CBDC Is A “Better” Alternative to Stablecoins, Which Are Unlikely to be Regulated Money: BoE Governor

CBDC Is A “Better” Alternative to Stablecoins, Which Are Unlikely to be Regulated Money, says BoE Governor

Andrew Bailey, the Governor of Bank of England, yet again shared his criticism of stablecoins as he said that he did not believe that stablecoins are likely to evolve into safe, regulated money, which means central bank digital currencies (CBDCs) will more likely be the future for electronic payments.

“I think we have two choices broadly,” Bailey told lawmakers in the upper house of Britain’s parliament as part of an inquiry into the future of digital payments.

“Is it going to evolve to some world of (asset-) backed stablecoins which has money-like features which could be regulated? I must say … I am sceptical about that. Or … is the better contribution, particularly to financial stability, to say the better alternative to that may be a central bank currency of digital form?”

Commenting on stablecoins, Bailey said out of the $2.5 trillion crypto market cap, which is around the level of the FTSE 100, “95% of it is unbanked crypto-assets,” and the other 5% are stablecoins, “some of which are more stable than others.”

He also warned that crypto-assets do have “all the potential to be a threat to financial stability, which is why we think we do need to take action.”

This month, the BoE and Britain’s Treasury said they would hold formal consultations next year on whether to move forward with a CBDC, which, if approved, would be introduced in the second half of the decade.

On Tuesday, Bailey said he would not expect the BoE to offer digital bank accounts directly to savers.

“We do not see this as the Bank of England moving into the retail bank account business through a central bank digital currency,” he said while speaking to the Lord’s Economic Affairs Committee.

The BoE would instead provide the means of settlements to a regulated platform on which banks and even alternative digital wallets holders would operate. The central bank, Bailey said, would need power over these firms on the platform to protect privacy.

According to him, work on a CBDC was intended to solve cash and retail transactions problems and not as a tool to implement unconventional monetary policy such as a negative interest rate.

Bailey further warned that allowing the private sector to manage the shift toward digital currency could result in the bank regulating big tech firms. “The question we’re going to face is… would we try to regulate” private tech firms creating digital money, he said.

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Author: AnTy

Zoomer Meme Coin Outperforms the Boomer Meme Coin, Will This Mark the Top of the Cycle Again?

In the last 11 months, the price of Shiba Inu has risen by a whopping 138731974.5% which means if you had invested just $1,000 at the time, you would have been a billionaire. And a mere $100 would have helped you become a multi-millionaire.

There are even some instances where people have become millionaires by investing a small amount of money in dog coins early on.

But the fact is unless you have forgotten that you had invested in the meme coins or had the conviction to hold it throughout all these eye-popping gains and heart wrenching crashes of as much as 80% to 95%, you wouldn’t have managed to completely change your fortune much like many people who sold their coins after a few multiples.

Interestingly, some did manage to do so who gained the limelight this week as the price of SHIB rallied.

During the latest rally, the price of SHIB hit a new all-time high at $0.00008616. As of writing, SHIB is trading at $0.00007680.

The DOGE killer has actually finally flipped Dogecoin to become the 9th largest cryptocurrency. With a market cap of $43 billion, SHIB sits right above DOGE, whose market is $38.9 billion.

“The Old Guard has fallen,” stated well-known trader Hsaka pointing to Dogecoin becoming a boomer meme coin that has been outperformed by the zoomer meme coin.

Trading at $0.3, DOGE has a circulating supply of 131,875,387,607 DOGE and is currently the 2nd largest trading crypto asset on Binance and 5th largest on Coinbase.

Meanwhile, there are currently 549,153,115,436,361 Shiba Inu circulating in the market.

SHIB/USDT currently accounts for more than 25% of Binance’s volume at $13.27 billion compared to DOEG/USDT’s $3.9 billion, Bitcoin/USDT’s $3 bln, and Ether/USDT’s $2.18 billion, according to CoinGecko.

On Coinbase, SHIB accounts for more than 40% of its volume at over $5 billion versus DOGE’s mere $720 million.

Now that SHIB has pumped so much, traders have taken to short the dog coin in anticipation of a dump as people start to take profit and turn their paper profits into real money, and Robinhood is not looking to add more coins unless regulatory clarity comes. But it remains to be seen if those going short on SHIB will be profitable to get liquidated.

Some people are also concerned that, just like in May, SHIB’s pumping would send the market crashing. But not everyone agrees; as a matter of fact, this money could see itself moving to other coins as well.

“History always pinballs,” said Su Zhu, the CEO of Three Arrows Capital, who doesn’t see meme coins pumping marking the end of the cycle. “Our understanding of history changes history itself.”

“Dogcoins are net great for crypto,” added Zhu.

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Author: AnTy

First US Bitcoin ETF is Reaching its Limit After Becoming the Fastest Fund to Amass $1B in Assets

This issue can potentially set the path to a Bitcoin spot ETF approval, for which Grayscale has already filed. But for now, GBTC shares are trading at a steep 19% discount.

The ProShares Bitcoin exchange-traded fund has become the fastest ETF to reach $1 billion in assets.

The first Bitcoin Futures ETF started off solid by amassing more than $1.1 billion of inflows in just the first two days and reaching over $3 billion in volume in the first week of launch.

The demand for the Bitcoin ETF outpaced the performance of GLD, the dominant gold-tracking ETF, which took three days to reach the milestone in 2004.

Mike McGlone, a commodities analyst at Bloomberg, calls the approval of futures-based ETF “a baby-step” toward getting the real deal, which is a spot Bitcoin ETF. US Securities and Exchange Commission (SEC) chair Gary Gensler approved the CME Bitcoin futures-backed ETF because they offer more investor protection.

“By saying they are focused on protecting investors, the SEC may have been doing the opposite,” said McGlone. According to him, the regulatory foot-dragging could have prospective investors miss out on sizable returns.

Bitcoin hit a new all-time high earlier this week at $67,000. Since then, BTC/USD has slipped and is now trading around $63k.

“Crypto is finding its footing as an investment vehicle, and the rollout of ETFs could be a big step in that direction,” said Lindsey Bell, the chief investment strategist at Ally Invest.

But this explosive start could be limited by regulated futures exchange CME.

The Proshares Bitcoin Strategy ETF (BITO) is on track to breach the limit on the number of contracts it is permitted to hold by the Chicago Mercantile Exchange.

After two days of trading, BITO owns almost 1,900 contracts for this month, ready to surpass the 2,000 limit as per CME rules that cap the number of front-month contracts one entity can own.

To avoid hitting this limit, the ETF has already gained 1,400 November contracts, but at the rate it is going, the limit might still be hit sooner rather than later.

One solution to this is CME raising the limit. Additionally, the launch of competing products such as Valkyrie Bitcoin Strategy ETF, which is to start trading today, and VanEck ETF next Monday, may help here by diluting the demand for BITO.

Another solution is Gensler approving using Canadian Bitcoin ETFs in Future exchange-traded funds. The issue with BITO could also set the patch for getting the Bitcoin spot ETF.

Interestingly, in anticipation of this, the leading digital asset manager Grayscale filed to convert its Grayscale Bitcoin Trust (GBTC) into an ETF this week.

This week, Grayscale’s parent company Digital Currency Group (DCG), also obtained authorization to up its purchase of GBTC shares to $1 billion, from $750 million. As of Oct. 19, the firm has bought $388 million worth of GBTC shares.

DCG “plans to use cash on hand to fund the purchases and will make the purchases on the open market, at management’s discretion,” said the company in a statement.

This is the company’s attempt to narrow the discount between GBTC shares, currently at a steep 19%, and their net asset value (NAV).

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Author: AnTy

ProShares Bitcoin Futures ETF Coming on Tuesday, Grayscale Confirms Filing to Convert GBTC into ETF

In anticipation of the first Bitcoin ETF, which will finally be coming to the US this week, Bitcoin hit $63,000.

ProShares will be launching its exchange-traded fund (ETF) linked to CME-based Bitcoin futures on the New York Stock Exchange (NYSE) under the ticker ‘BITO’ on Tuesday, the firm and the exchange have reported.

“2021 will be remembered for this milestone,” Michael Sapir, the CEO of ProShares, told DealBook.

Investors who want exposure to the leading cryptocurrency but don’t want to hold it directly and are hesitant to engage with unregulated crypto exchanges will now have “convenient access to Bitcoin in a wrapper that has market integrity,” he said.

In a statement on Monday, Sapir further said, “a multitude of investors have been eagerly awaiting the launch of a bitcoin-linked ETF,” and finally BITO will provide access to Bitcoin to this large segment of investors who have a brokerage account and are familiar and comfortable with buying stocks and ETFs but don’t want to go through the hassle for establishing another account with a crypto provider and be subject to security risks.

“This will be a floodgate of new capital and new people into the space,” said Ian Balina, CEO of the data and analytics firm Token Metrics.

Approval for the ProShares ETF, which is based on Bitcoin futures trading on the CME, won’t be announced by the US Securities and Exchange Commission (SEC), but the firm’s formal prospectus has met with no opposition ahead of its effective deadline, which means it is good to go. NYSE is also readying its launch for tomorrow.

“This is an exciting step but not the last,” said Douglas Yones, the NYSE’s head of exchange-traded products. He foresees a range of crypto-linked ETFs getting approval, eventually.

Currently, nine other ETF applications for Bitcoin Futures are awaiting approval, while many more for physically-backed ETFs.

Future ETFs will come with its own costs, though, as it adds 5% to 10% of annualized roll yield on top of the underlying asset’s price. Not to mention, they are “also more confusing,” said Matt Hougan, chief investment officer at Bitwise Asset Management, which has also filed for a Bitcoin futures ETF with the SEC.

“They have challenges like position limit and official dilution, and they can’t get 100% exposure to the futures market.”

Interestingly, Grayscale also announced that it is filing to have its $38 billion Grayscale Bitcoin Trust converted into an ETF on Monday. GBTC is still trading at over a 15% discount.

“It is official,” confirmed Barry Silbert, founder, and CEO of Digital Currency Group, the parent company of the largest digital asset manager Grayscale Investments.

While calling Bitcoin Futures ETF launch a “historic and important moment” for Bitcoin and the entire crypto ecosystem, Jennifer Rosenthal, Communication Director at Grayscale, said,

“I’m happy to confirm that Grayscale *WILL* file for GBTC to be converted into an ETF as soon as there’s a clear, formal indication from the SEC.”

The official and verifiable evidence of SEC’s comfort with the underlying Bitcoin market could likely be in the form of a Bitcoin Futures ETF being deemed effective, and once that happens, “the NYSE Arca will file a document called the 19b-4 to convert GBTC into an ETF,” she added.

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Author: AnTy

Canada’s First Multi-Crypto ETF Allows Investors to Hold Both Bitcoin and Ether

Evolve Funds Group has launched Canada’s first multi-crypto exchange-traded fund (ETF), which allows investors to hold both Bitcoin and Ether. The ETF now trades on the Toronto Stock Exchange (TSX) under the ticker ETC.

The Evolve Cryptocurrencies ETF (ETC), a market-cap weighted crypto fund, currently has about 68% of its holdings in BTC and 32% in ETH.

Raj Lala, Evolve’s President, and CEO said in an interview,

“A lot of investors want to invest in cryptocurrencies. They’re not exactly sure which one to pick, or they may also want to get exposure to the cryptocurrencies that are growing.”

“They’re looking for more of a turnkey solution to participate in the cryptocurrency market.”

The ETF provides exposure to Bitcoin and Ether by holding its Evolve Bitcoin ETF (EBIT) and the Evolve Ether ETF (ETHR).

This new ETF will be rebalanced monthly but doesn’t use leverage and won’t pay distributions. While no management fee is imposed on the ETF, the underlying ETFs held in the fund charge a 0.75% management fee.

Being an ETF allows the product to be less costly, more transparent, and more tax-efficient than mutual funds.

On its first day of trades, the Evolve Cryptocurrencies ETF managed to amass only about $2.1 million in assets, according to the firm’s website. The other two crypto funds, Bitcoin and Ether ETFs, have about $181 million in combined assets under management.

In its most recent study that polled 208 advisors conducted from August 26 to September 10, Evolve found that 40% have invested in cryptocurrency ETFs, while 31% said client interest was their biggest driver. Of the 60% who weren’t investing in cryptocurrency ETFs, 40% cited the asset class as too volatile.

Interestingly, 80% of respondents believe Bitcoin will continue to be the largest cryptocurrency at the end of 2022, while 85% expect Ether to have the most market growth in the coming year.

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Author: AnTy

Fintech Revolut Is Launching its Own Token, Which Will Be Earned By Users

Fintech Revolut Is Launching its Own Token, Which Will Be Earned By Users

Fintech company Revolut that offers cryptocurrency buying, selling, and trading, is now exploring launching its very own cryptocurrency token.

About three months back, the UK-based neo bank raised $800 million in funding at a valuation of $33 billion. Revolut has more than 16 million customers and sees over 150 million transactions per month.

Revolut offers access to more than 50 cryptos and, in its earnings call in June, said crypto services make up about 20% of its revenue.

Now the company is planning to launch its own token, which will be something like an exchange token instead of a stablecoin, reported CoinDesk, citing two people with knowledge of the plans.

“It’s a ‘Revolut users earn a token’ type of thing, similar to Wirex and Nexo,” said the source. Card issuer Wirex has a token called WXT, and the crypto lender Nexo has the  NEXO token.

The launch of the token, for which Europe and locations outside the US are being targeted, is subject to approval from the U.K.’s Financial Conduct Authority (FCA).

The firm already holds a European Union banking license and recently secured a US broker-dealer license to compete with the likes of Robinhood and Square, after launching in the U.S. last year just as the pandemic began.

“We are building a single app where people can manage all aspects of their finances, from banking and foreign exchange, to cryptocurrency and stock trading,” said CEO and founder Nik Storonsky at the time.

A couple of weeks back, Revolut became WeWork’s first enterprise members to pay for office space in Dallas using Bitcoin. The office-sharing giant first began accepting crypto as payment in April.

The company will eventually aim for a public listing in the UK, US, or maybe even a dual listing, Storonsky said.

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Author: AnTy

No, Coinbase Has Not Relisted XRP

Late on Thursday, some cryptocurrency market participants got excited to see XRP on Coinbase, which was a surprise as earlier this year, on January 19, Coinbase “fully” suspended trading in XRP.

The San Francisco-based cryptocurrency exchange announced the delisting of XRP back in late December, just like the majority of the trading platforms in the country. The delisting came in the light of the Securities and Exchange Commission (SEC) charging Ripple and its two key executives, co-founder Chris Larsen and CEO Brad Garlinghouse, for the sale of $1.3 bln unregistered securities.

But on Sept. 9, some users found XRP markets on the exchange that gave way to speculation that Coinbase has relisted the crypto asset.

But then, a few hours later, Coinbase put an end to it all, saying it was a technical issue.

“As previously announced, Coinbase has suspended trading in XRP. Due to a technical issue, XRP was temporarily viewable on the Coinbase Pro mobile app for some customers but was not tradeable,” clarified the exchange on Twitter.

Still, this was enough to send the price of XRP soaring from $1.1 to $1.244 but only to drop back to $1.04 a few hours later. As of writing, XRP is trading at $1.10 with a market cap of $51 bln as the 7th largest crypto asset.

While some people were excited about their favorite crypto asset being back on the biggest cryptocurrency exchange in the US, others saw this “issue” as Coinbase striking at the SEC for hindering its plans to launch its new lending product.

As we reported earlier this week, Coinbase shared that they have received a Wells Notice from the SEC for its Coinbase Lend product that allows its users to earn interest on their crypto holdings, starting with 4% on USDC.

Interestingly, Ripple CEO Garlinghouse tweeted the Die Hard GIF with the text “Welcome to the party, Pal” to Armstrong’s tweet discussing the “really sketchy behavior” from the SEC.

The same day, Garlinghouse released a blog post on the Ripple website titled “The SEC’s Attack on Crypto in the United States.”

“With the latest SEC cryptocurrency regulation tightening its grip on greater investor protection on digital currency, we remain confident after reviewing the SEC’s complaint today that we are on the right side of the law and of history.”

“Nothing will fundamentally alter our trajectory.”

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Author: AnTy

Crypto Market Dips and Over 165k Traders Get Liquidated for More Than $890 Million

But as long as central banks and governments continue to print money, which they will as Democrats are now pushing to expand the largest single spending bill in history $3.5 trillion package, investors will continue to turn to risk assets.

The cryptocurrency market has taken a drop today.

From its highs in the last 24 hours, Bitcoin has fallen more than 3.6% to as low as $50,590. The leading cryptocurrency had surged to $53,000 late on Sunday or early Monday.

As for Ether, it slid more than 6.5% to $3,675 from its 24-hour high of about $3,975.

Among the top 100 crypto assets, the biggest hit in the past 24-hours was recorded by SafeMoon of 15%, with other double-digit losses seen by Avalanche, IOTA, Horizen, Internet Computer, Filecoin, Sushi, Compound, Ethereum Classic, Polygon, Uniswap, VeChain, BAT, GRT, Cardano, Shiba Inu, Terra, Dogecoin, and Aave.

This has resulted in a 4% dip in the total market cap, which was at almost $2.47 trillion yesterday, nearing its $2.55 trillion peak, which slid down today and is currently at $2.36 trillion.

Despite the losses, Solana is up 25% and Fantom over 23%, while FTT is in the green by almost 5%.

The latest drop in the market resulted in liquidating 165,323 traders for more than $890 million, according to Bybt. But these numbers are not exhaustive as Binance does not report its full figures.

Bitcoin accounted for the most of it at $222.4 million, followed by $159.3 million in Ether and $80.8 million in Solana.

The funding rate on Bitcoin perpetual contracts has slid down some, with the highest currently at 0.0536% on Binance. The crypto asset prices have been recovering since July 21, and last week funding started trending up as prices made their way up, especially for Ether which went past $4k briefly on Friday, not far off of its $4,380 peak.

The highest funding rate on Ethereum perpetual is currently on Bybit at 0.0778% on USDT margin contracts, while the lowest is 0.01% on Binance for token margins contracts.

Meanwhile, open interest remains elevated at $19.41 billion on Bitcoin futures, gradually making its way to a $27.68 billion high. For Ethereum, OI has hit a new ATH on Monday, surpassing $11.6 billion from May 10. Today, it has seen a slight dip to $11.26 billion.

Despite the dip, the macro outlook remains bullish, with Democrats pushing to expand the largest single spending bill in history, $3.5 trillion tax and spending package.

So, as cryptocurrency exchange FTX noted in its blog titled “The everything bubble & TINA 2.0,” as long as money is being printed, the prices of everything from stocks, commodities, to venture capital, retail estate, and crypto should increase in value.

Since the COVID-19 pandemic began, already $32 trillion of fiscal and monetary stimulus — the largest stimulus as a percentage of global GDP — has been pumped into the markets while government bonds are negative-yielding.

“If global central banks and governments are going to continue to print money, investors are faced with a TINA 2.0 predicament, where cash is literally burning a hole in their pockets, pushing them not just into risk assets, but further out the risk curve, exacerbating wealth inequality along the way, leading to even further risk taking,” noted FTX.

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Author: AnTy

JPMorgan Discloses Owning Coinbase (COIN) Shares Which Gets A New Target 61% Above Current Price

JPMorgan Discloses Owning Coinbase (COIN) Shares Which Gets A New Target 61% Above Current Price

Banking giant JPMorgan disclosed in a filing with the US Securities and Exchange Commission (SEC) that it owns 62,589 shares of Coinbase as of June 30.

As of writing, the shares of COIN are trading at $258.24, down from its all-time high of $429.54 hit briefly on its trading debut on Nasdaq in mid-April.

This week, John Todaro, vice president at Needham & Co., a cryptocurrency and blockchain research company, also started covering Coinbase, giving it a ‘Buy” rating with a target price of $420.

San Francisco-based Coinbase is a market-leading crypto exchange with “significant future opportunities beyond exchange service, which include staking, custody, yield-bearing products, and more,” Todaro wrote in a note.

According to the analyst, these services will further accelerate its position as a one-stop shop for crypto financial services while noting that concerns around their fees meanwhile are misplaced.

The research firm projects Coinbase, “the largest crypto exchange by trading volume,” to have a 467% increase in 2021 revenue but only a mere 9% in the next year.

“We view COIN as the leading, fiat-crypto on-ramp and expect the company’s exchange business to grow rapidly and sustainably as new investors adopt its crypto assets and services,” Todaro added.

Another Bank Joins In to Boost Crypto Adoption

In other news, another bank, Pennsylvania-based Customer Bank, which has $19.6 billion in assets, has joined the small list of FDIC-insured institutions in the US to offer crypto firms basic accounts.

The bank believes it is “well-positioned” to be the third banking option after Signature Bank and Silvergate Bank to offer a “strong offering” to the crypto asset space. Their main focus right now is to build a low-cost deposit franchise similar to these banks.

Moreover, about two dozen clients will begin testing the bank’s blockchain payments platform through Tassat next month before the service is offered for the rest of the crypto industry in October.

The Tassat Pay Network works much like JPMorgan’s JPM Coin, tokenizing the USD deposits and moving them between digital wallets on its platform.

“Customers continue to try to find ways to be involved, engaged, and interested in the cryptocurrency world,” said Sam Sidhu, Customers Bank’s vice chair and COO. “Some banks might offer rewards or custody services to consumers. We are focused on the businesses that may directly or indirectly service those customers.”

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Author: AnTy

ETH Fees Renews its Uptrend and Back at May Levels, Making Ethereum Effectively Deflationary

So far, more than 50k ETH worth about $160 million has been burned, which is flipping Ethereum issuance to negative in more and more blocks.

The market has started to get back into action with Bitcoin above $47k, Ether $3,285, and the total market cap $2.1 trillion.

With this, the fees on the second-largest network have started to spike as well, currently, around $20, last seen on May 23rd, according to Blockchair. Average gas price has also jumped to 62.55 gwei, which increases further when using other applications like DeFi protocols, during high periods of activity, congestion, and if one needs their transactions to be processed fast.

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This surge in gas fees has resulted in more amount of ETH getting burned, leading to the flipping of Ethereum issuance to negative. About 100-150 gwei is the breakeven for the Ether issuance.

“Sustained base fee needed to fully offset issuance in Ethereum. Today: 167 gwei. After The Merge: 19 gwei. After capacity increase: even less,” noted yearn developer Banteg.

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So far, since August 5th, when the London upgrade with EIP-1559 was activated, more than 50k ETH worth roughly $160 million have been burned. The biggest contributor to this burn is the NFT marketplace OpenSea.

OpenSea continues to be the biggest gas guzzler on the Ethereum blockchain for some time now, followed by Axie Infinity (AXS), Tether (USDT), Uniswap V2 (UNI), and Uniswap V3, according to Etherscan.

The fees on the Ethereum network have actually been gradually increasing since early July, thanks to non-fungible tokens.

Before the greens made their re-entrance in the past month, NFTs have been attracting the mainstream masses to the world of cryptocurrency. Everyone has been hopping on this digital art train, from teenagers, celebrities, artists, and companies from different sectors.

OpenSea is also seeing its trading volume rising since the beginning of this month, recording nearly $800 million in August, up from $284.2 million in July and $125.2 million in the previous month. Last month, it raised a $100 million funding round led by A16z, valuing OpenSea at $1.5 billion.

However, in this NFT frenzy, it’s all about attention, with the likes of Pudgy Penguins and CyberKongz now at the forefront and the top collectible projects such as CryptoPunks and Meebits now seeing their sales drop by more than 70% in the last week.

While trading is declining, Christie’s is all set to auction Bored Ape NFTs along with CryptoPunks and Meebits NFTs next month, which can bring them back into the limelight. Rare NFTs are the ones that fetch millions of dollars, and the auction houses tend to sell the rarest ones.

Amidst this, this past weekend, the five-star hotel Ca’ di Dio announced that it is officially opening in Venice on August 27. Before that, through Monday, August 16, the parent company VRetreats is auctioning off a night’s stay, but consumers must bid on an NFT.

“We see using NFT for this auction as an advantage from a distribution point of view, not just from a marketing point of view,” said Angelo La Riccia, commercial director of VRetreats and VOIhotels.

“I’ve heard from colleagues in the hospitality industry that work at other brands who say they’re putting in a couple of euros to bid in the auction just to understand how that works,” La Riccia said. “Hoteliers have to think creatively as we come out of the crisis.”

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Author: AnTy