interest - Pwim.Net

CoinMarketCap CSO, on DeFi for Fostering a More Open Economy

Following part one of our interview with Carylyne Chan, the Chief Strategy Officer at CoinMarketCap, she elaborated on seizing market opportunities in decentralized finance (DeFi) with a new product, Interest by CoinMarketCap. She also outlined the potential effects of staking regarding CMC’s operations and plans for 2020.

DeFi allowing CMC to foster a more open economy

CMC announced the launch of Interest by CoinMarketCap on Oct.17, as the one-stop resource for users to acquire the latest information on rates in saving, lending, borrowing and margin trading on cryptoassets. The platform started with 33 cryptoassets traded across wallets, exchanges and decentralized finance (DeFi) platforms, and now has over 40 assets. Chan strongly believes that DeFi will allow CMC to foster a more open economy. By creating a more transparent data platform, Chan further explained, “What we’re trying to do in the DeFi space is to ensure that we show everything in the same place, bringing transparency and efficiency to the space.” Chan suggested that CMC may soon go beyond listing crypto assets on Interest by CoinMarketCap and that derivatives may be added in the future. She also believes that many aspects are interlinked, including the yields for borrowing and lending as it affects the pricing across the spectrum.

Integration for a better user experience

Gathering data from decentralized, borrowing, and lending platforms have been “pleasantly straightforward,” according to Chan, as there are a lot of similarities in the infrastructure of how the information is collected from exchanges. Elaborating on CMC’s aim to enhance user experience, Chan said, “We wanted to find meaningful ways that we can segregate different things, including centralized, decentralized categories that you see on the site. On the product side of things, people can really experience and enjoy the platform in a way that helps to compare things much more easily.”

What is the impact of staking?

As Ethereum is moving towards implementing a proof-of-stake (PoS) consensus algorithm, Chan explained the possible challenges CMC may have to overcome. “Staking has a few areas of impact, when we think about staking and how it affects circulating supply and finally on the market capitalization of crypto. When the crypto is staked, it is locked in a sense, so we have to think about how we can account for crypto, which is staked, and account for the supply based on that.” She further added that the company is currently working out the details of this matter, and she also believes that PoS is a better solution for the environment. “I think that there will be many more opportunities for us to aggregate some of this content to help push forward behaviors such as staking and participation in staking.”

What’s next for CoinMarketCap in 2020?

After announcing the new Liquidity metric at The Capital, Chan said that CMC would continue to push on improving the accuracy of data as well as to increase the utility and the content of the site to add more content partners. “We launched a jobs board as well, increasing the utility of the site will allow us to engage more deeply as we will be launching new educational initiatives. We are also going mainstream with outreach such as on Yahoo Finance and other aggregator sites,” said Chan. CMC confirmed its strategic partnership with Yahoo Finance on Nov. 21 to power Yahoo’s cryptocurrency screener section.

Litecoin Foundation Partners with Cred to Let Crypto Holders Earn Interest

Litecoin Foundation has announced a partnership with Cred to begin offering interest on Litecoin held as collateral. Cred customers can freeze their coins with Cred and earn up to 10% annual interest on their digital assets.

The strategic partnership program also enables Litecoin holders to lend their cryptocurrency at attractive rates, comparable to various decentralized finance (DeFi) solutions on Ethereum.To benefit from the interest program, Litecoin holders are required to freeze their coins for at least six months. No account minimum is required, and monthly interest payments will be given either in cryptocurrency or fiat. Cred partners like BitBuy, Uphold, and Bitcoin.com will also facilitate the credit process.

Alan Austin, director at Litecoin Foundation, revealed that the collaboration provides a real-world use case for Litecoin. Alan said, “Strong use cases need to be one of the most vital considerations when evaluating cryptocurrency. Besides Litecoin’s reliability, excellent liquidity, and use for payments, the opportunity to earn interest at competitive rates through Cred’s platform greater enhances this use case. We are delighted to be collaborating with Cred to provide this offering.”

Dan Schatt, CEO and co-founder of Cred mentioned,“We are happy to work with Litecoin Foundation, one of the most trusted and oldest names in the blockchain industry. We aim to support the millions of Litecoin holders with more equitable and transparent financial services we have developed. Thanks to the continued advances in blockchain technologies.”

Litecoin Foundation is committed to developing state-of-the-art blockchain technologies mainly through Litecoin (LTC). Litecoin is one of the most popular cryptocurrencies in the world and is a top global cryptocurrency with a coin market capitalization exceeding three billion dollars.

On the other hand, Cred is a global borrowing and lending platform, which facilitates open access to credit anytime and anywhere. Established by Dan Schatt, former PayPal fintech executive, Cred is based in the San Francisco Bay Area. The company strives to build a global network for accessing credit and allow everyone to benefit from excellent financial services.

Image via Shutterstock

Australia's National Blockchain Steering Committee Mobilizes Domestic Developer Community

The Australian National Blockchain Roadmap Steering Committee is seeking expressions of interest from its domestic blockchain community to create working groups on supply chain and credentialing.

Australia’s National Blockchain Roadmap Steering Committee has reached out to its wider tech community to explore specific applications of blockchain technology in supply chain management, education, and agriculture.

The Committee sent out the invitation via the Australian Government’s Department of Industry, Science, Energy and Resources’ website requesting that interested blockchain parties submit an expression of interest by July 22.

The Steering Committee’s Mission

The Committee was established in February 2020, following the release of Australia’s National Blockchain Roadmap, and is overseeing its implementation. The Committee brings together representatives and experts from government, academia and industry to work together on realizing the opportunities of blockchain technology in Australia.

“The roadmap is a critical step towards realizing a blockchain-empowered future for Australia,” said Digital Economy and Technology Division Head and Steering Committee Chair, Narelle Luchetti. She added:

“By recognising the rich opportunities that exist to leverage blockchain across our economy, these collaborative working groups will play a central role. They will help progress two important use cases for this technology —supply chains and credentialing.”

The Committee members include experts from RMIT University, CSIRO, and the Australian Stock Exchange. The National Blockchain Roadmap lays out a plan to integrate emerging and breaking technologies such as Artificial Intelligence (AI) and Internet of Things (IoT) which is expected to generate $3 trillion AUD within the next 10 years in the Australian economy.

The Committee’s recently appointed CEO, Steve Vallas added, “The roadmap provides a valuable opportunity for blockchain community members and stakeholders to be heard.”

Bitcoin Futures Open Interest Hit ATH Again as BTC Price Soars by 900% Since 2018

Bitcoin’s price rally seems to have been ignited again given that it is up by 10.97% in the last 24 hours to hit $38,549 at the time of writing, according to CoinMarketCap. The leading cryptocurrency recently tumbled to an intraday low of around $32,200 based on a looming correction following its bull run that saw the $41,500 level breached.

Crypto analyst Joseph Young has delved into the current price surge and noted that BTC future open interest is back to a record high of more than $12 billion. He explained:

“Bitcoin futures open interest is back to all-time high once again. Open interest = the sum of all futures contracts in the market. When the market is crowded, massive price swings like the Jan. 12 20% drop become more likely. Another flush drop above $42k could happen again.”

The present price rally has renewed BTC future open interest as the top cryptocurrency is a stone throw away from its recent ATH of $41,500 as its hovering around the $38, 500 level.

This trend is being witnessed at a time when analysis shows that Bitcoin holders are continuously accumulating and crypto whales saw the recent dip as the silver lining needed to increase their BTC portfolio.

Bitcoin has surged by 900% since 2018

Market analyst Holger Zschaepitz has disclosed that the current Bitcoin’s rollercoaster ride has renewed the ‘mother of all bubbles’ discussion as BTC has skyrocketed by 900% since 2018. He acknowledged:

“Bitcoin roller coaster renews ‘the mother of all bubbles’ discussions. 900% advance since 2018 has been so swift that it dwarfs all other boom cycles during the past 50yrs, from gold’s rally in 1970s to Nikkei’s surge in 1980s to Nasdaq 100’s run in 1990s.”

BTC has enjoyed a remarkable bull run since it plummeted to $3,800 in March last year as the coronavirus (Covid-19) pandemic took the world by storm. Its recent correction was deemed healthy by a Spartan Group partner as it could be the trigger to the next uptrend. Jack Dorsey, Twitter CEO, has also expressed his passion for Bitcoin and its decentralized control.

What’s Different About Cryptocurrencies This Time Around?

Even people who haven’t been paying all that much attention to the markets over the last several months are likely aware that cryptocurrencies are one of, if not the hot investment topic. If you followed the Game Stop fiasco, for instance, you likely heard mention of the now infamous ‘Doge Coin’ that was making headlines and rounds on social media at the time. While confidence and sentiments remain highly mixed, there is something notably different about the renewed crypto buzz and it comes down to several important factors.

Stronger Competition

While Bitcoin is still the largest coin by market cap and the one that continues to draw the strongest interest from institutions and businesses (it currently has a market cap of over $1 trillion), since 2017, a litany of other coins have also made names for themselves, including coins like Ripple, Ether, Lite Coin, and many others.

Increased competition in the crypto market is sometimes viewed as having a kind of contagion effect, in which positive price movements, led by Bitcoin, end up affecting the demand for other less popular currencies that nonetheless have solid fundamentals. With Bitcoin’s prohibitively high price, alternative coins also give newer retail investors a chance to get in on cryptocurrencies, and especially new entrants to the market.

Increased institutional interest

Institutional, and particularly central bank sentiment toward cryptocurrencies has always been and continues to be highly mixed. The governor of the Bank of England, for instance, believes that cryptocurrencies will not last and will eventually be replaced by digital currencies created and backed by governments around the world. India looks set to place an outright ban on cryptocurrencies. The Bank of Singapore, on the other hand, believes Bitcoin may one day replace traditional store of value assets like gold.

The fact that there are large, mainstream institutions around the world taking cryptocurrencies seriously marks a serious change in the tone of the conversations surrounding, at the very least, Bitcoin and represents a new, though still uncertain era in the future of crypto assets as viable stores of value. Other major financial institutions in North America, including banks like Goldman Sachs, are also incorporating crypto into their investing strategies moving forward.

Increased Private Sector Interest

The largest and most recent indication of the private sector’s warming towards cryptocurrencies is undoubtedly Elon Musk and Tesla’s 1.5 billion dollar investment in February of 2020, though this is far from the only private sector involvement and interest in cryptocurrencies. Publicly traded companies on the S&P 500 have bought up nearly 3.9 billion dollars in Bitcoin since the summer of 2020. Tesla’s purchase in 2021 is the largest one-time buy so far, but MicroStrategy, the business intelligence software company, has already purchased $2.19 billion since last summer. Like Tesla, Micro Strategy is expecting to hold onto its Bitcoin for the long term.

An increasing number of companies are also accepting cryptocurrencies as payment. Companies like Microsoft, Dish Network, all Shopify Sites, Overstock, Twitch, Wikipedia, and many more now allow you to pay in Bitcoin. A growing number of digital companies are also starting to accept coins like Ether, including snel.com, coincards.com, seoclerks.com, and gamerall.com.

Increased Mainstream Acceptance

At least with Bitcoin (and coins like Ripple and Ether are not far behind), the coin appears to be on the cusp of mainstream acceptance. The coin’s movement to $50,000 is often pointed to as evidence of this acceptance as more and more retail investors enter the space. What used to be the domain of insiders and maverick investors has become a household name.

More people now understand what blockchain is, how it works, and what its revolutionary potential is, particularly as we stand in the midst of such tumultuous times, low-interest rates, and talk of a major market correction coming this fall.

Conclusion

While crypto-assets are still unregulated, uninsured, often illiquid, and subject to high volatility and security issues, the tone of the conversation surrounding them, and especially the big 3 (Bitcoin, Ether and Ripple), has changed dramatically since 2017. Despite the success of crypto assets still likely dependent on widespread acceptance at the state level, the genuineness of the blockchain and cryptocurrency revolution is, at this stage, hard to deny.

Three US States Target Celsius Network as The Company’s Interest-Earning Crypto Accounts Draw Concerns

Various US states recently took action against the cryptocurrency lending platform Celsius Network, accusing the firm of providing residents with unregistered securities.

On Friday, September 17, Texas securities regulator – the Texas State Securities Board – filed legal action against Celsius Network, expecting the firm to explain why it should not be ordered to stop providing its products to state residents. The court hearing is scheduled to take place on February 14, 2021.

Also, on Friday, New Jersey securities regulator – the New Jersey Bureau of Securities – ordered Celsius to stop providing some of its products, which the state considered unregistered securities. Alabama also gave a similar order demanding that Celsius show why it should not be barred from providing its products within the next 28 days.

As of September, Celsius had more than $24 billion in “community assets.” The crypto firm stated that such assets under its management would make it the world’s largest interest-account provider and cryptocurrency lenders, if not the largest. The company provides customers with a yield of almost 9% for deposits of US dollar stablecoins like USD Coin and Tether, as much as 6.2% for Bitcoin and varying rates of interest on other cryptocurrencies.

Meanwhile, Celsius and other firms offering cryptocurrency interest accounts have stated that they can pay such high yields because they lend out the deposits at even higher rates to institutional investors, which need to borrow cryptocurrency to carry out their trades like to engage in arbitrage or short the market.

However, national and state regulators have stated that the firms are likely breaking the law and said that the products, which sometimes are marketed as an alternative to bank savings accounts, should be registered with their agencies. The registrations would give more details on disclosures to investors as well as agency oversight.

Cryptocurrency Savings Accounts

The development against Celsius Network came when Alabama, Texas, and New Jersey were also among US states that issued cryptocurrency leader BlockFi with similar actions in July.

During that time, the three US states mentioned that the cryptocurrency platform BlockFi may have violated securities law by providing its interest-bearing accounts within their jurisdictions.

The three states said BlockFi did not register its BlockFi Interest accounts with state regulators and stated that such products might be unregistered securities offerings.

BlockFi Interest Accounts allow customers to deposit their cryptos and earn interest, depending on how much and which kinds of assets are deposited.

On September 7, the US Securities and Exchange Commission warned that it would sue Coinbase if the exchange launched its new digital asset lending product. Coinbase plans to launch a yield product called Lend that allows customers to earn interest in certain digital assets on the platform. The SEC considers the Lend product as security.

Low-Risk Appetite Continues to Play Out in Bitcoin Market Based on Diminishing Institutional Activity

Institutional activity remains sluggish as bitcoin hovers around the lower $20K level, depicting a low-risk appetite.

On-chain analyst Caue Oliveira pointed out:

“Low institutional activity evidences de-risking movement by traditional whales. Looking at the daily trading volume in mutual funds traded in the traditional market with direct/indirect exposure to BTC, we can see the current low-risk appetite.”

Source:CryptoQuant/CaueOliveira

Institutional investment has played an instrumental role in enabling Bitcoin to hit all-time highs (ATHs). For instance, BTC breached the then-historic highs of $20K in December 2020 after failing to do so for three years as more institutional investors joined the network.

Furthermore, institutional investments enabled the leading cryptocurrency to record the latest ATH of $69,000 in November last year.

Nevertheless, retail investors continue jumping on the Bitcoin bandwagon based on the rise of non-zero BTC addresses. Market insight provider Glassnode stated:

“The number of BTC addresses holding 0.01+ Coins just reached an ATH of 10,560,930. Previous ATH of 10,560,117 was observed on 26 July 2022.”

Source:Glassnode

Despite the back and forth being experienced in the BTC market, long-term objectives continue to take shape.

Through its weekly report dubbed “Conviction Through Confluence,” Glassnode highlighted:

“Long-term supply dynamics continue to improve, as redistribution takes place, gradually moving coins towards the hodlers. Notable supply concentrations are observable at $20K, $30K, and $40K, which tend to align with both technical and on-chain price models, making these regions significant zones of interest.”

Bitcoin was hovering around $21,392 during intraday trading, according to CoinMarketCap. With the looming interest rate review by the Federal Reserve (Fed) slated for July 27, it remains to be seen how the top cryptocurrency plays out in the short term.

ADDX Introduces Cash Management Tool ADDX Earn

ADDX has introduced a cash management tool for investors, which consists of a solution that aims to withstand short-term volatility while preserving capital.

The new ADDX Earn will provide one more option to investors with excess funds in their wallets to make interest, instead of their funds sitting idle, according to the statement.

Per the private market exchange company, ADDX Earn has been built to boost investors’ returns deposited in their ADDX wallets and has not yet decided on which private market product to take part in. It added that some of the idle capital may also have come from previous investment earnings on ADDX.

The plan of the new management tool is also to beat short-term bank deposit rates by providing higher target returns for products under ADDX Earn. Many investors usually store undeployed capital in short-term bank deposit rates.

“The first two funds to be launched under the ADDX Earn umbrella are by Lion Global Investors, a fund manager that is a part of the OCBC Group,” ADDX said.

The two funds named the LionGlobaI SGD Enhanced Liquidity Fund and LionGlobaI USD Enhanced Liquidity Fund, are diversified over a range of issuers and tenors through investments in high-quality portfolios of debt instruments.

‘The two funds have weighted average portfolio durations of less than a year, which gives Lion Global the flexibility to adjust portfolio allocations in response to changing interest rates and market conditions,” ADDX said.

According to ADDX, investments can be redeemed on a weekly basis.

The funds are also targeting low-volatility assets. These are being done as they are “well-suited” for the current market environment that has seen increased volatility in other asset classes, ADDX announced.

Interest is accrued daily for both funds. As of July 31, the LionGlobaI SGD Enhanced Liquidity Fund had a weighted average yield to maturity of 2.22% p.a., while that of the LionGlobaI USD Enhanced Liquidity Fund was 2.38% p.a. These rates change monthly depending on the prevailing interest rate environment and the underlying assets held by the funds.

Gerard Lee, Chief Executive Officer of Lion Global Investors, said, “our liquidity funds are typically used by financial advisers and digital players. We are therefore delighted to have a private market exchange use our liquidity funds to provide a solution for their investors’ excess cash.”

The SGX-backed ADDX was founded in 2017. It is currently serving individual investors from 39 countries across the Asia Pacific, Europe and the Americas – except the US.

The company has started using blockchain and smart contract technology to reduce manual interventions in issuing, custody and distributing private market products.