Author: José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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Bitcoin Crypto News Institutions Investing

Goldman Sachs Investors Divided on Whether Bitcoin is an Investable Asset

Goldman Sachs investors don’t seem to agree on whether Bitcoin (BTC) is an investable asset or not.

The multinational investment bank issued a report on June 15 called “Digital Assets: Beauty Is Not in the Eye of the Beholder” – concluding that Bitcoin is no longer an investable asset.

Bitcoin is Not “Digital Gold“

This new report was issued by the bank’s Investment Strategy Group and contradicts its plans to launch crypto investment services in Q2 for its wealthiest clients. As reported, Goldman Sachs began trading Bitcoin futures on June 18 in a partnership with Galaxy Digital.

Further, the report concludes that Bitcoin itself is not digital gold, as gold is not a “reliable store of value”:

The argument that Bitcoin and cryptocurrencies are a digital version of gold does not confer any value to Bitcoin and other cryptocurrencies, because gold itself is not a consistent or reliable store of value.

Crypto May Not Be As Viable an Investment as Many Thought

This also contradicts Goldman Sachs’ May 21 report called “Crypto, a New Assets Class?” where several experts in the crypto field, such as Galaxy CEO Mike Novogratz, were gathered to analyse the current market, outlining a positive future for cryptocurrencies and stating that they were a new alternative investment.

The report suggested that despite many advances in blockchain technology, this would become obsolete with time and many enterprises would turn away from it. It concluded by saying cryptocurrencies are not a “viable investment” for their clients:

After analysing various valuation methodologies and our multi-factor strategy asset allocation model, we have concluded that cryptocurrencies are not a viable investment for our clients.

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Crypto News DeFi Institutions

Switzerland Bank to Offer DeFi Yield and Lending With Ethereum

Switzerland’s Sygnum Bank will allow investors to dive into the decentralised finance world by launching custody and trading for several DeFi tokens.

According to a recent blog post, the bank will offer trading services for up to seven leading tokens in the DeFi market: Aave, Synthetix, UNI (Uniswap), Aragon, Curve, Maker, and 1inch Network.

This is the next step on our journey to enable a variety of yield-generating products in the digital-asset space. These can either be based on the proof-of-stake protocol, so staking itself, or also leveraging and decentralised lending to generate yield for our clients, which is a bit further out on the roadmap.

Thomas Eichenberger, Sygnum Bank’s head of business units
Sygnum is a digital assets bank founded on Swiss and Singaporean heritage

Banks Rush to Explore DeFi

With a TLV (Total Lock Value) of US$60 billion, banks are rushing to explore the DeFi world as more institutional investors show interest in investing in it. In a further note, Sygnum outlined that the fast-paced growth of the DeFi ecosystem will “play an increasingly relevant role in shaping Future Finance”.

Besides custody and trading, the institution also launched banking services for USDC and intends to launch yield-generating products for its institutional clients. This bridges the institutional space with the decentralised one in a regulated manner.

DeFi Personal Banking Set to Take Off

As DeFi expands across international financial markets, investor Mark Cuban believes DeFi can revolutionise the way people do banking in the future. Cuban claims that while DeFi is hard for the average person to understand at first, once it becomes as easy to use as credit cards there will be a massive take-off in adoption.

Australia is not falling behind when it comes to DeFi as more Australian startups are emerging as international leaders in DeFi and tokenisation. Among some of these projects is Synthetix, a derivative liquidity protocol, and Ren Protocol, which provides inter-blockchain liquidity for dapps (decentralised applications).

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Bitcoin Crypto News Payments

El Salvador’s Government Considering Paying Workers’ Salaries With BTC

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El Salvador’s government is discussing if companies should pay their workers with Bitcoin, according to a tweet by a local radio station, 107.7 Fuego, on June 15.

El Salvador’s Minister of Labor Rolando Castro said three other government ministries were considering the possibility of companies paying workers’ salaries in BTC. The decision will be made once the country’s Bitcoin legal tender status comes into law. The ministry of labor will coordinate with the ministries of the economy and finance to put the plan forward.

El Salvador Setting the Pace With BTC Adoption

While El Salvador has been criticised by financial institutions for putting BTC as legal tender, the crypto community has praised the move as one of the key steps towards global adoption. The country now plans to use its wasted energy to mine Bitcoin in the country, using its state-owned geothermal electric company.

El Salvador has become a pacesetter for BTC adoption and other countries are now following its example. While many at first thought it would come from powerful countries like the US or Japan, adoption is taking place in less developed countries. Besides, Bitcoin and cryptocurrencies could help the unbanked – 75% of Salvadoreans are unbanked – to become more financially independent.

Tesla to Reconsider BTC Transactions … With One Condition

El Salvador and Elon Musk are the two main topics of discussion in the crypto community right now. While El Salvador prepares to make Bitcoin its official currency, Musk stated that Tesla could resume allowing BTC payments if its energy consumption were reduced by 50%.

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Bitcoin Crypto News

Elon Musk Says Tesla Will Accept Bitcoin Again When It’s 50% Eco-Friendly

Tesla will accept Bitcoin transactions again once its mining energy consumption is approximately 50 percent, as mentioned in a tweet by CEO Elon Musk.

Musk also clarified that Tesla only sold 10 percent of its BTC holdings to check if it was easily liquidated without “moving market”, while denying accusations of market manipulation.

Is Elon Manipulating the Market?

Musk has been mired in controversy in the past few weeks for reversing his positions on Bitcoin several times, which many in the crypto community have seen as a “pump and dump” strategy. Even gold bug and known Bitcoin detractor Peter Schiff has had plenty to say about it:

It’s easy to dump [Bitcoin] when you’re pumping up the price and suckering in buyers with market manipulation tweets. Bitcoin transactions were just a gimmick anyway to create the false impression that Bitcoin can function as either a viable medium of exchange or unit of account.

Peter Schiff, Twitter

Magda Wierzycka, CEO of financial services company Sygnia, has accused Musk of manipulating the market by engaging in various social media channels to cause price fluctuations for his own benefit.

The [Bitcoin] volatility we have seen is an unexpected function of what I would call market manipulation by Elon Musk. If that happen[ed] to a listed company, he would be investigated and severely sanctioned by the SEC.

Magda Wierzycka, interview on The Money Show

Bitcoin’s Environmental Debate

A month ago, Musk announced that Tesla would no longer accept Bitcoin transactions due to environmental concerns, which sparked a heated thread where crypto advocates like Michael Saylor, CEO of MicroStrategy, and investor Anthony Pompliano counter-argued his position.

While Bitcoin does consume a lot of energy, countries such as Iceland and Norway use otherwise wasted geothermal and hydroelectric energy to power their mining rigs. The most recent country to join that list is El Salvador, which is planning to harness its wasted geothermal energy to power rigs to mine BTC in what its president claims is a 100 percent clean manner.

The primary energy coming from renewables worldwide is low compared to BTC, which is 39-73 percent, according to Documenting Bitcoin.

Additionally, Michael Saylor hosted a meeting last month with Musk and North America’s top BTC miners with the aim of discussing ways to promote Bitcoin sustainability and energy transparency, leading to the creation of the Bitcoin Mining Council.

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Crypto Exchange Crypto News

Kraken Might Revaluate Its Launching Plans After Coinbase’s Poor IPO Performance

Kraken is re-evaluating its methods about going public after Coinbase’s poor results following its direct launch.

Kraken Rethinks Going Public

Coinbase debuted on the Nasdaq in April with a valuation of US$103 billion, calling the attention of many in the crypto industry and Wall Street as the first crypto exchange to be traded in the public market.

But seeing Coinbase’s results, Jesse Powell (pictured above), CEO of Kraken, is revaluating its plans to go public. Speaking to Fortune on June 11, Powell said a direct listing might have certain benefits, like no intermediaries – which makes it a cheaper process – but it might have a “dampening effect” in the long run.

An IPO is looking a little more attractive in light of the [Coinbase] direct listing’s performance. I would say we’re looking at it more seriously now, having the benefit of seeing how the direct public offering played out for Coinbase.

Jesse Powell, Kraken CEO

The Pros and Cons of an ICO

Coinbase went public earlier this year at $381 per COIN after a massive increase in users and revenue for 2020.

While a company that goes public with a direct listing doesn’t depend on intermediaries, an Initial Public Offering (IPO) does, and this has raised concerns in the crypto community. An IPO usually involves a Wall Street bank and, according to Powell, Wall Street still doesn’t understand crypto.

I think it’s the same thing that the Street missed about Amazon 20 years ago and what they are missing about Tesla now. I think they are just so tied up with the legacy way of doing things.

Wall Street in particular, and this is financial services, and I think there are a lot of players that have a lot to lose from the success of this space. I think you might be seeing people facing this cognitive dissonance of becoming increasingly aware of the impending doom of the legacy financial system.

Jesse Powell

However, Powell added that a direct listing aligns better with the nature of the decentralised crypto world, but that this also presents some problems:

Not having lock-ups, having billions of dollars of insiders be able to dump their shares, you know, on day one […] I think it has a dampening effect on the market.

Categories
Bitcoin Bitcoin Mining Crypto News Digital Asset Mining

El Salvador is Planning a Huge Bitcoin Mining Operation that is “100% Eco-Friendly”

El Salvador President Nayib Bukele is planning to use a state-owned geothermal electric company to facilitate cryptocurrency mining, using geothermal energy from the country’s 20 active volcanoes. 

In a recent tweet, Bukele revealed his plan to use the country’s hundreds of megawatts of geothermal energy potential to mine Bitcoin.

The country has 644 MW of wasted energy. If harnessed, it would make the small Central American country the biggest Bitcoin mining facility in the hemisphere, while remaining 100 percent clean, according to Bukele.

The IMF Expresses Concerns

Unsurprisingly, regulatory and financial bodies globally shared their concerns about the country embracing and mining Bitcoin. The International Monetary Fund (IMF) said Bukele’s plan might raise “macroeconomic, financial, and legal issues”. However, the crypto community has embraced the move, echoing the fact that 75 percent of Salvadoreans are unbanked and have no access to traditional financial systems.

Crypto enthusiasts have also pointed out that using geothermal energy could push miners globally to move towards clean production of Bitcoin. Besides, countries like Norway and Iceland are already using hydro-electric and geothermal energy to power their mining rigs.

Other Countries Set to Follow El Salvador’s Example

El Salvador accepting Bitcoin as legal tender has been in the news in the past week – a move that surprised many in the crypto community as it has become the first country to do so. Days later, Wikipedia added Bitcoin as the country’s official currency alongside the Colón and US Dollar.

While powerful nations like China have been causing FUD in the market – in cracking down on BTC trading and mining – smaller countries like Argentina, Panama and Paraguay are now working on plans to adopt cryptocurrencies, following El Salvador’s example.

We could soon see more smaller countries and states, even cities, moving towards crypto mining as an alternative income. A recent example is Rockdale, a small town in Texas that became a mining farm soon after losing its Alcoa aluminum mine in 2019.

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Australia Cryptocurrencies

Aussie Mortgage Brokers Claim Buyers Are Using “Coins” To Put Down Deposits

More and more Aussies are using cryptocurrencies to put down deposits or to pay off a large portion of their mortgages altogether. 

Marvin Coleman, from Mortgage Choice in Oakleigh, Victoria, revealed this week that at least 5 percent of his clients have crypto, and it’s becoming a common practice to cash out crypto savings to either fund a deposit or pay off an overall mortgage.

We’re obviously at a very embryonic stage of this. Around 5 percent of my clients have crypto, so the obvious question is, ‘can I use it to demonstrate I can complete my property purchase?’

Marvin Coleman, Mortgage Choice

Crypto and Real Estate Booming in Australia 

Real estate and cryptocurrencies are considered alternative investments for Australians, but it seems the crypto wave is getting more attention than ever – especially in 2021, which has become one of the most tumultuous years for Bitcoin. 

There’s a lot of FOMO [Fear of Missing Out] in both the crypto and the property markets, and lots of people still want to ride the crypto wave. But I think right now there’s slightly more nervousness around crypto and huge FOMO in the property market.

Marvin Coleman, Mortgage Choice

The global property market boom has elevated house prices to astronomical levels across Australian capital cities. The number of Aussies seeking home loans has increased tremendously in the past few months, and some of these homebuyers have holdings in cryptocurrencies as high as A$300,000, Coleman noted.

It’s also worth noting that some real estate agents are accepting cryptocurrencies as payment for properties. The biggest crypto real estate purchase to date was a luxury penthouse in Miami, Florida, which was bought anonymously for US$22.5 million using an undisclosed cryptocurrency.

Over a Million Millennials Will Buy Crypto Next Year

While the property market booms in Australia, so does the number of Aussies investing in crypto. As reported this week, at least 40 percent of Millennials and 31 percent of Gen Zs prefer crypto over real estate, according to a recent survey by cryptocurrency exchange Kraken.

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Bitcoin Institutions Investing

Hedge Fund Billionaire Marc Lasry Laments Not Buying Enough Bitcoin

Marc Lasry, a famous American hedge fund manager and co-owner of the NBA’s Milwaukee Bucks basketball team, has regretted not buying enough Bitcoin (BTC) in the past few years.

In an interview on CNBC’s Squawk Box, Lasry said he was surprised by how fast BTC surged in price over recent months, mainly due to institutional demand and widespread adoption.

I think the probability, as more and more people start using Bitcoin, is that it’s going to keep going up. It’s happened a lot quicker than I thought it would. I should have bought a lot more. That was my mistake.

Marc Lasry

This isn’t the first time Lasry regrets not buying BTC. In July 2018, he told CNBC he lamented not buying Bitcoin when it was valued at US$300, also predicting a price target of US$40,000 and that mainstream adoption would expand the cryptocurrency to better markets.

The reason I like Bitcoin is because it’s the one everybody is going to come to.

Marc Lasry

Going Down or Up, Bitcoin is Here to Stay

When asked about the current market status for BTC, Lasry said there are strong arguments for both sides, bearish or bullish. He maintains relatively bullish on Bitcoin. Whether it goes down to US$20,000 or up to $100,000 the market is “already here”, he said, adding it’s unlikely to go to zero.

I honestly don’t know where it is going to go but you’ve got that market, it’s there. I could make you an argument it could go to $100,000. I could make you an argument it could go to $20,000.

Marc Lasry

Lasry is a co-founder and CEO of Avenue Capital Group, a global investment firm founded in 1995. He has been a crypto advocate since he first heard about Bitcoin, making an undisclosed investment in the crypto hedge fund BlockTower Capital a few months ago.

We also saw in recent news that Ray Dalio claims that he owns some Bitcoin, as the list of large investors in cryptocurrencies continues to grow.

Categories
Crypto Exchange Crypto News

Google, Alibaba Plus 300+ Companies Are Seeking Crypto Licences in Singapore

More than 300 companies have submitted requests for payments and crypto exchange licences in Singapore, including Alibaba and Google. 

Sopnendu Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore (MAS), said the institute had received 300-plus requests as of June 4 since the institute established the Payment Services Act in 2020.

The MAS is now trying to speed up the application process for firms including Binance Holdings Ltd, Alibaba Group Holdings Ltd, and Alphabet Inc – the company behind Google.

Singapore to Become a FinTech Hub

Singapore is set to become a FinTech hub as the country saw over US$1.1 billion raised in FinTech firms last year. This represents record growth compared to 2014, when investments amounted to only US$20 million.

Firms are now waiting for the MAS to process their submissions. However, it might take time as the number of applications soared above expectations. It is not “something to be taken lightly”, Mohanty commented.

Giving licences to somebody is a premium, it is not something to be taken lightly. We are ensuring that whoever gets an MAS licence will be credible.

Sopnendu Mohanty, MAS

Singapore is one of the few countries embracing crypto and blockchain technology in recent months. Another is El Salvador, which has become the first country to Adopt Bitcoin as legal tender.

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Crypto News Institutions

MicroStrategy Proposes Private Offering of $400 Million To Buy More Bitcoin

MicroStrategy has announced offering US$400 million worth of Senior Secured Notes due in 2028 and using the funds to buy Bitcoin (BTC).

On June 7, the company said the secure notes will be available to qualified investors. This will be the first time a corporation issues a junk bond sale to buy cryptoassets.

MicroStrategy Ignores the Risks

MicroStrategy reported an overall operating loss of US$183.2 million, led by a $194.1 million impairment in the last quarter. MicroStrategy’s MSTR stock has been down more than 60 percent since February 2021 – added to a massive debt and over-leveraged exposure to BTC.

MicroStrategy already owns 92,079 Bitcoins, which would account for roughly US$3 billion at press time. The firm said it needed to write down the value of its assets by approximately US$284.5 million in the next quarter due to BTC’s price plunge.

Many in the crypto community are considering this a risky move. But it seems the firm hasn’t given up on the father of all cryptos, and it’s showing it with this recent junk bond sale.