In its latest report titled, “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures,” European Central Bank (ECB) takes on cryptocurrencies.
To start with, ECB points out that Bitcoin is the leader of the pack when it comes to market capitalization, user base, and popularity. It further mentions that despite losing its market share, it has recovered and currently stands at 54 percent.
Great to see @ecb come out with a clear POV on crypto assets – notably, that XRP is recognized as one of the most important in terms of usage, market cap and business model diversity. https://t.co/KeSiYFqy53
— Brad Garlinghouse (@bgarlinghouse) May 21, 2019
Regarding the development, the key findings have been:
- Financial investment vehicles like trusts, Exchange Traded Notes (ETNs) and Contracts for Difference (CFDs) have started to offer exposure to crypto-assets to European clients that are mainly found in the household sector with key markets in Belgium, Italy, and Germany in Q3, 2018.
- Price growth of crypto-assets surpassed that of historical bubbles viz. Dot-com bubble, South sea bubble, Mississippi, and Tulip mania before the crash in early 2018.
- An important share of bitcoin’s trading volume, an average of 10% of the total, is settled in euro.
- The top 1,000 addresses (0.0018% of all active addresses) represent around 36% of all bitcoin holdings and the top 10,000 holds 58%, reports ECB in its report
- Developments and activities like Bitcoin futures contracts and financial investment vehicles that track crypto-assets, may increase links to the traditional financial sector and the real economy.
- Banks do not seem to have systemically-relevant holdings of crypto-assets while hedge funds and asset managers showing strong interest.
- Initial coin offerings (ICOs), a largely unregulated way to raise capital collected about €19 billion in 2018.
Implications for Monetary Policy
- At the current stage, crypto-assets do not fulfill the functions of money, and neither do they entail a tangible impact on the real economy nor have significant implications for monetary policy.
- Since the size of the sector remains small and linkages to the wider financial system – let alone the real economy – remain limited, crypto-asset related developments have no direct implications for monetary policy at the present stage. At the same time, the dynamic nature of crypto assets, including the development of stablecoins, warrants continuous monitoring.
- Clarifying the accounting treatment of crypto-assets could lead to a more conducive environment for such investments being created.
“Regulation of crypto-asset gatekeepers could have an unintended impact on the market,” cautions ECB.It further states that still ECB continues to monitor the crypto-assets, and further raise awareness while developing preparedness for any adverse scenarios that too in cooperation with other relevant authorities.
[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.
Alex Krüger Warns Bitcoin Approaching Major Line of Resistance – Plus Ethereum, Ripple and XRP, Litecoin, Stellar, Tron, Cardano
From analysis on the potential path ahead for Bitcoin to the rollout of a new developer site for the XRP ledger, here’s a look at some of the stories breaking in the world of crypto.
Economist and crypto analyst Alex Krüger is mapping out the lines of resistance and support for Bitcoin. According to Kruger, the $10,000 mark is a crucial psychological line on the horizon.
“I use Bitmex for levels (and charting), as that’s where most of the bitcoin-USD liquidity is. The first level is a fib, not as meaningful IMO as prior highs and key psychological levels (e.g. 10K).”
Before $10,000, Krüger says he’s eyeing $9,600 as the most immediate technical hurdle for the bulls and $9,000 as the first line of support.
Looming ‘Supply Shock’ Behind Bitcoin’s 138% Rally, Says VC Executive – Plus Ethereum, Ripple XRP, Litecoin, Tron, Augur, VeChain
From new analysis on Bitcoin’s big rally to a new potential launch date for Ethereum 2.0’s genesis block, here’s a look at some of the stories breaking in the world of crypto.
Anticipation of a supply shock in 2020 is likely driving Bitcoin’s 138% rally in 2019, according to Alyse Killeen, a partner at the investment group StillMark.
Killeen, a fellow at the Singapore University of Social Sciences, told Bloomberg Technology that she believes Bitcoin’s upcoming halvening is the number one reason for the surge.
“What I think might be happening is an anticipation of a coming supply shock in 2020. So what we’re looking ahead to is a halvening event. The way that new Bitcoin is introduced to the market is through a process called mining and the mining reward decreases by half every few years. And so in 2020 we’ll have much less of a daily supply of Bitcoin that we do now…
“While we’re looking ahead to the halvening and the supply shock, we’re also seeing a greater demand for Bitcoin and new on-ramps for familiar and conventional sources, so there’s an anticipation that there will be a broader group of consumers that have access and appetite for Bitcoin.”
Killeen says there have recently been “exciting progressions” in terms of scaling the currency up to a level where it can be used for more purchases.
“In 2019 we’re actually seeing higher layer infrastructure development rapidly progressing and so by that, what I mean is, the development of Lightning Network and the quick adoption from an early-user set of Lightning Network, as well as entrepreneurs building on top of Lighting Network, and so that will provide scale and has already. We’re looking at the introduction of sidechain technology including Blockstream’s Liquid network which gives us a new breadth and depth of use cases of the blockchain.”
The StillMark partner also believes Bitcoin stands alone among cryptocurrencies in terms of “stability, security and dependability,” and that it will serve as the main store of value in the crypto ecosystem going forward.
Justin Drake, a researcher at the Ethereum Foundation, says ETH 2.0 genesis block could launch at the beginning of next year.
“Looking at a target Genesis date toward the end of 2019 could be realistic. One thing that could work well is the third of January 2020, so… that comes after the December holidays, which are generally quieter, and it would be the 11th anniversary of the Bitcoin genesis.”
Ripple and XRP
In a new interview, Ripple’s general counsel Stuart Alderoty talks about Ripple’s efforts to work with regulators.
Alderoty told Law.com that Ripple is constantly engaging with representatives around the world to teach them about blockchain and cryptocurrency.
“We have government affairs, full-time representatives in the U.S., in Europe, in Asia Pacific. We regularly meet with regulators to educate them, to get them more comfortable with what we’re doing and trying to do, which is to solve for the very real-world problem of being able to move money cross-border without a lot of friction and expense.
We’ve also sat on the Federal Reserve Faster Payments Task Force. We’ve hosted a summit for central banks to learn more about blockchain. We regularly speak on panels. We’re often invited by regulatory organizations to come speak or serve on panels. I would say we’ve engaged with more than 50 regulators and policymakers worldwide on this issue.”
Litecoin’s halving is now 50 days away, according to a countdown clock from CoinGecko.
The Litecoin block reward for miners will decrease from 25 to 12.5 coins, a difference in value from about $3,542 to $1,726, according to current market prices.
Tron founder Justin Sun is moving the location of his much-publicized $4.6 million lunch with famed investor Warren Buffett to the “heartland of tech.”
Sun says the meeting will happen in San Francisco for the first time in its history.
“We decided to move this year’s lunch to a restaurant in the Bay Area to further shine the spotlight on GLIDE’s amazing charitable efforts. I’ve also said we want to bridge the gap between the world of blockchain and institutional investors. Nowhere is that goal more apt than in the heartland of tech.”
Augur is working to explain how and why prediction markets work.
The company has released a thought experiment explaining the mechanics. It also plans to publish a future post on how decentralized prediction markets operate.
OceanEx has released an alpha version of its crypto exchange and asset management platform on iOS, built on the VeChainThor blockchain.
Features include trading pair recommendation for new users and fast tracks for deposits and withdrawals.
Anthony Pompliano vs Peter Schiff: Facebook’s GlobalCoin takes centre stage as Twitter blows up with debates
The entry of mainstream companies into the world of cryptocurrencies has been seen as a marker for the mass adoption of digital assets. With the advent of Facebook’s GlobalCoin that has become a reality as the social media giant partnered with several tech giants like Vodafone and Spotify to ensure its integration into the financial system.
The announcement of the cryptocurrency further split the proponents of the industry into two factions: one that supported the coin and one that was vehemently against the idea of Mark Zuckerberg launching a digital asset. This rift was out in the public when Peter Schiff, CEO of Euro Pacific Capital and Anthony Pompliano, the CEO of Morgan Creek Digital Capital locked horns on the GlobalCoin topic. Schiff had tweeted:
“Facebook’s new cryptocurrency “Libra” is bad news for Bitcoin. Facebook will target the very market Bitcoin is counting on for growth, the unbanked in nations with high inflation. Libra will be stable, and much easier and cheaper to use as a medium of exchange than Bitcoin.”
Schiff’s comments reflect the same sentiment shared by many in the space who speculated that Bitcoin’s speculative nature will result in its downfall. Pompliano, however, had a different opinion, stating:
“False. In fact, the exact opposite is true. Like restaurants on an intersection, the more available, the better for each of them. If you’re so confident, let’s bet 10 BTC on whether Bitcoin hits $100,000 in the next 5 years? Should be easy decision to put your money where your mouth is if you truly believe what you’re saying :)”
Schiff responded by saying that the bet was skewed against his favor because he believed Bitcoin also has the option to fall to a $100, reducing the bet prize to just $500.”
Andreas Antonopoulos, the author of Mastering Bitcoin, had taken the debate to banks, claiming that financial institutions should be very afraid of GlobalCoin. He, however, was confident that the cryptocurrency would not threaten the slots held by Bitcoin, tweeting:
“Anything that’s created by any centralized organization that is subject to specific laws, cannot achieve any of these five pillars. And the reason they cannot achieve is that the law prevents them from doing so.”