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Oman Oil & Orpic Group and HSBC Digitize Trade Finance with the Execution of their First Blockchain Trade Transaction

On their 49th National Day, Oman Oil & Orpic Group and HSBC Bank Oman succeeded in carrying out their first trade transaction via blockchain technology. The transaction which according to the report, clarifies in a deeper way the commercial and functional potential of blockchain involved the shipping of polypropylene to Abu Dhabi National Carpet Factory on a blockchain platform advised by HSBC using R3’s Corda system.

Pertaining to this, Sadiq al Lawati, Finance & Strategy Commercial Value Partner in Oman Oil and Orpic Group commented that their blockchain pilot is a great feat in the move in actualising digitisation which began with Artificial Intelligence. Lawati noted that their journey is resolved to continue welcoming new innovative technologies.

As stated in the report, the R3’s Corda system makes use of blockchain technology to trace and trace data between parties. It ensures to keep all stakeholders in sync, speed up transactions and reduce the need for reconciliation while providing visibility on what is happening which increases the confidence of the parties, and thus, makes trade finance more easy-going and straight forward.

Nizar al Lawati, Chief Financial Officer of Oman Oil and Orpic Group said that they are proud to be counted among the first group to embrace such an innovative idea.

“As an integrated Group, we are proud to be among the first in the region taking serious steps in digitizing Trade Finance through exploring Blockchain technology and responding to the 4th Industrial Revolution. This wouldn’t have been possible without the commitment of our team, our customer’s cooperation and the support we received from the Central Bank of Oman and HSBC Oman,” said Nizar al Lawati.

Just like the traditional process, the blockchain LC (letter of credit) allows all participants to a single platform to complete the transaction. However, instead of a space of 5 to 10 days like the traditional process, it does this in 24 hours.

Image via Shutterstock

Is Bitcoin still a Safe Haven? The Crypto Community Debates on Twitter Following Global Stock Market Crash

Bitcoin’s status as a safe-haven asset has been under intense scrutiny as the BTC price continues to fall amidst a series of crisis events in 2020 which have continued to create the ideal environment for the digital commodity to theoretically thrive. Beginning with the Iranian – US conflict in early Jan, the coronavirus outbreak triggering a cut in interest rates by the Federal Reserve, and now the plummeting oil price following disagreement in Vienna between Russia and the OPEC nations, by now surely Bitcoin’s price should be climbing due to its hypothetical ability to act as a non-correlating market hedge asset?

Markets worldwide have been gripped by growing fears over recent weeks as the coronavirus disruption ground manufacturing in China to a halt causing bearish global ripple effects and decreasing demand for oil. Last night, a break down in the alliance between Russia and the OPEC appears to be presenting as the straw that may break the proverbial camel’s back as oil prices took their biggest dive in 30 years.

The combination of the breakdown between Russia and OPEC and the already anxious coronavirus fueled environment has now facilitated the biggest decline in the stock market since the global financial crisis of 2009.

The biggest stock market drop since 2009

Stock Market Indices

% Fell

S&P 500

Dow Jones Industrial Average

6.9%

Nasdaq Composite

5.4%

UK FTSE

7.7%

Hang Seng Index

4.2%

ASX 200

7.3%

China’s Shanghai Composite

Japan Nikkei 225

5.1%

According to a report from CNN on March 9, the New York Stock Exchange halted trading for 15 minutes after stocks plunged more than 7% and the yield on the 10-year Treasury note also hit a record low falling below 0.5%.

President Trump Reacts

The sell-off panic began after Saudi Arabia unexpectedly launched a price war, slashing its own oil prices, in an attempt to retake the global market share. The sudden move by Saudi Arabia followed last Friday’s refusal by Russia to go along with the Organisation of the Petroleum Exporting Countries’ (OPEC) efforts to rescue the oil market from the drop in demand caused by the coronavirus outbreak.

President Donald Trump was among the first to chime in via his favourite social media platform, Twitter. The President acknowledged the disagreement between the Kingdom and Russia as the catalyst but also pointed fingers at the sensational or as he would say “fake” news.

Bitcoin’s Reaction

Despite a belief by investors that Bitcoin could serve as a tool against currency depreciation, the price of the cryptocurrency has also dipped over 13% since the failure by OPEC and Russia to reach a resolution. In a recent interview with CEX.IO Founder Oleksandr Lutskevych, he confirmed that US investors have been acquiring Bitcoin to hedge against the Federal Reserve’s quantitative easing and UK investors have also been relying on it as a bona fide store of value against Brexit fears.

Source: CoinMarketCap

In an article by Coindesk on March 9, Matt Smith, Director of Commodity Research, ClipperData described Saudi Arabia’s move as drastic and the kingdom’s attempts to bring the Russians back to the table has hurt economies everywhere.

The oil market is currently oversaturated and Smith believes it will be difficult for nations to reconfigure their supply chains to properly address the imbalance.

As Bitcoin has fallen with the traditional markets, Smith believes there is currently no serious interest in Bitcoin as a market alternative. He dismissed Bitcoin’s assumed safe haven status saying, “In times of crisis, all markets correlate.”

Crypto Market Twitter Reactions

Never one to miss out on an opportunity to kick the decentralized currency when it is down, economist Peter Schiff openly mocked the community for their belief that Bitcoin would moon in times of crisis. “The news couldn’t be more bullish. Yet the price action couldn’t be more bearish.” Schiff appears to still be licking his wounds from the onslaught of mockery he received when the price of gold, of which he is a super-advocate, fell immediately following the Federal Reserve’s rate cut of half a percentage point.

Schiff immediately received some push back from twitter users on his feed and offered the following explanation.

CEO of Coinbase, Brian Armstrong who only days ago openly pondered the fate of Bitcoin while drawing comparisons to the rise and adoption of the internet, seemed perplexed by the bearish movement saying he, “expected the opposite.”

Less Volatile than Traditional Stocks

American Bitcoin investor and influential figure in the space Anthony “Pomp” Pompliano, shared a different perspective, highlighting that the stock market had acted with a much higher rate of volatility than BTC.

Jimmy Song, one of the core developers in Bitcoin, reiterated Pompliano’s sentiments and also tweeted regarding Bitcoin’s low volatility considering the extreme stock market reaction.

Samson Mow of Blockstream also lent his voice to the cause. He outlined that Bitcoin was actually doing incredibly well in the crisis climate for a “ decentralized apolitical supernational asset” that was worth nothing a decade ago. He even directed his follower’s to a thread explaining why you should continue to buy Bitcoin.

At this point, it would be reasonable to wait and see what happens with Bitcoin. While the news seems dire to some analysts, a drop in 13% for bitcoin could almost be considered business as usual in terms of its usual volatility. The reality is that while it has fallen along with traditional stocks, the damage to the decentralized asset is not nearly as severe which for now leaves Bitcoin’s safe-haven status pending as we wait for more information to reveal itself over the coming weeks.

Why Energy Experts are Watching the Crypto Market Closely

The oil market is currently witnessing a tussle between Russia and Saudi Arabia on the issue of oil production to counter the slowdown of the US Market.

If the rumors are to be believed, the Iranian Government is making efforts to use cryptocurrency to bypass the sanctions which resulted from their involvement in the manipulation of the oil market. If one takes a closer look, China, Russia, and Iran have been some of the most active countries taking a keen interest in the cryptocurrency space. They are also some of the top oil-producing countries in the world.

Many cryptocurrencies, particularly Bitcoin operates on ‘Proof-of-Work’ algorithms which require energy for mining.

“Big crypto mining pools are rejecting Iranian miners because of sanctions We don’t give a damn about sanctions. If we get sanctioned we’d just shut down the company and open a new one.” as stated by Mikhael Jerlis, CEO of the Russian EMCD.IO mining pool

The three years of the proxy war between Saudi Arabia and Iran in Yemen has left the oil market in chaos. The catalyst appears to be the attacks executed by Houthi rebels at Red Sea’s Bab al-Mandeb Strait resulting in Saudi Arabia halting its oil supplies. This is why the crypto savy alliance of Russia, China and Iran are keeping a close watch on US sanctions and Saudi Arabia’s oil movement.

How Cryptocurrency Kicks In?

It is interesting to address that Bitcoin or for that matter, any other cryptocurrency can replace the ‘dollar’ in the oil market since Bitcoin is the least correlated asset in the glocal economy as compared to the oil market. Despite the havoc ‘Coronavirus’ is creating on the global GDP (reportedly $2.7 Trillion Loss), Bitcoin doesn’t seem to be shaken off from its steady route, having gained twice the market price of $7,900 as compared to last year’s market price.

“You could argue they [gold and the dollar] are inversely correlated. That could be an indication of how bitcoin will be impacted if it’s deemed to be a store-of-value asset class.” Aboualfa said.

However, he also mentioned that Bitcoin/cryptocurrency is looked upon as ‘sanction play’ and not any store-of-value asset class.

Apart from bypassing sanctions via playing with Bitcoins, another factor that makes the energy experts keep a close watch on the crypto market is their deep pockets in the crypto markets. Bitcoin, like any other asset, is currently without a doubt a ‘hot stock’ which is wanted by everyone. Whether or not it is going to make a big mark in the future, its potential to earn you big money in the current case scenario is very real.

On 7th March 2020, Bitcoin took a big hit as its price crumbled to $7,500 from a soaring $9,100. A total of $26 Billion was completely wiped off from the cryptocurrency market. Such a reaction came soon after the oil market plunged 24%, the worst day since 1991. The US West Texas Intermediate Crude posted their report on Monday with a drop as low as 24.59% settling for $31.13/Barrel. The drop in terms of absolute dollars was $10.15.

Apart from the drop on 7th March, Bitcoin again faced a nose crushing fall on 12th March where the price fell below $3,000 bouncing back to struggling $5,500. The reason for such a fall was again attributed to the poor stock market condition in US and fall in Oil Price, not to forget the COVID-19 outbreak.

Source: CoinMarketCap

Such kind of dips in the crypto markets (triggered by oil market) are huge opportunities for the big corporate giants and energy experts with a vested interest to buy crypto assets at low prices and make a profit out of it once the market is on the rise again.

Jehan Chu, co-founder of Kenetic Capital said,”For those who have long term investment horizons, bitcoin is absolutely a buy during these dips. We can expect more of this volatility sparked by macro health and financial shocks, but ultimately long term investments in the digital future and it’s key asset Bitcoin will be a winning strategy”

In order to maximize profits and take the full advantage (even when oil market is down), energy experts are keeping a close watch on the crypto market as part of their asset portfolio diversification.

Image via Shutterstock

Understanding the Market Structure of Oil and its Correlation with Bitcoin

Market Highlights

The price of crude oil dropped below zero for the first time in history.

Sellers were paying buyers to make deliveries of crude oil in a move to evade the possibility of sustaining storage costs.

Demand for oil has reduced so much that all the storage facilities are at overcapacity with no interested buyers.

The downtrend of oil prices started in January after the Coronavirus outbreak and has only accelerated thereafter.

The low demand for Crude oil is due to various reasons such as the Travel and Aviation ban followed by half of the world currently living under lockdown.

Before understanding the market structure of the oil, we need to understand that the oil market is a highly manipulated market due to the personal and monetary interests of various stakeholders. Understanding human conflicts, geopolitics, and principles of extraction, storage, and demand are the prerequisites of understanding how the oil market works.

Market History of oil

2004-2008: The demand for crude oil increased after a sustained increase in demand from developing countries. This initiated a parabolic movement of oil’s price as the demand outstripped the supply. Further, the OPEC nations were not interested in upgrading their extraction and storage facilities in order to bring the price of oil to an equilibrium.

2008-2009: The price of oil crashed due to a worldwide recession which reduced the demand for oil drastically and forced OPEC nations to take corrective measures.

2010-2011: The price of oil started increasing from 2010 after the Arab spring which increased political instability and caused fear in markets as the majority of the world’s oil reserves were at high risk including Libya, Syria, Iran, Iraq, Egypt, etc. Further, the economic recovery and increase in demand from India and China for oil increase the price of the commodity.

2011-2012: The OPEC nations came to an agreement to extract more oil thereby increasing the supply in order to supplement the world demand and remove the fears of conflict that had spiraled out of control causing fear in the markets.

2014-2015: The USA started the extraction of shale reserves which reduced the price of oil significantly, pushing Venezuela into an economic meltdown coupled with hyperinflation and sanctions. Further, the OPEC started a price war by letting the price of oil fall hoping that the decline in price would make shale reserves extraction unprofitable leading US shale producers to shut down.

2016-2018: The OPEC agrees to cut its production output in a bid to prop up the price. Various OPEC nations were suffering a serious and dangerous downturn with high costs of extractions as compared to US counterparts, due to which they agreed to decrease the supply in order to reach a better equilibrium price.

2018-2019: USA and EU nations imposed sanctions on Iran thereby cutting off its exports and the demand for oil on the international market. Reducing and weakening the demand for oil from countries like India, China, Japan, Germany, etc.

2020-Present: The price of oil started collapsing from the month of January as international flights started to shutdown. With the aviation and traveling industry under restrictions the demand for oil reduced significantly. As the spread of the virus accelerated and nations all around the world went into lockdown with the suspension of domestic travel, the demand for oil saw a sharp decline, and storage facilities around the world found it difficult to store oil with no buyers in the market.

What led to the oil price crash?

1. The increase in inventory at the rate of 6-7 million barrels per week.

2. Cushing hub, where a majority of oil is stored saw its facilities completely filled.

3. Traders who were not able to take the delivery sold it on for the available prices.

4. The fall in price and the fear of May futures expiring on Tuesday ie, April 21 intensified the selling of oil.

5. The drop in price triggered mass liquidations and margin calls on various positions held by financial institutions, traders, etc, driving the price down even more.

6. Liquidation of positions also removes liquidity from the market spreads thereby accelerating the crash with poor liquidity on the books.

The correlation between Bitcoin and oil:

The correlation between Bitcoin and oil has always been to the minimum when compared to the correlation between oil and Equities where the correlation is as high as 80%.

Even though the correlation index between Bitcoin and oil is slow, both of the commodities have a similar market structure, where Bitcoin experienced a parabolic advance in 2017 due to an increase in media attention, due to the ICO rush. After that time, Bitcoin has largely been traveling in a downtrend channel breaking the momentum and rallying due to fundamental time to time.

Even though we know that Bitcoin halving is right around the corner, the technicals are indicating a steep downturn is possible with the RSI trending towards 0, which represents that the price is overbought and will trend downwards. BBands is also tightening and trending in towards a downward momentum. It is highly unlikely that the blockchain market will face an upturn where there is no economic recovery or rally in the world and people are living paycheck to paycheck. Even though Bitcoin halving is a strong fundamental what is happening around the world negates its benefits as Bitcoin is a high-risk asset class and investors are wary of taking any investment decisions when a global recession is right at the doorstep.

Further, it is highly unlikely that money from the equity markets and the oil market will move towards Bitcoin and other cryptocurrencies as the institutions are cutting down risk and taking what all they have. Furthermore, retail investors are also personally affected by the lockdown and allocating resources to Bitcoin and cryptocurrencies ignoring that they would need money in the coming months for survival is highly unlikely.

The analysis provided by the author is purely educational in nature and does not continue any legal, investment, financial, or trade advice. Please do your research before investing or taking any financial decision.

Image via Shutterstock

References:

[1] Institue for Environmental Diplomacy and Security, Basic Principles of Economics and Rising Oil Prices, James M. Jeffords Center, the University of Vermont, available at https://www.uvm.edu/ieds/node/468.

[2] A. Mudgill, What led crude oil prices fall below $0 a barrel, Economic Times, dated 22 April 2020.

[3] B. Pulmer, Oil prices keep plummeting as OPEC starts a price war with the US, Vox, dated 28 November 2014.

[4] T. DiChristopher, Oil Suffers its worst monthly drop in more than two years during ugly October for markets, CNBC, dated 31 October 2018.

[5] L. Elliot, Middle East Crisis may leave world over an Oil Barrel, The Guardian, dated 7 February 2011.

[6] J. Baffes et al, The great plunge in oil prices: Causes, Consequences, and Policy Responses, World Bank Group, dated March 2015, available at http://pubdocs.worldbank.org/en/339801451407117632/PRN01Mar2015OilPrices.pdf.

US Stocks, Oil, and Bitcoin Price Plunge, Hinting Second Wave of Coronavirus Cases

Stocks have seen their worst day in three months, as the market has been concerned about a possible second wave of coronavirus cases as lockdowns have been easing in certain states in the US.

Along with the risk of a second wave of infections in a few of the US states, US President Donald Trump’s re-election prospects increased uncertainty in the market, according to Eli Lee, the head of investment strategy at the Bank of Singapore.

With jobless claims reaching more than double their peak during the Great Recession, at 20.9 million, US stocks slid, and Bitcoin price also witnessed a slump in the last 24 hours.

The Dow Jones Industrial Average plunged 6.9%, the S&P 500 fell 5.9%, and the Nasdaq dropped 5.3% near the end of the day. This trend marked its first three-day losing streak since early March when the coronavirus pandemic became a threat to the US economy.

The recent uptick of coronavirus-related hospitalizations became a catalyst for a grim outlook from the US central bank, according to Dan Deming, the managing director at KKM Financial. “The sense is maybe the market got ahead of itself, which makes sense given the fact that we’ve come so far so fast. The reality is this thing’s going to linger longer than probably the market had anticipated.”

Oil futures also fell for the third consecutive day of trading due to concerns over global energy demand, which depended on the currencies of oil producers and countries that rely on exporting commodities. The oil benchmarks are also heading for their first weekly declines in seven weeks.

Bitcoin struggled to reclaim its price at $10,000 as its price slid to $9,100 after fluctuating around the $9,500 mark for about a week. Bitcoin price takes a dip as institutional investors have been feeling uncertain about the market under the current crises.

COVID-19 has highlighted vulnerabilities in the fiat world

Bloomberg recently published a report on its crypto outlook in June 2020, suggesting that the COVID-19 pandemic has been pushing Bitcoin’s maturity, and Bitcoin is gaining the upper hand, against the stock market.

Progressing towards the digital equivalent of gold, Bitcoin’s volatility is at its lowest-ever against crude oil, indicating that the cryptocurrency is joining the mainstream market.

While the Fed is considering the launch of the digital dollar, Facebook’s Libra coin is getting a portion of the spotlight, in particular with the hiring spree of three C-level executives with strong compliance track records.

Goldman Sachs’ prediction

In Asia, the Chinese yuan is also heading for its biggest daily decline in two weeks, which is in line with Goldman Sachs analysts’ prediction. Goldman Sachs is expecting the Chinese yuan to fall to its lowest since 2008 in the coming months due to the existing US-China trade war, and now the US potential sanctions on China over its feud over Hong Kong.

The yuan has been forecasted by Goldman Sachs to fall to 7.25 per dollar during the next three months before recovering to 7.15 per dollar over six months, then to 7 per dollar in the next year. As the firm sees the yuan falling to its 2008 low, the potential for Bitcoin to experience an explosive price rally has been raised.

Bitcoin comes in for people who are looking to bypass China’s strict capital control over sending money offshore. China has previously banned Bitcoin trading as well as trading of other cryptocurrencies, although the development of blockchain has been widely praised in the country.

Venezuela Wants Citizens to Pay Taxes in State-Issued Petro Cryptocurrency

Venezuela is moving on a mandate that could see taxes being collected using its state-issued cryptocurrency—the oil-backed Petro. The effort is part of a nation-wide campaign to create mainstream use cases for Venezuela’s cryptocurrency.

In Venezuela, the Bolivarian Council of Mayors has signed off on the “National Tax Harmonization Agreement” which is a campaign to mandate the use of Petro cryptocurrency in tax collection and payments.

According to the announcement, an overwhelming majority of 305 mayors and municipality representatives have voted for the new crypto tax collection mechanism, with 30 mayors opting for fiat-based tax collection.

The campaign is being led by Venezuela’s Vice President Delcy Rodriguez who also leads the implementation of a new information exchange and monitoring system to allow companies to pay their taxes using the state-issued cryptocurrency.

Rodriguez said, “It is the simplification of procedures, making the State’s administrative activity at the service of the people more efficient, of the economic sectors that stimulate economic activity.”

Venezuelan Push For Petro Adoption and Usage

Over the last few years, Venezuela has been combating hyperinflation which has put the nation under extreme economic duress.

Since 2018, the Venezuelan administration of President Nicolas Maduro has used every opportunity to boost the adoption of its national oil- backed Petro cryptocurrency to circumvent the hyperinflation, even leveraging the COVID pandemic crisis to further airdrop the currency to doctors in the nation.

In addition, the Venezuelan government is accepting passport payments with the Petro and its oil companies are also seeking payment in the state-backed cryptocurrency. The country reported that 15 percent of all fuel payments in the country were now utilizing Petro.

Corruption and Sanctions

Venezuela is still facing harsh sanctions from the global community, particularly the United States for allegations of deep corruption in the South American nation’s government. In March 2020, the United States Department of Justice (DOJ) alleged that Venezuelan President Nicolas Maduro leveraged crypto in the illegal drug trade.

Maduro along with 14 other high-ranking Venezuelan officials was been charged for his alleged involvement in a multibillion-dollar cocaine trafficking ring that the DOJ claimed wreaked havoc on American communities by flooding the markets with cocaine for over 20 years. The allegations extend to drug runners, Colombian cartels, and the overall corruption that has plagued Venezuala’s governance.

“These indictments expose the devastating systemic corruption at the highest levels of Nicolas Maduro’s regime,” said DEA Acting Administrator Uttam Dhillon. “These officials repeatedly and knowingly betrayed the people of Venezuela, conspiring, for personal gain with drug traffickers and designated foreign terrorist organizations like FARC. These enforcement actions send a clear message to corrupt officials everywhere that no one is above the law or beyond the reach of US law enforcement.”

Iran Pushes Oil Investment on Citizens, Winklevoss Advises Bitcoin

Despite the oil price taking a beating this year, Iran has urged its citizens to invest in a scheme that would pre-sell 220 million barrels and drive liquidity into the OPEC nation’s struggling economy. In response, Cameron Winklevoss tweeted that Bitcoin is a far better investment.

The President of Iran and his administration have been encouraging Iranians to invest in the struggling oil market, prompting the famous Bitcoin billionaire Cameron Winklevoss to start a Twitter debate on black gold’s flaws compared to Bitcoin.

During a televised cabinet meeting, President of Iran Hassan Rouhani said that “The stock market and oil — not gold and the dollar — are the places to be investing and we want to help people this way.”

In a plan that has been ratified by Iran’s Supreme Council of Economic Coordination, the OPEC nation plans to enable members of the public to invest in oil on its capital markets for the first time. The economy of Iran has been battered by the COVID-19 pandemic, continued United States sanctions and declining oil demand.

In April, the oil market fell to new lows when expiring oil futures contracts scheduled for a May delivery through the West Texas Intermediate crashed by more than 100% send the oil price into negative territory.

Despite the obvious poor climate for oil investment, the Iranian government is forging ahead with its strategy to pre-sell 220 million barrels of oil to its citizens.

President Rouhani said, “The government is doing everything to control liquidity and counter oil sanctions […] the plan will help the economy and secure revenues for our people.”

Cameron Winklevoss Says Bitcoin not Oil

With a tweet that seemed in almost direct response to the Iranian government’s plan, Cameron Winklevoss took the opportunity to highlight the flaws in the oil market and suggest that Bitcoin is clearly the best option for investment.

Accompanied by a Wall Street Journal report on the frailty and uncertainty of the oil markets, Winklevoss wrote, “Oil is not a reliable store of value. #Bitcoin.”

While Bitcoin did initially take a hit with the rest of the S&P 500 on Black Thursday in March, the original cryptocurrency has made a strong recovery and there is now consensus amongst many mainstream investors that it has become a new form of digital gold.

Bitcoin’s price now sits at $11,527.99 at the time of writing according to CoinGecko.

Winklevoss appears to believe that if Iranian President Rouhani was serious about creating value for his citizens, then Bitcoin is the clear choice but it obviously would not directly impact the liquidity of the struggling oil-rich Iran economy.

Winklevoss Says Bitcoin Price to Reach $500,000 — Why BTC is Better than Gold and Oil

Bitcoin billionaire Tyler Winklevoss firmly advocates that Bitcoin (BTC) is headed towards a markup of $500,000 in pricing and that it will inevitably be the preferred safe-haven asset on the market, rather than gold.

Winklevoss: Why Bitcoin is the best safe-haven asset

The Gemini co-founder had always touted Bitcoin’s horn and preached that BTC’s recent stealthy performance on the market was merely the beginning of an even bigger bull run. Winklevoss firmly believes that it is only a matter of time before Bitcoin replaces gold as the global market’s preferred safe-haven asset.

Winklevoss did an analysis and compared gold, oil, and the US dollar with Bitcoin. Currently, gold’s market capitalization is estimated to be valued at approximately $9 trillion, while Bitcoin (BTC)’s value is currently sitting at around $200 billion in market capitalization. According to Winklevoss’ predictions, Bitcoin’s value will keep climbing steadily, as it is the only asset that is protected against inflation.

The Gemini co-founder asserted that “Bitcoin is ultimately the only long-term protection against inflation,” with a maximum supply of 21 million BTC.

While gold and oil are critiqued by Winklevoss for being hard to store and to move around, Bitcoin on the other hand can easily transferred as an asset and “can be sent anywhere in the world via the Internet.”

Gold vs. Bitcoin

Winklevoss examined gold and said that the problem with the traditionally viewed safe-haven asset was that no one knew what its actual supply was. Also, with Elon Musk’s plans to mine gold from asteroids, gold’s supply is set to increase, while BTC’s reserve will not, making the digital asset scarcer and therefore more valuable.

Elon Musk’s intentions to mine gold has already been backed by NASA. The US Space Agency had already publicly declared in March that SpaceX, Elon Musk’s company, will be the one responsible for launching a mission in space with the objective of conquering the asteroid “Psyche 16.”

Image Source: Tyler Winklevoss

US dollar is going down

As for the US dollar, the hugest dilemma addressed by Tyler Winklevoss is that the dollar lacks stability and is depreciating in value, due to the economic instability and looming inflation. With the coronavirus pandemic impacting global economies and the US bracing for an upcoming round of inflation, Winklevoss pointed out that Americans may be looking at hedge investments such as gold or cryptocurrencies. Taking to his Twitter platform, Tyler Winklevoss stated, “The US dollar is no longer a reliable source of value. Cameron Winklevoss and I make the case for $500K Bitcoin.”

Bitcoin pricing is valued north of $11,353.00 at the time of writing. Winklevoss has been actively promoting Bitcoin for a while, pushing people to invest in the digital asset, as it seems to be the only asset that is protected against inflation. With the cryptocurrency having a maximum cap of 21 million BTC, Winklevoss has therefore publicly touted BTC as the best hedge against inflation.

In recent months, interest in cryptocurrency has soared, as COVID-19 has pushed the dollar to depreciate with the US Federal Reserve mass printing stimulus checks for economic relief purposes. Concerns of inflation increasing at an alarming rate was brought up once again after Federal Reserve Chair Jerome Powell’s speech on Thursday. Powell had confirmed that the Federal Reserve was planning on exceeding its optimal inflation target of 2%.

Winklevoss always believed that the US Federal Reserve’s plans of mass printing stimulus check money were beneficial for Bitcoin. The Gemini co-founder said that it was going to stimulate the surge of BTC pricing on the crypto market. Also, with the current economic turmoil, investors have been looking at cryptocurrencies with renewed interest to secure their assets, in comparison with traditional gold and fiat dollars.

It was reported by crypto exchange giant Coinbase in April that a large amount of Americans had allocated their first COVID-19 stimulus check of $1,200 towards Bitcoin investments, rather than spending it on basic goods and services.

Cryptocurrency Payments now Accepted at Tifon Gas Stations in Croatia as Firm Hopes to Tap Tourist Trade

Croatian fuel wholesale and retail company Tifon, a subsidiary of Budapest-based MOL Hungarian Oil and Gas PLC, has announced that it now allows cryptocurrency payments for fuel and other services and products at its petrol stations across Croatia.

As per the report revealed on February 4, all Tifon’s fuel stops will accept cryptocurrencies including Bitcoin (BTC), Ethereum (Ether), Ripple (XRP), Stellar (XLM), and EOS.IO (EOS) through a partnership with the Paycek platform developed by Zagreb-based crypto-payment processing and cryptocurrency brokerage local firm Electrocoin.

The CEO of Electrocoin, Nikola Skoric, said that Paycek will convert crypto transactions into Croatia’s national local currency, the kuna, and then pass them to Tifon.

Tifon has positive expectations, particularly during the tourist season, as foreign clients use this form of payment more frequently during the summer season when tourists from across Europe flock to Croatia’s coastlines and cities. Ana Lokas, the Chief Financial Officer at Tifon, said:

“Even though cryptocurrency payments in Croatia are still in developmental stages, by introducing this payment option at all Tifon stations, we expect further growth and development.”

Based on the number of service stations, Tifon is among the largest five oil companies in Croatia. Its largest regional presence is in Slavonia (Eastern part of Croatia) and Central Croatia. The oil firm, which has been owned by MOL Group since 2007, operates 46 gas stations across the country and hires an estimate of 600 staff to help carry out its daily operations.

Crypto Payment Solutions for Businesses

Over the decades, the general public and businesses have been waiting for a single currency that could function as a viable medium of exchange. Bitcoin cryptocurrency has successfully been obtaining wider global acceptance, with major businesses increasingly recognizing the ability of the digital currency to transfer money within a matter of minutes.

Small retailers and large corporations have been accepting Bitcoin at a rapid pace. Touted as “the secure money of the internet,” the cryptocurrency is becoming accepted as a form of payment, just like credit cards. This signals financial inclusion as merchants and businesses begin accepting multiple payment options including fiat, credit, and cryptocurrency, all in one mobile point of sales system.

Bitcoin is the Best Institutional Asset in Q1 2021 – Messari

The meteoric rise of Bitcoin (BTC), the world’s first and largest cryptocurrency by market cap has positioned it to be rated alongside institutional assets in the global market thanks to its performance rating.

While the digital currency has remarkably battled the resentment from authorities around the world over the years, the shunning of all forms of skepticism by both retail and institutional investors has helped it change its course, for which today, many are hoping to get a piece of.

For the first quarter that is ending today March 31, 2021, Bitcoin stands out as the best performer according to Messari, beating traditional assets including global stocks, oil, gold, government bonds, and the world’s reserve currency, the US Dollar among others. For the quarter, Bitcoin has grown by 103%, in contrast with 26% for oil and 3% for global stocks respectively.

Amid the need to rebalance following the COVID-19 pandemic and its toll on the broader economy, assets like gold, government bonds, and investment-grade bonds all retracted at the rate of 10%, 5%, and 4% respectively. The performance of Bitcoin has also proven to be superior to cash and high yield bonds – both of which maintained 0% growth rates.

There are many attributes that position Bitcoin ahead of other assets. While Bitcoin is decentralized, most assets have a common denominator – they are controlled in one way or the other by human systems, or governments.

Bitcoin runs on its own codes, designed more than 12 years ago by its inventor Satoshi Nakamoto, and the entire system has been self-sustaining since then. Unlike the other assets profiled, Bitcoin is immune to human intervention and the aftermath of unfavourable economic and monetary policies.

Bitcoin is also anti-inflationary, made possible through its halving event. These features are part of the reasons why Michael Saylor and other Bitcoin evangelists advocate buying Bitcoin as an alternative to cash.