Digital Asset Insights #03
Elon Musk’s Rants and De-Fi on the move
In recent weeks, Ethereum has been in the news non-stop, owing to the release of the new Ethereum 2.0, the most obvious one being Beacon Chain. This deposit contract for the Ethereum 2.0 holds over 3million ETH, worth slightly over $5.5 billion at the current market rating. Although it was only recently launched, the contract holds over $3million ETH (+4.08%) as at the time of this report. A shocking outcome as the contract was only launched in early December. Beacon Chain means to serve as a bridge between the Ethereum 2.0 and the old Ethereum network. Although the Ethereum 2.0 rule states that validators should stake nothing less than 32 ETH, some platforms allow for more than the stated amount.
Elon Musk's Acceleration
This week saw a continuation of Elon Musk's adventures in the digital currency community. A major highlight of the week was the surge of Bitcoin from -0.88% (as at the time of writing) to its new all-time high and as at the time of this publication, the uptrend seemed to continue. Although a lot of Musk's tweets were centered around the Dogecoin when asked he confirmed that his tweets were for fun. It's hard to believe that a single tweet from the billionaire would cause a storm in the digital currency community but it did, thankfully, the wave seems to be settling down. However, all the dust raised during the short period is becoming evident as even altcoins like the Ripple on an uptrend as traders are watching to see just how high its price will rise.
DeFi Moves Up the Agenda
Inconspicuously, decentralized finance seems to be making some noise and it is getting louder as the days go by. Evidence of this is seen in the move by digital payment provider BitPay as they add support for apple pay. According to BitPay, their cardholders in the United States can now purchase on the Apple store with the digital currency in their BitPay wallet using their prepaid MasterCard. Furthermore, they have also announced that support for Google pay and Samsung will be added letter this year. BitPay already supports BUSD and PAX payments but it seems like this is just the beginning for this digital payment provider. This is setting the pace for others like MasterCard who are making plans to allow for the exchange of digital currency for merchants on its network.
An Apple Coin?
On the other hand, there were suggestions last week that mobile tech giant Apple seeks to enter the digital currency space and it may likely begin with creating wallets for over 1 billion of its users. All this happens all Tesla invests $1.5B in Bitcoin with plans to accept payments in Bitcoins shortly. This is something that most of the digital community has been yearning for and this news came after the automobile giant filed its annual report with the US Securities and Exchange Commission. According to them, the company plans to "Acquire and hold digital assets from time to time or on a long term." Even though they are taking action now, this plan is said to have begun in 2018 when Musk tweeted about Bitcoin and other digital currencies. Not just him, but several other big investors seem to have taken an interest in the digital currency community. Lately, investors like Bill Miller and Paul Tudor Jones II are advocating for the use of digital currencies like Bitcoin for use against inflation. The move by Tesla moved the price of Bitcoin up by 14%, taking it to a new all-time high of $44,801 as at the time of this report.
CME launches Ethereum Futures
Meanwhile, last week saw Ethereum futures trading on Chicago Mercantile Exchange. This began with an opening price of $1,669.75 after going live on Sunday last week. So far, 77 contracts have been traded on the exchange as many sights are set towards February expiry. These contracts legalize the sale and purchase of digital assets at a later date at a predetermined price. There are indications that the regulated futures from this exchange could attract institutional demand for Ethereum while boosting its recent price rally. For this reason, it is no surprise that those institutions that had earlier bought BTC are setting their sights on ETH, that and the fact that the Ethereum network (which is the most used network) is filled with so many potentials. This insight was stated by the co-founder of Messari and digital currency investor Qiao Wang. At the time of this report, Ether was trading at $1,838, which is a record high for the digital currency, but experts foresee the likelihood of rallying to $500 or more in the long run.
Another Bitfarm Capital Raise
Bitcoin mining is no easy task, and miner Bitfarm seeks to raise $31M in funds from the sale of shares to institutional investors. According to them, they intend to use the funds to acquire more miners to boost working capital and expand their mining infrastructure. This sale makes it the third financing sale for them this month, and whether there will be more like this before the month ends, we can only observe how it goes. As many get on the digital currency bandwagon, Bitcoin hits a new record high of over $43K, and this happened after the news of Tesla's investment in the digital currency. As many get on board the digital currency train, wallet providers are making room to accommodate the ever-growing community. Wallet providers like ledger are already making plans to support Decentralized Finance (DeFi) on their mobile applications. This came in an announcement earlier last week and stated that the new accommodation would accompany the updates which were slated for later in the week. The update according to them will allow connections with DApps through integration with WalletConnect (an open-source protocol.) this will solve the problem of the unavailability of decentralized applications to mobile users.
SEC Signals Interest in Bitcoin ETPs
While many are on the Ethereum frenzy, Casper, a close competitor of Ethereum and even a fork of it, is set to launch sometime this year. However, the news is that BSN, China's Blockchain Infrastructure Service Provider seeks to add Casper to its network. This will make Casper available to developers on BSN after its launch. BSN seeks to use this partnership to become a global blockchain infrastructure service provider. The aim is to offer standardized development environments, and cloud services to allow DApps from various blockchain networks to build on the same platform. As more and more developers join in developing decentralized applications, the US SEC seems to not be left out. The SEC commissioner Hester Peirce says that the capital markets in the United States are ready for a Bitcoin exchange-traded product. According to Peirce, many people are ready to trade a bitcoin ETP and it is best to give them a natural way than having them look for alternatives. While there are some worries that digital currencies may pave the way for financing terror, Peirce stated her doubt on the seriousness of the situation, insisting that there was no way to outrightly ban bitcoin and other digital currencies, while also stated how much she looks forward to working with Gary Gensler, who is the SEC chairman nominated by the US Senate.
The truth remains that some will seek gain from digital assets without wanting to work for it. One such individual is a man from Alabama who faces several charges for stealing over $150,000 in digital assets. This theft was carried out through SIM-swapping, where over 300 contacts were transferred from over 60 smartphones and hundreds of sim cards to mobile phones in his possession, bypassing two-factor authentication security to access the online accounts of the victims. The culprit Joseph Chase Oaks is charged with identity theft, scam among others. Although SIM-swapping is common among identity thieves, there are not many who would use such means for the thievery of digital assets.
Digital Asset Custody Solutions
As the use of digital currencies continues to gain prominence, infrastructures are being put in place in the various sectors of the economy. Institutions like BNY Mellon, the largest custodian bank plans to allow customers custody to digital assets by year's end. Although its partners remain unknown, many believe that this plan will open up more opportunities for decentralized finance shortly. Payment facilitators like MasterCard also intend to support the transaction of digital assets directly on their already massive network. And among these institutions, Amazon announced their intention to launch a digital currency project in Mexico. This project aims to extend the range of services to their customers. Uber, like Amazon, has also stated their intention to accept digital currencies as means of payment on its platform. However, both companies have made it clear that they will not be adding any digital currency to their balance sheet.
R3 launched a new computing platform last week called Conclave, and they aim to use it in bringing more privacy to sensitive business data and create trusted services for reducing cost, reducing fraud, and similar services. While many of us continue to have concerns about the use of digital assets for illicit purposes we believe that there is still room to develop better policies regarding digital assets and their security and privacy.