“We’re In A New Bull Market,” says Pantera Capital CEO But Warns Of A Bitcoin Bear Trigger

Pantera Capital CEO Dan Morehead is now calling for a new bull cycle as Bitcoin price moves towards $60,000 after recovering from the June low that was just under $29,000.

“​​We had a period of temporary insanity,” wrote Morehead in this month’s note to investors, pointing to China banning cryptocurrency mining and trading that had a negative impact along with the debate on the environmental impact of Proof-of-Work consensus mechanism, adding, “now we’re in a new bull market.”

Already up more than 30% in October, Bitcoin price is currently only 13% away from its all-time high of nearly $65,000. The market is hopeful of a strong performance this quarter, with Q4 being historically a bullish month.

According to Morehead, the deep bear markets where we experienced drawdowns of over 80% may be a thing of the past, and future bear markets will now be “shallower.”

“As the market becomes broader, more valuable, and more institutional, the amplitude of price swings will moderate.”

But at the same time, we won’t be seeing any more of the 100x-in-a-year rallies either, he added.

The Bear Catalyst

While Morehead is confident in the second round of the bull cycle, he warned of a potential bear catalyst in the form of the launch of the Bitcoin exchange-traded fund (ETF).

As we reported, the market is highly hopeful that the US Securities and Exchange Commission (SEC) will finally approve a Bitcoin Futures ETF this month. SEC Chair Gensler has also been hinting at a possible futures-based ETF for months.

This could be why Bitcoin futures on the regulated exchange CME is trading at a much higher price than other exchanges. The CME bitcoin futures basis increasing at a faster rate suggests that institutional investors are buying BTC futures that can further put upward pressure on the crypto asset and lead to an even steeper curve.

Interestingly, as NYDIG pointed out, the number of contracts that a participant such as an ETF can own on the CME is also raised to a total of 6,000 starting October 18th. The decision on the first ETF filed by ProShares falls on the same day.

If SEC says nothing on this, the ETF “will be free to launch on 10/18 as the 75 days req will have passed,” said Eric Balchunas, Senior ETF Analyst for Bloomberg. “No news is prob good news at this point,” he added.

Meanwhile, to Morehead, this approval could turn out to be a ‘Buy the rumor, sell the fact’ much like two other past events.

Will History Repeat Itself?

The Pantera Capital CEO pointed to the launch of Bitcoin futures on CME in December 2017 and Coinbase going public via a direct listing in April this year as examples. The market rallied 2,440% the first time and 822% the second time but resulted in an 83% and 53% bear market, respectively.

The same can happen when Bitcoin ETF gets approved, said Morehead as he concluded:

“Will someone please remind the day before the Bitcoin ETF officially launches? I might want to take some chips off the table.”

Trader @SplitCapital, however, is not of the same opinion as he argued that the CME futures launch came at a time when the market was “coming off of the most frothy period in crypto history,” and funding rates were at 30% for short-dated futures. Similarly, during Coinbase’s IPO, there was the most amount of bitcoin openly traded in history.

This time, however, financing rates are averaging below 15%, open value is at record lows, and we have a renewed macro tailwind in the form of fiscal and monetary policy, which means this is not a classic ‘sell the news’ event, and “this time really is different.”

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Author: AnTy

Developers and Miners ‘Not’ Forced to Comply, says Spokesperson of Sen. Rob Portman

Meanwhile, senators Pat Toomey and Ron Wyden are calling to “fix” crypto tax provision in the bipartisan infrastructure bill.

Senate Pat Toomey (R-Pa.) is the latest crypto supporter who announced plans to “fix” the provisions for enforcing cryptocurrency transactions into the infrastructure bipartisan bill, calling it unworkable. Toomey said in a statement,

“Congress should not rush forward with this hastily-designed tax reporting regime for cryptocurrency, especially without a full understanding of the consequences.”

He further pointed out how by including an overly broad definition of the broker, in its current form, the provision sweeps in non-financial intermediaries like miners, validators, and other service providers as well.

“These individuals never take control of a consumer’s assets and don’t even have the personal-identifying information needed to file a 1099 with the IRS.”

Toomey is also concerned that the bill would allow the Treasury Secretary to define a digital asset with broad discretion, according to an aide.

Meanwhile, late on Monday, The New York Times reported Drew Nirenberg, a spokesman for Senator Rob Portman, the Ohio Republican who helped draft the legislation, pushing back against the idea that the proposed rules would hurt the crypto industry.

“This legislative language does not redefine digital assets or cryptocurrency as a ‘security’ for tax purposes, impugn on the privacy of individual crypto holders, or force nonbrokers, such as software developers and crypto miners, to comply with I.R.S. reporting obligations.”

“It simply clarifies that any person or entity acting as a broker by facilitating trades for clients and receiving cash must comply with a standard information-reporting obligation.”

Confusing Language

The government estimates that it will raise $28 billion from these crypto provisions to fund its nearly $1 trillion infrastructure plan. This will be used as a way to offset the package’s $550 billion in new spending for roads, highways, bridges, and other infrastructure projects.

The final bill would require business transactions involving over $10k in crypto to be reported to the IRS, a mandate that already exists for large cash payments, but the problem is with the definition of “brokers” who are required to report the information to the IRS.

As we reported, even the latest tweaks in the proposal were bad, and the changed language even further broadened the scope of brokers that could include miners, validators, DEX protocols, and others. The Electronic Frontier Foundation said,

“The broad, confusing language leaves open a door for almost any entity within the cryptocurrency ecosystem to be considered a “broker”—including software developers and cryptocurrency startups that aren’t custodying or controlling assets.”

Meanwhile, the Blockchain Association and Chamber of Digital Commerce have been lobbying Senate offices to change the broker reporting pieces of the legislation.

Unintended Consequences

Senate Finance Chair Ron Wyden is another one who wants to make changes to the provisions.

According to an aide to the Oregon Democrat, changes could come in a manager’s amendment to the bill, which senators typically agree to ahead of time, reported Politico.

Over the weekend, Wyden tweeted that this infrastructure framework is not a solution to the problem of crypto tax evaders, rather “It’s an attempt to apply brick and mortar rules to the internet and fails to understand how the technology works.”

Wyden is the one who leads the chamber’s tax-writing panel and wants to make sure that the rules do not apply to those who may face difficulty complying with them, which is the problem crypto advocates have been pointing out ever since the proposal first became public knowledge.

According to an aide, Wyden supports reporting rules for crypto exchanges which the provision aims to do, but his concern is that the language lacks clarity and could mean that the developers would have to provide information to the IRS, which could “pose technological challenges and cause unintended consequences.”

Wyden has reportedly not ruled out putting forward his own amendment as a fix either.

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Author: AnTy

“Netherlands Must Ban Bitcoin Now,” says Director for Economic Analysis

Pieter Hasekamp is calling for a complete ban on crypto — mining, trading, and holding because they are only good at privacy which is used by criminals, while government money works just fine with “hardly any currency devaluation…although inflation is now slowly picking up,” he said.

The director of the Dutch Bureau for Economic Analysis is calling for a complete ban on the mining, holding, and trading of Bitcoin and other cryptocurrencies.

This comes after crypto trading platform Bitonic won its case against the Dutch Central Bank last month regarding the apex bank’s wallet verification requirement. The regulator formally acknowledged at the time that its requirement was unlawful and should have never been called for the purpose of crypto exchange platform registration.

Now, today in an opinion piece on the local publication FD which had 3.72 million visitors in May, Pieter Hasekamp, director of the Central Planning Bureau, said the bursting of the crypto bubble is inevitable, and the Netherlands needs to act now, or the consequences of the crash will be “too great.”

Pointing to Gresham’s law, “Bad money crowds out good money,” Hasekamp said Bitcoin fits this pattern with cryptos exhibiting “all the hallmarks of “bad money”’ — unclear origin, uncertain valuation, and shady trading practices.

That’s Not Going to Happen

According to Hasekamp, cryptocurrencies do not fulfill the three functions of money, while government money “scores well in terms of value retention.”

Interestingly, the buying power of one euro (1€) has depreciated by a whopping 30% between 2000 and 2020 from 1€ to 0.7€. Hasekamp wrote,

“In recent decades, there has been hardly any currency devaluation. Although inflation is now slowly picking up, few people believe that we are returning to the figures from the 1960s and 1970s.”

All in all, the current monetary system works very well in practice, he said while arguing further improvements are conceivable through central bank digital currencies (CBDC).

While fiat currencies work so well, private cyber currencies “perform far worse than public money on all counts,” he added.

But Hasekamp did find one area where cryptocurrencies do better, and that’s in the privacy aspect, and “that anonymity is exactly what makes them attractive to criminals.”

As for its use as a store of value, Haskamp wrote that it is based on the hope that cryptocurrencies will one day replace real money, “but that’s not going to happen.” He wrote,

“Cryptocurrencies are essentially neither money nor a financial product, but… a contagious story in which people believe because other people believe in it. Gresham’s law is replaced by Newton’s law: what goes up must come down. The ultimate collapse of the crypto bubble is inevitable.”

As countries take steps to curb the crypto hype, Hasekamp wants the Netherlands to move fast and “ban Bitcoin” because “whoever moves last is the loser.”

He points out how China has already made its move by banning several crypto activities while the Netherlands is lagging behind. While the Central Planning Bureau concluded in 2018 that stricter regulation was not yet necessary, cautious regulation can now “backfire,” he said.

Regulation simply “legitimizes crypto as a bona fide financial product. Recent developments show that it is time to act: the longer we wait, the greater the negative consequences of the eventual crash,” said Hasekamp.

As such, he is recommending a total ban on the production, trading, and even possession of cryptocurrencies.

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Author: AnTy

“Not the Death of Crypto,” Clarifies Guggenheim CIO After Calling it “Tulipmania”

“Not the Death of Crypto,” Clarifies Guggenheim CIO After Calling it “Tulipmania”

Scott Minerd has always been all over the map with his crypto takes that have only proven to be untimely. His latest comes as BTC price closes on to $42k after crashing to $30k and lower yesterday.

  • Scott Minerd just can’t help himself from dishing out bad takes.

The Global Chief Investment Officer at Guggenheim Partners took to Twitter to share what he really thinks of the Bitcoin market after the cryptocurrency price crashed 54% and the total crypto market capitalization lost billions of dollars. Minerd said,

“Crypto has proven to be Tulipmania. As prices rise, tulip bulbs and crypto currencies multiply until supply swamps demand at previous market clearing prices.”

And he can’t be more wrong. For starters, Tulips went up, crashed, and then never came back. However, it is Bitcoin’s third bull market. Not only has BTC been making a new all-time high in every cycle, but Bitcoins’ low also has been going up and up almost every year.

When it comes to the cryptocurrency market, it is best that one does not listen to Minerd because every single take of his has been untimely.

Minerd’s firm actually did not get into Bitcoin until this year. At the end of January, they received the SEC approval for buying Grayscale Bitcoin Trust (GBTC) shares.

And since the sell-off of March 2020, BTC price had already run more than 800% by Jan. 31st.

Before Bitcoin made a new all-time high of $65,000 in mid-April, Minerd advised investors and traders to take profits off the table on several occasions. While predicting a drop to $20,000, he said that the bull market is over.

He is also the same person who called for a $400,000 Bitcoin target in Dec. 2020 and then, at a later date, revised it to $600,000.

Already, the crypto market is recovering from the deep rout, with Bitcoin trading just under $42,000 at the time of this writing, up from the $30,000 low we saw just yesterday.

“De-Levered Markets get crushed. Doesn’t matter what the asset is. Stocks. Crypto. Debt. Houses. They bring forced liquidations and lower prices,” noted billionaire investor Mark Cuban who has become a pro-crypto and has taken a special interest in DeFi while testing out various protocols.

In a separate tweet, Minerd then clarified that “This is not the death of crypto just as the collapse of Tulipmania was not the end of tulip bulbs!”

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Author: AnTy

BitMEX Co-Founder Arthur Hayes Puts Ether Moon Target Above $20,000

From calling Ether “a double-digit shitcoin” to wishing he had bought some in the pre-sale, Hayes has come a long way and is very bullish on the “most developed, decentralized smart contract network” and DeFi.

Arthur Hayes, the co-founder of crypto derivatives exchange BitMEX is big-time bullish on Ethereum, saying he wishes he had bought some ETH in the pre-sale when it was sold for about 30 cents in 2014.

This week, Ether hit a new all-time high at $2,500.

This is a big shift from calling Ether “a double-digit shitcoin,” which, in his favor, he admits to.

“One of the best writers in the space. Also the most successful market maker/manipulator,” commented trader and investor Tetranode, who is extremely bullish on Ethereum. “The double-digit shitcoin was just a phase. Soon all will understand the method in the madness,” he added.

Ethereum, Hayes goes on to say, though imitating Bitcoin like the majority of the projects does in the crypto space, it “offered a substantial improvement by creating a virtual decentralised computer that greatly expands the potential use cases for the technology underlying Bitcoin.” BTC -8.30% Bitcoin / USD BTCUSD $ 56,210.51
-$4,665.47-8.30%
Volume 97.47 b Change -$4,665.47 Open $56,210.51 Circulating 18.69 m Market Cap 1.05 t
9 h A New Record: Over 1 Million Traders Liquidated for a Whopping $10.1 Billion 10 h Cathie Wood’s ARK Funds Buy More Coinbase (COIN) Shares, Now Owning Just Under 1.3 Million 11 h BitMEX Co-Founder Arthur Hayes Puts Ether Moon Target Above $20,000

Hayes’ views on Ether aren’t much different from the likes of Kyle Davies, co-founder of Three Arrows Capital, who revealed on the podcast “TechnicalRoundup” that their fund is “overweight Ethereum.”

With their focus on layer one, Davie believes Ethereum is “overlooked” as everyone is focusing on the success of some other layer ones. And while some DeFi projects are moving to other platforms like BSC, “layer two is real.” Though 3AC is invested in some layer two solutions as well, Ethereum is where “a lot of innovation is still happening,” he said.

The second-largest cryptocurrency network is the base of the decentralized finance (DeFi) sector, with $60 billion in total value locked (TVL).

The goal of the DeFi movement is to have “a peer-to-peer system that moves information from point to point without a centralized, trusted gate keeper,” Hayes said.

Broken Traditional Model

Haye’s focus in his latest write-up is to determine how much upside there is left in the market right now if some decentralized crypto can replace a portion of the need for blind trust in a centralized trust cartel.

He found this out by putting the failing traditional banking business model in the limelight. The banking index all over the world has been doing poorly despite all the help that they get from governments.

“Banks who privatize profits and socialize losses haven’t managed to enrich their shareholders,” he noted. But if these banks adopted the technological improvements, they would have seen the exponential growth the technology bellwethers are recording.

A decentralized service powered by a public blockchain can actually replicate and improve upon every product and service offered by a bank that too at a lower cost on a macro scale, Hayes wrote.

Traditional banks, he says, “are destined to be service companies for a subset of relatively wealthy global Boomers,” which still got billions of dollars of fee income in that business, but it’s not a growing slice of the market.

The public paid $2.68 trillion, 2% to 3% of world GDP, to these banking institutions. On top of this, we paid audit and accountancy services $87.09 billion, which Hayes said will go to zero because of blockchain.

Ethereum & DeFi is the Way

Ethereum, today, is the most developed, used, and decentralized smart contract network. No doubt others like BSC, Polkadot, and Solana are emerging but simply put, unlike Ethereum, no has proven themselves yet.

“No other public smart contract-enabled blockchain operates at the scale of Ethereum.”

Some might argue that the gas fees are astronomical, but as Hayes says, “it is a good problem to have,” after all, “nothing in life is free, and this is doubly true in the crypto capital markets.”

This fee that incurs on every action, along with the fees charged by dapps, can actually be seen as income to those keeping the network running, just like the tax we are paying banks to use their services.

Assuming Ethereum can capture some percentage of the 5-year average earnings of banks and the big four audit firms, Hayes comes up with extraordinary numbers.

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At 0.50%, the price of ETH implies a 10x price appreciation from current levels putting it above $20,000. Trader Teranode is of a similar opinion and sees Ether hitting $100k in the future.

“Eth went 80% down (400 to 80) after he called it a double-digit shitcoin. 20k, the conservative prediction in his blog post based on DeFi penetration of overall financial markets, would be an 8x from 2.5k. Both spooky and auspicious,” commented Zhu Su, CEO at Three Arrows Capital on this.

“I am very certain that DeFi can take away at least 0.50% of activity from CeFi,” wrote Hayes.

“When you take a high-level approximation that shows you will make money even when you are assuming the worst-case scenario, get long whatever the fuck you are valuing.”

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Author: AnTy

Citi Cuts MicroStrategy’s MSTR Due to CEO’s ‘Disproportionate Focus on Bitcoin’

Calling the recent rally “overextended,” Citi has downgraded MicroStrategy from neutral to sell in its latest report.

MSTR shares are up 168% over the past six months, climbing to a level not seen since 2000. These gains were made on the back of MicroStrategy’s Bitcoin bet. In August, the company first adopted Bitcoin as its primary reserve asset, and last Friday spent another $50 million on 2,574 BTC. During the time, the largest digital asset has rallied a whopping 150% YTD.

MicroStrategy’s commitment to Bitcoin turned the company and its CEO into a fully blown celebrity in cryptocurrency market participants’ eyes. This also got Citron research short on the company to say MicroStrategy is the best way to own Bitcoin in the stock market.

It also had many wondering if MicroStrategy is a software company or a Bitcoin hedge fund. This raises concerns for the company as it will raise questions from regulators who refuse to approve a Bitcoin ETF.

And now, MicroStrategy’s Bitcoin bet that has Citi getting bearish on the company, resulting in the company’s shares losing over 17% of its value in a single day.

Citi’s remarks came after MicroStrategy announced on Monday that it will be issuing $400 million convertible senior notes, proceeds of which will yet again be used to be even more BTC.

The price of Bitcoin also experienced a correction, which extended today. However, currently down around $18,000, a pullback has been expected after the recent rally from $10,000 to $20,000.

Analyst Tyler Radke sees “incremental risks to the story” following the debt issuance to buy more Bitcoin, which has been described as “aggressive” and possibly a “deal-breaker for software investors.” The analyst said,

“MSTR’s bitcoin investment has returned $250M (or worth $26/share or +20% towards stock) since August ’20. While impressive, it pales in comparison to the 172% return in the stock. At the current stock price, our analysis suggests that the market is pricing in much more optimistic valuation scenarios for the core business and Bitcoin.”

Radke further noted that the recent insider selling in MicroStrategy has been “significant and broad-based,” adding its shares may be overvalued.

The analyst also questioned Saylor’s “disproportionate focus on bitcoin.” Radke said,

“We are also concerned that the company could be losing focus on execution with CEO Saylor’s disproportionate focus on Bitcoin vs. running the business and signs of deteriorating employee sentiment.”

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Author: AnTy

Avoid Billionaire Michael O’Leary, Who’d Never Invest in Bitcoin, Like a ‘Plague’

Irish airline Ryanair owner billionaire Michael O’Leary bashed bitcoin, calling it a “Ponzi,” nothing new, and advised people to stay away from it. O’Leary, in an interview with The Sunday Times said,

“I have never, and would never, invest one cent in bitcoin, which I believe is equivalent to a Ponzi scheme, I would strongly advise everyone with any shred of common sense to ignore this false story and avoid bitcoin like a plague.”

While O’Leary is calling people to avoid the most significant digital asset, which has been slowly making its way into the company’s balance sheet as a reserve asset replacing cash, analyst Mati Greenspan said, “Avoid Ryanair like the plague.”

O’Leary recently was the latest celebrity who was targeted to promote the crypto-related scams. According to the reports, an online scam has been doing the rounds where O’Leary has been allegedly talking about making “tens of thousands of euros a day on autopilot” in Bitcoin Lifestyle and claiming that National Ireland Bank stopped him from revealing it.

UK victims have reportedly lost £200,000 ($261,643) in such scams that have been doing the rounds for about three years.

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Author: AnTy

Open- Source Toast Wallet Shuts Down, Calls Out Ripple for ‘Abysmal Treatment’ of Developers

  • XRP developers of the Toast Wallet are calling it quits citing ‘abysmal treatment by Ripple” as the reason for leaving the project.
  • Launched in early 2017, the closure of Toast Wallet is heavily linked with the investment arm or Ripple, Xpring, looking over the wallet in its funding over the years.

The short tweet on its official page, Toast Wallet, XRP wallet that allows users to buy, sell and safely store their digital assets, will be shutting down due to the “abysmal treatment of community developers.”

As of June 22, 2020, the Toast App will no longer be available on mobile application stores denying access to additional users. The tweet reads:

The existing users’ wallets will be functional for a short time as users withdraw their assets to other wallets. The company has also given assurances to the safety of user assets.

“Existing Toast installs will continue to work, and funds are safe. We await a clear and transparent community developer support program from Xpring.”

The mention of Xpring in Toast’s tweet raises suspicion on whether the Ripple owned investment company had something to do with the wallet’s collapse. XRP Arcade, a crypto news publication, cites unnamed sources that claim the Xpring development fund did not extend to Toast, which led to its failure.

The remaining action is for users to send their XRP assets to other wallets quickly.

Send Users Xumm’s way

Toast Wallet has requested that users start migrating their assets to different XRP compatible wallets before the wallet is completely shut down.

Despite the dark cloud hovering above Toast Wallet’s open source project, Wietse Wind, one of XRP’s leading developers, took this opportunity to grab some of the users to choose his Xumm crypto wallet. After passing his graces, Wind wrote:

“I’d like to share the procedure to migrate from Toast to XUMM. I don’t want to come across as a vulture: I’m sorry to gain XUMM users this way.”

The open-source code will remain on the Toast Wallet GitHub page.

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Author: Lujan Odera

New Zealand Aims To Abolish Cryptocurrency Sales Tax While Income Tax Would Remain

Quick Read:

  • The New Zealand Inland Revenue Department is calling for a revision of current Goods and Services Tax laws that are unfavorable to the crypto sector.
  • Issues of whether to treat different crypto assets differently have arisen as they all have different features.

The New Zealand government has held discussions in a bid to revise the Goods and Service Taxes applied to cryptocurrency. This would mean that cryptocurrencies exchanging ownership would be liable to a 15% GST and end up double taxing as they would still be keen on applying the income tax.

The revenue authority Inland Revenue Department (IRD) has come to acknowledge that the tax rules in place cannot be applied to cryptocurrencies. This is because they don’t fall into the same framework that was designed for currency, shares, debt and equity securities.

“Because of their innovative nature, they will often also have different features to these other investment products.”

Should different tokens have different GST terms?

They are, however, in a bit of a crunch, as they have yet to decide on whether or not they will have different GST treatment for the different types of crypto-assets. With current laws being a bit unfavorable to the sector. This is because of the nature of various tokens, it makes it even harder to classify. The list includes payment tokens, utility token, security token, asset token, and hybrid token are all very different in nature.

They are however confident that simplifying the laws could make it attractive to crypto investors who would open job opportunities and further technological developments in New Zealand.

There is also the question of how to treat situations where the exchange of ownership in crypto assets has occurred with an individual that is not living in New Zealand.

“The supply of a crypto-asset could be an exempt financial service, subject to 15% GST, or a zero-rated supply to a non-resident.”

The authority reckons that there’s a need for change, as the current GST framework in regards to crypto assets is vague, making the sector less attractive for the investors. There’s an April 9thdeadline for anyone with varying opinions.

Notably, New Zealand is following the footsteps of their neighbor Australia who revised their GST laws in October 2017.

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Author: Lujan Odera

Bitcoin Can Only Act As A Hedge Against A Loss Of Confidence In Fiat And Payment System: JPMorgan

  • From calling Bitcoin a “fraud” to the crypto asset having a place in investors’ portfolio
  • “2019 will be remembered for the rise of digital money” – JPMorgan Chase Report
  • Blockchain has its “clearest” use case in “payments, trade finance, and custodial services” but not in supply chain

According to JP Morgan Chase and Co.’s 74-page report later this week states, the digital money will change the financial world.

“2019 will be remembered for the rise of digital money,” the bank said in its report. “The groundwork is now in place for more mainstream adoption of blockchain technology at the same time that the foundation is being established for the development of digital currency and fast payments.”

Back in 2017 JPMorgan CEO Jamie Dimon called Bitcoin a “fraud” and now in 2020, the bank says crypto assets have a place in investors’ portfolio. JPMorgan report said,

“Developments over the past year have not altered our reservations about the limited role that cryptocurrencies play in global portfolio diversification or as a hedge instrument. Crypto assets have a place in investors’ portfolios only as a hedge against a loss of confidence in both the domestic currency and the payments system.”

Rapid adoption faces practical challenges

The New York-based bank said in its report that the emergence of blockchain that underpins Bitcoin and Ether has made the modernization of payments global. While JPMorgan debuted its very own digital coin last year to facilitate cross border payments with a digital asset among the banks, the blockchain system created by Paxos has broken through to the real world and China is developing digital yuan, noted the bank.

It further said blockchain is promising for corporations and banks, yet most corporate efforts are in the early development stage or being tested.

When it comes to using blockchain, JPMorgan sees its “clearest” use cases in “payments, trade finance, and custodial services.” But founds using a distributed ledger to manage the supply chain — “viewed as ripe for disruption is often a limiting factor” — to be a fading application.

However, challenges still remain in the form of technology such as scaling and slow network and regulatory unclarity.

Tech giants are also jumping in on the trend with Facebook launching its so-called cryptocurrency Libra pegged by a basket of fiat currencies. However, it received a lot of backlash from European officials and members of Congress.

“The failed release of Facebook’s Libra serves as a reminder that rapid adoption faces practical challenges to attain scale,” the bank said in the report. In order to succeed, the bank said Libra needs several market mechanisms in place such as less distributed, semi-private networks and short-term liquidity facilities.

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Author: AnTy