Crypto Guides, Knowledge & Insights

Japanese Card Giant JCB Readies Crypto Interoperability Pilot

In a press release, the Japanese card firm said that it had begun working on a pilot with Cowry, a Tokyo-based payments and blockchain startup that was set up in 2017. The firms, they said, would begin on a demonstration experiment involving interoperability solutions for tokens, making use of “existing cryptocurrencies and other blockchain networks” on Cowrys own blockchain platform.　　The two companies struck an initial partnership deal back in August 2019, and agreed to work on token economies such as local currencies, stablecoins, and more.　　However, it appears this partnership has finally borne fruit, and another conventional business giant, the IT behemoth Fujitsu, is also aboard – the pilot will make use of interoperability solutions developed by Fujitsu Laboratories, a research arm of the tech firm.　　JCB and Cowry claim that they have developed solutions that will allow them to settle payments immediately by using technology that “partially centralizes” when confirming new transactions – rather than force buyers and merchants to wait for blocks to be mined on their respective blockchain networks.　　In theory, this innovation could allow merchants and buyers to receive or make transactions even if they were using different tokens to do so – for instance, a token X-holding customer

2021-01-27Deep Dive

Philippine Central Bank Widens Cryptocurrency Regulation

Philippine Central Bank Introduces New Rules for Crypto Service Providers　　The Bangko Sentral ng Pilipinas (BSP), the Philippines central bank, announced Tuesday that it has established new guidelines on virtual asset service providers.　　“The Monetary Board (MB) approved the guidelines on virtual asset service providers (VASP), or entities that facilitate financial services through the conduct of virtual asset (VA) activities, to cover new business models and activities,” the central bank explained.　　BSP Governor Benjamin E. Diokno commented:　　“We have seen accelerated growth in the use VCEs in the past three (3) years and it is high time that we broaden the scope of existing regulations in recognition of the evolving nature of this financial innovation and set out commensurate risk management expectations.”　　The new guidelines amend the existing regulations on cryptocurrency exchanges that were issued in 2017. The central bank says that the new regulatory framework “is aligned with fintech industrys best practices and is consistent with risk management standards set by international standard-setting bodies such as the Financial Action Task Force (FATF)” on anti-money laundering (AML), combating the financing of terrorism (CFT), and proliferation financing (PF).　　“The MB-approved framework expanded the activities subject to the licensing regime of the Bangko Sentral from initially covering

2021-01-27Deep Dive

Here’s the Key Level Bitcoin Needs to Reclaim for Bulls to Take Control

Bitcoins appears to be caught within a firm bear trend, with the cryptocurrency being wholly unable to see any sustained rebounds　　Each rally over the past week has been firmly rejected, with BTC rallying to highs of $34,500 yesterday before facing a rejection that sent it down towards $30,000 today　　Where the entire market trends next will undoubtedly depend on whether or not bulls can guard against a dip below $30,000　　The selling pressure that caused the recent dip is showing few signs of letting up anytime soon and may cause further near-term losses　　One trader is optimistic, however, noting that bulls could still take back control if they can break above one crucial level　　Bitcoin and the entire crypto market have been facing some intense selling pressure as of late that has hampered the uptrend BTC formed throughout the past couple of months.　　It remains unclear whether this trend has been invalidated, but bulls certainly have some serious work in front of them if they want to reverse the recent selloff.　　One analyst is pointing to $34,500, noting that this is a crucial level that bulls need to break for the market to see further upside. Once claimed, he is setting his sights on a move

2021-01-27Deep Dive

EMURGO, Ergo, and IOHK announce AgeUSD, the first stablecoin that will come to Cardano

A new type of stablecoin to launch on the Ergo blockchain　　EMURGO, a multinational blockchain company tasked with developing solutions for the Cardano blockchain, has announced the launch of a new stablecoin called AgeUSD. The stablecoin, however, wont be launched on Cardano, but on Ergo, a decentralized blockchain platform.　　Announced during the “Ergo Summit 2021” on Jan. 24, the stablecoin will be based on a novel algorithmic design developed on the Ergo blockchain. AgeUSD is a result of a joint partnership between the Ergo Foundation, EMURGO, and IOHK, the company behind the Cardano blockchain platform.　　What makes AgeUSD different from other stablecoins on the market is the fact that it‘s not a fiat-pegged token, but a crypto-backed algorithmic stablecoin protocol. This means that AgeUSD doesn’t rely on collateralized debt positions (CDPs), essentially making liquidation events impossible.　　The protocol will see a significant portion of its mathematics as automated as possible and stop relying on dynamic transaction posing. And while EMURGO noted that AgeUSD is still far away from solving all of the problems stablecoins experience, it represents an important attempt at creating a highly secure alternative to the current market offering.　　With Goguen, AgeUSD could also see the light of day on Cardano　　The significance of

2021-01-27Deep Dive

Ethereum’s realized cap spikes to record highs as capital floods in: Report

Ethereums realized capitalization has increased by nearly 50% in January so far to tag new all-time highs above $70 billion, according to CoinMetrics.　　The data shows that Ethereum‘s realized cap has more than tripled since dropping below $25 billion in during March 2020’s “Black Thursday” crash..　　Ethereums realized cap: CoinMetrics　　The realized capitalization metric calculates the value of a crypto assets supply according to when each unit last moved on-chain. The indicator seeks to estimate the price actually paid for each ETH in circulation — rather than simply multiply the current price by the total supply as market cap does. However, realized cap cannot account for coins that are only traded on centralized exchanges and do not move on-chain.　　The indicator is designed to offer a way to compensate for lost or unclaimed coins by ignoring their appreciation from the time each unit was last transferred on-chain.　　By ignoring the fluctuating capitalization of dormant coins, realized cap offers a signal for when new capital is flowing into a given market, with CoinMetrics inferring that many new investors may have been buying the bags of seasoned ETH whales during Januarys bull market.　　The report also noted a 5% spike in the number of Ethereum addresses holding more

2021-01-27Deep Dive

How Mudrex is Bringing Algorithmic Investment to the Masses

Algorithmic trading and investing are potent tools for those who dream of making passive income from the volatility of the cryptocurrency markets. The idea of “set it and forget it” strategies that provide a yield is enticing indeed. However, there are significant barriers to this utopian ideal.　　The main challenge is that successfully using algorithms to play the financial markets is still mainly the preserve of a small niche of people who sit in the center of the Venn diagram that merges “knows how profit from the financial markets” and “knows how to write code.” Most of us would struggle to find the time to master one of those disciplines, let alone both.　　There are some positive signs of change. Bots that can be programmed by users based on an intuitive user interface are starting to emerge. Elsewhere, copy trading offers newcomers a means to replicate the strategies and tactics of more experienced market players.　　However, a new up-and-coming Indian startup called Mudrex is now developing a platform based on “financial infrastructure legos” that offers an intriguing fusion of copy trading along with an intuitive drag-and-drop strategy builder. The overall aim is to make automated trading and investing accessible to everyone – even

2021-01-27Deep Dive

The GBTC story – How Grayscale determines Bitcoin’s price, future

Grayscale‘s dropping BTC premium is sounding alarm bells for investors and traders alike. Alarm bells isn’t an understatement, especially since the premium plummeted to 2% from about 30% back in December 2020. What does this mean？ Well, the premium may have been the only motivation for institutions to invest in GBTC, and not Bitcoin.　　This irrational motivation and market were explored by Peter Schiff during a recent talk. Drawing a parallel between Bitcoin and Gamestop, Schiff highlighted the red flags in Michael Saylors argument for buying Bitcoin using cash from the balance sheet of institutions. Saylor had underlined this move as a hedge against inflation. According to Schiff, however, if you buy Bitcoin under the flawed line of reasoning that its price will go up in the future, relying on future buyers to generate demand and buying is just as good as buying Gamestop.　　Source: YCharts　　This fuels the question – What makes Bitcoin different this time around, and why buy now and not before？　　The argument is that Bitcoins price rally is centered on institutional buying and the digital gold narrative. The key here is that institutional buying is an investment in GBTC, and institutions are buying GBTC for a premium. Once the

2021-01-27Deep Dive

Pantera is moving to launch a new fund aimed at institutional bitcoin investors

Pantera Capital—the cryptocurrency fund manager with more than $1 billion in assets — is working on launching a new fund aimed at heavyweight institutional investors.　　Pantera already operates a number of funds, including a bitcoin fund and an initial coin offering fund. As The Block reported earlier this month, the aforementioned funds clocked in returns of approximately 299% and 500%, respectively. The new fund, according to CEO Dan Morehead, could launch in “the next few months.”　　The launch, detailed by Dan Morehead during a recent episode of The Scoop, would come as a number of new Wall Street players enter the market, including Anthony Scaramuccis Skybridge, which has been pitchinginvestors on its new bitcoin fund since the end of last year.　　Union Square Ventures expects to invest around 30% of its new $250m fund in the crypto industry. Elsewhere, insurance giant Mass Mutual has entered the market and a range of endowments are rumored to have made an investment in crypto.　　Panteras new fund would be more tailored toward multi-asset-class institutional investors, according to Morehead.　　“We‘re really seeing an inflection point with more coming into the market over the last couple of months,” Morehead said. “We’ve had a ton of inbound calls from endowments and

2021-01-27Deep Dive

DeFi airdrops in 2020: Ethereum users are the biggest beneficiaries

I‘m not too sure about you guys but one of the most fascinating things I’ve seen in DeFi is airdrops.　　In 2017, airdrops were all the rage. But often the case, all users did was dump them, and most of the time, they werent worth all too much.　　But this has changed with the introduction of decentralized finance. Airdrops have become extremely sizeable for all users and there have been investors holding their coins as sometimes, holding the airdropped coins performs better than selling them right away for Bitcoin, Ethereum, or stablecoins.　　I recently broke down the top airdrops of 2020 (though one was in 2021) and what effect they had on Ethereum DeFi users.　　The airdrop phenomenon　　There have been five (or six) major airdrops in the DeFi space over the past 12 months. Here are each of them and some details about each one:　　Uniswap (UNI): 252,803 addresses could (and still can) claim. Average amount is 593.3 UNI.　　1inch (1INCH): 55,224 addresses could (and still can) claim. Average amount is 1,629.76 1INCH.　　BadgerDAO (BADGER): 32,262 addresses could (and still can) claim. Average amount is 64.31 BADGER.　　BadgerDAOs DIGG: Average airdrop of 0.0704 DIGG.　　Curve DAO Token (CRV): Average airdrop of 16,043 CRV　　Tornado Cash (TORN): Around 8,000 addresses will

2021-01-27Deep Dive

All risk, no gain? The vague definition of stablecoins is causing problems

Sometimes, “stablecoins” and variants such as “algorithmic stablecoins” function like historical names, as they refer to projects that call themselves stablecoins, such as Basis Cash, Elastic Set Dollar, Frax and their clones.　　The word “stablecoin” can be used as a logical description for “a cryptocurrency designed to have low price volatility” and has “stores of value or units of account,” or “a new type of cryptocurrency that often have their value pegged to another asset… designed to tackle the inherent volatility seen in cryptocurrency prices,” or a currencythat can “act as a medium of monetary exchange and a mode of storage of monetary value, and its value should remain relatively stable over longer time horizons.”　　On the more metaphysically speculative end, some have defined a stablecoin as “an asset that prices itself, rather than an asset that is priced by supply and demand. This goes against everything we know about how markets work.”　　Circularity is the core issue, as I see it. The alleged deficiency of Bitcoin (BTC) as money and a vague definition originally inspired a host of stablecoin projects. The design features of these projects have now been incorporated back into the stablecoin definition.　　Haseeb Qureshi — a software engineer, author and

2021-01-26Deep Dive

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