Cryptocurrency News Now!: The new stablecoin in town

Tuesday, September 11, 2018

The new stablecoin in town

QUOTE OF THE DAY

“Economists and journalists often get caught up in this question: Why does Bitcoin have value? And the answer is very easy. Because it is useful and scarce.”

- Eric Voorhees

MARKET

COIN	PRICE	24H

BTC	$6,314.824752	-0.29%

ETH	$191.809857	-2.28%

XRP	$0.26504	-3.1%

BCH	$465.097375	-2.5%

EOS	$4.952199	-1.85%

*Information as of 9:30 AM EST

NEWS

Tether, but transparent

Winklevoss Brothers Get Green Light to Launch Fiat-Backed Stablecoin

GEMINI DOLLAR SPECS

According to Gemini's Medium yesterday, the exchange will be launching its own fiat-backed stablecoin, Gemini Dollar
Gemini Dollar will operate as an ERC-20 token on the Ethereum network so users can easily send the stablecoin to their Ethereum wallet
In addition, the Winklevoss brothers hope to use Gemini Dollar to solve time delay issues between time-restricted fiat markets that halt over the weekend and the 24/7 cryptocurrency market

WORLD'S FIRST

In the past, 1:1 fiat-backed stablecoins have been scrutinized for not being transparent about their actual fiat holdings
Now, however, the Winklevoss brothers are taking on that problem head-on by having Gemini dollar become the "world's first" regulated stablecoin
With oversight by the New York State Department of Financial Services (NYDFS) and monthly examinations by an "independent public accounting firm", Gemini Dollar looks to be the most trustful option to date

NYDFS superintendent Maria T. Vullo commented to Forbes:

“These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework.”

THE CRITICS

Though many praised Gemini for creating (hopefully) one of the most transparent stablecoins to date, not everyone saw the news as groundbreaking

Meltem Demirors of crypto investment firm CoinShares tweeted her thoughts on the new release:

"So basically we have more tether? Feel like USD-collateralized stablecoins are only marginally interesting at best. There are dozens of efforts under way, and I don't see natural demand for these assets. Hope this makes them money, because it sounds like it was expensive to print!"

To learn about the different types of stablecoins besides fiat-backed coins, visit here.

RESEARCH

72% Investors Plan to Buy More Cryptocurrency This Year

BTFD

A new survey conducted by SharesPost finds that 72% of cryptocurrency investors are planning on buying more crypto some time within the next 12 months
This survey was conducted in July and pinged 2,490 retail investors and 528 accredited investors
Investors are intrigued by the strong decline in the market and are still believers in their original investment, so they are willing to double down

SLOWER ADOPTION

Although a majority of investors admit that they are going to buy more crypto during the dip, they now believe that crypto mainstream adoption will take longer
In January, when crypto was hitting all-time highs, investors were predicting the space to reach mainstream adoption by 2020
Now after the bear market that has spanned 2018, respondents think that mainstream adoption will happen slower, predicting 2025 for mainstream adoption

Rohit Kulkarni, managing director and head of research at SharesPost, commented on the findings:

“Based on our survey, crypto investors haven’t lost faith and are planning to buy more. Importantly, this survey indicates that this correction is separating long-term believers from short-term day traders. Investors remain bullish on Bitcoin and Ethereum over the next 18 months because they are the leading digital currencies globally. Both enjoy relatively low correlation to other asset classes and can be an ideal way for investors to diversify a portfolio of stocks and bonds.”

OPINION

'Crypto-Assets are Here to Stay', EU Watchdog Chief

HERE TO STAY

Recently EU regulators met at the EU Economic and Financial Affairs Council (ECOFIN) in Vienna, Austria
After the meeting, the Council concluded that cryptocurrencies are going nowhere
The Council acknowledged the bear trend of the market but does not think that it takes away from the potential of the technology

European Commission Vice-President Vladis Dombrovskis said in the opening comments of the meeting:

“We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow. In particular initial coin offerings, or ICOs, we see they have the potential to emerge as a viable form of alternative financing. Already last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”

REGULATORY FRAMEWORK

EU regulators are debating about how to classify cryptocurrencies, either use already existing rules or create totally new rules
However, there is one thing that regulators can agree on, we need a clear answer for how to handle cryptocurrencies that can apply to the entire EU

Dombrovskis talked about the timeline for future regulations:

“Many Member States today supported the need for such mapping, so we expect to conclude this assessment later this year. This will provide a solid ground to build on and to decide on further steps in this area.”

ANALYSIS

ICOs Slump in August to Reach Lowest Funding Level in 16 Months

16 MONTHS LATER

According to Autonomous Research, startups who funded via initial coin offerings (ICOs) only raised $326 million
This is the lowest month recorded to date since May 2017, just before ICO funding started to boom

Looking at the chart below, it's easy to see that ICO funding followed strongly with the entire crypto market as funding has been declining since January 2018:

ICOs GETTING BATTERED

ICOs have been strongly scrutinized from a regulator perspective since there is no third-party intermediary involved to reduce the risk of fraud
In addition, startups that previously raised funding via an ICO are now being blamed for Ether's price dive since they are "cashing out" their ETH to cover expenses
However, though ICOs are under fire in 2018, Binance CEO CZ claimed earlier this year that they are "necessary" because of strict venture capitalist procedures

BITS

Financial services blockchain startup Chain has been acquired by the Stellar-focused firm Lightyear.
Former Ripple general counsel Brynly Llyr is taking on the same role for crypto payments startup Celo.
Canada’s “first” and “only” regulated Bitcoin (BTC) fund First Block Capital Inc. has obtained mutual fund trust status.

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A person who is a firm believer in Bitcoin and is skeptical of altcoins.

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