October 15, 2018
QUOTE OF THE DAY
"Objectively, the world is improving. To the elites, it's falling apart as their long-lived institutions are flattened by the Internet."
- Naval
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| COIN | PRICE | 24H |
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| BTC | $6,657.34 | +5.48% |
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| ETH | $210.21 | +5.01% |
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| XRP | $0.447180 | +6.70% |
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| BCH | $460.28 | +3.49% |
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| EOS | $5.47 | +4.47% |
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*Information as of 10:30 AM EST
Market Launches, Tether Dips, What Happened Last Night?
A quick rundown
Last night, around 1:00 AM Eastern, Bitcoin's price skyrocketed up $600, from $6,212 to $6,809, within just two hours.
During that same time frame, Tether (USDT), a stablecoin pegged to 1:1 with the U.S. dollar, fell from its peg at $1.00 to just under $0.95.
While the markets have seen USDT price dip like this before, the event indicates that traders are fleeing from the stablecoin to buy up other cryptocurrencies like Bitcoin.
Bitcoin boom, Bitfinex bust
On Bitfinex, Bitcoin's price soared as high as $7,800. In addition to Bitfinex, other exchanges that offer USDT trading pairs saw similar premiums over their non-USDT exchange counterparts.
Thus, because of Tether's correlation to the event, some experts are attributing the surprise rally to the questionable financial health of Bitfinex, a crypto exchange that shares ownership with USDT's issuer, Tether Ltd.
The crypto exchange has been in the hot seat recently after reports claimed Bitfinex's previous bank, Noble Bank, was put on the market for sale. In addition, customers reported that they received little to no support regarding complaints and that Bitfinex subreddit moderators were suspiciously deleting customer posts.
Still, despite all the allegations, the crypto exchange responded with wallet proof on its blog last week to showcase that it is not in trouble financially.
Paranoia or warning sign?
While this may be a warning sign that USDT is in trouble, it also could just be paranoia among investors.
Nonetheless, even if it is just investor paranoia, USDT's reputation must improve if it wishes to remain the dominant player in an ever-growing sea of stablecoins.
Cryptocurrencies Have the Potential to Change the Banking Landscape
The birth of a new asset class in a perilous time
Cryptocurrencies were born and prospered in a time when banks were failing during the financial crisis of the previous decade. Trust in banks was broken and emerged a new form of currency, not controlled by a central entity, rather a decentralized network backed by mathematics. Bitcoin was the first pioneer to transfer the power and wealth from 'too big to fail' financial institutions into the hands of the common mass.
Banks have since recovered from the mortgage and credit crisis of the previous decade, but cryptocurrencies have also increased in number, size, and adoption. As much as banks and famous investors criticize cryptocurrencies, they are aware that they directly threaten their core business which has been around for centuries. Institutions are starting to realize that they can no longer just sit on the sidelines or else their existence may be in question in the future.
Salvador Casquero who has worked as an executive at some of the world's biggest institutions including JP Morgan and BBVA said:
"Experience in the industry and knowledge of how fintech companies work, the unexpected technology we have seen in the cryptocurrency industry has unsettled the banks. These major banking establishments were controlling mass sections of the economic stratosphere and are now competing with small yet dynamic crypto and fintech firms that are revolutionizing the flow of resources, business models and also technology that are geared towards specific products."
Banks need to innovate or face disintermediation
Times are changing and with new innovations banks are scurrying to keep pace with the rapid growth of new competition. Banks could be at a disadvantage because they are so large and heavily regulated, which means they struggle to adapt to new change and innovation. It seems like everyday now a bank is frantically applying for a new blockchain related patent or researching and testing a blockchain implementation.
Our financial system has been established for centuries, but has never seen a direct threat of replacement like cryptocurrencies. Cryptocurrencies have started a revolution, but it is no where near following through on its mission.
World Bank President Says Blockchain has 'Huge Potential'
What is the World Bank?
The World Bank is an international financial institution that acts as the central bank of the world. It is comprised to two institutions: the International Bank for Reconstruction and Development and the International Development Association. The Bank states that its main goal is to reduce poverty around the globe.
President endorses blockchain
Speaking at the International Monetary Fund and World Banks' Annual Meeting, the president of the World Bank Group, Jim Yong Kim, praised the potential of blockchain technologies. He believes that technologies like blockchain can help the world fight prosperity by boosting monetary efficiency and eliminating corruption.
Kim's exact quote from his speech reads:
"We talked about cryptocurrencies, but we think distributed ledger has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology."
Admitted the Bank is not doing enough
The World Bank has used blockchain technology in the past to manage a bond. From this use case, the Bank realized that it could save massive amounts of paperwork and costs. However, the Bank has admitted that it is not doing enough with the technology. The Bank says that it needs to keep more up to date with the "great things that are coming out."
Crypto Hedge Funds Continue Climbing Despite Market Slide
2018 takes the lead
Despite the significant market slump in 2018, crypto-focused hedge funds continue to sprout up across the world.
According to Crypto Fund Research, so far this year over 90 crypto funds have launched and another 30 are expected to open for business before the end of the year. Compared to last year, 2018 is projected to launch just 2 more crypto funds than 2017's number.
Though that's a surprising number of crypto funds, perhaps more significant is the fact that out of all hedge funds launched in 2018, 20% are crypto-focused - showcasing the hype surrounding the industry.
What do they see?
Though, the market has stalled in 2018, the number of crypto fund launches offers a promising view.
Joshua Gnaizda, the founder of Crypto Fund Research, commented on the current environment:
"In the midst of 2018's decline in traditional hedge fund launches, crypto hedge funds are a notable aberration. Cryptocurrency prices have been in a bear market for the better part of the year and regulatory uncertainty persists in much of the world […] While we don't believe the rate of new launches is sustainable longer-term, there are currently few signs of a significant slowdown."
But wait, there's more...
- Payment giants MasterCard and VISA will soon group cryptocurrency and Initial Coin Offering (ICO) jurisdictions in a new "high risk" category.
- Spencer Dinwiddie is leading a new team Of NBA crypto investors after buying Bitcoin in 2017 for $3,000.
- In a new interview, Ripple's chief marketing strategist Cory Johnson says Ripple has discussed XRP with the Trump administration.
Nuls (NULS)
NULS is a global blockchain open-source project which is a highly customizable modular blockchain infrastructure; it consists of a microkernel and functional modules. NULS provides smart contract, multi-chain mechanism and cross-chain consensus. It aims to break the technical barriers of blockchain, to reduce the cost of development, and to promote the usage of blockchain technology in the commercial field.
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