Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets also plans to increase its employee headcount by up to 70% by the end of the year. Meanwhile, its survey reveals over 60% of US investors are neutral to positive about a Bitcoin ETF.

Fidelity Investments is growing its digital assets team to expand its cryptocurrency-related products in response to the increasing interest from financial advisors, family offices, and other institutional investors.

Tom Jessop, president of Fidelity Digital Assets, said in an interview that the company is planning to increase its employee headcount by up to 70% by the end of the year.

Fidelity’s digital asset arm that provides institutional services including trade execution and custody is also exploring the possibility of offering yield funds and other products that may involve stablecoins or DeFi tokens, said the managing director, Peter Jubber.

“All of these are candidates for us as we begin this exploration.”

“Could they result in actual products? Early days.”

Fidelity also published a survey this week that showed that in the US, 79% of family offices have a neutral, positive view of digital assets. The survey of 1,100 professionals was conducted between early December and early April.

It further showed that factors such as fear of inflation due to financial stimulus was a catalyst for many investors to enter the crypto market.

“A catalyst for a lot of industries was the start of the pandemic.”

“Our clients said the factor to get them off the fence were the macro economic issues in the pandemic.”

For the first time, Fidelity surveyed Asian investors and found them to be the most accepting of digital assets, with more than 70% of those surveyed currently invested in them.

Investors are particularly looking for institutional investment products to hold digital assets. More than 60% of U.S. investors express a neutral to positive view about a potential Bitcoin exchange-traded fund (ETF). Fidelity itself has filed an application with the SEC for a Bitcoin ETF.

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Author: AnTy

Driven by Real Demand Bitcoin Hits Resistance but Retail and Speculator Euphoria Is Not Here Yet

Technical obstacles are here with consolidation expected around $51,000 while the possibility of Fed tapering risk has been pushed back has greenback falling and US dollar net longs declining by more than half.

Bitcoin has finally hit $50,000 after three months.

As of writing, the leading cryptocurrency is trading just under $50k, finding resistance at this psychologically important level.

“We’re seeing some very bullish signs here,” said Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore. Bitcoin could “test all-time highs again” after pushing past levels that have seen some major challenges.

The rally is now overcoming a confluence of hurdles, including a Fibonacci and Ichimoku cluster between $47k and $48k. Besides $50k being a round number, the 61.8% Fibonacci retracement of the April to June downtrend presents a potential obstacle at $51,000.

“The next major resistance, for now, is at the $50,000 zone,” said Konstantin Anissimov, executive director at CEX.IO crypto exchange.

“Should more buyers dive in to push the price above the $50,000 level, a frenzy may be ushered in to steer the price toward a medium-term target of $55,000.”

Appetite Must Remain Intact

As Bitcoin’s market cap inches closer to $1 trillion, the total cryptocurrency market capitalization is currently at $2.23 trillion, fast approaching the mid-May peak of $2.6 trillion propelled by the gains of AVAX, LUNA, RUNE, AR, SOL, and ADA in the last 30-days.

The latest uptrend is marking the end of a months-long slump after crypto-assets peaked in April and May, driven by profit-taking and China’s crackdown on cryptocurrency mining and leveraged trading.

According to Edward Moya, senior market analyst at OANDA in New York, the fears of capital gains taxation have led some traders to hold cryptocurrency as a long-term investment as well.

“New investors are the key to this latest bitcoin rally, and all signs show they are comfortable with high risk.”

“Bitcoin could see a fast appreciation here and might not hesitate making a run for $60,000 if appetite for risky assets remain intact.”

USD Giving Back Its Gains

Investors are also betting on the prospect of more US stimulus spending that would lead to further gains amidst the growing adoption of cryptocurrency among mainstream financial services firms.

With Dallas Federal Reserve President Robert Kaplan, a well-known hawk, saying he might reconsider the need for an early start to tapering as concerns over the outlook for global growth due to the Delta coronavirus variant, USD slipped on Monday.

The greenback saw some profit-taking after registering its biggest weekly rise in over two months, currently around 93 after climbing to Nov. 2020 levels on Friday.

Last week, US dollar net longs also declined to $1.06 bln, from $3.08 bln in the previous week after the USD positioning was net long for five straight weeks, which came after staying net short for 16-long months.

Markets are expected to experience some volatility in the coming days, with Fed Chair Jerome Powell to speak about the economic outlook at the central bank’s Jackson Hole Aug.26-28 conference.

Tapering Pushed Back

The possibility of Fed tapering risk pushed from Sept. to December has QCP Capital maintaining a bullish bias against the 40k support level in BTC. Also, Governor Lael Brainard’s latest dovish pivot to become Fed chair is “likely to raise enough questions within the FOMC to delay their decision by a quarter.”

Not only is headline regulatory risk exhausted in the near-term, the funding rates in perpetual swaps and premium in the futures is also low and muted, meaning “most of the rally has been driven by demand in physical spot rather than from leveraged speculators.”

With no signs of overheating or overextension, QCP is bullish but not overly so due to GBTC still trading at a discount. In the meantime, consolidation is expected at $51,110.

However, NFTs are drawing the attention of retail and institutions alike. And as retail investors return to the market, another upswing could see crypto prices rallying to new heights.

Given the fact that the last time BTC was at $50k, the Google trends for Bitcoin searches were much higher than what it is right now, “this suggests that retail euphoria hasn’t entered the market yet, and bitcoin has a long way to go in this market cycle,” said Marcus Sotiriou, a sales trader at the UK based digital asset broker GlobalBlock, in a note.

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Author: AnTy

Bank of Russia Is Studying Pros & Cons of a Digital Ruble; May Start Developing CBDC In 2021

  • The Bank of Russia (BOR) is studying the possibility of launching its digital ruble.
  • BOR and the Ministry of Finance investigate the advantages and cons of adopting a national digital currency within Russia.
  • Can a digital ruble replace the use of the dollar in Russia?

According to Izvestia, a Russian finance news site, the Ministry of Finance and Bank of Russia investigate other nations’ efforts in releasing a central bank digital currency (CBDC). The post, published on Monday, highlights some of Russia’s advantages of launching its own digital ruble, including reducing the cost of transactions, more opportunities for cross-border payments, and ending dollarization in its economy hence reducing sanctions from other countries.

Despite the advantages of the digital ruble, the Ministry of Finance cautions on the problems a CBDC could bring along. Digital currencies have long been associated with high volatility risks, poor network security, and its use in promoting illicit activities.

The central bank aims to increase its efforts in launching a digital ruble. While the final decision is yet to be made, BOR plans for the digital ruble to follow FAFT recommendations on digital assets. The digital coin is set to boost the overall domestic economy by enhancing online payments – allowing offline use of the digital ruble if there’s no internet.

According to Anatoly Aksakov, head of the State Duma Committee on the financial market, the digital ruble may start to be built as early as 2021. Once the consultation period elapses, the digital ruble will be released in a pilot phase, with several citizens using it.

Read More: Russian Central Bank To Curb Total Digital Assets An ‘Unqualified’ Investor Can Acquire

Can a digital ruble help in de-dollarization?

The Russian government is working on finding a way around its economy’s dollarization – a digital ruble is expected to do so. The central bank explains that the token will help end corruption, reduce the costs associated with distributing physical cash, and help Russia avoid sanctions.

The bank did not clearly say how the digital ruble will end sanctions from other countries, with Plekhanov Denis Domashchenko, a PRUE lab research lead. G.V., stating it ‘may not be the solution to sanctions.’ According to him, the digital ruble’s launch has more to do with the private cryptocurrencies such as Bitcoin (BTC) circulating in the country rather than the dollar.

Russia has had a stern stand against the use and distribution of cryptocurrencies in the past. The digital ruble will not be any different from the regulator, stating that only the issued CBDC will be accepted as money across the country.

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Author: Lujan Odera

U.S Treasury Secretary Says the Country Will Not Shut Down Despite Second Wave COVID-19 Fears

U.S Treasury Secretary, Steve Mnuchin, has ruled out the possibility of a second lockdown despite a spike in new COVID-19 cases within the United States. This comes as Wall Street and Asian markets dipped towards the end of last week in fears of possible second wave.

Mnuchin was speaking to CNBC reporter, Jim Cramer, on June 11 as he made these remarks. He went on to defend the position of keeping the economy open noting that a contrary move would cause more damage,

“We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage.”

Furthermore, many vital areas such as medical have been put on hold and ought to bounce back according to Mnuchin. The Treasury Secretary noted that they foresee a bounce back in the remaining two quarters of 2020.

The Optimistic Outlook

While the U.S remains as the highest country with active COVID-19 cases, Mnuchin signaled an optimistic future for the leading economy. He emphasized that President’s Trump approach was prudent coupled with the $3 trillion stimulus approval from the House of Reps and Senate. Notably, only about $ 1.6 trillion of the injected funds are the in U.S economy. Mnuchin has since highlighted that another $1 trillion will be pumped into the economy within the next month.

Following this progress, the U.S Treasury Secretary, said that his number one job is getting everybody to work; an initiative that is already underway in collaboration with the Trump administration. Mnuchin said,

“We have the Fed program, we have Main Street [lending program], which is going to be now up and running, and we’re prepared to go back to Congress for more money to support the American worker.”

Recently, another $3 trillion stimulus package was passed by the House Democrats sparking debate but is yet to be voted in the Republican-dominated Senate. The latter, however, prefer a more conservative approach towards increasing federal deficit to ease the COVID-19 economic effects.

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Author: Edwin Munyui

Hyperledger Fast Tracks Dev of Ethereum Based eThaler As US Central Bank Digital Dollar

  • A lot of talks have emerged on the possibility of the Federal Reserve issuing a digital dollar as part of the $2.2 trillion dollar stimulus package to fight the COVID-19 pandemic being a key turning point in the discussions.
  • Now, an Ethereum-based project is accelerating its efforts in the development of a platform that will potentially allow the Fed to directly send cash to an individual.

eThaler Set To Create Central Bank Digital Currency (CBDC)

At a planned meeting at Hyperledger, a blockchain consortium, it was decided to accelerate its efforts in the development of eThaler, an Ethereum based project aiming to create a CBDC. While the need for a CBDC has only been a priority to a small number of governments, the current COVID-19 virus pandemic, is setting a new stage for governments to become more “blockchain-friendly,” the U.S becoming the latest superpower to join the race.

In February, a clear use of the CBDC started to show as California Congresswoman and chair of the House Financial Services Committee, Maxine Waters, introduced the concept of a digital dollar, firing up the accelerated development of Hyperledger’s, eThaler.

Vipin Bharathan, 59, chair of the Hyperledger identity working group said,

“The concept of the CBDC seems to have gotten an imprimatur from the house finance committee. That’s a significant step, and I argue that such crisis situations always produce new ideas, and acceptance of new ideas, which will live on long after the coronavirus has burned through the world.”

Development of the eThaler, CBDC project

Over the past six months, developers across the world have kept working on open-source projects – professionals from Accenture and InfoSys and the Itau Bank in Brazil – leading the charge. The token follows the ERC-1125 standard, which differs from the conventional ERC-20 token standards by providing a single standard designed to support multiple kinds of tokens.

The token is expected to be fungible, mintable and destroyable through a burning process similar to Binance Coin (BNB) structure. Notwithstanding the CBDC is expected to be highly divisible to allow micropayments across the system, a feature currently unavailable with fiat currency.

“Lastly, and perhaps most controversially, the asset must be “pausable” in case a bug in the software is discovered, or an update is being implemented.” – Forbes.

Criticisms of the CBDC

Despite the accelerated development of the platform, it may not be used for the current disbursement of the $2.2 trillion dollar relief fund with several critics coming forward to disclaim the formation of a CBDC.

First, the legacy finance argument is that most of the currency across the world is already on a digital platform. Doubling up, is the Bitcoin community who believe that the central banks interference still makes the blockchain centralized hence defeating the purpose.

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Author: Lujan Odera

Crypto Lender Nexo Now Allows Retail Investors To Use PAX Gold (PAXG) As Collateral

Renowned crypto lending firm Nexo has opened up the possibility of retail investors to use PAX Gold (PAXG) as a collateral option against loans. The firm had previously launched a pilot scheme on the same but the services were only available to institutional investors only. The pilot saw a high demand for the gold-backed credit lines and the firm has decided to extend the service to retail investors.

The announcement signifies that collateralized borrowing backed by high-grade gold can be extended to everyone and not only the rich.

PAX Gold token was introduced in September last year and is entirely backed by as well as redeemable for actual gold which is currently kept in Brink’s vaults. Every token is backed by ‘fine troy ounce of London Good Delivery Gold’ that allows the user to own gold which is a safe-haven asset. Tokenization adds to the convenience of the safe-haven asset.

During the pilot phase, there was a high demand for its gold-backed credit among the institutional customers such that the firm had to invest an extra $5 million in PAXG to satisfy the investors demand.

The expanded scheme that will rope in the retail customers will enable everyone to take advantage of gold-backed PAXG assets using it as collateral within the Nexo platform.

According to Nexo co-founder, gold backed PAXG is highly relevant more so during high volatility times like currently and majority of retail clients have been seeking for such a service. He explained:

“Especially in high-volatility times, as in the present, gold is sought after by many of our retail clients and we have worked towards reflecting their wishes.”

The crypto loans sector has been growing rapidly in the recent past as the majority of crypto owners or holders are looking to use their assets as collateral as opposed to liquidating them.

Nexo enjoys the backing of Michael Arrington, TechCrunch founder, and was able to raise $52.5 million during a private token sale back in 2018.

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Author: Joseph Kibe

A New Market Developing for Bitcoin Issues a Warning About its Future

  • “A very real possibility the price of bitcoin does not go up after halving” – Meltem Demirors of CoinShares
  • “Anything is only worth what someone else is willing to pay for it” – Wallet developer Jack Mallers

The upcoming Bitcoin reward halving is a much-anticipated and talked about events in the cryptocurrency space. The market is currently divided among those who believe it to be a bullish event for Bitcoin price because of the supply shock and those who see as a non-event.

Meltem Demirors of CoinShares, a digital asset management company, belongs in the second category.

According to her, “there is a very real possibility the price of bitcoin does not go up after halving.”

Price to decouple from its value and its supply & demand

This is because, for the first time, there is a “robust derivatives” market for Bitcoin in the form of futures and market, she argues. As we already know, Bitcoin is still a speculative asset and according to Demirors, most of those firms will trade a derivative than the underlying asset itself.

She illustrates oil markets over the last 20 years where options and futures skyrocketed while oil production remained constant. In this speculation driven market, derivatives dominate trading and most firms trade paper contracts to speculate on the price of oil.

“There is a new market developing for bitcoin – one driven by speculative trading and enabled by derivatives.”

In the bitcoin market, she points out crypto derivatives platform BitMEX was the “first to crack this market” and then came CME Group. Now, there are hundreds of new firms popping up. She said:

“The more bitcoin becomes an investable asset, the more it’s price becomes decoupled from its value and its supply and demand.”

At that point, it will become just another backwater in the big game of global speculation and become correlated to macro markets.

The Bitcoin derivatives market today is still small but it will grow quickly, Demirors said.

“Anything is Only Worth what Someone Is Willing to Pay for it”

Wallet developer Jack Mallers, the founder of Zap Solutions and ZeroHouseEdge however, doesn’t agree with Demirros. Derivatives help in market efficiency and general price discovery but it does not affect the basic supply and demand of an asset, he countered.

“Derivatives derive their value from the underlying, settling against an index composed of spot exchanges. General arbitrage and market efficiencies will always keep derivatives tied to the underlying.”

The premium on the future, he said is only because of the cost of carrying and commodity derivatives were invented to simply transfer risk and has nothing to do with the price of an asset.

Price is a function of supply and demand and isn’t set by the producer of an asset. The willingness for someone to acquire an asset, Mallers said is what sets the price.

“Anything is only worth what someone else is willing to pay for it.”

And this is exactly the reason why he says the halving is not priced in.

“When a market goes through such a supply shock (one that no other asset has ever been through), it’s impossible to predict where demand will meet the new-found supply.”

But time, as Mallers said, is always the ultimate truth-teller and we’ll have to see how in the coming years, Bitcoin will perform.

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Author: AnTy

The Fed Is Analyzing A Central Bank Digital Currency, But Would The US Benefit As Much As Others?

The U.S. Federal Reserve System (FED) is analyzing the possibility to issue a digital dollar. Although there is nothing confirmed, Jerome Powell, the Chairman of the FED, explained that they are exploring whether it makes sense to issue a Central Bank Digital Currency (CBDC).

Could CBDCs Change The Economy?

In a recent letter signed by Jerome Powell answering to U.S. Representatives French Hill and Bill Foster, he said that the Federal Reserve is currently monitoring the developments of other central banks regarding CBDCs.

Powell explained that they are continuously analyzing the costs and benefits of launching a CBDC but the conditions of the market are not yet ideal.

He stated that these CBDCs are suitable for specific economies in which societies migrated away from cash into other technological solutions. Meanwhile, the United States has a strong demand for cash, which cannot be seen in other economies.

At the same time, he stated that the payments landscape in the United States is very competitive compared to some countries. There are several options available for customers in the market, and this is why it may not need a CBDC.

Furthermore, Powell continued saying:

“If it is designed to be financially transparent and provide safeguards against illicit activity, a general purpose CBDC could conceivably require the Federal Reserve to keep running record of all payments data using the digital currency […] and sometimes that raises issues related to data privacy and information security.”

At the moment, there are several countries that analyzed the possibility to issue CBDCs. The National Bank of Ukraine, for example, is focusing on analyzing the effects that an ‘e-hryvnia’ would have on the market.

The Bank of England has also released different papers on the effects a CBDC would have over the economy.

Venezuela is the first country in the world to have a national cryptocurrency called Petro. Although there aren’t many use cases for it, the government is trying to expand its usage in the country.

Whether the U.S. will be issuing a digital dollar remains to be seen and it seems that the FED will carefully analyze any other implementation before launching its own CBDC.

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Author: Carl T

Crypto Analyst Not Convinced That Bitcoin Has Bottomed Yet

$7k still a possibility until bulls prove themselves

Forge $1 million, BTC will be worth $10 million, so don’t worry even if goes down to $3,000 again

Bitcoin price is still riding the green wave that started yesterday.

The leading cryptocurrency surged to $8,518 before settling to $8,345 with 24 hours gains of 0.96 percent, as per Coincodex.

However, last month also started on a good note as it went up from $9,600 to over $10,900 in less than a week only to end up around $7,730 by the end of September.

The trading volume meanwhile is still low at just above $400 million.

$7k still a possibility

Bitcoin is still trying to break the 200 DMA early in the day but failed to do so, pointed out trader and investor Josh Rager.

The 200-day moving average is a technical indicator that is used to analyze the price trends. The price that coincides with the 200-day simple moving average is recognized as a major support level.

It is perceived to be the dividing line between an asset that is technically healthy and one that is not.

“Ranging between support and resistance zones – volume declining. The only play atm are trades on the lower time frames with decent price movement,”

notes Rager about Bitcoin price movement.

As for BTC returning to $7k, Rager says, it’s a “possibility.”

It could very well be the case until bulls prove themselves by closing back above $8,750, said analyst DonAlt.

He further isn’t “convinced that we’ve bottomed.”

Forge $1 million, BTC will be worth $10 million

Meanwhile, John McAfee, founder of one of the world’s top software security companies, McAfee Associates, is standing firm on his $1 million BTC price prediction by the end of the year 2020.

But even this figure he said is conservative.

“Let’s get real, there are only 21 million bitcoins,” McAfee said in an interview with Forbes. “Seven million of which have been lost forever, and then, if Satoshi [bitcoin’s anonymous creator] is dead, add a few more million,” he added.

He explains how if Bitcoin even gets to be 5% of the world’s transactions, which he says it will, then BTC would be worth $10 million per coin.

“I think bitcoin represents simply a store of value,” McAfee said. “It is surpassed in every respect technologically and functionally.”

“A store of value which will increase, probably for the next 15 years, so for the next 15 years, don’t worry,”

Mcafee said.

“I don’t care if it goes down to $3,000 again,”

he said.

“It’s going to go up, we know it is.”

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Author: AnTy

Bitcoin (BTC) Price Shows a Potential October Bullish Breakout, or Bakkt’s September 23rd Launch

A multitude of investors and traders are presaging October as the breakout month of Bitcoin (BTC). A possibility of a ”no deal” Brexit is set to happen, bullish technical indicators and the launch of the long awaited Bakkt Futures are all set to converge in the months of September and October – is Bitcoin (BTC) set to break its all-time high price before the end of the year?

Bakkt physical settled futures

Intercontinental Exchange’s (ICE) Bakkt is finally offering its physically settled Bitcoin futures starting September 23rd. The wait is over after several challenges facing the futures contracts including the U.S Securities and Exchange Commission (SEC) regulation challenges.

Speaking on the launch of physically settled Bitcoin futures, the CEO of ICE, Jeff Sprecher, said,

“That infrastructure has attracted a lot of very, very interesting companies that have come—some that have invested in Bakkt, some are just working with Bakkt to try to tap into that infrastructure for some new use cases that will involve blockchain and digital assets and other things that we can provide these people.”

BEG announced on Aug 28. Bakkt will start custodial services to ensure security of their users’ digital assets through their Warehouse storage starting September 6.

Brexit: A ‘no deal’ to boost Bitcoin

The second factor expected to boost the price of BTC in the final quarter of the year is the possibility of a “no deal” Brexit. British citizens are currently in one of the worst constitutional crisis in the past 500 years, which is pushing investors to look for safe haven assets to hedge against the risks of a failing economy in case no deal is reached.

Brexit uncertainty coupled with the launch of physically settled Bitcoin futures by Bakkt and LedgerX opens up a leeway for Bitcoin’s growth in the coming months.

Technical indicators point to September 23rd

In a post published on CryptoSlate, Bitcoin’s price is forming a symmetrical triangle on the 1 day charts. Such an indicator shows the likelihood of a consolidation phase before a potential bullish breakout at the convergence point. Coincidentally, as seen on the chart below, the symmetrical triangle converges on the 23rd of September. Is the market reacting to Bakkt Futures announcement?

Bitcoin USD price chart

Bitcoin USD price chart

Technical chart showing a potential consolidation of BTC’s price before a bullish breakout on the 23rd September (Source: Trading View)

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Author: Lujan Odera