Ethereum Slayers 2.0: Crypto’s Usual Suspects, or New Kids on the Blockchain?

Whenever a new blockchain platform launched between 2017 and 2018, it was inevitably heralded as a future replacement for the largest, most successful cryptocurrency platform of all. In short, it came bearing the name of Ethereum Killer.

Those prophecies turned out to be premature, and by 2019 the hit that’s been put out on Ethereum is still waiting to be cashed.

A year is a long time in the crypto space, and many would argue that the lineup of possible contenders for Ethereum’s throne has changed already. New upstarts have come to the fore, while some who’ve been in the fight for too long are starting to weaken due to falling coin prices.

So let’s take a look at the so-called Ethereum Killers in 2019. Are we looking at a new crop of assassins – or just the usual suspects?

Zilliqa (ZIL) Draws First Blood

Zilliqa has perhaps already drawn first blood in the battle against Ethereum – last year the Ethereum-based game Etheremon was packed up by developers and emigrated to the Zilliqa blockchain. | Source: Shutterstock

Zilliqa has perhaps already drawn first blood in the battle against Ethereum – last year the Ethereum-based game Etheremon was packed up by developers and emigrated to the Zilliqa blockchain.

The move was in response to rising gas prices on Ethereum, and the assertion that Ethereum’s lack of scalability solutions was draining the game’s potential. The Zilliqa team announced at the time:

“We are glad to announce that we will work with the Zilliqa team to explore Zilliqa as a scalability solution for Etheremon. The higher throughput and low gas of Zilliqa’s sharding solution offer players better experience.”

More on Zilliqa can be read here, in CCN’s interview with Zilliqa CEO, Xinshu Dong where he goes into detail on Zilliqa’s sharding process:

“Imagine a sample network of 1,000 nodes. ZILLIQA will automatically divide the network into 10 shards each with 100 nodes. Each shard can now process transactions in parallel. If each shard is capable of processing 100 transactions per second, then all shards together can process 1000 transactions per second.”

If all of this sounds too good to be true, read my deep-dive on Zilliqa which covers some of the technical difficulties still facing this possible Ethereum slayer.

Holo (HOT) – The Non-Blockchain Wildcard

In this sense Holo opts for a distributed network as opposed to a decentralized one (however, a distributed network is by nature decentralized). | Source: Apollo Capital/Medium

wildcard compared to some in this list, Holo (HOT) sets itself apart from the rest of the crowd by not actually utilizing a blockchain. Instead, Holo uses distributed hash tables (DHT), which are more similar to a torrent network than a blockchain.

In this sense, Holo opts for a distributed network as opposed to a decentralized one (however, a distributed network is by nature decentralized).

Already, several projects have opted to build on the Holochain network, including a Holo-based Reddit competitor named Comet; an open-source legal system called Ulex; as well as several others in industries ranging from social media to supply-chain.

In early 2018, the CFO of Mozilla, Jim Cook, named Holo as one of the projects which was creating an agent-centric model that could wrestle control of the internet back from the hands of Google and friends. Holo’s association with Mozilla is extended by their common use of the Rust programming language.

When Binance’s CEO and founder, Changpeng Zhao, sent out job posts for Rust developers last year, the effect was such that the HOT coin price responded by jumping 26%.

Waves (WAVES) – The Old Guard

Waves launched in early 2016, and within two years over 100 projects had opted to launch ICO’s on the Waves platform. The most successful of those is the gaming-focused MobileGo (MGO), which briefly broke onto CoinMarketCap’s front page in November, and now has a market cap of $18 million.

That could soon change, however, as $120 million was just raised via the Waves platform for its Vostok ICO. With Waves holders set to be airdropped a portion of the Vostok tokens, it could be speculated that Vostok was the driving force behind Waves’ 300% ascent throughout December 2018.

Waves can boast of its own decentralized cryptocurrency exchange and a strong position around the top twenty by market cap. It was launched just one year after Ethereum.

Read More: The Ethereum Killers – A Hit Still Waiting to Be Carried Out

Tron (TRX) – The Young Pretender

No other coin has leveraged the Ethereum Killer label as much as Tron – the trouble is, it’s usually being leveraged by the Tron’s CEO and founder, Justin Sun. | Source: Shutterstock

No other coin has leveraged the Ethereum Killer label as much as Tron. The trouble is, it’s usually being leveraged by Tron’s CEO and founder, Justin Sun. We only have to go back to the start of this month to find the last time Sun wielded the term – this time in reference to Tron’s domination of the dApp rankings compared to Ethereum.

That domination is genuine – Tron dApps account for six out of the ten most utilized in existence. The proliferation of dice games and gambling dApps on Tron may also account for its soaring transaction rate towards the end of 2018.

But statistics can make anything look good, and one should ask what value these gambling dApps have in comparison to the tried and tested blockchain platform that remains Ethereum’s main use-case.

The arrival of blockchain projects and ICO launches on the platform will have to wait until the completion of the Odyssey phase of Tron’s roadmap – scheduled to for completion in mid-2019.

Notable Mention – Stellar (XLM)

Despite a recent increase in the number of projects being launched on its platform, Stellar isn’t really compared to Ethereum in that way. | Source: Shutterstock

Stellar (XLM) has been around for one year longer than Ethereum, and despite a recent increase in the number of projects being launched on its platform, Stellar isn’t really compared to Ethereum in that way.

Often regarded as one of the ‘finance coins,’ along with Ripple, Stellar’s priorities can be ascertained from the opening line which greets visitors to its website (emphasis theirs):

“Stellar is an open platform for building financial products that connect people everywhere.”

That’s not to say Stellar can’t fulfill some of Ethereum’s roles, as evidenced when one of its recent progeny, Repo Coin (REPO), hit 1,437% growth within the space of a month in early January.

Ethereum Killers Not Living up to Their Name?

EOS is still the fifth highest capped cryptocurrency, but the enthusiasm surrounding its potential dislodging of Ethereum is much less than this time last year, at the height of its $4 billion ICO. | Source: Shutterstock

One of last year’s Ethereum Killers looks to be in much worse shape this time around, as the EOS blockchain flirts with being a money-losing machine for its block producers. EOS is still the fifth highest capped cryptocurrency, but the enthusiasm surrounding its potential dislodging of Ethereum is much less than this time last year, at the height of its $4 billion ICO.

Meanwhile, a project which didn’t make last year’s list, but was at one point in contention with the coins listed above, is NEM (XEM). The NEM blockchain was tipped to play host to Nicolas Maduro’s Venezuelan Petro cryptocurrency, although much of the Petro’s existence was clouded in confusion, as was its launch.

By the end of January 2019, the ‘crypto winter’ was such that the NEM Foundation had begun to freeze over – with the team announcing a suspension of all projects and partnerships due to lack of funds.

Ultimately, Ethereum is still alive and well, and with upgrades to scalability and speed on the horizon, it may yet be a long time before it is displaced.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.


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Author: Greg Thomson 
Image Credit: Featured Image from Shutterstock

Coinscious Demonstrates How Accurate Crypto Market Data Ultimately Leads to Winning Model

Coinscious, a data and trading analytics provider for the cryptocurrency market, today announces the publication of its article illustrating the high importance of accurate data when creating quantitative and high-frequency trading models with far greater than average performance.

To view the article in its entirety, visit: https://coinscious.io/coinscious-lab/accurate-crypto-market-data/

OHLC Error Rates

A key aspect that is often overlooked in quantitative crypto-trading is the quality of the data being used to design sophisticated prediction models. In the new era of cryptocurrency trading, those with the most data of the highest quality will surely win as the underlying data ultimately determines the execution prices, the model’s behavior, and the model’s ability to fit the market efficiently and effectively.

Many algorithmic traders incorporate massive amounts of data into their algorithms to create better pricing models and leverage large volumes of historical data to backtest their trading algorithms. Particularly with recent advances in machine learning, the data-driven approach to modeling is being emphasized more than ever before.

In the article, the error rates of Binance, Bittrex, Bitfinex, Bitstamp, Bitmex, Huobi Global, Okex, and Coinbase Pro were measured and then placed in bar chart format to illustrate the accuracy of Coinscious data compared to Kaiko and CoinAPI. The data quality was assessed by comparing each well-known exchange’s OHLCV (open, high, low, close, volume) data with derived OHLCV data.

Whether viewing error rates in trading volume or price movements, Coinscious data proved to be the most accurate among the other data vendors for the top 3 coins (BTC, ETH, and XRP). In average, Coinscious data are 38% better than Kaiko’s data, where the relative errors on OHLC are 39%, 41%, 31%, and 37% respectively. Similar results have also been shown using four alternative coins (ADA, XLM, TRX, ZRX).

When answering the question of why accuracy discrepancies exist across different data providers, a couple of possible reasons are given. For example, it could be due to downtimes of exchange APIs or rate limits getting in the way when there is high activity among the thousands of combinations of cryptocurrency exchanges and trade pairs.

While many companies are collecting vast amounts of data across different exchanges and coins, the quality of the data may be hidden underneath the quantity of the data. Especially in this era of a data-driven finance world, success and risk can be heavily dependent on the data quality and the data operations environment. Obtaining the right trading tools and hiring talented traders can certainly help, but even then, tools and people cannot guarantee success if the data is imperfect. The cryptocurrency finance market could benefit from having more of data quality analysis in order to understand the granular level of datasets and where they can be obtained.

About Coinscious 

Coinscious provides comprehensive data, insights and solutions to professional and non-technical cryptocurrency traders alike. We focus on delivering quick and accurate data to our users, connecting trading systems and strategies to the dynamic crypto market through our enriched data sources and data-driven insights. We specialize in providing traders with tools to allow them to backtest, validate, optimize and execute their own strategies.

To learn more about Coinscious, visit: http://www.coinscious.io


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Author: Coinscious Inc
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Reddit Founder Talks Crypto Winter and Ongoing Innovation in the Space

The founder of the social news discussion website Reddit has once again commented on his belief in the future of crypto. Alexis Ohanian has long been a believer in the fintech innovation and states that the bear market has driven many speculators from the space, allowing developers to concentrate on building out much-needed infrastructure.

Despite his optimism for the industry, Ohanian did not give any price predictions for any digital assets. He was famously proved spectacularly wrong with a call he made last year for Ether’s end of 2018 price.

Alexis Ohanian: All That is Left in Crypto is the True Believers

The founder of Reddit and software venture fund Initialized Capital appeared on Yahoo! Finance’s “Influencers with Andy Serwer” show earlier today. Alexis Ohanian was asked by Serwer to comment on a variety of topics, ranging from the history of Reddit, his interest in paid annual leave for employees, and whether social media could use regulation to help prevent harassment of users.

After these topics, the conversation turned to crypto. Serwer asked Ohanian if he was still confident in the future of digital assets. To this, the Reddit and Initialized Capital executive responded that he was indeed optimistic. He added:

“So, this is the crypto winter, no doubt. But a friend of mine – Brian Armstrong, who is the CEO of Coinbase – said, ‘This is the spring of crypto innovation.’”

Ohanian then elaborated on this point, stating that many of the mindless speculators that fuelled the impressive bull run of 2017 had left the space now and that those remaining were fuelled by passion for the technology, rather than trying to make a quick buck:

“The people who are now building on crypto are true believers, and they’re actually builders. They’re actually building the infrastructure that it’s going to take to really make this happen.”

He continued, stating that some of the brightest minds he knew were working on creating new products, services, and companies to take cryptocurrency and blockchain mainstream.

Next, Ohanian addressed the recent announcement by JP Morgan to create the JPM Coin. Although not particularly innovative in terms of its design, the fact that the bank headed by one of crypto’s biggest naysayers is even exploring such an idea is evidence for the Reddit co-founder that digital assets are here to stay.

Finally, Ohanian commented on investor expectations in the crypto market. He stated that investing in digital assets, and any other sector for that matter, should always be a long game:

“It’s a painful thing for a lot of people to see those accounts but if you were investing in it in the first place, you really should have been thinking long-term.”

One thing absent from Ohanian’s interview with Serwer was discussion of any particular digital assets or their specific price performances. Previously, the former Reddit exec has had proverbial egg on his face thanks to his Ether price predication last year. Seemingly defying all logic, Ohanian stated that he believed that the price of a single ETH coin would reach highs of more than $15,000. Clearly, this particular call never came true and prices of almost all digital currencies continued to slump throughout 2018.


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Author: Rick D.
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$1 Million: IBM Crypto Chief Sets Massive Bitcoin Price Target

IBM VP of Blockchain and Digital Currencies Jesse Lund is bullish on Bitcoin – so bullish, in fact, that he set a long-term $1 million price target.

Bitcoin Price Has Million-Dollar Potential

Lund revealed his long-term Bitcoin price target at the recent Think Conference, in an interview with Fred Schebesta.

The IBM executive pointed out that the higher the price of a crypto asset, the more utility it has. Therefore, he thinks people should focus less on the moving prices of crypto assets and more on their utility.

“If the price of Bitcoin were higher, there would be more liquidity on the network, we could be having a really different discussion with banks right now,” he says.

He adds that speculators are hurting the value of cryptocurrencies “because they’re thinking about it wrong.”

Lund sees the Bitcoin price rallying by more than $1,000 before the end of 2019.

Later in the interview, Lund made an astonishing remark as to the future of cryptocurrencies. By New Year’s Eve, he predicts the price of Bitcoin will be $5,000. However, his long-term outlook is much different.

“I have a long-term outlook. […] It goes back to that discussion about the utility of the network with a higher price. I see Bitcoin at a million dollars someday. I like that number because if Bitcoin’s at a million dollars, then the satoshi is on value parity with the US penny. And that means there’s over $20 trillion of liquidity in this network. Think about $20 trillion in liquidity and how that changes things like corporate payments.”

Lund’s view is that when the Bitcoin price gets high enough, serious banks take more interest. When this happens, the utility of the token increases at its core value proposition – less-expensive transfers of value. Both IBM and R3 Corda are working hard on creating solutions for cross-border payment solutions using multiple digital assets.

It’s not every day that someone from the old world of technology predicts such a high price for Bitcoin. The $5,000 figure may even be debatable from here, as speculators make anything possible.

Lund: Stellar is a ‘Viable Settlement Instrument’

stellar
IBM exec. Jesse Lund praised Stellar’s utility for settlement. | Source: Shutterstock

IBM recently launched its World Wire product, which in part relies on major cryptocurrency Stellar. Lund explained that Stellar is useful for cross-border payments, despite its smaller market cap.

“There’s no technical reason or technical barriers that should prevent money from flowing the same way [as information]. […] The architecture of World Wire is really a cross-border payment network, the magic of which, if you will, the novelty of it, is the ability to send payment instructions saying, ‘Hey, I’m sending you something, get ready.’ And on the other end, the receiver is making sure that who you’re sending it to is not some nefarious actor or bad actor.”

“Once that happens, and that happens really fast, then we send the value along with it. That transfer of value is made possible by digital instruments, settlement instruments, of which Lumens is one. So we see Lumens as a viable settlement instrument in this ecosystem of cross-border payments.”

Lund believes that a variety of assets should be available when making cross-border settlements. Most blockchain protocols outside of smart contract platforms don’t allow for the transfer of multiple assets. In essence, IBM’s World Wire is an alternative to R3’s Corda settlement layer, which in part uses Ripple.

Featured Image from Shutterstock. Price Charts from TradingView.


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Author: P.H. Madore
Image Credit: Source: Shutterstock

Elon Musk Jokes about Giving Satoshi a Nobel Prize, Reveals Bitcoin Balance

Wall Street is abuzz with rumors that Apple might dip into its $245 billion war chest to purchase electric vehicle giant Tesla, but all Crypto Twitter wants to talk about is what Elon Musk thinks about bitcoin – and its pseudonymous creator.

Tesla CEO Doesn’t Have Much Crypto, But He Owns Bitcoin

Just one day after heaping praise on bitcoin during the latest episode of the ARK Invest podcast, Musk revealed that he still owns a relatively small amount of cryptocurrency. All of it, he said, is denominated in bitcoin.

Responding to a report that he had called bitcoin “brilliant” and said that crypto was a “far better way to transfer value” than paper money,” he stressed that he had not yet made the transition himself:

“That said, I still only own 0.25 BTC, which a friend sent me several years ago. Don’t have any crypto holdings.”

Elon Musk said the only cryptocurrency he owns is bitcoin. | Source: Twitter

Musk has long maintained both that he only owns one-quarter of a bitcoin and that it was a gift – he did not purchase it himself.

Almost exactly one year ago, Musk tweeted:

“I literally own zero cryptocurrency, apart from 0.25 BTC that a friend sent me many years ago.”

Those funds were worth as much as $5,000 during the crypto market’s late 2017 bull run, which doesn’t even add up to a drop in the bucket of Musk’s massive $22 billion net worth.

Musk owns no ethereum, which is somewhat ironic given the proliferation of crypto scammers who have schemed to trick his followers into participating in a fake ethereum giveaway.

Elon Musk: Satoshi Deserves a Nobel for ‘Delayed Gratification’

Rumors have long circulated that Elon Musk himself created bitcoin, though he flatly denies them and few within the crypto industry give them any credence anyway.

Replying to yet another tweet implying that he was Satoshi Nakamoto, the Tesla CEO joked that Satoshi deserves a Nobel Prize for “delayed gratification,” given that he/she/they owned a fortune in cryptocurrency but never spent a dime, other than for testing purposes.

“Whoever owns the early BTC deserves a Nobel prize in delayed gratification”

While the Royal Swedish Academy of Sciences has not yet recognized “delayed gratification” as a valid scientific field, Musk does have a point.

Satoshi is believed to have at one time controlled bitcoin wallets holding as much as 1 million BTC – funds that have never been spent.

At the height of the crypto boom, the mysterious programmer would have ranked as one of the world’s richest people, with a net worth – nearly $20 billion – rivaling that of Musk’s. However, a decade after the cryptocurrency’s launch, the general consensus is that those coins are locked away forever, either because Satoshi died or otherwise lost access to the wallets containing them.

Despite his praise for bitcoin, Musk maintains he does not think it is wise to involve Tesla in the still-fledgling crypto industry. However, some believe that his love for technology and courage to gamble on nascent-but-potentially-world-changing ideas makes a future embrace of cryptocurrency inevitable.

After all, if someone’s going to take bitcoin to the moon, it makes sense that it would be the founder of SpaceX.

Elon Musk Image from AP Photo / Rich Pedroncelli


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Author: Josiah Wilmoth 
Image Credit: Source: AP Photo / Rich Pedroncelli

With Minedblock’s Security Token you can own part of a crypto-mining company!

With cryptocurrency mining becoming an ever-popular venture within the space, we take a look at one such mining company who will use security tokens as a means to provide a share of the company for token holders. By literally allowing people to own a piece of the company that owns and operates everything, Minedblock is enabling a new level of access to cryptocurrency mining. To be abundantly clear, this is not a service that rents out mining rigs long term or another service selling “mining contracts” popular with amateur home miners, this token offering comes with a whole lot more than just a token!

With token holders legally entitled to a portion of ownership in the company itself, Minedblock becomes the first to use the security token model to fund a cryptocurrency mining operation and the first to file with the SEC, this can be proved here.

So how would it work exactly? Token holders are sent their cut of the profits at the beginning of each month, paid in ETH for now, but the company says they’ll have several payout options in the future. The token itself, the MinedBlock ‘MBTX’ is an ST-20 token built on PolyMath platform, which is in turn built on the Ethereum blockchain.

Also interesting to see, but actually makes a lot of sense – the fundraising caps are totally open-ended, with no limits. That wouldn’t sit well in the whitepaper of a typical ICO, but in this case, the amount they raise simply determines how many mining rigs will be running at the start. The percentage someone earns isn’t based on the number of tokens, but the percentage of the total token supply someone is holding instead.

Security tokens cannot thrive on hype alone, for obvious reasons, and the token holders know exactly how well the company is doing at all times due to monthly updates as well as the amount of their payouts.

So the Minedblock team is going to be feeling the pressure, and mining isn’t a risk-free business – the reality is far from ‘free money’ like some try to describe it.  Thankfully, the Minedblock team seems to have been taking notes on what has and hasn’t worked for others.

The largest expense of course – electricity. To lower that cost they’ve chosen Iceland as the first location, which has been consistently been drawing in miners with their low-cost electricity. They’re also not just mining Bitcoin, they’ll go wherever the highest profits are.

You can participate right away because the token sale has just begun! They’ve already earned some impressive evaluation scores from ICOBench with a 4.3(out of 5.0), as well as 9 (out of 10) on ICOMarks. Head over to their site to learn more https://www.minedblock.io/

Useful Links:

Official Site https://www.minedblock.io
Facebook https://www.facebook.com/MinedBlock/
Twitter https://twitter.com/mined_block
Reddit https://www.reddit.com/r/MinedBlock
Telegram https://t.me/minedblockofficial
Contact Email contact@minedblock.it

 

 

$8 Billion Coinbase Faces Backlash for Latest Acquisition

Bitcoin exchange giant Coinbase has acquired Chainalysis competitor Neutrino in an effort to enhance its compliance efforts and regulatory relationships. Neutrino uses blockchain analytics to identify potential money laundering or other illegal transactions on the blockchain. Until its acquisition, it was one of a few companies growing in the space of analyzing blockchains. Its work mainly benefits crypto exchanges, regulators, and other centralized powers.

According to Coinbase, companies like Chainalysis, Whitestream, and Elementus are “necessary” in an “open financial system.”

“Blockchain intelligence is increasingly important in the crypto ecosystem, and is necessary to achieve our mission of bringing the open financial system to the world. By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors. It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations.”

Coinbase has chosen to buy the company outright for an undisclosed price. Neutrino’s team will move from its base in Italy to Coinbase’s offices in London.

Coinbase: Bitcoin Bank Extraordinaire

Long the subject of derision at the community level of Bitcoin and other cryptocurrencies, Coinbase’s acquisition is one more in a list of “anti-crypto” charges against it.

Neutrino’s CEO, Giancarlo Russo, formerly worked as Chief Operating Officer for HackingTeam, the government security contractor that was famously hacked in 2015. Documents leaked by the HackingTeam attackers showed that the company willingly aided repressive governments including Saudi Arabia, who wanted to buy the company.

Crypto community members are unfriendly to anything which can lead to censorship. That is the bottom line for many.

If it leads to censorship, it’s poison.

Very little of Coinbase’s business model has been favored by long-time members of the crypto community.

Nevertheless, Coinbase has grown to be an $8 billion company in spite of regular complaints. Its notorious customer support and various compliance initiatives frequently raise ire. Whatever you have to say against them, they’ve done a great job onboarding millions of people. People who might not otherwise have been able to join the cryptocurrency world.

Now Can We Have a Crypto ETF?

According to Coinbase, Neutrino is superior to Chainalysis, a leader in the space.

“Neutrino’s technology is the best we’ve encountered in this space, and it will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world.”

Coinbase director of product and engineering Varun Srinivasan added in a CoinDesk interview:

“We want to bring them to the American market and the international market and introduce them to companies that are doing all kinds of things with crypto that need blockchain intelligence.”

Is blockchain intelligence the last mile?

We have regulated custodians, exchanges, payment processors, and a thriving community of enthusiastic users. We also have several multi-million dollar firms dedicated to preventing fraud and money laundering. Now can we have a Bitcoin ETF?

Venerability of markets is an important part of the SEC’s concerns toward cryptocurrency investment products. One persistent fear is the potential for market manipulation in Bitcoin. Such concerns aren’t helped any by the accusations against Bitfinex and Tether regarding the 2017 bull run.


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Author: P.H. Madore 
Image Credit: Source: Shutterstock

Why Nasdaq’s Bitcoin Index is a Bigger Deal Than Most People Realize

On February 11, Nasdaq, the world’s second-largest stock exchange, launched Bitcoin and Ethereum indices to present accurate prices of the two leading crypto assets.

Nasdaq’s Bitcoin Index a Likely Precursor to Crypto Investment Products

According to cryptocurrency analyst Alex Ziupsnys, the introduction of the crypto indices of Nasdaq could lead to the approval of a wide range of investment vehicles in the long-term.

The analyst said:

“NASDAQ to add a bitcoin index on its platform. They are reading the writing on the wall and don’t want to get left behind. There is no stopping this. Adoption happens gradually right in front of you, until you finally pause, look around, and bitcoin is the dominant asset.”

“This is big news. The launch of Nasdaq crypto indices could lead to regulatory approval for crypto-based derivatives in the market. And as a direct initial effect could mean more interest from institutional traders. The feeds are going live Feb 25th.”

Bitcoin ETF is a Prime Example

In July 2018, the Bitcoin exchange-traded fund (ETF) proposal of Tyler and Cameron Winklevoss was officially rejected by the U.S. Securities and Exchange Commission (SEC).

At the time, among other issues, the SEC named the pricing of Bitcoin as its main concern. The commission claimed that the risk of price manipulation exists on cryptocurrency exchanges and as such, an ETF cannot be operated based on the price of digital assets on exchanges.

The official document released by the SEC explicitly stated that small trades can sway the price of Bitcoin on exchanges, and due to the presence of overseas markets, it is virtually impossible to audit all BTC transactions.

“This commenter expresses concerns regarding the Gemini Exchange Spot Price, noting that the nominal price of the Shares under the proposal is supposed to be tied to the market price of bitcoins at the Gemini Exchange, which is closely tied to the ETP proponents,” the document read.

Speaking to CNBC in November of last year, SEC Chairman Jay Clayton further emphasized that cryptocurrencies have to become free from the risk of manipulation and until the issue is addressed, an ETF will not be approved.

Nasdaq’s Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX) provide a real-time spot or reference rate for the price of BTC and ETH in USD derived from the most liquid parts of the global market.

The indices of Nasdaq are not concentrated in a small group of exchanges or over-the-counter (OTC) exchanges. Rather, the indices take into consideration all platforms processing cryptocurrency trades and find a reliable spot price.

BLX and ELX could serve as the base prices of Bitcoin and Ethereum for regulated investment vehicles in the long-term.

With the track record of Nasdaq in the financial sector and the emergence of a wide range of cryptocurrency indices, Bitcoin ETF operators could consider utilizing several indices including Nasdaq’s BLX and ELX to find an accurate representation of the value of leading digital assets.

Currently, firms like VanEck, Bitwise, and the Chicago Board Options Exchange (CBOE) are working with the SEC to release the first Bitcoin ETF in the U.S. market.

Liquidity is Key

As CCN reported earlier this week, Hwang Hyeon-cheol, a former Citi and Allianz executive, said that the cryptocurrency market still does not have a stable level of liquidity and market size for both institutional and retail investors.

Most investment vehicles that are pending approval in the U.S. are targeted at retail investors, and for their success, large liquidity and a reliable source of price is key.

Analysts expect Nasdaq’s indices to operate as the main source of crypto prices throughout the years to come, opening the door for various investment tools.


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Author: Joseph Young 
Image Credit: Source: Shutterstock

Put Your Money On Crypto for the Long-Term, Says Major Wealth Manager for Pensions

It’s time institutional whales put their money into cryptocurrency according to major investment management firm Cambridge Associates.

IT’S TIME TO ‘BEGIN EXPLORING’ SAYS CAMBRIDGE ASSOCIATES

The Boston-based consultancy only advises major institutions who manage more than $300 billion worth of clients’ assets. Cambridge was quoted in Bloomberg on Monday as saying:

“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term. Though these investments entail a high degree of risk, some may very well upend the digital world.”

That’s a remarkably on-point statement in a space dominated by optimistic cheerleading and deathly pronouncements. Cambridge specializes in pensions and endowments, and its declaration of support for crypto is probably not a spur of the moment decision.

The firm advise would-be investors to conduct an industry-wide deep-dive on the various aspects of cryptocurrency; from investing in venture capital to trading tokens on exchanges.

Despite the year-long decline in the value of the cryptocurrency market, Cambridge believes we are still in the developing stages of the industry:

“The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.”

SIGNS OF A TURNING TIDE AMONG FINANCIAL INSTITUTIONS?

Last week Grayscale released this report detailing the steady influx of institutional money to the crypto space in the past year. The fact that institutional investments only increased as coin prices declined is an encouraging sign, and suggests that major firms see potential for a reversal.

Grayscale went so far as to declare cryptocurrency a new asset class, and suggested they could play a ‘diversifying role’ within the average investor’s portfolio:

“Despite a slowdown in investment across products in the fourth quarter, we continue to see evidence that digital assets are here to stay as a new asset class. Moreover, we believe in a future where multiple digital assets survive, thrive, and complement one another in the digital economy.”

Days ago it was revealed that two public pensions – the Virginia’s Police Officer’s Retirement System, and Employees’ Retirement System in Fairfax County – had invested in the new $40 million cryptocurrency fund started by Morgan Creek.

Katherine Molnar, the chief investment officer overseeing the Fairfax County pensions said:

“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents.”

On top of all this, the much derided JPM Coin marked a major change of sentiment for JP Morgan Chase CEO Jamie Dimon this week. While the coin is unlikely to add anything in the way of innovation, it stands as another example of rapidly growing sentiment for the crypto space among financial institutions.


Source
Author: Greg Thomson
Image Credit: Source: Shutterstock

Bloomberg Editor Says JPMorgan’s Cryptocurrency Will ‘Obliterate’ Ripple; is XRP in Trouble?

On February 14, JPMorgan, the $340 billion banking giant, launched a stablecoin called JPM Coin. Industry experts foresee the stablecoin thrashing Ripple and its cryptocurrency XRP in the long run.

Joe Weisenthal, co-host of Bloomberg’s What’d You Miss? said:

“If it turns out that the Blockchain/Coin framework turns out to be a good one for banks transferring money around, then the JPM Coin should absolutely obliterate Ripple.”

“Think about it, let’s say you were in the business of transferring money, why would you take on the exchange rate volatility risk associated with having Ripple as a bridge currency, when you could have a fiat-coin backed by JPMorgan. No brainer.”

Executives at major cryptocurrency investment firms such as Multicoin Capital raised a similar issue for XRP.

Could the Price of Ripple (XRP) Decline Due to JPMorgan’s Crypto?

The Ripple blockchain network is a payment infrastructure for cross-border transactions which banks and financial institutions can utilize to send and receive payments with low costs and faster clearing time.

RippleNet and XRP serve as the main tools on the Ripple blockchain network that enable financial institutions to clear transactions using the blockchain.

The value of any settlement network comes from its liquidity and on a banking network, the liquidity comes from the number of banks that exist on the network.

Ripple, the company, has been focused on establishing partnerships with both banks and fintech service providers throughout the past several years, primarily to improve the liquidity of the network.

The concerns of industry executives and experts on the long-term growth trend of XRP is that if JPMorgan uses JPM Coin to settle payments between its clients, as the bank said, it will put XRP in direct competition with JPM Coin.

Speaking to CNBC, Umar Farooq, JPMorgan blockchain projects head, said that JPM Coin will have three core use cases and the primary use case is international payments for corporations.

“The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift,” CNBC reported.

The problem is, that is exactly what Ripple was built for and the company has the same vision as JPM Coin: to overtake SWIFT and establish a global blockchain network for financial institutions.

In November 2018, Ripple CEO Brad Garlinghouse said in an interview with Bloomberg:

“The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market. Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.

Essentially, JPM Coin and Ripple have the same use case, are targeting the same market, and are both aiming to overtake the SWIFT network.

Tushar Jain, a general partner at Multicoin Capital, said JPMorgan will “wipe the floor with Ripple,” emphasizing that banks would rather use a technology developed by banks rather than a company outside of the traditional financial sector.

XRP in Trouble?

In the past three months, the price of XRP has fallen from $0.565 to $0.298, by more than 47 percent.

The decline in the XRP was accelerated by the inability of the cryptocurrency market to maintain the momentum created in the last quarter last year.

But, in comparison to other well-performing cryptocurrencies such as Binance Coin and Bitcoin, XRP has underperformed.

It remains to be seen whether the increasing competition in the blockchain sector and cross-border transactions market will directly lead toward a decline in the price of XRP.

The concerns in the long-term growth of XRP are in the challenging environment Ripple is in following the release of JPM Coin to secure banking partners.

Click here for a real-time Ripple price chart.

Featured Image from Shutterstock. Price Charts from TradingView.


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Author: Joseph Young 
Image Credit: Source: Shutterstock