ETFs Are Having the Best Year Ever, While SEC Refuses to Give A Bitcoin ETF The Green Light

ETFs pulled in $488.5 billion in less than 7 months of 2021 and are on track to break the $497 billion full-year record set in 2020. Meanwhile, in crypto, since 2013, not a single one has been approved by the US SEC, which says it wants to protect the investors when ETFs are what will ensure low fees, tax advantages, and relative ease of trading for them. 

  • US money managers are stampeding into exchange-traded funds, with ETFs having the best first half of inflows on record.

According to Bloomberg, ETFs are on the brink of attracting the most money in just seven months than in any calendar year on record. Towards the end of last week, at $488.5 billion, they were on track to break the $497 billion full-year record set in 2020.

As investors migrate to the cheaper, easier-to-trade, and more tax-efficient vehicle, almost all of the top 25 largest asset managers in the US either already offer an ETF or plan to do so.

ETF - The Flow Show

ETFs are vehicles that pool investor cash and trade all day like stocks but with an intermediary that helps investors defer tax liabilities. Ben Johnson, Morningstar’s global director of ETF research, said,

“The stress period we lived through in the first quarter of 2020 further validated not just the ETF structure but the ETF ecosystem in its entirety.”

In this ETF mania, Vanguard leads the ecosystem with $239 billion in its Vanguard S&P 500 ETF. Together BlackRock, Vanguard, and State Street Corp. account for roughly 80% of the market.

Due to ETFs popularity, mutual funds have also converted into an ETF with quant giant Dimensional Fund Advisors leading in this.

“It will be paramount that every existing asset manager has a viable ETF strategy moving forward,” said Nate Geraci, president of the ETF Store, an advisory firm.

Big Three ETFs

Besides the S&P 500 repeatedly hitting new all-time highs this year, star manager Cathie Wood is driving this growth. Wood’s Ark Investment Management has pulled in $15.3 billion this year.

It is expected that the growth that started in the first half of the year will continue in the second half of the year. ETFs have collectively lost money in only two months in the past three years, and even then, the outflows were relatively middle.

“ETFs are an easy button of sorts that you can hit to get exposure to any number of different segments of the market,” drawing from a broader investor base, said Morningstar’s Johnson.

8 Years and Counting

While ETFs are having a wild year in the traditional world, the Bitcoin market hasn’t had one yet in the US after eight years. Meanwhile, in other parts of the world, Canada and Brazil, several Bitcoin and Ether ETFs have been approved and traded on exchanges.

Recently, the U.S. Securities and Exchange Commission (SEC) postponed its decision on Wisdom Tree’s Bitcoin ETF and said that it is looking for comments from the public on the product, which isn’t’ the first time.

Several Bitcoin ETFs and a couple of Ether ETFs have been filed with the SEC, but the regulator has yet to give any positive signs despite having the new Chair Gary Gensler. He told Congress this spring,

“The exchange that trades crypto tokens has not yet been registered as an exchange with the SEC.”

“Overall, this has significantly reduced investor protection compared to traditional securities markets and has increased the chances of fraud and tampering accordingly.”

The world’s largest digital asset manager, Grayscale, is also looking to turn its flagship product GBTC into an ETF, towards which CEO Michael Sonnenshein reiterated that they are 100% committed. Last week, they said Grayscale is working with BNY Mellon to achieve this.

According to Sonnenshein, the SEC is looking for a couple of different maturation points in the underlying market, which he believes are the “final stages” that regulators need to approve such a product and give investors the protections they are looking for.

For the US, to approve a Bitcoin ETF “is a matter of when not if,” he said on Monday.

While the SEC says it wants to protect the investors, especially the retail, ETFs will ensure low fees, tax advantages, and relative ease of trading for them.

The adoption of ETFs was what upended the way bonds, stocks, and commodities are traded. Giving Bitcoin ETFs greenlight will also allow anyone with a securities account to invest in crypto.

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Author: AnTy

Crypto Deals in 2021 ‘Already on Track to Significantly Surpass’ $1.1B from Last Year: PwC Report

Crypto Deals in 2021 ‘Already on Track to Significantly Surpass’ $1.1 Billion from Last Year: PwC Report

The value of overall crypto fundraising increased by 33% in 2020 from the year prior, a greater percentage of it happening in Europe and Asia.

Mergers and acquisitions (M&A) in the cryptocurrency sector surged in 2020 and are expected to keep on climbing this year, according to a report by PwC.

The total value of this activity in crypto more than doubled last year to $1.1 billion from 2019, PwC said in a market overview released Monday. The average deal size has also risen from $19.2 million to $52.7 million.

Overall, the value of crypto fundraising has increased by 33% from the year prior. A greater percentage of this deal activity is taking place in Europe and Asia.

While crypto fundraising and M&A made a record last year, 2021 “is already on track to significantly surpass it from every single metric,” said Henri Arslanian, PwC global crypto leader.

According to him, cash-rich crypto platforms, large investors, and institutional players will drive activity.

image1

The latest report supports the case that the crypto market is expanding as the price of Bitcoin rises to a new all-time high of nearly $62,000 this month.

PwC also predicts that the cryptocurrency industry will become more institutionalized, citing the gains seen in the market and the buzz surrounding central bank digital currencies (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs).

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Author: AnTy

New York is Pilot Testing IBM’s Blockchain-Based Health App to Track COVID-19 Vaccinations

New York is Pilot Testing IBM’s Blockchain-Based Health App to Track COVID-19 Vaccinations

New York set to pilot IBM’s blockchain-based health app across the state to confirm an individual’s vaccination or recent negative COVID-19 test. The app was first tested in a Brooklyn Nets basketball game earlier this month.

New York governor, Andrew Cuomo, announced a pilot program to test the Excelsior Pass, a blockchain-based health app developed in partnership with IBM Technologies. In a statement during the “NY Governor’s 2021 State of the State Address”, Cuomo stated the app would confirm a person’s vaccination status or recent COVID-19 test to “get back to normal.”

“The Excelsior Pass will play a critical role in getting information to venues and sites in a secure and streamlined way, allowing us to fast-track the reopening of these businesses and getting us one step closer to reaching a new normal.”

image1

Excelsior Pass, a blockchain-based health app developed by IBM (Image: NY Gov)

The app will be tested at the Madison Square Garden and Barclays Center events to help fast-track the reopening of public spaces and events in the state.

The app will voluntarily ask users to share their health status through their mobile phones, and the data is then encrypted and stored on a blockchain safely. Steve LaFleche, General Manager, IBM Public, and Federal Market, said,

“This solution can provide New York, and other states, a simple, secure, and voluntary method for showing proof of a negative COVID-19 test result or certification of vaccination.”

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Author: Lujan Odera

Tether’s Exchange Supply & $900B US Stimulus Deal Offers Fuel to Bitcoin Bulls

After the monster weekly candle last week while being on track to beat 2Q17 to become the second-best quarter after 4Q17, today the market is in red but the bulls might not back down yet.

Last week was a wild one for Bitcoin.

The digital asset capped one of the biggest weeks with a monster candle that pushed us from about $18,950 to above $24,000.

There have been only a handful of times when 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
recorded more gains than what we posted last week.

This quarter, which is still 10 days from its end, has recorded the third-largest quarterly gains of 121% beaten by 125.32% in Q2 of 2017 and of course the 10.13% gains in Q4 of the same year, as per crypto data provider Skew.

The world’s largest cryptocurrency made yet another new high early Monday, as it jumped past $24,300 following Tesla CEO Elon Musk’s Bitcoin meme and inquiry about “larger transactions” required to convert $100 billion of USD in Tesla’s balance sheet to BTC.

According to Hxro Labs, “With a break of 24k, it looks like the next such cluster of objectives lay in wait up around the $26,750-$26,650 area.”

But the weakness in the price of the digital asset seen last night and today has some feeling a bit cautious.

And, today the price of the Bitcoin went down to about $21,885 level and is currently trading around $22,800 in red.

Interestingly, amidst the ongoing bullish price action, the number of Bitcoin holders with 1,000 or more BTC continues its upward momentum. Unlike these multi-millionaires, addresses with under 1,000 BTC have been selling off their stash since Wednesday, the day BTC price breached the all-time high of $20k only to continue to break past several levels.

Meanwhile, the bullish sign for the Bitcoin bulls is the percentage of Tether supply on cryptocurrency exchange hitting a 4-month low on the weekend, as per Santiment.

At the same time, Congress reached a deal on the $900 billion coronavirus relief package. Congressional leaders announced the agreement on the bill on Sunday which will fund the government through Sept. 30.

“At long last, we have the bipartisan breakthrough the country has needed,” Senate Majority Leader Mitch McConnell, R-Ky., said on the Senate floor Sunday.

However, House Speaker Nancy Pelosi called the plan inadequate and that they would soon push for more spending after President-elect Joe Biden takes office a month later, on Jan. 20.

This relief plan includes direct payments of $600 to adults and $600 per child. These payments could make their way to Bitcoin, like the last time. The $1,200 check from last time is currently worth about $4,000 in Bitcoin.

The Democrats said it would put $240 billion into Paycheck Protection Program small business loans, and direct another $20 billion to small business grants and $15 billion to live event venues.

With all the money printing going on at “unprecedented levels,” Bitcoin price could see more action. According to Mike Belshe, the CEO of California-based cryptocurrency firm BitGo, BTC is “immune” to this money printing which is because the digital asset “got a level of scarcity that we really don’t have in any other market,” not even in gold, he said.

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Author: AnTy

Crypto App, ZenGo, Joins Visa’s Fintech Fast Track Program; Debit Card Launching in 2021

  • ZenGo, a crypto wallet app, joins Visa Fast Track program.
  • Allow users to spend crypto at any VISA merchant and withdraw from supported ATMs.

Crypto wallet management firm, ZenGo, announced that it had joined the VISA Fast Track Program on Tuesday. Following the partnership, ZenGo will start offering users in the U.S. VISA debit cards, allowing them to spend cryptocurrencies at millions of VISA merchants and withdraw at supported ATMs.

The crypto wallet provider is joining a stream of payment companies, including PayPal, Square, Coinbase, and Paxful, aiming to push for cryptocurrencies in everyday payments. The company enters the debit card space – joining Coinbase, who recently announced their rewards card, and Binance – in a race to push for crypto adoption.

Unlike the rest, ZenGo offers its users a non-custodial wallet, which leaves the user’s security. Expounding on the benefits of ZenGo’s non-custodial wallets, ZenGo CEO Ouriel Ohayon said,

“Those other offerings are only a half-vanilla taste of what crypto is because they only let you own an IOU over a cryptocurrency.

This is the only one that is tied to a user-controlled wallet where the users have control of their funds, and the funds are on-chain.”

However, the enhanced self-custodial measures make it difficult and complicated to send and spend cryptocurrencies from your wallet, hence the VISA wallet’s launch. ZenGo users will need to convert crypto from their wallet and deposit to their debit card before using it for payment. Regular users can also set a fixed amount to be converted every week and deposited to their debit card.

“The issue if you do it automatically like Coinbase is that you can’t pick which crypto you want to use for spending,” Ohayon said.

“They decide for you, or they force you to make a choice once for all your transactions.”

ZenGo uses Multi-party computation (MPC) techniques to secure its user’s accounts, passwords, and private keys by breaking down the long alphanumeric cryptographic code. This also helps in transactions – saving senders from writing down the long wallet address or remember passwords.

The VISA debit card by ZenGo is expected to launch early next year in the U.S. with plans to launch to other countries also in place. ZenGo aims to offer users a convenient, secure, and scalable way to spend cryptocurrencies seamlessly. Ouriel added,

“We have real estate agents who get paid in cryptocurrency; we have photographers, DJs, independent workers of all sorts. Those guys want to be able to spend it.”

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Author: Lujan Odera

Crypto Lender, Cred, Joins VISA’s Fintech Fast Track Program To Leverage Its Payment Network

U.S. based crypto-financial borrowing and lending platform joins Visa’s Fintech Fast Track Program to leverage the multinational payment gateway resources, expertise, and security systems. The crypto lending platform will improve its payment system to give users a fast and efficient platform to borrow and pay using cryptocurrencies.

In a press release, Visa Fintech Fast Track Program confirmed Cred would join its ranks, leveraging Visa’s capabilities in its payment system and lending and borrowing of digital assets. As a part of Visa’s Fat Track Program, Cred will build its platform to “accept direct interest payments to the customers’ bank accounts and allow Crypto Lines of Credit (C-LOC).” These lines of credit allow users to stake their crypto assets and take out a loan without liquidating their assets.

Cred is a San Francisco based company that provides borrowing and payment services to both retail and institutional customers. The CEO and co-founder of Cred, Dan Schatt, said joining Visa’s Fintech Fast Track program will allow it to develop into a more efficient platform helping the platform “provide users with fair financial services and expand its lending and borrowing services.”

He further stated,

“Cred has always served as a bridge between traditional banking and blockchain based financial services and having a direct relationship with Visa will enable the company to scale much more rapidly to support the significant growth occurring with digital asset lending.”

Fold, the Bitcoin rewards app [and soon to launch Visa Debit Card], joined the Fast Track Program in 2019, shortly after Visa launched it in a bid to increase payment gateways and develop a crypto debit card. The latter was launched in April this year, enabling users to earn BTC from purchases. Ripple’s partner firm, InstaReM, a Singapore fintech firm, also joined the Fast Track Program in early 2019 to leverage Visa’s fast and scalable payments system.

Cred will also access Visa’s vast resources, experts, and technology through the Fast Track Program, Cuy Sheffield, Head of Crypto, at Visa said.

“As the preferred network for digital currency wallets, we are excited to help innovative fintechs like Cred harness the value of Visa’s network,” Cuy further stated.

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Author: Lujan Odera

Visa’s Fast Track Program On Boards New Bitcoin Lightning Payment Startup, LastBit

The Visa fast track program has onboarded a new Bitcoin Lightning crypto payment startup, LastBit, which recently launched its beta app. This addition comes barely a month since Strike also joined the Visa initiative to scale crypto adoption through Lightning BTC payment solutions.

Lastbit will enable merchants to accept BTC payments regardless of their preference since the underlying tech converts such transactions to fiat upon settlement. Currently, this BTC lightning-based innovation only allows merchants to receive their payments in U.S dollars. However, they are set to release an app that is Euro compatible in a few weeks, according to the company’s founder, Prashanth Balasubramanian.

LastBit’s BTC Lightning for Micropayments

Despite the rise of Bitcoin and other cryptocurrencies, mainstream adoption is still one of the most significant uncertain factors. Well, BTC lightning solutions, which came up as a result of network congestion, seem to be finding a niche in micropayment fiat-crypto on-ramps, given the convenience in rates and transaction time.

LastBit’s lighting payment, for instance, allows users to load BTC on their applications, after which they can access a digital debit card. With this card, they can then initiate BTC payments, which are received by vendors in dollars and soon Euros.  Balasubramanian has since noted that their goal is to facilitate the mass adoption of Bitcoin as a standard means of payment,

“We simply want to see the masses using bitcoin on a day-to-day basis. To do this, we have engineered arguably the most seamless interoperability between bitcoin and fiat, on top of the Lightning Network, that caters to the needs of both new and experienced users alike,”

Prospect Markets!

As the world continues to move towards digital ecosystems, crypto startups like Stripe and LastBit are looking to capitalize on the growing opportunities in various markets. On this front, LastBit is set to expand into Europe following approval from the EU. Balasubramanian confirmed this prospectus move with Coindesk, highlighting that;

“With a solid product, partnerships and notable investors […] behind us, we’re going to roll out our Bitcoin, Lightning, and EUR interoperable payments layer in the EU to prove that this works and that a small company without millions can pull off a complex payments product to push for Bitcoin adoption,”

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Author: Edwin Munyui

Medalla Testnet Hits 1M Staked ETH; Triggers Speculations of Ethereum 2.0 Launch in 2020

The Medalla ETH 2.0 testnet, which was launched last week, is well on track and could set the stage for the final Mainnet to be rolled out later in 2020.

This milestone is quite significant, given the ETH 2.0 team has launched four testnets before Medalla to smoothen the platform’s transition from a proof-of-work (PoW) to proof-of-stake (PoS) consensus. Recent weeks have also seen the price of ETH rally to break past the $400 mark, highs it had only touched during the 2017 crypto market bull-run.

Medalla Setting Stage for ETH 2.0 Mainnet

With the Medalla testnet now in play, ETH enthusiasts are optimistic that the project’s fundamentals will finally be reflected in its market price. Currently, over a million GoETH have been staked by validators whose role is to propose and attest the blocks in return for annual rewards.

The testnet’s beacon chain is, however, yet to launch as of press time given 524,288 GoETH are still required to reach the threshold. For better insights, GoETH is a simulated ETH version from an earlier testnet dubbed ‘Goerli’.

eth-2-staking-reward
Source: Ethereum.org

Ideally, the validators are incentivized with GoETH rewards in return for securing the network until it reaches consensus. Based on this underlying, the APR keeps on reducing as more GoETH is staked on the Medalla testnet. Initially, validators could earn as much as 21.6% annually but this is now down t0 15.3% and will continue on that trajectory up to a possible 4.9% should the number of staked GoETH hit 10 million.

While the testnet is running smoothly so far, Ben Eddington, a researcher at ConsenSys, has noted that the team might have to adjust the genesis delay in the Mainnet launch. This was because of issues with the client implementations that were set to make attestations for the genesis block in Medalla:

“To improve some of these issues for the Mainnet launch, we’re looking at increasing the genesis delay from its current 48 hours, to 96 hours, or even a week. This buffer will allow everyone to get their ducks in a row.”

Security is a Priority!

Other than the Medalla testnet, Ethereum foundation has been running parallel attack-nets and recently discovered a 9-year-old bug in Prysm’s Go standard library. The foundation has since added $15k as an incentive for hackers to look for other bugs within its ecosystem. It is also quite noteworthy that ETH 2.0 is currently looking to hire an internal security team as they prepare for the final Mainnet launch.

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Author: Edwin Munyui

Rhode Island Policymakers Table Blockchain Bill To Spur Economic Growth in the State

Rhode Island is on track to join blockchain-friendly jurisdictions after they introduced a bill on leveraging this tech for economic growth. The state’s goal is to create a sustainable ecosystem that will allow innovations around distributed ledgers to thrive.

This bill was tabled on March 11 by two GOP policymakers and partly read that;

“The state of Rhode Island understands that to compete in the twenty-first century economy, Rhode Island must offer one of the best business environments in the United States for blockchain and technology innovators, and should offer a comprehensive regulatory technology sandbox for these innovators to develop the next generation of digital products and services in Rhode Island.”

The State of Rhode Island plans to establish grounds for collaboration between private and public entities with interests in blockchain technology. In doing so, they are hopeful to consolidate ideas for spurring economic growth through emerging tech. One of the practical approaches to this includes forming ‘an immutable interagency-industry-operability blockchain filing system.’

Blockchain Banks and Hemp Supply Chain

The bill noted that the current legal framework has been a big challenge to blockchain-based projects looking for financial intermediary services. This is mainly because a large number of banks are skeptical given the US Fed and SEC are yet to issue clear guidelines. Rhode Island, however, suggested a solution to this shortcoming;

“A new type of Rhode Island financial payments and depository institution that has expertise with customer identification, anti-money laundering, and beneficial ownership requirements.”

Ideally, the financial institution should provide custodial services for both traditional and digital assets within the state’s compliance scope. Rhode Island has since formed an advisory council comprising 13 people who are expected to look into blockchain tech in detail on behalf of the state.

Another proposition by this bill was the integration of blockchain within the supply ecosystem of hemp products. According to the bill, such an initiative would ensure that there is accountability, product safety and legal compliance in this booming market. Furthermore, hemp derivatives that are not fit for the public would not make it to the blockchain.

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Author: Edwin Munyui

BTC Price Still on Stock-to-Flow Track Despite ‘Extreme Fear’ & ‘Bearish Sentiment’

  • Market in “extreme fear” is an opportunity rather than “panic”
  • Bitcoin still spot on S2F track but network signals indicate “bearish sentiment”

2020 started on a positive note. We kicked off this year at around $7,200 and climbed to above $10,500, recording about 45% gains on a year-to-date basis.

However, the spread of coronavirus all over the world soon took over the global markets, which had bitcoin acting as a risk on market as well. As the deadly virus continues to spread notwithstanding the central banks announcing stimulus, the global markets recorded substantial losses.

For the past three weeks, bitcoin has been tumbling only to see positive momentum last week. But not for long.

The oil price war on the weekend hit the already weak markets. Bitcoin also dropped over 16%, all over again, going as low as $7,685.

An opportunity rather than “panic”

According to Crypto Fear & Greed Index, the market is in “extreme fear” with a reading of 17. However, commentators say this is an opportunity rather than “panic.”

Interestingly, despite the bloodbath in the crypto street, bitcoin is spot on the S2F track.

Bitcoin price is exactly in line with the value put by the stock-to-flow model. The daily RSI is also below 40, meaning it could be a good buy the dip opportunity.

The S2F model puts bitcoin’s price at $8,636 while the actual price is currently just above $7,900.

Meanwhile, Fundamentals Turns Bearish

When it comes to the fundamentals, with the continued increment in the hash rate and difficulty adjustment in the network while price drops, many miners will be in loss that would propel them to sell their BTC to stay afloat.

The global scenario is not presenting a good picture, with oil price war started on the weekend further adding to the pressure on the market.

As we saw in 2020, the external factors have been affecting the price of bitcoin. Besides price, the network is growing slower, and there are fewer addresses in the money, shared crypto data provider IntoTheBlock. Moreover, the number of large transactions dropped with smart price and bid-ask volume showing negative numbers as well.

For bitcoin price, the bearish scenario could see the digital asset crashing to $5ks.

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Author: AnTy