Libra seems to be the new cuss word in Washington D.C.
After unveiling Libra and setting up the association to oversee its governance in Switzerland, Facebook probably thought they’d be taking more flights across the Atlantic. However, it looks like the layover in the US Captial is longer than expected.
On July 16, David Marcus, lead of the Libra project and VP of Messaging Products at Facebook, sat before the US Senate Banking Committee to discuss Facebook’s cryptocurrency project, and it wasn’t pretty. Senators from both parties unified with pressing questions about the privacy, security, and global concerns associated with Libra.
This is certainly not the first rodeo for Facebook executives in front of US Congressmen. But, the way the latest hearing went, it certainly won’t be the last.
Senators likened Facebook’s plan of entering the payments realm to a toddler burning the house down, calling Libra a “delusional” goal, and revisiting Facebook’s privacy problems. Arson comments and snide remarks aside, there were genuine concerns that the wide reach of the social media giant, coupled with its entry into the payments realm via a digital asset, would be a sovereign problem and not a case of a private company merely expanding its operations.
Senator Sherrod Brown, who during the Fed Chairman’s appearance before the House Finance Committee on Libra mulled big tech’s efforts to rival big banks, questioned the trust customers had in Facebook after its previous debacles and PR disasters. He opened his address by stating, “Facebook is dangerous,” and called out the social media company.
“Do you really think people should trust Facebook with their hard-earned money?…I just think that is delusional.”
He spoke out against not just Facebook’s payment plans, but also its nefarious advertisement algorithm, its ability to betray journalistic principles and create a facade of news stories. Brown also spoke of the Menlo Park company “manipulating our emotions.” The business model of Facebook, according to Sen. Brown, is to ‘intensify hate’ by the dichotomy of connecting people and making a buck. In short, the motto of Facebook is “Move Fast and Break Thing.”
Senator Brown added,
“We’d be crazy to give them a chance to experiment with people’s bank accounts, to use powerful tools theydon’t understand like monetary policy to jeopardize hard-working Americans ability to provide for their family. This is a recipe for more corporate power over markets and consumers.”
Other Senators also reigned down on Marcus, visibly angry about last year’s privacy issues. Chairman of the Committee, Senator Mike Crapo, questioned the 2 billion strong “reach and influence” Facebook has, equating this to a global cause for concern. However, he appreciated Facebook’s endeavor to build a credit system that was cheaper and faster, despite criticizing the means.
The concept of cryptocurrencies coupled with a private company of Facebook’s reputation has made the Senators even more displeased. Senator Thom Tillis said that digital assets are still in the “wild wild west” phase due to a lack of regulations, while still maintaining that Libra could be a “good idea for us to explore.”
Other Senators including Senator Pat Toomey and Senator Mark Warner lauded the idea of blockchain-based payment system, adding that the regulatory backlash against Facebook and Project Libra was a bit “premature” and “misguided,” to some extent.
Throughout the accusations, Marcus maintained a pro-regulatory stance and added that Facebook would work with any governing body, both at home and overseas, to ensure that everything is by the book. Libra will not see the light of day, unless the “regulatory concerns” are addressed, stated Marcus after the hearing.
His post-hearing tweet reiterated the above sentiment,
The conversation was thoughtful and highlighted important issues we, and the @Libra_ Founding Members, will need to address. I want to reiterate here what I said before the Committee: We will take the time to get this right.
— David Marcus (@davidmarcus) July 16, 2019
Marcus is certainly adhering to the lawmakers’ repeated concerns; from the Fed Chair, to POTUS, to the Treasury Secretary and now the Committee, the Libra main-man seems to have his hands full at the moment. With the Senate hearing done, Marcus will sit before the US Financial Services Committee soon. And by the looks of things, his stint in Washington D.C. will go on for a while now. If I were Marcus, I wouldn’t book my flight to California just yet.
Enjin Coin’s Breakout Was Possibly the Beginning of a New Market Cycle
The Enjin Coin price ended a long period of consolidation with a breakout on December 4. This was possibly the beginning of a new market cycle.
The Enjin Coin price increased by more than 50 percent on December 4 — possibly in anticipation of the announced partnership between Enjin Coin and Microsoft in regards to Azure heroes. The increase continued until December 6, and the price has been correcting since.
However, he suggested that he will close the majority of his position, in case the price revisits its recent highs.
Will the price do so? Continue reading below if you are interested in finding out.
Long-Term ENJ Bottom
The 600 satoshi support area has been historically significant for the ENJ price. After the initial upward movement of 2017, the price initiated a six-month-long correction until it reached the support area.
The Enjin Coin price bounced on this area twice on August and November 2019, before initiating a very strong upward move.
After the ensuing correction, the price again reached this area in August and October 2019.
The ENJ price reached a low of 510
The rally ended once the price reached 1466 satoshis, coinciding with the 0.618 Fib level of the previous upward move. Afterward, the price retraced and almost retested the previous resistance area.
Inverse Head and Shoulders
Since reaching the aforementioned high, the ENJ price is, possibly, in the process of completing the right shoulder of an inverse head and shoulders (H&S) pattern.
The head was created at the 0.786 Fib level, making it a suitable place to end the retracement. The possible increase is supported by positive news — since the ENJ/USD pair went live today on the Binance exchange.
A breakout the full height of the pattern would take the price near the highs of 1500 satoshis, making it a likely resistance area and increasing the possibility that the price makes a double top.
This gives validity to the claim in the tweet in which “the majority of the positions will be closed if we revisit the highs.”
To conclude, the ENJ price recently initiated a very strong upward move which could have been the beginning of a new market cycle. It is currently completing an inverse H&S pattern which could take it to 1500 satoshis.
What is Saga? SGA Stablecoin Backed by Basket of Fiat Currencies
Saga has a bold vision for the future of global commerce, and it has created a tool that may allow people everywhere to trade directly with each other.
Unlike stablecoins, which rely on a single currency to maintain their value or tokens like Bitcoin which float freely, Saga has a novel solution. The token that Saga has created maintains its value via a tie to the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs), which will be explained in greater detail below.
The team at Saga is also top-notch. The Israeli-based company has former central bankers on its team, as well as a Nobel laureate in economics.
In some ways, the Saga project is working to create a stateless stablecoin that can be used in the same way that a person would use a Bitcoin. The choice to tie the value of the Saga token (SGA) to the SDR is a good way to prevent the problems that Libra presents while sidestepping the issues involved with a token like Bitcoin.
Saga Has a Solid Idea
Bitcoin was a truly revolutionary idea.
While Bitcoin has been wildly successful, it isn’t really the same thing as currency, at least in the way that we are used to thinking about currencies. The biggest issue for Bitcoin as a currency is that its value swings around violently. This is a real problem from a trade settlement perspective, as volatility makes hedging more expensive.
The stablecoin solution is also not ideal, as it puts a single central bank in control of the currency. It isn’t a direct tie, as the stablecoin will likely be managed by a third-party, but any asset that is tied to a fiat currency will rely on the central bank that manages that currency to maintain its value.
Saga chose to use the IMF’s SDR as the base for its token. The system that Saga designed will not allow large moves in the value of its token vis a vis the SDR’s value, and unless there is some major volatility in the world’s largest fiat currencies, Saga’s token will be relatively stable.
What Are SDRs?
Special Drawing Rights aren’t a new idea. The IMF created them many decades ago, but they are rarely talked about outside of economic circles. SDRs are just a basket of the world’s biggest currencies, such as US Dollars, Euros, and Chinese Yuan.
According to Ido Man, who is the founder of the Saga Foundation:
“It (SDRs) achieves the purpose of not being reliant on a single currency or a single state (while) rendering accessible the usage of a hedging currency not only to central banks, but to the public.”
How it Works
When Saga launched its token on December 10th of this year, the value of one SGA token was worth the value of one tokenized SDR. Saga holds reserves in a variety of currencies, including cryptos, which are used to enforce the SDR peg.
There is no motivation for the SGA token to either rise or fall in value relative to the value of the SDR, as it is designed to be a stable store of value.
According to Man:
“If anyone wants to speculate, SGA is probably not the proper vehicle…If the market cap grew by $1 billion overnight, the price of SGA wouldn’t even double.”
Of course, the fact that the company is telling speculators to move on from the beginning will probably also dissuade people from trying to bid up or sell down SGA, which will likely help to reinforce its status as a digital reserve asset.
Why SGA is Relevant Today
There is no shortage of reasons why the SGA token may become a popular way for people to trade, and hedge fiat currency risk. The world is teetering on the edge of a recession, and some smaller economies, like Hong Kong, are already in a technical recession.
The modern take on economic management usually involves a lot of newly created money being spent into a low-interest rate economy, which means that some form of a rise in asset values is inevitable.
The big spend after 2008 manifested in record high equities and record low-interest rates (as much as ¼ of global investment grade debt has negative yields), and the broad economy still hasn’t recovered. More money creation is almost inevitable at this point, which makes
When governments start pushing central banks for more stimulus, the result is generally a lower currency value, which could make stablecoins less attractive as time goes on. A tie to the SDR makes these moves less worrisome, as one currency in the basket will benefit from a fall in the other.
Could SGA Become a Reserve Asset?
One issue that Saga may be anticipating is the political issues that tend to arise when an economy falters. South Africa has used currency control to attempt to maintain the value of its national currency, the Rand, and we may see this happen to larger currencies as central banks and governments look for ways to prop-up the value of their fiat currencies.
Capital controls in a regional economy aren’t going to destabilize the global financial system, but they could cause major problems if they were used by a nation like the United States to protect the US dollar. In addition to big moves in the FOREX market, global trade would be undoubtedly be impacted.
One of the most important things that currency does is enable trade. Saga’s SGA token allows investors large and small to hold a reserve asset that can be used across borders for trade, even if the economic landscape of a nation is in flux. Unlike a stablecoin, SGA is unlikely to be influenced by geopolitics, at least by the same amount that a national currency would be.
An Experienced Team
Saga has attracted some of the brightest minds in economics and technology to its project. The core group at Saga has experience across a range of industries and is well suited to make the SGA token a success.
Here is the core team at Saga (information from the company):
Ido Sadeh Man, Founder & Chairman of the Board: Mr. Sadeh Man spent the last decade leading product and technology organisations, including Odysii (sold to Gilbarco Veeder-Root, NYSE: FTV), and at Mobli where he was COO.
Keren Orian Nadel, Managing Director: With over 15 years’ worth of experience in strategy, product, marketing, operations and P&L management, Keren has held global senior management positions in both corporates environments (Microsoft, Haaretz Media) as well as startups. Keren holds a BA in Political Science and an MA in Public Policy from Tel-Aviv University.
Barry Topf, Chief Economist: Mr Topf joined Saga after a 33-year career at the Bank of Israel, where he served as one of the founding members of the Monetary Policy Committee and as Senior Advisor to the Governor, Stanley Fischer. He also held positions of Head of Market Operations, Head of the Foreign Currency Department, and Chief Investment Officer. In his capacity as an IMF Consultant, Mr. Topf has advised over 25 countries on economic policy.
Roy Eshkol, CTO & Blockchain Architect: Roy joined Saga with a wealth of knowledge and experience in technologies and infrastructures. With a passion for methodical information technology specifications, Roy leads Saga’s architecture design and development. Roy holds an M.Sc in Management Sciences in Management of Technology and Information Systems from Tel Aviv University.
Ron Sabo, PhD, Chief Scientist: With a PhD in experimental condensed matter physics from Weizmann Institute of Science, Ron leads Saga’s Research department. A Clore Scholar, he also lectures at the international program in Electrical & Electronics Engineering at Tel Aviv University.
Saga also has a number of advisers who are equally qualified in their respective fields, and will probably be a great help to the project. All their information is available here.
Saga is Creating New Assets
Cryptos were a huge shift away from existing asset classes, but with the SGA token, Saga has taken blockchain technology and made it into a viable trade and reserve asset.
In the future, the price of decentralized tokens may calm down, but for the moment, SGA is a bridge to a world where people can trade freely with blockchain technology, and not worry about price volatility. If you want to learn more about the project and token, just follow this link.
Cryptocurrency News Today – Headlines for December 13
- Crypto assets have once again outperformed other major asset classes.
- A huge percentage of the crypto rally this year is due to Bitcoin’s ability to lead the market trends.
Cryptocurrency News Today – It is that time of the year when analysts compare the performance of different asset classes. During this decade, digital currencies came into existence and stayed on top compared to traditional assets. Every year since the decade began cryptocurrencies have led.
Now as the year draws to a close and as this decade ends, we have taken a look at how each class of assets performed. In the last 12 months, cryptocurrencies have once again outperformed traditional assets. Note that the asset class was able to achieve this feat once again despite trading significantly lower than the record highs attained on December 2017.
At the time, the large-cap cryptos had a phenomenal 12 months. That period remains the greatest investment success story in the closing decade. It was during that era that crypto placed itself as the world’s number one asset class by yearly performance. It is safe to agree that cryptos have risen significantly above the annualized returns issued by the equities, commodities and bond markets of the U.S for the closing year.
Large-cap Digital Assets Offer Higher Returns than Traditional Assets for the Year
The Co-founder and president of Digital Assets Data, Ryan Alfred, remarked that for this year large-cap cryptos possess higher returns compared to traditional markets. A research given by Digital Assets Data highlights this year’s performance of top 10 digital tokens by market cap and how they fared against traditional assets like gold, oil and equities. 2019 didn’t start booming for crypto.
In February 2019, crypto was in a fairly dismal run, and was resting below the bulk of traditional assets. However, sentiment picked up in March and as of mid-year, cryptos were ahead of other asset classes. This began to close as stocks, bonds and commodities increased their lead. Yet crypto remained significantly ahead of others as the year draws to a close. Much of this is courtesy of Bitcoin. BTC is currently up by 100% since the beginning of the year.
Ethereum is up by 35% up. XRP is down by 25% from the point it traded as of January 1 2019. During the year before the closing decade began, there was a global financial crisis. Since then to this day, stocks have rebounded. From the March 2009 market meltdown to now, S&P 500 has gained 369%. While, the Dow Jones Industrial Average has gained 326% in the same period. All in all cryptocurrencies have had another remarkable year.