Author: Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

Categories
Australia Banking CBDCs Crypto News

RBA Looking to Hire CBDC Experts to Contribute Towards ‘Future of Money in Australia’

It’s official, according to a recent Linkedin job listing – the Reserve Bank of Australia (RBA) is currently hiring for its “Central Bank Digital Currency Research Team”.

RBA job listing. Source: Linkedin

RBA Making Moves

In October last year, Crypto News Australia reported that the RBA was continuing its research into CBDCs despite its reservations. In the following month, we also reported that Commonwealth Bank, National Australia Bank, Perpetual, and ConsenSys Software had joined forces with the RBA to conduct further research into the use of a wholesale CBDC.

Just recently, the RBA reiterated its position that it does not yet see a policy case for issuing a retail central bank digital currency (CBDC), however it was “researching tokenised CBDCs and financial assets”, as per an announcement last month.

Quite clearly, the RBA is focused for the time being (at least publicly) on wholesale, as opposed to retail, CBDCs. For a short overview on each, be sure to check out our article outlining the differences.

What is a CBDC? Source: Daml.com

With that said, the latest news of the RBA looking to hire ought to come as no surprise to those who have been closely following the matter.

Insights from the Job Listing

According to the job listing, the role’s primary focus will be to “contribute to research on the future of money in Australia” and engage in “impactful work that helps make a difference to the Australian people”. If it sounds like fluffy stuff, you aren’t alone. According to the listing:

The Reserve Bank of Australia has been researching central bank digital currency (CBDC) for the past few years … We are researching whether there is a case for a CBDC in Australia, and if so, how it might be designed and what benefits and other implications it would have. This work is contributing to one of the RBA’s strategic focus areas on supporting the evolution of payments in Australia.

RBA job listing, LinkedIn

The RBA is said to be creating a new new cross-disciplinary team responsible for “designing, executing and communicating the results from a series of research projects aimed at improving our understanding of the case for, and implications of, issuing a CBDC as well as exploring different technical solutions”. It is expected that the team will work with stakeholders within the RBA as well as external partners on “collaborative projects”.

Time will tell which direction the RBA ultimately takes. In the interim, it’s worth focusing more on what it does rather than what it says.

Categories
Bitcoin Crypto News Market Analysis Markets Trading

Bitcoin Price Hits Golden Cross, Bull Run Imminent?

After showing signs last month, the holy grail of technical analysis is finally upon us – bitcoin has reached a “Golden Cross”, which typically is viewed as an indicator of bullish price action on the horizon.

What is a Golden Cross?

In the world of technical analysis (TA), the golden cross is a chart pattern where a shorter-term moving average (MA) crosses above a longer-term moving average. This is typically considered to be a bullish signal.

BTC golden cross. Source: Reddit

When considering a golden cross, the most commonly used moving averages are the 50- and 200-day periods. Once the crossover happens, the longer-term moving average is typically considered to be a strong area of support.

The opposite of a golden cross is a death cross, where a shorter-term moving average crosses below a longer-term moving average. This is typically considered to be a bearish signal.

What Happened with Previous Golden Crosses?

Since inception, there have been six Golden Crosses and in four cases it has resulted in massive price action. In the past two instances, it has resulted in values increasing by five and three times respectively.

Let’s examine how bitcoin has fared in each of the previous six Golden Crosses.

May 2020: + 600 percent

February 2020: +5 percent

April 2019: +150 percent

November 2015: +7,000 percent

July 2014: +0.5 percent

February 2012: +21,000 percent

What’s the TLDR?

It’s clear that in general, golden crosses tend to result in rather bullish price action, but not always. Given that the market is more mature, diminishing returns ought to be expected.

Importantly, one shouldn’t overly rely on any single indicator – a multiplicity of variables have an impact on the price, none of which is predictable. Experienced investors know this and are no doubt taking it into account going forward. Just recently, bitcoin looked unstoppable as it crossed US$50,000, before declining sharply shortly thereafter to US$44,500.

If you’re interested in upping your technical analysis game, be sure to consult Crypto News Australia‘s guide to bear and bull markets.

Categories
Crypto News Nigeria South Africa Surveys

P2P Drives Africa’s Soaring Crypto Adoption, Up 1200% Since 2020

Whether one is a sceptic or proponent, this past year has undoubtedly been crypto’s breakout year. Global adoption is up some 880 percent, but it is the African continent that has seen the most dramatic increase, according to a recent blogpost by Chainalysis.

Cryptocurrency value received by Africa, July 2020 – June 2021. Source: Chainalysis
 

According to Chainalysis, the African crypto market has grown by 1,200 percent (in value received) over the past year. Estimates put these figures at approximately US$105.6 billion between July 2020 and June 2021.

Africans Use Crypto Differently

As noted by Chainalysis’ report, emerging markets tend to turn to crypto to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions. By contrast, in developed markets it is driven more by institutional investment.

Despite being the smallest market by a long way, Africa enjoys some of the highest grassroots adoption in the world with Nigeria, Kenya, South Africa and Tanzania ranking within the top 20 of Chainalysis’ Global Crypto Adoption Index.

Supporting the notion of grassroots adoption, retail-sized transfers comprised 7 percent of transaction volume, compared to the global average of 5.5 percent.

Retail share of the market. Source: Chainalysis

Growing Popularity of P2P (Peer-to-Peer) Platforms

One of the important trends in the African crypto adoption story is the enormous growth in transaction volumes on P2P platforms (adjusted for purchasing power per capita and internet-using population). One of the main reasons for this is the lack of access to trusted, centralised exchanges. In other instances, central banks (such as in Nigeria) and retail banks often have made it difficult for customers to transfer funds across to centralised exchanges. The chart below illustrates growth in two of the more popular P2P exchanges:

Trading volumes for Localbitcoin and Paxful in USD. Source: UsefulTulips.org

Compared to other regions, Africa’s P2P bitcoin volume is a lot higher, particularly in developed regions. Importantly, since so much trade is done informally, the figures below are probably lower than reality:

P2P share of transaction volume, July ’20 – June ’21. Source: Chainalysis

Remittances Play a Big Role

Crypto-based remittances are also increasing in Africa. Some of that is attributed to the growth in international commercial transactions as Africans use crypto to pay for goods to import and sell at home.

Estimated remittance payments in Africa, July ’20 – June ’21. Source: Chainalysis

Wealth Preservation a Natural Consequence

In general, African countries tend to suffer from relative high levels of economic instability and currency depreciation. As the phrase goes: “bitcoin fixes this”. Africans would appear to have taken heed. Note the inverse correlation since May 2020 between P2P trading volume and currency depreciation in the Kenyan shilling. The case couldn’t be any clearer:

Kenyan shilling depreciation v P2P trading volumes. Source: Chainalysis

Categories
Bitcoin Crypto News

Bitcoin Supply Squeeze Likely as Whales Gobble Up 103,600 BTC, 80% of Supply Held by HODLers

After breaching US$50,000 some three weeks ago, bitcoin at face value appeared to have lost some momentum, fluctuating around the US$45,000 mark. Glassnode’s latest on-chain report, however, paints a picture of strong underlying fundamentals and a potential supply squeeze on the horizon.

Close to 80% of Supply Held by HODLers

Who is a HODLer? According to Glassnode, it refers to investors whose coins have a lifespan of around 155 days or more. For obvious reasons, they tend to have extremely high levels of conviction and are therefore seen as “buyers of last resort”, snapping up discounted coins when volatility and fear take hold.

On that basis, coins purchased after mid-April would be regarded as short-term holders and, as per the chart below, only 16.8 percent of them are currently in profit.

Perhaps more telling is that HODLer-owned supply reached 79.5 percent of all bitcoin supply this week. This is the same level reached in October last year, when bitcoin traded for around US$10,750. If the following three months replicated what happened in October 2020, we may be looking at a price north of US$120,000 before year end.

Long-term v short-term holders profit and loss. Source: Glassnode

Peaks in LTH (long-term holders) owned supply typically correlate with late stage bear markets, which are historically followed by a supply squeeze and initiation of cyclical bull runs.

Checkmate, Glassnode

In absolute terms, HODLers currently own the most coins in history, hitting 12.97 million bitcoin this week. Supporting the “buyers of last resort thesis”, much of the momentum has been since the market crash in May this year.

Total supply held by HODLers. Source: Glassnode

As further evidence of the bullish supply-side dynamics, it’s also worth noting that 93 percent has not moved in a month.

Bitcoin HODL waves. Source: Glassnode

Whale Feeding Frenzy

This week, MicroStrategy, a well-known whale, has once again been at it:

While MicroStrategy may be one of the best known whales, other lesser known whales have been on the prowl, gobbling up 103,600 BTC over the past three weeks alone.

Bitcoin whale holdings. Source: Glassnode

A strong case is mounting for some strong price gains into the last quarter of 2021. Don’t bet on it, however – the world of crypto never ceases to offer all sorts of surprises along the way. As Mark Yusko likes to say: “Price is a liar”. We’ll see.

Categories
Bitcoin Crypto News Surveys

Recent Poll: Half of Brazilians Want to Follow El Salvador’s Bitcoin Path

According to local financial news outlet Valor Investe, a new poll conducted by Sherlock Communications has found that almost half of Brazilians are pro-bitcoin.

Brazil May Follow Trailblazing El Salvador

In a study that included other South American nations, Sherlock Communications found that Brazilians were the biggest supporters of El Salvador’s adoption of bitcoin, with 56 percent agreeing with the republic’s approach.

Of those surveyed, 48 percent of Brazilians expressed a belief that their nation ought to follow suit and adopt bitcoin as legal tender – 31 percent agreed and 17 percent agreed strongly with the idea.

The nation appears to be confident in Bitcoin’s future – 23 percent believed that in the future, there would be many more Bitcoiners compared to only four percent who believed Bitcoin would have absolutely no future in the country.

The research showed that the reasons to invest in bitcoin were varied:

  • 55 percent used it as a portfolio diversifier;
  • 39 percent to guard against inflation and ongoing economic instability; and
  • 37 percent to keep up with technological trends and developments.

Bitcoin was comfortably the best-known crypto; 92 percent of those surveyed knew about it, compared to only 31 percent who knew about Ethereum.

Brazil Increasingly Crypto-Friendly

Even though 31 percent of those surveyed felt that crypto was progressing well in Brazil, 35 percent believed that the nation was lagging behind. That belief perhaps stems from rumblings all over South America of other countries looking to follow El Salvador’s example.

This is certainly an interesting perspective, considering Brazil has beaten many developed nations such as the US and Australia in establishing a bitcoin exchanged traded fund (ETF). Brazil has some 1.4 million bitcoin and crypto users, in addition to 21 bitcoin ATMs distributed nationwide.

The research suggested that adoption was partly linked to the availability of an ETF which “allows people to invest in a regulated way, allowing more conservative investors to experiment with the cryptocurrency”.

As expected, El Salvador’s moves were regarded as being a potential brushfire that could trigger a wave of Bitcoin adoption across Central and South America.

El Salvador’s experiment could become a big reference for Latin American countries on how to incorporate blockchain and cryptocurrencies to their economies and generate greater wellbeing [for] its citizens.

Luiz Eduardo Abreu Haddad, consultant for Sherlock

It’s evident that Brazil is marching forward within the crypto space, and even Visa appears to have taken notice of the momentum. Last week, it was established that the company is reportedly working to integrate bitcoin into its Brazilian payments infrastructure.

Categories
Bitcoin Crypto News Payments

El Salvador’s Bitcoin Adoption Could Cost Western Union $400 Million a Year

One of the purported reasons El Salvador adopted bitcoin was that it was “for the benefit of its people“. Specifically, President Nayib Bukele referred to international remittances which account for almost a quarter of El Salvador’s GDP.

Costly Remittances

Bitcoin became legal tender in El Salvador this month and, unsurprisingly, things are moving fast. Its citizens have started spending money while the government has added some 550 bitcoins to its balance sheet.

Despite critics slamming bitcoin’s volatility, few have recognised the plight of everyday Salvadorean citizens’ woes when it comes to remittances. Being a developing nation, many of its citizens rely on remittances from family members who work in the US.

In 2020, El Salvador received nearly US$6 billion in remittances, which accounted for about 23 percent of its GDP. It’s been suggested that up to 70 percent of the Salvadorean population receives remittance payments. The average monthly remittance transfer is US$195, and for the households that receive remittances, they account for 50 percent of their total income.

Cross-border remittance inflows as a percentage of GDP. Source: CNBC

Remittances are one area where the status quo in our legacy financial system is terrible, with extraordinarily high fees levelled at populations that can ill afford them.

Matt Hougan, chief investment officer, Bitwise Asset Management

Western Union Set to Lose Out

Close to 60 percent of cash received is via remittance companies and 38 percent through banking institutions. Fees vary by company but typically, the smaller the payment, the higher the percentage that goes to fees. For instance, it costs US$3.24 to send US$10 to San Salvador from the US – almost 33 percent commission is payable to Western Union.

Rather than relying on third parties, waiting in lines at money changers or several days to receive their money, Salvadoreans now have the ability to send and receive cheap instant payments worldwide through the lightning network. This saves citizens from having to physically travel to the money services’ office and the worry of gangs who tend to hang around them.

Receiving remittances at the speed of light with almost no costs, compared to the slower and more costly fee structures of money services such as Western Union, means that El Salvador’s bitcoin adoption could cost the company US$400 million a year in lost commissions for remittances.

At the end of the day, using the lightning network over traditional remittance services means that more money ends up in the pockets of Salvadoreans – something you’d imagine that bitcoin critics and supporters alike would agree is a good thing.

Categories
Australia Banking Crypto News Regulation

Aussie Crypto Businesses Are Being Debanked On Short Notice

At hearings before the Australian Senate Committee on September 8, several domestic crypto-related businesses shared their experience of financial institutions denying or terminating banking services without notice, or offering up any reason for doing so.

Debanking Explained

‘Debanking’ is a relatively new phenomenon that is not well known among the broader population. Quite simply, it’s the process whereby financial institutions, usually retail banks, decide for whatever reason to terminate services to a particular customer.

As Australia moves towards becoming a cashless society, the negative consequences for those debanked is self-evident.

Banks tend to be risk-averse and often claim they are merely complying with their statutory anti-money laundering (AML) and counter-terrorism financing (CTF) obligations. In Australia, under the Anti-Money Laundering and Counter-Terrorism Financing Act, 2006, failing to do so carries a maximum penalty of up to A$22.5 million per breach.

Transparency and Communication Lacking

The common denominator underlying many of the complaints was a lack of transparency and communication.

Rebecca Schot-Guppy, CEO of Fintech Australia, told the Senate Committee that around 150 of her organisation’s members were debanked without reason or the ability to appeal. A local remittance business, Nium, described its position:

Nium has bank relationships in 40 countries around the world and yet Australia is the only market where we’ve been debanked.

Michael Minassian, VP, regional head of consumer business, Australia & Oceania, Nium

Bitcoin Babe founder Michaela Juric told the committee her banking services had been terminated 91 times since founding her crypto brokerage business seven years ago. Remarkably, even some of her family members were affected, making it difficult to access everyday utilities such as internet, electricity, water and insurance.

Local brokerage Aus Merchant was debanked four times over the past year, leading managing director Mitchell Travers to conclude that anti-competitive practices might indeed have been the real reason for the banks’ actions.

With the sort of anti-competitive nature of the banks, it’s somewhat buying them time…It could be considered a stopgap for them as they sort of educate and find a way to enter the space in a more profound manner.

Mitchell Travers, managing director, Aus Merchant

Senator Andrew Bragg, chair of the Senate Committee, acknowledged the issues raised but was quick to distinguish debanking within crypto from the remittance industry in general.

There are a range of reasons, including a lack of regulation, driving debanking in crypto, which is something this committee can help solve. In relation to remittance, I suspect there are anti-competitive drivers behind that, as banks have had a monopoly on ripping people off for remittances forever. Both of these issues are solvable, but they will require different tools.

Senator Andrew Bragg, Senate Committee chair

Hearings continue in the hope of gaining further insight into this matter. On the plus side, it appears as if the Senate Committee is committed to providing clarity on how crypto and other fintech businesses can work with traditional financial institutions going forward.

Categories
Australia Crypto News Real Estate Tokens

HeroX Announces the Tokenisation of the First Property in Australia

House price affordability remains a perennial issue in Australia without an obvious solution. One innovative property development company, HeroX, appears to offer a partial solution at least as it seeks to disrupt the global real estate market with the tokenisation of the first property in Australia.

Artist’s impression of one of four luxury townhouses in HeroX Templestowe Park, Victoria

Tokenisation in Real Estate an Inevitability

As we shift from an industrial to a digital-led economy, tokenisation of real world assets appears to be all but inevitable, particularly for those paying attention.

Basically, I have for a long time been talking about [how] we can tokenise everything conceptually. What does this all mean? It basically means the breakthrough has been made to attach intellectual property, or physical assets, or digital assets, to a blockchain in a method that is transferable, instantaneously, to anybody, and storable, and proven in its store.

Raoul Pal, Real Vision CEO

The tokenisation of real estate is just the latest example of a trend that includes art, fine wine, whisky, collectible cards, collectible cars or pretty much anything that is both valuable and scarce.


Property tokens are digital representations of properties and their financial interests, such as their capital growth and yield. They are supported using distributed ledger technology and smart contracts.

HeroX

The company claims that tokenisation (or fractionalisation) lowers the barriers to entry for investment by enabling access to a wider pool of investors. The relative inaccessibility of real estate as an asset class is but one of the reasons many Aussie millennials prefer crypto over real estate. If you’re looking for proof, consider August’s Core Logic Home Value Index, which showed that Australia’s house price index grew by 16.1 percent over the past 12 months, the fastest growth in national housing values since February 2004.

Additional benefits of tokenisation include complete transparency and liquidity. This has the potential to negate the obvious downsides of investing in real estate – namely that you need a lot of capital (ie, highly concentrated), and further, that it is an illiquid asset with high transactional costs.

It will be worth watching to see how traditional lenders respond to tokenisation. For now, it looks unlikely that you will be able to borrow against your token. This is arguably one of the disadvantages of tokenised real estate – you aren’t likely to be able to access cheap and freely available credit.

Notwithstanding, the possibility to diversify one’s investments in a thriving asset class within a liquid market will undoubtedly be attractive to first-time and seasoned investors alike.

HeroX Launches First Tokenised Property in Australia


To get the ball rolling, there are four simple steps to becoming an investor within HeroX’s new luxury development:

  • 1) Know Your Customer (KYC) and Anti-Money Laundering (AML) checks are performed for every potential investor to confirm the identity of investors and ensure they comply with the requirements of Australia’s regulations.
  • 2) Invest – buy one of the 20 tokens available.
  • 3) Get paid, every month, your share of the rental yield.
  • 4) Trade – leveraging HeroX’s secondary market to trade your tokens.

To learn more about HeroX and how to get involved, visit its website for further details.

Crypto and Real Estate Intersect

Tokenisation is only one example of how the worlds of crypto and real estate are beginning to collide.

Some companies have started accepting bitcoin as payment for rent and increasingly, owners around the world are accepting bitcoin for the sale of their properties. Even within finance markets we’ve seen some major shifts as one company in the US is now allowing for bitcoin-backed refinance loans.

Categories
Bitcoin Crypto News

El Salvador Buys 200 Bitcoins and is Planning To Buy More, Says President

With effect from today, El Salvador is the first nation in the world to officially recognise bitcoin as legal tender. President Nayib Bukele took to Twitter to declare another first – that El Salvador would become the first nation to announce the acquisition of bitcoins for its balance sheet.

El Salvador in Good Company

With the announcement, El Salvador joins an illustrious and growing group of individuals, funds and companies who have bought bitcoin for their balance sheet.

To keep track of the latest updates regarding institutional adoption of crypto, Crypto News Australia has compiled a list that is regularly updated as new participants choose crypto over cash.

Bitcoiners Back El Salvador #BitcoinDay

When Bitcoiners opined as to which nations would adopt bitcoin first, most suggested it would end up being ‘rogue nations’ crippled by sanctions – the likes of North Korea or Iran, who gained little from the current petrodollar system.

Instead, it proved to be a democratically elected government of a republic with a population just over 6.5 million people, a mere 13 years after its creation. It’s difficult to overestimate the significance of this.

As a sign of support for El Salvador, Bitcoiners around the world have decided to purchase US$30 worth of bitcoin to match the amount the government is offering citizens for downloading its digital wallet.

September 7, heralded as ‘Bitcoin Day’

Even Michael Saylor got in on the act and according to his poll, over 82 percent of followers said they too would be buying US$30 worth of bitcoin.

Adoption Isn’t a Straight Line

The charismatic president of the Central American republic, who has some 2.8 million followers on Twitter, recognises that the road to adoption is likely to be bumpy.

Nayib Bukele

Like all innovation, the #Bitcoin process in El Salvador has a learning curve. Every road to the future is like this and not everything will be achieved in a day, or in a month. But we must break the paradigms of the past. El Salvador has the right to advance towards the first world.

President Bukele via Twitter

The El Salvadorean government has been criticised by opposition parties as well as the World Bank and IMF – that much ought to be expected. El Salvador is disrupting the debt-based global financial system and in many ways is taking its destiny into its own hands. Its success is not a foregone conclusion but, for many, bitcoin offers hope.

El Salvador does not enjoy the “exorbitant privilege” of being able to print more US dollars to fund its economy. In that regard, the move towards bitcoin makes a whole lot of sense.

Categories
Bitcoin Bitcoin Mining Crypto News

Today Bitcoin is Legal Tender in El Salvador, What You Need to Know

On June 9, the El Salvador legislative body officially voted in a bill adopting bitcoin as legal tender. Today, that law comes into force.

Background

Almost 20 years ago, El Salvador adopted the US dollar amid ongoing economic woes in the Central American republic. Despite intending to bring stability, it ultimately hurt the lower economic strata of society most. At the time, much like the recent bitcoin protests, some felt that the decision was rushed without sufficient consultation or education of the broader populace.

In an interview in June, President Nayib Bukele provided some context behind the move, saying it was ultimately for the benefit of all Salvadorean citizens.

The purported benefits include:

  • Receiving remittances at the speed of light with almost no costs, compared to the slower and more costly fee structures of Western Union and the like. Importantly, personal remittances account for almost a quarter of El Salvador’s GDP.
  • Providing financial inclusion to the 70 percent of the population who remain unbanked.
  • Becoming less dependent on the output of new US dollars and resultant inflation due to an unprecedented increase in the money supply; in short, El Salvador wants to take back some control of its monetary system as it derives no benefit from the increased supply of US dollars, only the downside.
  • Increased levels of financial investment and the attraction of global talent, particularly when coupled with forthcoming residency-by-investment laws.

How Will It Work?

One of the more controversial elements of the newly enacted law is Article 7 which provides that from September 7, all businesses in El Salvador are required to accept bitcoin for the sale of goods and services. Despite this provision, President Bukele and Finance Minister Alejandro Zelaya have both declared that bitcoin will be “totally optional”.

The use of bitcoin will be optional. Nobody will receive bitcoin if they don’t want it […] If someone receives a payment in bitcoin, they can choose to automatically receive it in [US] dollars.

President Nayib Bukele

To provide for those who do not wish to hold bitcoin and to otherwise manage its volatility, a US$150 million trust fund has been set up to instantly convert bitcoin to US dollars, effectively transferring the volatility risk to the trust. From time to time, the trust would replenish its US dollars through the sale of bitcoins.

If there’s an ice-cream parlour [and the owner] doesn’t really want to take the risk, he has to accept bitcoin because it’s a mandated currency but he doesn’t want to take the risk of convertibility, so he wants dollars deposited in his banking account and when he sells the ice cream, he can ask the government to exchange his bitcoin [for] dollars. Of course he can do that in the markets also but he can ask the government to do it immediately.

President Nayib Bukele

To encourage widespread adoption, the country has installed more than 1,000 bitcoin ATMs and offered US$30 in bitcoin to citizens who download the government’s voluntary digital wallet.

As a signal of support, a three million-strong Reddit community in Brazil has pledged to purchase US$30 each on September 7, a day that happens to coincide with the country’s independence day.

Aside from the purported benefits to its citizens, El Salvador is also looking to become a leader in 100 percent eco-friendly “volcano” bitcoin mining, which promises to provide an economic windfall for the nation, generating up to 20,000 BTC per annum according to some estimates.