Category: Investing

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Blockchain DeFi Investing

AAVE Looking Into A Security Module Rehaul

The 8th of January marks a full year since AAVE has been on the Ethereum mainnet. The team behind AAVE hosted an anniversary zoom call to mark the occasion – an AAVEversary, if you will.

Better Insurance Against Shortfall Events

Among other small updates on the state of affairs at AAVE, the team also announced that they are in talks with Delphi Digital, who are offering to completely rework AAVE’s safety model and build a new insurance product from the ground up.

The current procedure in place at AAVE is to allow AAVE holders to stake their tokens in the Safety Module – which is a liquidity pool that aims to safeguard the tokens from smart contract exploits and other “shortfall events”. The safety module currently holds the largest decentralized insurance fund, worth about $375 million.

However, there are some pitfalls – such as the fact that the safety module covers the whole platform, which means investors who deposit funds in the safety module are covering all projects in the AAVE network – even if some projects bring with them a considerably higher risk level than others.

According to Jose Maria Macedo – a founding member of Delphi Digital and Jonathan Ehrlich – an analyst at the company, the insurance product they offered would come as a separate product for users, instead of being bundled in with all deposits, allowing a better prediction of risk factors for potential investors.

“With existing insurance solutions users have to purchase cover upfront which entitles them to insurance on a given protocol for a set amount of time (generally at least 6 months). With the current state of DeFi, most users don’t know where their capital will be next week let alone 6 months from now […] With our architecture, users only pay for insurance while they use it and the process of buying/selling is abstracted away entirely.”

Although nothing has been decided yet, the new insurance product may help AAVE attract more cautious investors, who may want to stick with safer projects – making it a proposal worth seriously considering.

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Bitcoin Bitcoin Mining Crypto News Crypto Trackers Cryptocurrencies Ethereum Investing Markets Stablecoins Tether Worldwide

Crypto Market Cap Hits One Trillion US Dollars

The overall cryptocurrency market capitalization has reached one trillion US dollars for the first time in history, according to data from the leading crypto statistics site Coinmarketcap.com.

Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen exponential gains over the past few months, both rising by over 300% since November. Some smaller cap crypto assets and digital tokens like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT) have enjoyed similar price rallies.

Bitcoin’s market valuation recently catapulted to $650 billion, overtaking major US investment firm Berkshire Hathaway, with a $533 billion market cap. Berkshire Hathaway was acquired and reformed in the 70s by iconic investor Warren Buffet, who remains its chairman and CEO to this day. Buffett has historically been very vocal about his dislike of cryptocurrencies, once famously calling Bitcoin “rat poison squared”. 

Despite Bitcoin being the best performing asset of the past decade by a large degree, Buffett continues to discount its worth, insisting that it has no value and is purely speculative. However, several major tech firms and financial institutions disagree, such as 170-year-old Mass Mutual which recently bought up $100 million worth of Bitcoin. A small amount compared to the world’s largest digital currency asset manager, Grayscale, with over $20 billion invested in crypto assets.

Image from Howmuch.net
Image from Howmuch.net

Criticism

Naturally, the extreme gains mean the cryptocurrency market has once again come under fire from critics who believe that asset prices are being manipulated. As with the previous 2017 rally, many critics believe that USDT tokens printed by stablecoin company Tether are being used to artificially prop up the cryptocurrency market – much like the US Federal Reserve props up traditional stock markets with seemingly endless USD issuance.

The concerns are not without merit, especially considering Tether’s continued reluctance to prove that it’s USDT tokens are fully backed by genuine dollar reserves. Tether has been minting millions of dollars in USDT tokens lately, presumably to meet the demand of consumers cashing out their Bitcoin profits or buying USDT as a digital onramp to the crypto world. Without clear and transparent auditing of this issuance, it’s fair to say the situation has the potential for abuse and manipulation.

One argument that challenges this theory is PlanB’s Bitcoin stock-to-flow model, which has accurately tracked the price movements of the BTC/USD trading pair over several years. The model reveals how the price of Bitcoin closely follows a set pattern dictated not by buyers or sellers but rather scarcity created by the algorithm which halves the BTC mining reward every 210,000 blocks. Price movements from the very first Bitcoin halving in late 2012 – long before Tether started printing in 2015 – correlate with Plan B’s stock-to-flow model. This suggests that the current price rally and the one following the previous 2016 halving are simply a result of Bitcoin’s coding rather than any external manipulation.

Image from PlanB (@100trillionUSD) on Twitter
Image from PlanB (@100trillionUSD) on Twitter
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Cryptocurrencies Investing Tokens

Blockchain Platform Launches NFTs That Are Meant To Act Like Bonds

Telos, a blockchain development platform who have been exploring new and innovative solutions for the application of blockchain tokens, have come up with a new idea: namely, to sell Non-Fungible Tokens (NFTs) as a store of value that will operate in a similar fashion to bonds.

More Options For Fintech Startups

The aim of the project is to allow blockchain startups to perform their Initial Coin Offerings (ICOs) in a more efficient way.

New fintechs on the block have often been faced with a catch-22 – once the ICO was over, trading of the tokens would sometimes begin prematurely, causing the value of the token to plummet before development of the new platform was even complete.

An NFT is a type of crypto token that represents something unique and is not interchangeable with any other token. For instance, 2 bitcoins will always have the same value – but the NFT F1 car paid for with over $110,000 worth of ETH at the time will always be distinctly unique from any other NFT – such as this turquoise kitten that goes for a much more affordable price tag.

According to Douglas Horn – the Chief Architect of Telos – the new T-Bond NFTs will allow investors to sell the NFTs without actually affecting the price of the token until after the project has launched.

“T-Bond NFTs offer a new and powerful option for any project seeking funding based on future technical achievement. Back in the ICO boom and continuing still, far too many projects have raised funds only to see their token plummet in value and community support dwindle. T-Bond NFTs create an ecosystem where projects can raise funds through investors, who in turn have the freedom to sell their NFTs on the secondary market without impacting the token price. This facilitates a vastly more sustainable model by harnessing the new synergy between DeFi and NFTs.”

Although the ICO boom has come and gone 3 years ago, so did Bitcoin – and it recently reached its’ all-time high. Maybe projects like these are the spark of a resurgence in ICOs – which this time around will be able to benefit from advances made in the DeFi sphere.

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Cryptocurrencies Investing Scams

SEC Goes After Yet Another Crypto Company

Following their legal tussle with Ripple Labs – the second one this year for Ripple, after their debacle with the NPPA – the SEC has also moved against Virgil Capital LLC, a crypto investment firm.

The US Securities and Exchange Commission have put in place an order freezing assets and emergency relief funds for Virgil Capital LLC and all affiliates of the company, citing possible securities fraud.

Undisclosed Investments

Virgil Capital’s cryptocurrency trading fund – Virgil Sigma Fund LP – is being investigated in relation to fabricated records. The record states that up to $3.5 million in investments were not redeemed and $1.7 million in investor funds were due to be cashed in, in an attempt to pay off loans.

Although the funds were meant for crypto trading using a proprietary algorithm, it appears at least some of them were used for risky undisclosed investments and other purposes.

Stefan Quin – the 23-year old founder of Virgil Capital – reportedly told investors ever since July that their assets had been transferred to another fund, known as the VQR Multistrategy Fund LP.

However, it appears the transfers never actually took place.

According to Kristina Littman, the head of the SEC Enforcement Division’s Cyber Unit, the freeze is a preliminary step taken to ensure no more damage can be done to investor assets until the bigger picture is revealed.

“This emergency action is an important step to protect investor assets and prevent further harm. Stefan Qin allegedly made false promises to lure investors and then continued his deception to conceal his misuse of investor funds.”

The SEC’s ongoing investigation will be led by Fitzann Reid of the San Francisco Regional Office and Amanda Straub of the Enforcement Division’s Cyber Unit.

On the litigation side, work will be carried out by Susan LaMarca, Ms. Straub, and Ms. Reid, under the direct supervision of Steven Buchholz and Ms. Littman of the Cyber Unit.

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Australia Crypto News Industries Investing

Japan’s SBI Buys B2C2 Aiming To Become A Bigger Force On The Crypto Markets In APAC

London-based crypto asset management firm B2C2 was recently bought by the financial monolith SBI Group.

According to Phillip Gillespie – the CEO of B2C2 – the spike in interest in Bitcoin that sent the most popular cryptocurrency rocketing to a $2400 price tag coincides with the interest in the asset shown by Square, PayPal, and others. However, this has also lead to a drop in the available supply of the asset.

“If an institution wants to buy crypto, there’s a bit of a problem. There are not that many places they can go right now.”

Regional Competition Heats Up

At the beginning of November, Australian Senator Andrew Bragg spoke out at the Future Of Financial Services 2020 conference – stating that Singapore’s decision to build the world’s first global data exchange showed that Australia was not the only economy in the region investing in cryptocurrencies, blockchain-based fintechs and the like – and that the Australian government would need to allocate more resources to ensure Australia stays in the lead in the very lucrative market.

“Hong Kong will still be an important gateway to China, but because of the recent turmoil there and the foreign influence laws, they won’t have the same regional headquarter attraction. We would be mad to sit idly by and allow such a lucrative share of the market to lead to Singapore or to Tokyo.”

Following a purchase of B2C2 shares worth $30 million back in July, SBI Holdings has bought up much more of the company’s stock – in fact, following the recent deal, SBI Holdings now owns 90% of the company. At the time this article was written, the price of the acquisition has not been publicly stated.

According to Ryo Suzuki – the executive director of SBI’s FX and Rates Division – the company already had the infrastructure to become a key regional player but was missing the necessary assets.

“SBI Group is the biggest internet financial group in Japan so we have the customer base. The cryptocurrency market is not mature in Japan yet, but B2C2’s expertise can provide such a service.”

Japan has now entered the APAC crypto market alongside Australia,  Singapore, and Hong Kong – now it’s time to see where the chips will fall, how the Australian government can help the local crypto industry get a leg up on the competition.

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Australia Bitcoin ChainLink Cryptocurrencies Ethereum Investing Litecoin

New Report Reveals The Six Coins Aussie’s Are Holding In Their Crypto Portfolios

A recent report shows what cryptocurrencies Australians are holding in their portfolios. Over 1,000 Australians were interviewed, interesting revealed that the northern territory is the largest holder of digital assets compared to the other states.

What Coins Are Aussies Hodling?

Not surprisingly, the most popular asset held is Bitcoin (BTC). One surprise though was although Ethereum (ETH) is the second most popular crypto by market cap, more Australians are holding Ripple (XRP).

  1. Bitcoin: 74%.
  2. XRP (Ripple): 28%
  3. Ethereum: 27%.
  4. Bitcoin Cash: 17%
  5. Litecoin: 15%
  6. Chainlink: 5.2%
  7. Others 8.5%

While these are currently the most popular in the average Aussie portfolio, other tokens amounted to a total of 8.5%. Interestingly, the crypto held by Australians mostly resembled the actual order by market cap, similar to that of a “crypto index”.

Millennials Are Making The Most Out Of Crypto

The report also suggests, adults between the ages of 25 and 45 consider cryptocurrencies as savings for their future. At least 18 % of Australians own some token, and 2 out of 5 consider it a good investment.

About 42.7% of those interviewed said they increased their capital by making successful investments in the cryptocurrency market. In contrast, only 20% have lost money. Last year, only 35% of those surveyed increased their wealth.

Cryptocurrencies in Australia are more popular among the youth. However, Australians who have increased their wealth the most are adults between 45 to 50 years old.

From: Independent Reserve

Australians Are More Positive About Crypto in 2020

Above all, the survey has reflected a more positive attitude towards digital assets in Australia for 2020. Bitcoin has gained more attention in these last few months, breaking all time highs. This marks a milestone in the history of BTC — which could attract more people looking for more diversity in their financial investment portfolios.

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Australia Crypto News Cryptocurrencies Investing

Australian Fund Managers vs General Population – Who’s More Optimistic About Crypto?

Bitcoin recently broke the all-time high. In a country like Australia, where 91.4% of respondents to a survey stated that they were aware of at least one cryptocurrency, opinions are naturally split.

General Public Optimistic Despite Some Bearish Asset Managers

Although some investment management firms such as the Pendal Group are optimistic on Bitcoin – with management at the firm considering Bitcoin a better investment than government bonds, other financiers have a less optimistic approach.

“Bitcoin is a cockroach that exists. They can’t ban it out of existence.

We think ultimately that government bonds will turn into a dead asset class, so we now have to imagine what it will be like for other assets classes when bonds are no longer relevant to hold in a portfolio.”

Geoff Wilson – the chairman and founder of Wilson Asset Management – stated that despite being enthusiastic about blockchain technology, he did not see Bitcoin in the same light, considering it a risky investment.

“As an investment, it is extremely volatile and appears to be easily manipulated. Thus it is not a prudent investment, it is not strategic for us as an investor and in our view, it is not sustainable.”

Other fund managers were even more bearish on Bitcoin and cryptocurrencies in general, with one Aussie financier saying that when wanting a good punt, he preferred to visit a casino.

Meanwhile Jamie Hannah – the deputy head of investments at VanEck – has found a middle-of-the-road-solution by listing a Bitcoin exchange-traded note in Germany. This allows investors to purchase Bitcoin-related funds without having to invest in crypto themselves.

This decision came following a noted increase in interest by clients of the firm, even when advised against it – after all, 2 out of 5 Aussies consider Bitcoin a good investment, and over 18% are in possession of crypto tokens.

It’s worth noting however that investors such as JPMorgan and Goldman Sachs have also been dismissive of crypto in the past – and had a change of heart. Like any investment, crypto may have its detractors – but only time will tell who is right.

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Australia Blockchain Investing

Root Cause Of November ASX Crash Found

Last month, a glitch caused the ASX to go down for nearly half an hour – merely one of the many telltale signs that the ASX’s CHESS system is showing its age, and coming out worse for wear.

NASDAQ Takes Responsibility

Although the ASX and others are working hard to upgrade from the CHESS system to a blockchain-based one that can carry the weight of one of the leading securities exchanges worldwide, NASDAQ has identified the bug in their software – used by the ASX – that nearly wiped an entire trading session last month.

NASDAQ Chief Executive Officer Adena Friedman issued a statement regarding the November 16 glitch.

“We take our role as a provider of mission-critical technology seriously and apologize to ASX, its customers, and all those impacted.”

The responsibility for the crash lies with an incorrect functionality in the Tailor-Made Combinations (TMC) order book created by NASDAQ and used by ASX Ltd.

A tool used by many equity and equity derivative traders across both public and private sectors, TMC  allows multiple trades to be carried out in a single transaction. When the error occurred on November 16th, the ASX was forced to halt trading in order to avoid losses by stock traders.

Although the ASX plans to bring back some functionalities of the TMC system on the 21st of December, this seems to be a stop-gap measure until the ASX makes its planned move towards a blockchain-based trading system.

Whether the ASX will choose its own in-house solution after scaling up the size of their project or go for the DESS system that the National Stock Exchange of Australia (NSX) has built is not yet clear – however, the planned switch to blockchain stock trading solutions will be a boost to the system’s reliability. 

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Australia Blockchain Crypto News Investing

Linqto Announces Speakers For The Global Investment Conference 2020

Taking place on the 8th and the 9th of December, the conference will have a line-up of 48 speakers from all corners of various investment markets.

Linqto is one of the top digital trading platforms for private market securities The upcoming conference will aim to look over the way the world has changed in the past year – and how to change things for the better in 2021, whether by using new investment strategies, digging in for a possible future bull run and much more.

Australian Speakers And Hosts

Australia will be represented at the GIC taking place next week by the CEO of BTC Markets and the founder of Sapien Ventures.

BTC Markets is one of the largest cryptocurrency exchanges in Australia, and its CEO – Caroline Bower – will be present for a discussion with Steve Vallas about the importance of blockchain technology and its impact on multiple sectors worldwide.

Steve Vallas is the CEO of Blockchain Australia, an advocacy group working with both the public and private Australian sectors in order to further the development and adoption of blockchain technology.

The conference will be hosted by Victor Jiang and Karim Nurani. Karim Nurani –The Chief Strategy Officer at Linqto – has been a part of over 100 successful start-up ventures and is here to tell the story.

Victor Jiang is the executive chairman of Sapien Ventures, a firm specializing in venture capital operating out of Sydney, Melbourne, and Shanghai. With a large portfolio of companies under its wing and a range of options for potential investors, Sapien Ventures is a true heavy hitter in the investment market.

The Global Investment Conference can be joined free of charge via a zoom link that will be provided to you upon sign-up.

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Bitcoin Investing Japan

Japan’s SBI Holdings to Launch Crypto Lending Service via VCTrade

Major Japanese financial services provider SBI Holdings has announced the launch of a new cryptocurrency lending service via its crypto subsidiary VC Trade.

The new service, named simply as VC Trade Lending, will allow customers to earn interest by lending out their cryptocurrency holdings to other crypto enthusiasts for a period of 84 days. Initially the platform will support only Bitcoin (BTC) but SBI Holdings plans on adding other major coins like Ethereum (ETH) and XRP at a later date.

SBI Holdings announced the new service earlier today in a press release posted in Japanese on its official website. The release outlines the conditions related to the new service, including the level of interest users can earn set at the relatively small amount of only 1.0%. Considering the huge gains Bitcoin has been making lately, this seems like a bad choice of investment. However, for those investors with a low level of risk aversion, it promises guaranteed returns rather than the potentially huge losses one could accrue trading cryptocurrencies on the open market.

Following the news earlier this year of lending platform Cred Inc. going bankrupt and failing to pay out its customers, SBI Holdings is aware of the skepticism around crypto lending services. To this end, it has assured customers that all assets are lent to companies within the SBI Group, mitigating any risk of third-party losses. 

Other conditions include a minimum loan amount of 0.1 BTC (approximately AUD$2,600) and a maximum of 5 BTC (approximately AUD$130,000). Users of the VC Trade Lending service won’t be charged any account management or annual membership fees and won’t have to pay for cryptocurrency transfers or deposits made in Japanese Yen. However, there is a small fee charged for withdrawals in Yen.

Expanding Crypto Products

The move follows a prior expansion of its crypto offerings in August this year, when SBI Holdings launched a cryptocurrency derivatives product on its SBI FX Trade platform. The service allowed users to buy and trade CFDs (contracts for difference) with the top three major cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and XRP. 

Each coin was available for trade in pairs with both USD and Japanese Yen, with a high maximum of 500 BTC. However, CFD offerings have come under intense scrutiny lately, particularly in the UK, where local regulator the Financial Conduct Authority (FCA) has called for a ban on the product.

The ease of entry the product provides makes it very attractive to amateur traders who may not know what they are buying into and fall foul to fraud. More often than not, CFDs are presented in a way that makes them difficult to understand and highly risky for the buyer, leading financial regulators to question the ethics of the product.