$1 Trillion of Cryptocurrencies Shows Booming ‘Asset Class’ – Crypto Money Daily

$1 Trillion of Cryptocurrencies Shows Booming ‘Asset Class’ – Crypto Money Daily

The authorities in Iran have seized nearly 1,620 mining firms of cryptocurrencies.The firms were reported to be working illegally and were therefore Edelman’s RIA Digital Assets Council is bullish on cryptocurrencies as institutions start to pile in.

Bitcoin (BTC) rose for a third straight day, pushing early Thursday to a new all-time high price above $38,000 and setting bullish traders’ sights on $40,000.

“Momentum has been building over time, and it’s anyone’s guess where or when we might eventually top out,” Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, told clients in a newsletter.

The gains came after a day of turmoil in Washington, D.C., during which supporters of U.S. President Donald Trump stormed the Capitol building and disrupted a congressional vote to formalize challenger Joe Biden’s victory in last November’s presidential election. The shocking images prompted world leaders from the U.K., European Union and Canada to condemn what they characterized as an unacceptable attack on democracy. U.S. lawmakers later reconvened and certified the election result early Thursday. 

The upshot, according to Bloomberg News, is that global investors are now focusing on the likelihood that a Biden White House, backed by a legislature controlled by his Democratic Party in both chambers, could more easily pass new U.S. stimulus measures. Bitcoin prices quadrupled in 2020 as a growing number of big Wall Street investors said the cryptocurrency could serve as a hedge against the potential negative impact on the dollar’s value from trillions of dollars of fiscal and monetary stimulus.  

In traditional markets, European and Asian shares rose on Thursday and U.S. stock futures pointed to a higher open. Gold weakened 0.1% to $1,916 an ounce. 

Earlier this week, First Mover flagged the possibility that the total market capitalization of all cryptocurrencies combined could surpass $1 trillion within a few months. 

The milestone could prove another catalyst for big Wall Street funds to look more seriously at cryptocurrencies for a potential portfolio allocation. It’s getting harder and harder to argue, as the big bank and brokerage firm Goldman Sachs did last May, that cryptocurrencies are “not an asset class.” The sums are getting too big to ignore.   

“Is it frothy? A little bit in the short term,” Qiao Wang, co-founder of decentralized finance (DeFi) accelerator firm DeFi Alliance, told Voell. But is it ridiculous? “Nope.”

One of the biggest stories in finance during the last decade was the rapid (and concerning) growth in so-called leveraged loans, which are big loans that are arranged by Wall Street firms on behalf of junk-grade or even unrated companies and then typically apportioned to other banks, sold off to investors or even transformed into new triple-A rated bonds via the alchemy of structured finance.

Headlines abounded when the outstanding amount of U.S. leveraged loans grew to about $500 billion in late 2010 and then doubled to $1 trillion by early 2018.

Cryptocurrencies have now traversed that chasm in just a few months.  

“The $1 trillion mark cements cryptocurrency as an investable asset class that no longer sits on the fringes of traditional finance as a toy for retail investors,” Jack Purdy, of the crypto-market analysis firm Messari, told Voell. “It demonstrates that this asset class is large enough to absorb large orders like we’ve seen recently with the slew of institutions entering over the last few months.”

Bitcoin, the original cryptocurrency and the largest by far, represents about 70% of the industry’s total market capitalization. So the push toward the $1 trillion milestone came largely on the heels of bitcoin’s rally over the past year. 

Bitcoin now has a market capitalization of about $700 billion, up from about $130 billion at the start of 2020. According to the website fiatmarketcap.com, bitcoin’s outstanding value would rank it as the 16th biggest global currency, just ahead of the Mexican peso and one rung below the Russian ruble.  

And if bitcoin were a publicly traded company, it would rank as the world’s eighth-largest, according to another website, AssetDash, well behind Apple’s $2.1 trillion valuation, Amazon’s $1.6 trillion and Facebook’s $751 billion valuation, but far in excess of the big U.S. financial institutions like Visa ($468 billion), JPMorgan Chase ($401 billion) and Citigroup ($135 billion).

If the recent trend is any indication, bitcoin could keep climbing these ranks.  

Options traders are signaling a looming change in digital-asset markets – from a focus on bitcoin to relatively undervalued ether (ETH) and alternative cryptocurrencies.

The spread between the six-month implied volatility (IV) for ether and bitcoin – a measure of the expected relative price volatility between the two – has risen to a record high of 46%. That surpasses the previous peak of 45% seen on Feb. 21, 2020, according to data provider Skew. The three- and six-month spreads have risen to an 11-month high of 32% and 23%, respectively.

The widening of the IV spreads indicates that the market expects ether and other alternative coins to chart bigger percentage moves than bitcoin in the near term.

Some may argue that implied volatility reflects investor expectations of price turbulence and may not turn out to be reflected in the charts going forward. However, historical data show that implied volatility spreads are reliable indicators of upcoming shifts in the market. For example, the ether-bitcoin IV spread nosedived in the second half of September 2020, portending a big shift toward bitcoin. And the largest cryptocurrency delivered, outperforming most other cryptocurrencies by a significant margin in the final quarter of last year, with a 168% rally. 

CME becomes biggest bitcoin futures exchange as institutional interest rises (CoinDesk) 

Maker governance token MKR surges 44% in 24 hours to highest in two years, as issuance of stablecoin dai (DAI) surges along with DeFi’s rapid growth (CoinDesk)   

Crypto brokerage Voyager to suspend trading in XRP tokens after SEC suit against Ripple Labs (CoinDesk) 

Bitcoin investment makes sense in current economic climate, former Fed Governor Kevin Warsh tells CNBC (CoinDesk) 

Kraken users are staking more than $1B in crypto, including ether (ETH), tezos (XTZ) and polkadot (DOT) (CoinDesk)  

Eric Vorhees’s ShapeShift plans phase-out of centralized trading activity, will route orders through DeFi applications, which “frees users from having to provide personal, private information” (CoinDesk) 

Iranian authorities close 1,620 illegal cryptocurrency mining farms, Financial Tribune says (CoinDesk) 

U.S. economy seen getting boost with Democrats’ Georgia sweep, possibly another $1T stimulus (Bloomberg) 

Danish 20-year home mortgages now carry a fixed interest rate of 0% (Bloomberg) 

Italian government could take on $17B of lender UniCredit bad loans to facilitate takoever of state-owned bank Monte dei Paschi (Reuters)  

U.S. private payrolls post first decline in eight months as coronavirus cases skyrocket (Reuters)

Source: cryptomoneydaily.com


CRYPTOCURRENCY MINING FIRMS SEIZED BY THE AUTHORITIES OF IRAN - TCR

CRYPTOCURRENCY MINING FIRMS SEIZED BY THE AUTHORITIES OF IRAN – TCR

  • The authorities in Iran have seized nearly 1,620 mining firms of cryptocurrencies.
  • The firms were reported to be working illegally and were therefore seized. 
  • The authorities announced that the illegal firm’s operations would be stopped, and the miners will be sentenced for prosecution. 

One of the first countries to legalize the mining of cryptocurrencies was Iran. It provided legitimate miners with licenses for cryptocurrency mining. The due date for the cryptocurrency miners to authorize and register themselves was 2020, August. The ones who failed to do so were considered as working illegally and have now been raided. Iran had passed a bill in August, which approved and registered cryptocurrency miners under the government body and offered incentives and subsidies to only those miners. 

It was Tavanir, a spokesperson of an Iranian power supply company. He used to deliver power to cryptocurrency miners and also to the illegal ones under strict rules. He used to levy fines on any miner who used his power from an unauthorized mining firm. Based on his complaint, the Iran authorities banned the firms, cut all their network from the nation’s grid, and prosecuted them. 

In the month of June, Iran had seized over 1000 software of Bitcoin that was running illegally. These unauthorized miners used the electricity and all other power supplies at subsidized rates like other legal cryptocurrency mining firms. They did not possess any valid license and were not deemed firms under the cryptocurrency mining units in Iran. The Minister of Energy had put out a pact where if any of the licensed mining firms would out any of the unauthorized firms, that firm will be awarded 20% of the funds seized from the illegal miners. This announcement led to more illegal crypto mining businesses being brought under the government’s notice, thereby helping the government check its unnecessary losses. 

All these illegal bodies incurred huge losses on the Nation’sNation’s grid due which the government had to take strict measures. The authorities imposed fines on the mines and prosecuted the miners, which helped the government cover some of the losses. It was crystal clear that the Government of Iran was totally against the use of electricity at a subsidized amount by cryptocurrency miners and had added many conditions for the ones who wished to avail the subsidy offer from the government. 

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Ritika Sharma

Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

Source: www.thecoinrepublic.com

Author: Ritika Sharma


Ric Edelman: 12 Predictions for Bitcoin, Other Cryptos in 2021

Ric Edelman: 12 Predictions for Bitcoin, Other Cryptos in 2021

“Blockchain and digital assets are new asset classes with the potential to transform commerce on a global scale,” Ric Edelman, founder of the RIA Digital Assets Council, said upon release of the council’s predictions for 2021.

RIADAC is an education source for financial advisors. It produces live and online events, webinars and content to boost their knowledge of blockchain and digital assets.

During the first quarter, RIADAC will offer a program that allows advisors to earn continuing education credits by attaining RIADAC’s Certification in Blockchain and Digital Assets.

Here are some of the group’s predictions for digital assets for 2021.

  • Prices for digital assets will end the year higher than they began — notwithstanding possibly extreme volatility — fueled by increased institutional adoption and the snowball effect of individual investors.
  • Bitcoin’s share of market will rise, as lots of Layer 1 coins will disappear. Even so, Bitcoin will not be the best-performing digital asset.
  • For the financial advisors and their firms and asset managers, reputational risk will shift from “why did you invest in that?” to “why didn’t you invest in that?”
  • Bitcoin is here to stay. Federal acquiescence to (if not outright approval of) digital assets will continue; the more regulation, the more legitimate digital assets become, fostering greater adoption. And as the number of investors and the amount of capital invested increase, the harder it will be for the federal government to outlaw it.
  • At least one centralized company will roll out a decentralized, user-owned/operated crypto-network that will have legitimate checks and balances over the company’s actions.
  • Top talent from law, engineering and financial services will leave their positions for the blockchain and digital asset space.
  • The Securities and Exchange Commission will approve a Bitcoin ETF, causing the GBTC, ETHE and BITW premiums to evaporate. The first Bitcoin ETF deposits will exceed $5 billion within two weeks of debut. Dozens more filings will follow, spurring a new exponential growth curve for the price of Bitcoin and other digital assets, likely followed by another crash.
  • Frauds and scams will increase commensurate with the price of Bitcoin.
  • Tokenization will skyrocket. Assets of all types — from tangibles (real estate and collectibles) to intangibles (recording artist royalties and athletic and artistic performance contracts) — will gain huge traction.
  • Global regulators will slow, probably stall, deployment of Diem (the digital currency project spearheaded by facebook, formerly called Libra) and Novi (the digital wallet for that currency) and possibly stop it altogether.
  • The Biden administration will be very friendly to digital assets and blockchain, ushering in a new wave of investment in this space — not merely purchases of Bitcoin itself.
  • As more investment funds come onto the market, prices will fall. Before long, though probably not in 2021, prices will be comparable to today’s ETFs. Investors, meanwhile, will continue to tolerate higher fees as the price of admission to the digital asset world.
  • Check out the council’s website for the full list of predictions.

    — Related on ThinkAdvisor:

  • 11 Reasons Advisors Should Rethink Bitcoin
  • Ric Edelman: ‘We Have Solved’ Crypto Custody Problem
  • Bitwise Launches First Cryptocurrency Index Fund
  • The One Big Question Ric Edelman Is Hearing Now
  • Source: www.thinkadvisor.com

    Author: By
    Michael S. Fischer

    |
    January 07, 2021 at 01:55 PM


    $1 Trillion of Cryptocurrencies Shows Booming ‘Asset Class’ – Crypto Money Daily

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