assets of Bitwise 10 Crypto Index Fund including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Stellar (XLM), Bitcoin Cash (BCH), Chainlink (LINK), Tezos (XTZ), and EOS.

In an official announcement that came on Wednesday, the company said the decision has been made in response to the US Securities and Exchange Commission (SEC) filing an action in the court that XRP is security and subject to the registration requirements of the federal securities laws. The company noted,

“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws.”

As we reported, three exchanges have already suspended XRP trading. The Asia-based OSL known for its OTC trading desk has “suspended all XRP payment in and trading services on the OSL platform, effective immediately and until further notice,” tweeted the exchange.

Two small crypto trading platforms Beaxy and CrossTower have also halted trading for XRP.

This week, the price of XRP has fallen 50%, going as low as $0.296 today, a level is last seen towards the end of November, and is currently trading at $0.310.

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Author: AnTy