Wells Fargo Unveils New Crypto Strategy For Qualified Clients

Wells Fargo Unveils New Crypto Strategy For Qualified Clients

Wells Fargo might become the latest banking firm to embrace cryptocurrencies. The bank is set to debut its new cryptocurrency investment strategy in Mid June, according to Business Insider.

From Crypto Cynic to Believer

The strategy would see qualified investors get some form of Bitcoin exposure, as stated by Darrell Cronk, the president of the bank’s investment institute.

Cronk said that the bank views crypto as a viable investable asset and that the cryptocurrency space has hit an evolution and maturation of its development.

He noted that the digital assets market is still rapidly evolving and requires due diligence to be regarded as an alternative investment and not a strategic allocation.

This move by Wells Fargo comes a few months after the bank published a report on Bitcoin and other cryptocurrencies. The report painted the crypto market in a positive light as one that has a potential future for wider investments but still warned against the dangers thereof.

Cronk said that the bank had been working on the products for months and is only dedicating crypto as a strategic allocation to diversify qualified investors’ portfolio holdings. Cronk said,

“For those investors who qualify and have an interest, there’s some good academic and money management work to suggest that it can be a nice diversifier to portfolio holdings.”

For so long, Wells Fargo has hunted down clients and shuttered their accounts for trading Bitcoin. The bank even stopped customers from using its credit cards to purchase cryptocurrency.

Wall Street Banks Making Crypto Moves

Wells Fargo has now joined the growing number of major US banks that have jumped on the crypto train. Banks like Goldman Sachs and JPMorgan Chase & Co. are reportedly seeking to offer their clients Bitcoin-related services.

Major US bank JPMorgan is expected to introduce a Bitcoin fund later this year due to strong customer demand.

Earlier this month, Goldman Sachs announced that it had formed a dedicated cryptocurrency trading team after relaunching its crypto desk.

Since its first launch in March, the crypto desk has been buying and selling Bitcoin futures on CME Group and non-deliverable forwards.

Morgan Stanley, the first US bank to offer its wealth management clients access to Bitcoin funds, also plans to launch up to three Bitcoin funds in the future, per CNBC.

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Author: Jimmy Aki

Every Internet Community Might Have Its Own Micro-Economy, Including NFT’s, Someday

Every Internet Community Might Have Its Own Micro-Economy, Including NFT’s, Someday

“Crypto, and specifically NFTs (non-fungible tokens), can accelerate the trend of creators monetizing directly with their fans,” reads a16z latest blog post written by Chris Dixon, a general partner at Andreessen Horowitz.

While social platforms will continue to be useful for building audiences, creators can increasingly rely on other methods, including NFTs and crypto-enabled economies, to make money, he said.

Non-fungible tokens (NFTs) are gaining a lot of attention lately as people digitize their art, videos, music, gifs, games, text, memes, and any number of things and sell them online.

HighestSellingNFT

Source: Twitter

While NFTs will have their own ups and downs, they offer fundamentally better economics for creators by removing rent-seeking intermediaries, enabling granular price tiering, and reducing customer acquisition costs to near zero by making users owners, he wrote.

As such, this new sector which is still early and will evolve, Dixon believes, will see an increase in their utility as digital experiences are built around them, including marketplaces, social networks, showcases, games, and virtual worlds. He added,

“Someday, every internet community might have its own micro-economy, including NFTs and fungible tokens that users can use, own, and collect.”

In this burgeoning sector, recently, the major auction house Christie’s also joined in through Beeple’s digital art, the payment for which was accepted for the first time in crypto, Ether.

ChristiesBeepleNFT

Source: Twitter

People are pouring in huge amounts of money in these NFTs, with a batch of digital collectibles known as CryptoPunks getting sold for about $1 million in cryptocurrency in just a few minutes recently.

These digital collectibles are created on the Ethereum blockchain using the ERC-721 standard and are embedded into a smart contract.

This obviously has people making copycats, as seen with “Binance Punks.” Larva Labs, the company behind the Punk collectibles, clarified last month that it “has taken the art from CryptoPunks and is selling it as a copy on another chain. This is in no way an authorized project.”

AmandaCernyNFT

Source: Twitter

On February 22nd, volume in the NFT space peaked above $64 million and over 44k traders, an uptrend of 114x and 26.5x respectively from the beginning of the year, as per Dapp Radar.

Since then, the volume on NFT marketplaces has come down to just under $16 million and traders to over 25k.

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Author: AnTy

Leveraged Funds are Record Short on CME Bitcoin Futures

However, this might be bullish instead of bearish for BTC.

Bitcoin continues to break new records every day lately.

Yesterday, BTC/USD broke the $29,000 level as well and the market is expecting to enter into 2021 above $30k and end 2020 with more than 300% returns.

Amidst this extreme bullishness, leveraged funds on the Chicago Mercantile Exchange (CME) are record short.

However, this might be rather bullish for Bitcoin’s price than bearish as the same picture was seen on Dec. 1st.

As data provider Skew noted, they are likely to be record long on Grayscale Bitcoin Trust, trying to collect the premium. GBTC is currently holding 607.07K BTC, 3.2% of Bitcoin’s circulating supply, which is trading at a 23.5% premium to BTC price.

Grayscale, however, hasn’t bought any BTC since Dec. 25th, as per Bybt.

These leveraged funds might also be taking advantage of the CME futures basis, the average is currently over 10%. The difference between the spot price of Bitcoin, $28,268 as of writing, and CME Bitcoin futures price, which is $29,135, is an arbitrage opportunity for these funds.

On Monday, the regulated exchange had to temporarily pause the trading of bitcoin futures after one of the biggest gaps was formed, of more than $3k, between the derivatives and the underlying asset.

CME has actually become the largest Bitcoin futures venue by the number of open contracts amidst the growing institutional interest. Open interest on CME stands at $1.60 billion, the highest among the major derivatives exchanges, as per Skew.

Now, CME accounts for more than 18% of the total OI which stands at over $9 billion.

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Author: AnTy

Robinhood in Preparation for a Possible IPO Launch in Q1, 2021; Report

Robinhood might be planning to go public early next year, according to a recent publication by Bloomberg. This trading platform, whose popularity has risen in the past few years, is reportedly seeking advisers in the banking domain to support its Initial Public Offering (IPO) process.

Per the Bloomberg report, Robinhood could go public as soon as Q1 of 2021; sources opted to remain unidentified given this information’s private nature. However, they were also keen to highlight that the firm might change this position and abandon the IPO plan altogether.

While Robinhood’s official sources are yet to comment, this move might be a game-changer for the trading platform, given its value proposition to novice investors. Robinhood has become a darling to millennials and the tech-savvy Gen-Z, giving them exposure to various previously cumbersome assets to trade.

In fact, it is one of the popular trading platforms with access to crypto-assets and enjoys the backing of tech-focused VC’s such as Sequoia Capital. Other prominent investors that have allocated funds to Robinhood include Index Ventures, Andreessen Horowitz, Ribbit Capital, DST Global, and D1 Capital Partners.

The latest Robinhood valuation is $11.8 billion; this was after the firm raised its series G funding, which totaled $200 million. With the murmurs of an IPO, Robinhood could soon be listed in the U.S stock markets, a move that would expose the firm to more market liquidity.

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Author: Edwin Munyui

Ray Dalio Admits “Missing Something about Bitcoin,” says Would Love to be Corrected

The co-founder of the world’s largest hedge fund manager, Bridgewater Associates, might not be convinced that Bitcoin can be a currency. Still, he is also admitting that he might be missing something about the leading cryptocurrency.

“I might be missing something about Bitcoin, so I’d love to be corrected,” said Ray Dalio in a tweet on Tuesday.

This tweet came in response to someone’s comment on Dalio not practicing what he preaches. Dalio’s original tweet talked about practicing to “appreciate the art of thoughtful disagreement,” being critical to society and very relevant in getting the very right answers together.

“His opinion on BTC at the moment clearly reflects a lack of deep insight in the matter,” said one Twitter user.

After saying that he might be missing something about Bitcoin, he reiterated his view on why he has problems with BTC being an effective currency.

The issues are simple: “Bitcoin is not very good as a medium of exchange because you can buy much with it,” he said, adding because it is too volatile for most merchants to use but added, “correct me if I’m wrong.”

The billionaire investor further pointed out that it is this volatility that makes it “not very good as a store-hold of wealth” and also because “it has little correlation with the prices of what I need to buy so owning it doesn’t protect my buying power.”

And last but not least, he thinks, if Bitcoin “becomes successful enough to compete and be threatening enough to currencies that governments control, the governments will outlaw it and make it too dangerous to us.”

Last week, when Dalio talked about the government banning the open-source, peer-to-peer system, Twitter CEO Jack Dorsey has cut it down with a simple “No.”

Dalio just “can’t imagine” that central banks, businesses, multinational companies, or big institutional investors are using it. But again,

“If I’m wrong about these things I would love to be corrected.”

Given the kind of adoption Bitcoin has been seeing from the public companies and institutional investors in 2020, Dalio certainly needs to take a deep dive into Bitcoin to understand it better.

Meanwhile, BTC continues to climb higher and higher, reaching levels not seen since January 2018. Today, BTC/USD jumped to nearly $17,900.

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Author: AnTy

Euro’s Dominance at Risk of Replacement by Digital Yuan in the Next Five Years: dGen Report

The Euro might be overtaken by China’s digital Yuan as soon as 2025 if the European Union will not have launched a CBDC by then, highlights the latest research report by German-domiciled think tank, dGen. This release which was published on September 9 focuses on the ramifications a major CBDC on the Eurozone as well as the potential of a digital Euro to be ahead of the pack.

As the crypto industry comes of age, regulators have found themselves at a cross-road in the creation of oversight mechanisms. Well, China which began research in this space as early as 2014 recently launched its digital yuan ‘DC/EP’, sparking a hype towards the global adoption of CBCD’s. Since then, a number of central banks including the European Union have floated the idea of piloting their own digital currencies.

The EU progress on CBDC’s has, however, been criticized by prominent contributors in Europe’s blockchain ecosystem including the Head of Frankfurt’s School Blockchain Center, Philipp Sandner,

‘[The] ECB’s reaction has been too slow. Especially, the benefits from a CBDC for the industry, e.g., based on programmable money, are currently neglected. Given Libra and the DC/EP, the ECB has to react quickly to keep its geopolitical position’.

According to the report, the launch of a digital Euro would be strategic for the region to continue its global dominance as the second most held fiat reserve; only this time a digital Euro will be used instead. Consequently, the research notes that a digital Euro has the potential to transform the global economy while acting as the fundamental pillar of a virtual monetary ecosystem in the Eurozone.

U.S Dollar Still Safe!

Unlike the Euro whose odds against the DC/EP are less favorable, dGen predicts that the digital yuan will not unseat the world’s reserve currency, at least not yet. The research highlights China’s political unrest as one of the factors that could hinder its CBDC’s global adoption at level to compete with the U.S dollar. In addition, smaller nations are more likely to adopt a digital dollar as opposed to the yuan given its already established dominance and ease of access globally. The research reads,

“In the coming decade, with the launch of a digital Dollar, digital Yuan, and digital Euro, we predict that smaller nations will take the path of least resistance, and opt for using and storing the digital Dollar.”

Global CBDC Integration Could Hit 60% in the next Decade

Other predictions made by the German think tank include the possibility of a 60% global CBDC integration by 2030. As per the dGen insights, three out of five nations will have completely replaced their fiat currencies with a central bank backed digital asset by then. On this front, China and Bahamas in the West Indies Caribbean have already set a pace based on the CBDC progress within the two jurisdictions.

Last but not least, the report predicted that CBDC’s will have to co-exist with private stablecoins which have now been in the crypto space for quite a while. This is because of their value proposition in the volatile cryptocurrency market as well as the ability to circumvent authorities through blockchain tech, regardless of their position when it comes to digital assets.

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Author: Edwin Munyui

Tether Saves the Day by Reversing a 1 Million ERC20-based USDT Transaction Sent to DEX Swerve

Some might say, Tether has saved the day.

Surely for the degen whose million dollars was involved here. But not for the crypto industry, which promotes self-sovereignty.

As Dovey Wan said, “It’s defeating the purpose of “code is law” and “unconditional execution of smart contracts.”’

And of course, it’s DeFi (Decentralized Finance), not CeFi (Centralized Finance).

What happened was someone accidentally sent a million dollars in ERC20-based USDT to the Swerve token contract directly.

“I have sent 1000000 usdt to swrv address, who can help me get back the usdt,” wrote the user @free on DEX Swerve’s Discord channel.

Swerve Finance is the copycat of the popular DEX Curve, which has more than $1 billion of total value locked (TVL) in it. Swerve, meanwhile has only about $385 million locked while having less than 10% of Curve’s volume.

Its token SWRV is trading at $3.40 with a market cap of $5.4 million compared to CRV’s $74 million market cap at $1.88.

Tether then came to the rescue of the degen, offering to recover the amount.

Paolo Ardoino, CTO at Tether and it’s sister company Bitfinex, asked the person to open a ticket to the Tether support service. Because of the amount involved, Ardoino said the company would prioritize it if the person directly involved in the issue provides the ticket ID.

“If it’s USDt ERC20 stuck in an address we should be able to recover it, but in order to be sure, please contact our customer support and we’ll try our best,” said Ardoino.

USDT is the most popular stablecoin in the market, but much like Coinbase and Circle’s joint effort USDC, it can blacklist the transactions and recover your money.

Back in 2016, Ethereum also reversed the $50 million DAO hack, but the crypto king Bitcoin has never done so. Back in 2019, Binance CEO suggested such a move, a “rollback,” after the exchange suffered a hack, but it didn’t happen because of the strong opposition from the crypto community.

“Most CEX or wallets probably should not let users send to these addresses. But new ones come up all the time…” commented Changepeng “CZ” Zhao this time.

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Author: AnTy

Filecoin Is Currently Testing EIP 1559, A Proposal to Restructure Ethereum’s Gas Fees

The issue of rising gas costs on Ethereum might soon come to an end, should an Ethereum Improvement Proposal (EIP) currently being tested on the Filecoin network go through. Dubbed ‘EIP 1559’, this proposal is among those that have been suggested to reduce Ethereum’s network fees.

Announcing the development on Twitter, Ethereum’s founder Vitalik Buterin, highlighted that the solution seems to be working well on Filecoin,

“In case you missed it: recent writing on fee market reform (EIP 1559) …. Oh and it seems to be working great on Filecoin:”

Notably, Filecoin, which is a decentralized storage network, shares fundamentals with Ethereum hence the compatibility of innovations within both ecosystems. The project is, however, still in its early stages and is set to launch a Mainnet in September as per the latest Filecoin progress update.

The EIP 1559 Proposed Network Fee Solution

With activity rising in DeFi, Ethereum’s network continues to suffer congestion problems to an extent where profits end up being eaten up by transaction costs. The suggestions to work on these shortcomings gained momentum back in 2019 but have now become more critical than ever for Ethereum’s survival in the blockchain space.

Well, ETH-oriented developers seem to be catching up and could soon solve the rising gas cost problem. The EIP 1559 proposal, in particular, suggests the use of a ‘base fee’ for dynamic fee adjustments on Ethereum’s network. Ideally, this approach will constrain gas fee increments by altering the current calculation of gas fee on Ethereum.

The proposal introduces an automatically increasing base fee if the network is more than 50% utilized while decreasing the same if it is below 50%. In doing so, ETH users still have an option to get ahead of the queue by paying a tip in addition to the base fee. These funds will then be delivered to miners while the ETH used for paying the base fee is burnt.

Filecoin Marking Milestones!

As EIP 1159 makes progress, the Filecoin testnet in totality is also marking milestones as its native ‘FIL’ token launch approaches. The project recently incentivized developers to stress test its network under the ‘Filecoin Space Race’ program,

“Compete and collaborate at the same time. The top 50 miners in each region and the top 100 globally are eligible for rewards. The greater the total storage power, the bigger the total prize pool.”

This incentivized testnet has since recorded around 22 petabytes in total raw byte storage power with contribution from 295 miners. Going by the International Electrotechnical Commission 1998 metrics, this data can roughly be compared to 12,500 two-hour-long films.

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Author: Edwin Munyui

USPS Patents A Blockchain-Based Mail-In Voting System Despite President Trump’s Critics

The United States Postal Service (USPS) might have a blockchain-based plan for the U.S mail-in voting suggestion. According to a patent made public by the U.S Patent and Trademark Office on August 13, the USPS had filled an intellectual property application for a blockchain ecosystem dubbed ‘Secure Voting System’ back in February.

Interestingly, this development coincides with President’s Trump recent sentiments towards shutting down the USPC, a move that could ultimately stall mail-in voting.

The USPS patent features blockchain as a fundamental tech that will serve as a means towards a ‘trustworthy’ 2020 election in the U.S. Ideally, this blockchain voting ecosystem should leverage the aspects of reliability and security to enhance voting logistics as well as data transmission and storage of the same. The patent notes that registered voters will receive a computer-readable code, which in turn ought to confirm their identity and ballot information. The patent reads,

“The system separates voter identification and votes to ensure vote anonymity, and stores votes on a distributed ledger in a blockchain.”

Industry stakeholders, including Hedera Hashgraph Technical Lead, Paul Madsen, have since weighed in on the USPS blockchain-focused mail-in voting patent. In his opinion, such a move would be beneficial to everyone involved in the election process, but most importantly, to voters.

“The votes of individual voters would be recorded, either on the blockchain or effectively timestamped and then recorded elsewhere – and so both help to mitigate the risk of double voting, or vote manipulation as well as give the voter confidence through the transparency of the process.”

Successful Blockchain-Based Voting in the U.S

While the stakes are higher on U.S 2020 elections, the use of blockchain cannot be ruled out given the tech has been used in other instances. Some notable events in which stakeholders voted through blockchain include delegate selection for the Republican National Convention in the states of Utah and Arizona.

It was also used for absentee ballots in the 2018 West Virginia elections in representing the military who are overseas. Now that the USPS is looking to join this bandwagon, its Inspector General Office (OIG) has suggested other areas like supply chain, identity services, device, and financial management where it could further leverage blockchain.

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Author: Edwin Munyui

Popular Bitcoin Payment App, Square CashApp, Considers Launching Short-Term Loans

Jack Dorsey’s Square might soon be offering loans of up to $200 through its P2P service platform, CashApp. This revelation follows a recent report by TechCrunch, which highlighted that the firm is testing the new feature with about 1000 users as of press date.

Notably, Square attributed this strategic move to some factors, including the uncertainty of a second U.S stimulus. According to the firm, the market demand for loans between $20 and $200 might expand significantly as a result.

Users who qualify for these loans will be given a one-month payback period with a 5% flat fee charged on leveraged funds. Calculated annually, the interest translates to around 60%. However, it may seem quite high; it is more favorable compared to average payday loans in the U.S, which in some cases are charged as much as 700%.

Should the borrowing parties default, Square intends to put a one-week grace period, after which a non-compounding interest of 1.25% will be added to the cost every week. With the testing still in play, a CashAPP spokesperson mentioned that they are looking forward to feedback from the 1,000 clients featured:

“We look forward to hearing their feedback and learning from this experiment.”

Square’s BTC Streak Continues

Other than its prospectus loan product, Square has been making headlines in the crypto scene and is now positioning itself as the go-to platform for Bitcoin purchases. The company’s Q2 revenue from Bitcoin totaled $875 million, with $17 million as the gross profit from BTC related transactions.

These stats are up by 600% and 711% YoY, respectively. Going by these stats, a move towards loan issuance might even expose a more significant population who initially couldn’t afford a stake in the crypto market.

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Author: Edwin Munyui