Crypto Guides, Knowledge & Insights

DeFi Can 'Transform Global Finance': Wharton

The Wharton School of the University of Pennsylvania has released a report titled “DeFi Beyond the Hype,” produced by the Wharton Blockchain and Digital Asset Project in collaboration with the World Economic Forum.　　According to the famed business school, the DeFi industry has the potential to transform global finance. To date, however, it has yet to fulfill the hype.　　“DeFi has the potential to transform global finance, but activity to date has concentrated on speculation, leverage, and yield generation among the existing community of digital asset holders,” the report said, adding that the novel industry is exposed to many risks.　　The state of DeFi according to Wharton　　DeFi Pulse, a data platform tracking the growth of DeFi, indicates that there is more than $54 billion locked into the sector. This figure was just under $1 billion last year.　　DeFi Pulse Total Value Locked (TVL) over the past year. Source: DeFi Pulse.　　Amidst the growing industry, the Wharton report claims there are six chief uses within the sector: stablecoins, decentralized exchanges (DEXs), credit, derivatives, insurance, asset management, and “auxiliary services,” including wallets and oracles.　　Some of the chief benefits of the sector—according to the report—include reduced friction and transaction costs for the trading and distribution of financial assets.

2021-05-25Deep Dive

Federal Reserve Governor Pushes for Central Bank Digital Currency

After Federal Reserve Chairman Jerome Powell stated that the central bank was in no rush to issue a central bank digital currency (CBDC), Fed Governor Lael Brainard says they are in fact stepping up research into a CBDC.　　Governor of the Federal Reserve Brainard has begun to press harder for a digital dollar after chairman Jerome Powell stated the Fed was in no rush to roll out a CBDC. In a speech on Monday, Brainard said that a central bank-backed cryptocurrency could provide numerous benefits to all parties involved.　　Providing financial services to the nearly 20% of “underbanked” American citizens is one of the major advantages Brainard spoke about in a crypto conference this morning. Brainard also cited the safety of a federally backed system, along with the evolution of efficiency and cross-border payments. This would ease the stress of transactions between people in different countries considerably.　　A shift to contactless payments　　While Brainard underlined the importance of continuing with caution, she believes the covid-19 epidemic increased the need for a system that would give access for a wide range of individuals to regulated digital money. An example of this would be the many citizens who did not receive their relief payments, due to

2021-05-25Deep Dive

Billionaire Hedge Fund Manager Ray Dalio Reveals He Holds Bitcoin

Ray Dalio, billionaire hedge fund manager during his interview at Consensus revealed that he holds Bitcoin on his portfolio. During his conversation, Dalio revealed that he would prefer Bitcoin over bond in an inflationary scenario. He said,　　“Personally, Id rather have bitcoin than a bond” and added, “I hold some Bitcoin”　　Dalio changed his stance on the top cryptocurrency like many others towards the end of December last year and since then has been quite bullish about it. Earlier the billionaire had criticized Bitcoin for its volatility and claimed its high price fluctuation would not make it suitable either as a form of payment or store of value.　　“Personally, Id rather have bitcoin than a bond” in an inflationary scenario, @RayDalio said during a conversation with @mikejcasey at #Consensus2021.　　Watch his full remarks by registering for our virtual event: https://t.co/PJg71S61Ru pic.twitter.com/qH4YUtfhI3　　— CoinDesk (@CoinDesk) May 24, 2021　　Dalio even during his criticism days was open to suggestions and has said earlier that he is ready to listen to the other side and understand why they think that he is wrong in his assessment. However, now seems he has put a lot of thought behind Bitcoin and has studied its socio-economic impact. During the interview, he added

2021-05-25Deep Dive

Goldman Sachs Calls Crypto A ‘New Asset Class’, Marking Major Shift In Tone

Slowly but surely, renowned investment banks are creeping toward the reluctant acceptance that bitcoin is, in fact, a thing that is here to stay. A top executive at Wall Street megabank Goldman Sachs is now indicating that crypto is a “new asset class” and an “investable asset”.　　It‘s quite interesting to see a stalwart investment bank passing such a judgment on a financial tool specifically developed to render Wall Street banks worthless. Moreover, it represents a remarkable shift in Goldman Sachs’ tone after asserting that cryptocurrencies are not an asset class in May last year.　　In a new report, Goldman Sachs‘ global head of digital assets Mathew McDermott, observed that while bitcoin has its own risks because it’s still a new technology, the cryptocurrency is “now considered an investable asset”. McDermott further explained:　　“It doesn‘t behave as one would intuitively expect relative to other assets given the analogy to digital gold; to date, it’s tended to be more aligned with risk-on assets. But clients and beyond are largely treating it as a new asset class, which is notable — its not often that we get to witness the emergence of a new asset class.”　　Today, the bitcoin price remains mired in a devastating market

2021-05-25Deep Dive

German bank that went nearly bankrupt in 2019 says Bitcoin is ‘wishful thinking’

Last weeks crypto market meltdown has proved yet again that “the value of Bitcoin is entirely based on wishful thinking,” according to a research note recently published by Deutsche Bank analysts.　　Bitcoin, trendy or tacky？　　In the paper, titled “Bitcoin: Trendy is the Last Stage Before Tacky,” the banks experts compared cryptocurrencies to fleeting fashion trends and pointed out that a couple of “negative” tweets from Elon Musk combined with yet another crackdown on Bitcoin in China were enough to tank the whole market last week.　　“What‘s true for glamour and style might also be true for Bitcoin. Just as a ’fashion faux pas‘ can happen suddenly, we just received the proof that digital currencies can also quickly become passé,” wrote Deutsche Bank’s macro strategist Marion Labouré, adding, “All it took for the cryptocurrency to fall out of style was one tweet and a Chinese government statement.”　　Namely, on May 12, Musk announced that Tesla is suspending Bitcoin payments for its cars—just a couple of months after initially adding support for them—citing environmental concerns. And last week, Chinas government announced another wave of crackdowns on the crypto industry and Bitcoin mining.　　“Those few words caused Bitcoins value to plummet from nearly $60,000 in the days

2021-05-25Deep Dive

TRGC Empowering Global Investors With Strategic Entry into Blockchain

The world of blockchain, cryptocurrencies, and DeFi protocols has been witnessing growth like never before for more than a year now. Available numbers relating to the crypto market capitalization, value locked in protocols, and the price of digital assets stand glorious testimony to this growth.　　Between March 2020 and April 2021, the market capitalization of Bitcoin, the most popular digital currency, has increased from nearly a hundred billion dollars to more than a trillion. The price of Bitcoin attained a phenomenal all-time high of $64,863.10 on April 14, 2021. Not only digital assets but growth in the cutting-edge technologies of blockchain and DeFi protocols have witnessed a phenomenal rise in their value as well. The total value locked in DeFi increased from $1.04 billion to nearly $87 billion, between June 2020 and May 2021.　　Riding the Crypto Growth Bandwagon　　Such phenomenal growth has prompted many noted banking institutions and investment management companies in the US to leverage the opportunities present in the world of crypto and digital assets.　　For instance, BNY Mellon, the oldest bank in the US, has decided to offer integrated services for digital assets. The leading investment management firm BlackRock has also been exploring investment opportunities in Bitcoin. Such interest towards

2021-05-24Deep Dive

Bitcoin miners are shutting down Chinese operations after Vice Premier’s comments

Chinese Bitcoin miners are scrambling to shift or shut operations after the latest round of ‘crypto FUD’ initiated by the government, a report on news outlet Reuters said today.　　Ending operations　　Crypto exchange Huobi suspended all mining operations this morning (alongside ceasing trading services for Chinese users), BTC.TOP, a crypto mining pool, announced the suspension of its China business citing regulatory risks, and crypto-miner HashCow said it is not buying Bitcoin mining rigs anymore.　　Mining, for the uninitiated, uses up a massive computing system that solves millions of complex calculations each second to validate transactions on the Bitcoin network (a process known as ‘proof of work’).　　This requires massive amounts of energy for the maintenance, cooling, running of the machines. But some say as the source of this is via coal and fossil fuel-powered energy producers, it leaves behind a big carbon footprint for seemingly little benefit to the world.　　And that, in turn, is against what China is trying to achieve as a country. “Crypto mining consumes a lot of energy, which runs counter to Chinas carbon neutrality goals,” explained Chen Jiahe, a chief investment officer of Beijing-based family office Novem Arcae Technologies.　　He added the recent crackdown is part of the countrys drive to

2021-05-24Deep Dive

How Leveraged Positions Could Have Accelerated Ethereum’s Slump

Ethereum has retraced to levels not seen since the beginning of 2021. The cryptocurrency records a 50% correction in the weekly chart and has fallen from an all-time high at around $4,000. At the time of writing, ETH trades at 1,927 with 22.9% losses in the weekly chart.　　ETH on a downside trend in the daily chart. Source: ETHUSD Tradingview　　The crash in ETHs price was preceded by one of its largest inflow to exchange platforms. Around 199,947 ETH or $445 million were deposited across all exchanges on Mach 23rd, as shown in the chart below.　　Source: Glassnode via Lex Moskovski　　In the derivatives sector, around $809 million worth in long positions and $785 million in short positions for the trading pair BTC/USDT were recorded by monitor CryptoMeter for Binance Futures in the last hour. The pair ETH/USDT had $394 million and $388 million in the same period.　　Derivatives exchange have been crucial to the development of the current price action. FTXs CEO Sam Bankman Fried shared data on the performance of this sector. Bankman said that $20 billion in long positions have been liquidated over the past week.　　However, $20 billion still remain as Open Interest, the total amount of contracts traded in this sector.

2021-05-24Deep Dive

4 Signals That the Bitcoin Crash Might Soon Reach a Local Bottom

A bullish case isn‘t on many people’s minds – but signs are cropping up that Bitcoin may indeed be headed for a trend reversal. Here are some signs explaining why BTC might be overdue for a renewed uptick.　　Bitcoin reached its all-time high of almost $65K on April 14, 2021, a little over a month ago. However, over the past 10 days the price violently broke down from the $50K mark and even reached $30K last Wednesday.　　Bearish sentiment affected the whole crypto market, as altcoins suffered even more: ETH, which saw its all-time high of $4400 just 11 days ago, dropped below $1800 earlier today, before a slight correction as of writing these lines.　　Where is the bottom for this ongoing crypto bloodbath？ No one knows, but it might be worth keeping an eye on the following optimistic signals.　　Crypto Fear & Greed Index: Remember April 2020？　　The crypto fear & greed index is now at levels not seen since April 2020, which is about the time when the last crypto market crash occurred, taking BTC down below $4,000, losing over 50% in two days at the peak of the pandemic “Black Thursday.”　　In hindsight, it was an amazing time to buy in, but it

2021-05-24Deep Dive

Navigating a New Digital Era Means Changing the World Economic Order

COVID-19 has accelerated the growth in the digital economy through a dramatic increase in working from home, online shopping, digital entertainment, online services, among other areas. Ideas such as telemigration in which people from different parts of the world work in virtual offices might once have sounded outrageous. Today, many are already working from home through video streaming.　　A completely virtual future is perhaps unlikely, but such shifts are a fundamental challenge to how we organize societies. Laws and regulations governing trade, taxation, labor, and social security, among other areas, are largely based on geographically-defined states that contain and regulate our economic and social activities.　　This applies to the global economic order which consists of agreements between states to manage interactions between them. For example, an international regime regulates services based on how the service is supplied, in turn determined by where the buyer and seller are. For trade in goods, borders are used to implement rules such as tariffs and standards.　　In taxation, the shift from physical to digital has resulted in a major challenge to taxation law. Similarly, living in one country and working in another remains a bureaucratic challenge even in some of the most integrated economies in the world.　　Over

2021-05-24Deep Dive

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