“Dollarization” Contributing to “Cryptoization” of Emerging Markets, says IMF

“Dollarization” Contributing to “Cryptoization” of Emerging Markets, says IMF

This “cryptoization” can become a threat to fiscal policy as such developing nations should consider the benefits of issuing CBDCs as a response to the growing use of crypto, the Fund said.

The growing usage of cryptocurrencies in emerging markets could create the “cryptoization” of local economies, the International Monetary Fund (IMF) said on Friday.

This “cryptoization,” according to the international organization that promotes global financial stability, could potentially undermine exchange and capital controls and further upset financial stability in these markets.

The agency said that inefficient payment systems and unsound macroeconomic policies in emerging economies are among the drivers of cryptocurrency adoption. The lure of quick gains may also be another potential reason.

Weak domestic banking systems and the low credibility of central banks that fuel “dollarization” can further contribute to growing crypto use, according to the Fund.

“Dollarization can impede central banks’ effective implementation of monetary policy and lead to financial stability risks through currency mismatches on the balance sheets of banks, firms, and households.”

Here, wide adoption of stablecoins, which are usually backed by fiat, particularly USD, could also pose significant challenges by reinforcing existing dollarization forces, the IMF added.

But the Fund also said that the exact level of adoption of crypto assets in emerging economies was hard to gauge accurately.

In an August report, blockchain data platform Chainalysis noted that Vietnam, India, Pakistan, Kenya, and Nigeria are leading the crypto adoption globally.

The IMF said “cryptoization” can become a threat to fiscal policy as crypto assets potentially facilitate tax evasion. As such, it urged developing nations to strengthen macroeconomic policies and consider the possible benefits of issuing digital fiat – central bank digital currencies (CBDCs) as a response to the rise of crypto.

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Author: AnTy

FTX’s Bahamas-based Subsidiary Becomes a Registered Entity

FTX’s Bahamas-based Subsidiary Becomes a Registered Entity

FTX Digital Markets, the Bahamian subsidiary of rapidly growing crypto derivatives platform FTX, announced on Monday that it is now a regulated entity.

The Bahamas-based platform has been registered by the Securities Commission as a digital assets business under the Digital Asset Registered Exchanges Bill or the “DARE Act.” This Act which establishes a full regulatory framework for digital asset activities, will allow the exchange to expand in a compliant manner. Sam Bankman-Fried, CEO & Founder of FTX said,

“We are committed to maintaining a close working relationship with local regulators so that together we can navigate putting a comprehensive regulatory framework in place to help promote the growth of this nascent asset class.”

Ryan Salame, former Head of OTC at Alameda Research, has been appointed as the CEO of the platform, which will be headquartered in Nassau, Bahamas. It will be hiring key roles locally in the areas of finance, marketing, and software development.

Bankman-Fried tweeted about the announcement saying Bahamas’ comprehensive regulatory framework is “essential to ensuring that the crypto industry is safe, robust, and growing.”

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Author: AnTy

Solana’s DEX, Mango Markets, Raises $70 Million in MNGO Token Sale

Solana’s DEX, Mango Markets, Raises $70 Million in MNGO Token Sale

Mango Markets, a decentralized exchange platform on the Solana blockchain, has raised $70 million in a just-concluded token sale.

MNGO Tokens Now Listed On FTX And Openserum

Investors initially locked up over $500 million in USDC in the DEX as they raced to get a piece of MNGO tokens. However, the token sale closed at $70M.

While announcing the conclusion of the token sale, Mango Markets revealed that the MNGO tokens are currently on offer on popular crypto exchange FTX and derivatives exchange Openserum.

Solana first introduced Mango markets in May this year as a decentralized autonomous organization (DAO) that also offers spot markets, perpetual futures, and lending. The project claims to provide users with lightning-fast network speed and near-zero transaction fees.

Liquidity is sourced from its pools and also from Serum, the Uniswap equivalent on Solana. Apart from being the governance token of the Mango Markets, Mango tokens give token holders the power to upgrade the protocol as they see fit. It also allows token holders to create incentives to reward participation and drive usage of the protocol.

Mango’s token sale appears to be one of the largest this year. Many decentralized finance (DeFi) protocols raise between $1 million and $15 million in seed-stage funding. However, Mango made a substantial $70 million. This rise from a budding project reflects the rising fortunes of the Solana blockchain.

The Solana Blockchain Rapidly Evolving

Mango markets’ $70 million token sale shows the growth and popularity of the Solana blockchain. The blockchain has seen strong support from developers and users over the past few months. This is because of its vital role in solving problems faced by Ethereum users regarding congested networks and high gas fees.

The number of projects building on Solana has increased tremendously. Currently, there are more than 400 projects in Solana’s ecosystem. Some of the most notable projects include Serum, Raydium, Maps.me, Chainlink, Terra, Audius, USDC, USDT, and Pyth Network.

The networks based on Solana are also thriving. An example is Saber Labs which recently secured $7.7 million in an initial seed fundraising round led by early-stage venture capital firm Race Capital. Another is Wormhole, a communication bridge based on Solana that launched its mainnet to support inter-blockchain message transfers.

One of the principal backers of the Solana blockchain is Sam Bankman-Fried, the founder of crypto exchange FTX. Bankman-Fried has invested heavily into many of the projects currently built on the Solana blockchain.

This can be seen in the $314 million Solana Labs raised in June. Some of the major investors of the funding were Alameda Research (a firm backing FTX exchange), alongside Andreessen Horowitz and Polychain Capital.

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Author: Jimmy Aki

Simplify Buying GBTC at a Discount for its ETF

Crypto assets’ non-correlation to equity and fixed income markets and a “vast majority of U.S. investors have yet to invest in crypto” has Simplify investing 10% of the fund in Bitcoin.

Simplify Asset Management has announced the launch of Simplify US Equity plus GBTC ETF.

Filed with the US Securities and Exchange Commission (SEC) on May 23, the fund will invest at least 80% of its net assets in equity securities. The vast majority of the fund’s equity portion is invested in the iShares Core S&P 500 ETF and the remaining in futures contracts.

10% of the fund is invested in Bitcoin (allocation capped at 15%) through Grayscale Bitcoin Trust (GBTC). Paul Kim, CEO of Simplify, said in a statement,

“Recent research has shown how uncorrelated crypto assets are to equity and fixed income markets, making them a possibly compelling part of a well-diversified portfolio.”

“But allocating to crypto-assets is difficult since over-the-counter offerings can present a host of challenges for investors and advisors, managing direct crypto exposure can be incredibly time consuming and onerous, and there remains no ETF on the market providing direct exposure to crypto itself.”

Through its SPBC, Simplify aims to solve these challenges and provide a “liquid, scalable way to add Bitcoin exposure to a portfolio.” The Fund charges a fee of 0.50%.

While the “true diehard” crypto investors are already into bitcoin, a “vast majority of U.S. investors have yet to invest in crypto,” said Kim, adding that surveys show the majority of financial advisors have been asked about crypto by their clients.

GBTC is a closed-end fund that invests in Bitcoin, which is currently trading at a discount of nearly 13%, recovering from a 21.23% low from May 14.

As we reported, GBTC shares which are locked for a six-month period, will start unlocking by this weekend and gain pace next month, especially in the second half of June, and the biggest unlock of shares in mid-July that will flood the market.

“We’re acquiring bitcoin via GBTC at a discount,” Kim said. “If GBTC trades at a premium in the future, we can manage the entry and rebalancing both from tax and strategic targeting perspectives, and also from the standpoint of the premium/discount.”

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Author: AnTy

Saxo Markets Launches BTC, ETH, & LTC Trading on ‘Strong Demand’

Saxo Markets has launched a cryptocurrency offering enabling its clients to trade Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) against the dollar, euro, and yen, from a single margin account.

Due to being in the form of derivatives, clients can go both long and short on these cryptocurrencies.

The company is targeting mass affluent and emerging-affluent clients for its latest offering. Over the next few weeks, this will be launched in different countries.

This new service was introduced on the back of “strong demand,” said Saxo Markets APAC Chief Executive Officer Adam Reynolds.

“The active trading clients are going to be the ones most interested in this,” Reynolds said, “and that will include people who are active traders in FX, but also people like active traders in tech stocks.”

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Author: AnTy

Investors Pump Millions into The NFT Market, Analysts Debate – Good Or Bad Investment?

  • Non-fungible token (NFT) markets are quickly catching the eyes of venture capital firms.
  • Critics claim investment in NFTs is akin to “gambling in a casino.”
  • Are NFTs being used for money laundering?

Over the past few months, there’s been a boom in demand for non-fungible tokens (NFTs) in tandem with the growing cryptocurrency market. However, this rise in demand has not gone unnoticed as venture capital firms have poured over $90 million in NFT projects so far this year representing a sharp 150% increase from NFT projects’ investment last year, a CNBC report states.

According to Pitchfork, Sorare, a blockchain-based football digital collectibles game, has raised the most from VCs this year, $48.8 million, including Accel, Benchmark, and former Manchester United F.C. defender, Rio Ferdinand.

Andrei Brasoveanu, a general partner at Accel, labeled the expansive growth of NFTs as “one of the most exciting tech developments” shortly after the “record-breaking” investment became public. Brasoveanu further stated,

“It’s one of those developments that have mass-market appeal and could potentially impact a world outside the crypto niche.”

Notwithstanding, reports have linked popular NFT marketplace, OpenSea, which has previously sold some of the top-selling NFTs, with a possible $250 million raised at $2 billion valuations. The DApp creator, Dapper Labs, raised $23 million in a seed funding round for OpenSea led by Andreessen Horowitz in 2020.

Dapper Labs is well-known for its NBA Top Shot application that creates and sells to users NBA players’ NFT collectible cards. However, the funding rumors were quashed by Roham Gharegozlou, CEO and founder of Dapper Labs, who said the rumors were “baseless.”

A Critical Stand Against the Booming NFT Market

Despite VCs opening up their checkbooks to invest in NFT-related firms, some critics believe the NFT market is a fad in the crypto world. CEO of L’Atelier BNP Paribas, John Egan, compares buying NFT collectibles to gambling in a casino. “I think it’s probably akin at this stage to going into the casino,” he said.

In the past week, Beeple, a digital artist, made huge waves in the crypto world as his collection of NFTs sold for $69 million, making this art the third most expensive art from a living artist. Elon Musk, Jack Dorsey, and athletes such as Ron Gronkowski have all offered their unique NFTs to the public amidst the surging demand.

Despite his skepticism, Egan stated the NFT world possesses highly risky assets, but he believes the ecosystem will play a key role in the future. He stated the unique and cryptographic secure nature of NFT provides “the bedrock economic infrastructure within the virtual economy.”

The Path to Darkness – Money Laundering?

Apart from an ensuing “bubble” that most critics have prophesied, others claim NFTs are headed to a regulation path, similar to the cryptocurrency assets preceding them. One of the most practical dangers lingering above NFTs is money-laundering, which is also a grave issue in the crypto field.

According to Jesse Spiro, the chief of government affairs at the blockchain analysis firm Chainalysis, NFTs present a harder challenge to single out money laundering. Spiro said,

“One of the ways to identify trade-based money laundering with [traditional] art is that [an appraiser] comes up with a fair market value for something, and you’re able to measure that fair market value against the pricing that’s involved [and flag] over-invoicing or under-invoicing.”

“This is either selling that asset for less than it’s worth or for more than it’s worth.”

While noticing money laundering patterns in well-established markets such as the NBA Top Shot is easy, random or one-off NFT sales is much more complicated, he explained.

“All that’s needed is two parties that are involved to execute that [transaction] successfully effectively.”

However, a former Deutsche Bank and Credit Suisse fund manager argued that money laundering using NFTs “does not make sense.” The fund manager stated,

“I certainly see the potential for money laundering here, but given that there are lots of assets out there on the blockchain that people can use for that, [NFTs] may not be best-suited.”

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Author: Lujan Odera

New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority (FMA) has become the latest financial watchdog to issue cryptocurrency risk warnings to crypto holders and investors.

The warning is coming as the crypto market is witnessing a gradual contraction in market prices. The financial watchdog has warned citizens dealing with crypto assets to be wary of the risks since digital assets are not regulated in the country. FMA stated,

“Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers.”

A rise in crypto scams

Based on NZ Herald’s report, the FMA has expressed worries about the increasing cryptocurrency scams in New Zealand, with several unregulated digital exchanges promising unusually high returns that are unrealistic.

This latest announcement from the FMA is coming barely 24 hours after the UK’s Financial Conduct Authority (FCA) issued a warning about the risk of cryptocurrency investments in the country.

Highly volatile market

The watchdog added that New Zealanders looking to invest in Bitcoin and cryptocurrencies should be very careful because they are highly volatile and risky investment vehicles.

The FMA said it shares the FCA concerns, and crypto holders and investors should be prepared to lose all their invested funds if they continue in the highly volatile crypto market.

Many cryptocurrency exchanges based overseas are not regulated, as they carry out their business exclusively online. As a result, investors of such exchanges are at high risk of losing their entire investments if something goes wrong in the market. The FMA noted that there is no assurance that their funds will be safe since it’s difficult to find out who is selling, buying, exchanging, or offering the cryptocurrencies.

In the past year, the crypto market has risen substantially, as almost all the digital assets added considerable gains. Now the overall market cap of crypto assets stands at over $1 trillion, with Bitcoin having about 70% of the share.

In 2020, the world’s most valuable cryptocurrency rose by more than 300%. But with the rise in the value of cryptocurrencies, more people became interested in the crypto market. As a result, crypto scams more than doubled as well.

Elliptic, a crypto assets risk management provider, reported recently that threat actors are hiding stolen Bitcoin in privacy wallets. Some criminals are also using pictures and details of famous people to deceive crypto holders on fake news websites.

The threat actors have used scam Bitcoin ads featuring unauthorized pictures of celebrities and personalities like Waleed Aly, Chris Hemsworth, and Andrew Forest to lure their victims to part ways with their cryptocurrencies. The report revealed that these cybercrimes are linked to threat groups from Moscow.

Verifying registration status of the exchange

New Zealand’s watchdog has also issued an advisory to crypto investors who deal with crypto exchanges. According to the regulator, users should verify whether the exchange holds their New Zealand dollars in a trust account. They should also ensure that the exchange is dully registered with the Financial Service Providers Register (FSPR), which is required in the case of a dispute resolution.

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Author: Ali Raza

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

The US government is preparing to push the prices in all markets higher.

Calling the recently-passed coronavirus relief bill a “disgrace,” President Donald Trump is demanding Congress to increase stimulus payments from $600 to $2,000 and get rid of “wasteful and unnecessary items.” Trump said in a video,

“I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple.”

However, the $900 billion COVID-19 stimulus bill was passed on Sunday in both houses of Congress with veto-proof majorities which means Trump might not be able to raise the direct payment limit. The good thing is top Democrats in Congress are in favor of bigger cheeks to people.

“Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!” House Speaker Nancy Pelosi tweeted in response to Trump’s video.

It is not known if the $2,000 will replace the $600 check yet. Meanwhile, the recently passed pandemic recovery bill includes direct payments of up to $600 to eligible adults plus $600 per child dependent. Individuals earning up to $75,000 in adjusted gross income, or $112,500 as head of household and $150,000 as a married couple qualifies for the maximum benefit of this stimulus payment.

As we reported, Treasury Secretary Steven Mnuchin said on Monday that qualifying Americans could get their direct benefits as early as “at the beginning of next week.”

Now, if the latest $2,000 direct payments become a reality, “All markets will moon,” said one trader.

Up over 14% YTD, S&P 500 hit a new all-time high last week while the US Dollar index is at multi-year lows, down more than 12% from its March uptrend. When it comes to precious metals, gold is enjoying a 22.3% uptrend this year trading at $1,862 but down from its August peak of $2,075. As for silver, it rallied 47% year-to-date, currently at $25.5 but down from August’s nearly $30 high.

Bitcoin, however, is the leading asset with 227% gains in 2020, making a new ATH at $24,300 just this past weekend.

Canadian fund managers are also revamping their portfolios and bringing BTC into the mix as COVID-19 vaccines roll out and central banks provide a historic level of stimulus. The Bitcoin Fund has actually soared 65% since it began trading in Canadian dollars in October.

“It’s a hedge against all the money printing that is going on,” said Arthur Salzer, chief executive officer of Northland Wealth Management, noting “institutional investors are embracing” this asset class.

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Author: AnTy

USD Spoils the Party as Bitcoin, Precious Metals, & Stock Market Record Massive Reversals

After last week’s crazy performance, markets are experiencing a massive reversal on the first day of the week.

Starting with Bitcoin, the digital asset had made a yet new all-time high just last night, or for some early Monday morning, at about $24,300 amidst the heightened institutional interest.

But after surging 28% in just last week and breaking multiple levels, today it is bleeding red.

Dropping just under $22,400, BTC/USD rebounded some and is trading around $23,050, down about 2.5% on the back of $5.32 billion in ‘real’ volume.

In tandem with Bitcoin BTC -4.74% Bitcoin / USD BTCUSD $ 22 930,0532
-1,086.88 -4.74
Volume 47.02 b Change -1,086.88 Open $22 930,0532 Circulating 18.58 m Market Cap 425.98 b
1 h Crypto Exchange EXMO Hacked; BTC, ETH, XRP, ZEC, USDT, and ETC Stolen By Attacker
, altcoins are falling even harder.

ETH has gone down 6% to nearly $600 while Litecoin fell 11%, Bitcoin Cash 9%, Chainlink and XRP 8%, and Polkadot, Stellar, Tron, and Cardano are in the loss by over 7%.

More Volatility

This price action over the weekend was actually led by retail investors than institutional investors. The consistent decline in OI shows that institutional investors were taking profits and missed out on the latest rally.

As per CME’s latest report, asset managers’ long positions fell from 544 to 492, while short positions increased from 11 to 26. Leveraged funds’ long positions declined from 4,365 to 3,946, along with the short positions that declined from 9,354 to 8,702. Non-reportable accounts also increased in short positions from 506 to 606, while long positions fell from 3,403 to 3,134.

The jump in price came on the back of the high volume, which is rising rapidly. The futures market has been particularly active, with the aggregate weekly volume of BTC futures hitting $270 billion across derivatives exchanges. Open interest (OI) also reached a new ATH of $8.9 billion on Saturday.

This bullish price action has the BTC perpetual swaps price exceeding the index price with funding rates hitting a peak; excessive funding rates indicate rising leverage. With quarterly futures and options settlement coming up this Friday, more volatility is expected.

Other Markets

Much like digital gold, the risk-off market has precious metals, also having a bad day. Gold fell 2.7% to $1,854 before finding support around $1,874, for now. Silver meanwhile crashed over 9% to just under 25; currently, it is around 26.

S&P 500 futures plunged 2.5% on the first day of the week, right after the Index made a new ATH at 3,722 just before the weekend. Tesla fell 6.3% in pre-market trading on its first day on the S&P 500 index, after catapulting 731% this year.

Today’s winner is the US dollar, which breached above 91, from Friday’s low of 89.7. The USD is gaining against several currencies after European nations began imposing travel bans on the UK after it reported a more-infectious and “out of control” coronavirus variant.

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Author: AnTy

Cboe Feeling the Bitcoin FOMO; Will Launch a Crypto Index Next Year With CoinRoutes

Now, CBOE wants in on crypto, too, again.

Cboe Global Markets is planning to launch a suite of tools including crypto indexes, real-time ticks, and historical data by the end of the first quarter of next year, in partnership with CoinRoutes. Catherine Clay, Senior Vice President and Head of Information Solutions at Cboe Global Markets, said,

“Together, we can help bring transparency to the asset class and its market models by using RealPrice data to potentially create indices and tools that help clients better understand cryptocurrencies and encourage their participation in a nascent market.”

As Bitcoin continues to rally, up 175% YTD just blew right through the all-time high, hitting $20,800, along with the rest of the crypto market, institutions have been rushing in to jump on this bandwagon.

Everyone is long on Bitcoin, and earlier this month, S&P 500 revealed its crypto index plans through Lukka in early 2021.

Now, Cboe wants to provide data for the explosive cryptocurrency market. Interestingly, Cboe launched Bitcoin futures, along with CME, at the peak of the last bull market, in December 2017. But only to close its bitcoin futures in March 2019.

Now, Cboe wants back in, although apparently their corporate interest in digital currencies never declined.

Cboe has signed an exclusive licensing agreement with CoinRoutes, a New York-based trading software firm.

One of the largest stock exchange operators in the US, Cboe aims to reach a customer base of at least thousands initially with its real-time index data and then grow it to a global level. Michael Holstein, Chief Revenue Officer, CoinRoutes said,

“We believe existing arbitrarily weighted indices that do not take into account the different fees or actual liquidity available on crypto exchange platforms do not represent the true cost of buying or selling a given cryptocurrency.”

The company’s algorithmic products are built for both spot and derivatives products.

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Author: AnTy