It’s not entirely clear yet how — or if — blockchain will transform the financial services market, but that hasn’t stopped industry players from scrambling to get a leg up on the technology and ahead of the competition.
New data from Greenwich Associates put a price tag on that effort: According to Bloombergreports Tuesday (June 12), the financial services market spends an estimated $1.7 billion dollars every year on blockchain as banks and other companies emerge from proof-of-concept stage into market launches and commercial products. The industry’s budget for blockchain jumped 67 percent last year, researchers found, with a tenth of financial services companies reporting that they spend more than $10 million on distributed ledger technology (DLT). Reports also noted that the number of employees assigned to blockchain projects has doubled year over year.
Despite the flow of cash, blockchain has proven to be a difficult nut to crack for financial services firms.
Richard Johnson, vice president of Greenwich Associates Market Structure and Technology, told Bloomberg, “More than half the executives we interviewed told us that implementing DLT was harder than they expected.”
Loose purse strings also mean blockchain companies themselves are vying for the top spot to provide businesses with DLT services.
This week, reports in the Financial Times highlighted the competitive pressure between SWIFTand Ripple as the two companies rival for the top spot in the cross-border payments market. SWIFT, a payments messaging company, has introduced its Global Payments Innovation (GPI) initiative to boost innovation in global payments. But Ripple, a blockchain company, wants to disrupt global payments and has more than 100 financial institutions (FIs) registered to use its messaging system, xCurrent.
SWIFT Head of Banking Harry Newman said in an interview with Financial Times that blockchain “is not straightforward to scale and it is not yet appropriate to do so.”
However, Ripple scored another win this week when American Express (Amex) confirmed it is collaborating with the company, as well as Spain bank Santander, to develop a blockchain platform. Reports in Bitcoin Exchange Guide said Amex has inadvertently confirmed plans to launch the blockchain platform via a job posting on its website (though the posting now links to a 404 page).
The three financial services players announced their partnership last November in an initiative that sees payments made by Amex business customers routed through Ripple’s enterprise blockchain network. The job posting revealed that the partners’ blockchain platform is slated to launch later this year.
According to reports, the job opening at Amex is under its FX International Payments (FXIP) unit within its Corporate Payments division.
“In 2018, we are introducing a blockchain solution with Ripple and Santander,” the job posting read. “This is an exciting time to join the FXIP organization as we increase our focus on growth, new products and technology offerings to meet customer needs and build on the American Express brand as a top, global provider of payments services.”
The job opening is for a Sales Coordinator, reports said.
Even as big money and big names fuel the blockchain hype, waves of doubt continue to crash on blockchain’s shores. This week, GlobalData published a new report on blockchain, in which its authors warn the technology is “not magic.” The report, “Blockchain — Thematic Research,” warned that the blockchain bubble “will burst in the next two years,” and that the technology “will have lost much of its gloss by 2025.”
Reports in MarTech Today, summarizing the GlobalData report, noted that authors did acknowledge blockchain’s potential and the technology is “awash with hype, but with a powerful core value proposition.” Still, the authors concluded that in “19 out of 20” cases in which blockchain is referenced as a viable solution, the tool can be replaced by a more straightforward database or other tool.
Galaxy Digital’s Novogratz: Bitcoin Is “Going To Be Digital Gold”, Talks Sovereignty And Periodic Table Elements
Galaxy Digital Founder Believes That Bitcoin Is “Going To Be Digital Gold”
Mike Novogratz is known for his former work on Wall Street with Goldman Sachs, but he has since made a name for himself in the cryptocurrency industry with the crypto merchant bank Galaxy Digital. Recently, he sat down with Bloomberg TV for an interview, during which time he spoke on the spread of crypto assets and how Bitcoin remains the top coin.
The interviewer started off with commenting that “it was carnage” in cryptocurrency, asking if the industry is in the “birthplace of recovery in crypto.” That opened the door to talk about exactly how government decisions and the lack of institutional investors have truly been the hold-up.
As the attention turned to the crypto winter, Novogratz commented that this whole year has been an example of “just how painful popped bubbles can be.” Considering how the retail sector has settled down and the inflation of crypto values has balanced out, the industry is likely to go from “a people’s revolution to an institution-led one.”
Discussing the way that crypto assets have evolved, Novogratz acknowledged that there are many altcoins that have tried to go head-to-head with Bitcoin as a store of value. He added,
“There are 118 elements on the periodic table, and only one gold […] Bitcoin is going to be digital gold, a place where you have sovereign money, it’s not U.S. money, it’s not Chinese money, it’s sovereign. Sovereignty costs a lot, it should.”
Even though there was not a discussion on why Bitcoin has been able to take the center stage, Novogratz said that all cryptocurrencies do not need the use of blockchain to thrive. From a security standpoint, cryptocurrencies without the same value and traditional roles could help to offer gains.
Bitcoin, for now, is holding steady between $3,400 to $3,600, though Novogratz believes that this is presently the bottom, leaving plenty of room to increase. He said that the most realistic and achievable medium-term price point is $8,000, adding, “We’re not going to bubble back up.”
The structure necessary to welcome and entice institutional investors into the space is finally coming to fruition, Novogratz adds. Even though the government shutdown slowed it down, the solutions being offered from major companies like the New York Stock Exchange and Fidelity show that the increase of institutional investors “is just getting started,” he said.
Even though traditional institutions are starting to get involved with the crypto industry, existing exchanges and services are bringing custody solutions to the table as well. Big Four auditor KPMG also seems to agree with the stance of Novogratz, saying that institutionalization is “a necessary next step for crypto to create trust and scale.”
CARDANO (ADA) Daily Price Forecast –February 13
ADA/USD Medium-term Trend: Ranging
Supply zones: $0.0600, $0.06600, $0.06800
Demand zones: $0.02000, $0.01500, $0.01000
ADA is in consolidation in its medium-term outlook. The new week saw the bullish pressure stronger as the coin enters the range. $0.04399 in the supply area was high while $0.04037 in the demand area was the low thus far.
The inverted hammer within the range implies the bears return within the range shortly after today opening. Price is below 10-EMA and the stochastic oscillator signal points down at 35% an indication of downward momentum within the range.
ADAUSD is consolidation and trading between $0.04405 in the upper supply area and at $0.04091 in the lower demand area of the range. A breakout at the upper supply area may be considered for a long position after a retest while a breakdown at the lower demand area may be a short position with good candle pattern as confirmation for entries. Hence patience is needed to allow this occurred before taking any back position.
ADA/USD Short-term Trend: Ranging
The cryptocurrency is in a range-bound market. The bullish candle formed after the bearish spinning top was an indication of the bulls’ presence during yesterday session.
Confirmation to the bulls takeover occurred at the break of the two EMAs with a large engulfing candle at $0.04167. ADAUSD rose initially to $0.04279 and later to$0.04341 in the supply area before exhaustion.
The bearish spinning top at $0.04303 followed by a bearish candle signaled the bears gradual returned. The cryptocurrency dropped to $0.04301in the demand area due to increased bears pressure as it enters a range-bound market.
ADAUSD is ranging and trading between $0.04368 in the upper supply area and at $0.04077 in the lower demand area of the range. A breakout at the upper supply area or breakdown at the lower area may occur hence traders should be patience.
The views and opinions expressed here do not reflect that of BitcoinExchangeGuide.com and do not constitute financial advice. Always do your own research.
Litecoin [LTC]’s Charlie Lee: MimbleWimble is a good way to get privacy and scaling
Recently, a cryptocurrency known as Grin was launched in the cryptocurrency space. The coin grew to be one of the most controversial cryptocurrencies in the space within hours of its launch. The credit directly goes to the protocol the coin is based on, MimbleWimble.
The protocol was initially introduced to solve the scaling and privacy problems in Bitcoin, by an anonymous developer Tom Elvis Jedusor. Interestingly, both the pen name and the name of the technology are an inspiration from Harry Potter. The developer ensured that privacy would be the core of this technology.
More so, the protocol makes sure that apart from the information that is absolutely required to confirm a transaction, no other information is revealed, including the addresses involved in the transaction and the amount of cryptocurrency involved in the transaction.
During the sixteenth episode of Magical Crypto Friends, Charlie Lee, the creator of Litecoin, Riccardo Spagni, the lead developer of Monero, Samson Mow, the CSO of Blockstream, and Whale Panda, discussed the new privacy-oriented coin. Here, Lee opined about the technology that made the coin one of the most controversial ones in the space. He said:
“I think MimbleWimble technology is actually pretty cool. So when I first learned about it, seems like a good way to get both privacy and scaling and privacy that doesn’t make scaling hard or much worse which is very cool. So I’m yeah happy to see where where this technology goes”
This was followed by Riccardo Spagni aka FluffyPony speaking about Grin’s mining, which drew the attention of even the VCs. Spagni said:
“If you look at at Grin’s economic design it’s clearly designed to be currency. It’s designed to have this crushing inflation so that you’re forced to spend it so hodling is not really part of the economic design. So, they’re throwing money at it because they know that there’s be hype and that, you know, the moms and the pops would eventually go in to buy it.