Chef Aarón Sánchez and IBM teamed up at CES 2020 to create a vision of a blockchain-based food chain. IBM’s Food Trust project, of which Sánchez is a part, aims to allow growers, grocers and cooks to track their food from seed to plate.
The system, said IBM General Manager of Blockchain Services Jason Kelley, uses the blockchain simply because it is the cheapest way to get everyone – from the farmer in the field to a tech-loving chef like Sánchez – to connect. Rather than forcing each participant to run massive data stores or buy expensive gear, this blockchain allows for most of the interaction to happen using 3D-printed hardware and cellphones.
Sánchez is the founder of the restaurant Johnny Sanchez in New Orleans and a judge on the television show MasterChef.
Originally aimed at managing food supply chains for big corporations like Nestle, the new tech allows for farmers to optically or chemically scan their products using simple electronics. Then, as the food moves from farmer to supplier to kitchen, everyone involved can confirm the product matches the description. In fact, IBM showed off how its technology can “read” the colors in olive oil and help identify the manufacturer. One manufacturer, CHO, is already shipping its blockchain-tracked oil to Whole Foods stores.
We spoke with Kelley and Sánchez at CES 2020. In fact, Sánchez cooked with blockchain-tracked produce including kale and scallops.
“For me, I felt like there were a lot of nameless ingredients, in the sense that I didn’t have the connection to the farmer necessarily,” said Sánchez. “Blockchain allows you to have a direct connection and a conversation through technology.”
Sánchez served his blockchain-infused food at the event, showing us that the path to mass adoption may be through our stomachs.Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
For the first time, investors can trade gold-backed futures contracts on a leading crypto derivatives exchange. In addition to its spot market trading, PAX Gold is now available as perpetual and quarterly futures contracts on FTX.
Using PAX Gold, a stablecoin backed by gold, FTX will allow traders to buy and sell gold futures contracts via digital assets.
A futures contract is an agreement to buy or sell a specified asset at a predetermined price at a specific time in the future.
The price of PAX Gold is tied to the spot price of one troy ounce of London Good Delivery gold, a standard measure for the London gold market. With PAX Gold, a trader or investor owns the underlying physical gold stored in London vaults, which is unlike gold futures, exchange-traded funds or unallocated gold.
By offering more sophisticated trading vehicles for digital assets, FTX hopes to pave the way for eventual options and leverage trading for PAX Gold.
“Crypto trading is still a young market,” said Paul Ciarvardini, Head of Trading at Paxos in an email to CoinDesk. “PAX Gold futures on FTX shows how the market is maturing and that it is ready for more complex financial instruments.”
FTX is operated by Alameda Research, a cryptocurrency liquidity provider that ensures the exchange has access to deep liquidity pools essential for the health and growth of the crypto derivatives market.
Overstock CEO and Medici Ventures President Jonathan Johnson has been betting on crypto companies for most of the last decade. Now he believes these investments are finally ready to enter the real world.
In an interview at the Digital Money Forum during CES 2020, Johnson talked about Medici’s portfolio of companies and said many of them are shipping products. He still believes, however, the ecosystem is being driven by early adopters.
“There will always be early adopters who take it and it will become more widespread. I think we’re in the early adopter stage of product in production, not the widespread stage quite yet,” he said.
Johnson believes the real value blockchain brings isn’t quite clear but it will be as the use cases become more visible. He sees companies like Voatz as leading the way in blockchain-powered solutions.
“It’s understanding which problems the technology solves,” he said. “So, for example, in the voting space, it’s overseas voters. It’s military personnel and their families. Or it’s disabled voters where the mayor has to have a compliance mechanism to comply with the Americans with Disabilities Act.”
Ultimately, he believes mass adoption comes from understanding.
“Blockchain technologies could [solve those problems.] So when these companies can explain the solution that they’re providing, then I think it becomes more readily adopted,” he said.
In a rare interview, London-based insurance firm Arch says a sizable but containable loss would demonstrate how well its $150M crypto storage policy would react.
Only a handful of cold storage crypto policies have been written at this time; high net worth individuals are the main driver for the business.
Lloyd’s of London has set up a crypto subgroup within its Product Innovation Facility which includes mega-broker Marsh.
Marsh says it has a hot wallet crime cover product in the pipeline.
An insurance company saying it hopes to pay a sizable claim sounds like a turkey looking forward to Christmas.
But that’s exactly what James Croome, fine art and specie underwriter at Arch Insurance International, says he wants his firm to do. Just to show that it can.
Arch is one of the few underwriters willing to insure cryptocurrency exchanges and custodians against the theft or loss of customer funds. London-based Arch Insurance International, which works with a number of big-name brokers offering crypto cover, is yet to pay out for any losses in this relatively new market.
If someone does manage to pull off a heist of cryptographic keys kept offline in cold storage, Arch will get a chance to demonstrate it’s good for the money, said Croome, who works out of London.
“I would like there to be a containable, but sizable loss,” he said. “Because that would give evidence to our potential clients as to the service we can provide, the speed at which we will pay the claims, and remind people who have bought coverage that it does work appropriately.”
Insurers have years of experience in covering specialized assets in the traditional world, whether that’s fine art or the regulatory requirements to protect financial services firms. But they feel less secure with crypto, because there is a shortage of data for firms to model policy rates from.
In response to this, Croome helped create a consortium, including mega-broker Marsh and global law firm Norton Rose Fulbright, to offer cold storage cover for crypto assets.
Released back in September, Blue Vault, which is solely owned by Arch, provides limits of up to $150 million and covers the loss of digital assets due to internal and external theft (via direct access to the storage media as opposed to remote hacking attacks) and including employee collusion. Blue Vault also covers physical damage or destruction of private keys from fires, floods, earthquakes and other catastrophic events.
Ankur Kacker, vice president and specie expert on Marsh’s Digital Asset Risk Transfer (DART) team, said: “We have placed four policies for Blue Vault as of now, all in the last seven months.”
Marsh, the world’s largest insurance broker, recently announced a deal with Ledger Vault, the institution-focused arm of Ledger, the well-known hardware wallet provider for $150m cold storage cover; Marsh is working in a similar way with crypto custodian KNOX.
Pet peeves
Arch chose to work with law firm Norton Rose Fulbright on the crypto policy because it wanted precise policy wording. Ambiguous language is a pet peeve of Croome’s.
“My biggest annoyance with the specie market is the existence of ambiguous wordings which is why I chose to work with a legal firm with a track record in this space,” he said.
Norton Rose Fulbright has given presentations in New York, Bermuda and to the London Market to help “educate insurance markets and develop set the market and standards for cold storage of these assets,” said Nicholas Berry, a partner at the law firm. The firm also helped Lloyd’s of London with its market guidance on underwriting digital assets.
Norton Rose Fulbright enlisted the help of Peter McBurney, Professor of Computer Science, King’s College London and a consultant with the law firm, to spell out technical aspects of key management and crypto storage and create appropriate policy wording. This is an instance where the London Market has led other international markets, said Berry.
“Going back to 2018, there has been a mismatch between supply in terms of underwriting capacity and demand for those wanting cold storage or even hot crime-type cover. Some of the big brokers have been pushing the supply side to provide more cover in terms of higher limits, wider cover,” he said.
Crypto insurance is widely seen as a prerequisite for greater institutional involvement in the market. But Croome is wary of companies offering insurance policies as a marketing ploy.
“We tend not to look at insureds that are looking for a chicken-egg scenario. They feel they don’t have a current revenue stream but are hoping the existence of insurance will help speed up the point at which assets come into custody and therefore increase their revenue,” he said.
As well as Marsh, Arch has been working with Aon, the number two broker by size. Other brokers known to be exploring crypto include Arthur J Gallagher and Paragon.
But Croome says that for now he is shying away from really broadening out his broker network for crypto.
“I think I will keep to the ones that have shown comprehension of that which we like. They understand that and therefore they can filter out the sort of things we seek to avoid,” said Croome.
Virgin territory
Insurance companies like Arch bring in third party specialists to examine physical vault security and do the same to understand and communicate the risks around the storage of crypto. “I wouldn’t consider myself capable of valuing a Dutch master [painting], knowing if it was genuine or a fake.That’s not my job,” said Croome.
Peter McBurney, who divides his time between academia and advising Norton Rose Fulbright’s clients on technology matters, does the equivalent of physical vault checking for the IT system that would create and store the private keys.
McBurney estimates there are still reasonably few policies written in London covering crypto cold storage, and the same in New York, although this number is increasing. “It’s still very early days, it is almost virgin territory.”
McBurney said ultra-high net worth individuals or hedge funds who already have relationships with custodians for storage of fine art or gold bullion are driving the market for crypto insurance.
“They are going to their existing physical custodians and saying can you also store our private keys. So the custodians are going to insurers and saying can you insure us to store these private keys, and that’s where a lot of the business has originated – it’s customer-driven from the individuals and the hedge funds who have large crypto holdings,” he said.
Lloyd’s of London, the centuries-old insurance market, has realized there are new revenue streams to be had with crypto. Its underwriters have launched the Product Innovation Facility, which spans some 24 markets and has over $100m of capacity. The facility includes a crypto subgroup, where Marsh has a representative.
A spokesman for Lloyd’s said it’s too early for any on-record comment from the crypto subcommittee at this time. Marsh also did not comment on the group’s purview.
The group will likely be looking beyond cold storage to include crime bond markets; E&O (Errors and Omissions) insurance; D&O (Directors and Officers) and a general smorgasbord of potential product offerings to the digital assets world, according to sources close to the Lloyd’s market.
Hot and cold
The risk relating to crypto held on exchanges and in wallets connected to the internet is a very different animal from vaulted cold storage.
To deal with losses from third party hacks, most of the large crypto exchanges simply self-insure, holding large amounts of bitcoin locked up for such occasions. Having battled it out in the market for some years, people like Binance chief “CZ” Changpeng Zhao, or Kraken CEO Jesse Powell see insurance for hot wallets as a fundamentally flawed concept.
Arch is not looking to enter the hot wallet space any time soon. However, Croome said he can see ways the crime market could interplay with the specie world.
“We will often take an excess layer, the larger chunk of capacity above the crime policy, to very high exposures but on a much tighter coverage. They will take much broader coverage with much smaller limits,” he said.
Marsh’s Digital Asset Risk Transfer team has clearly been pursuing its own plans regarding a hot wallet product. Quizzed on the subject of hot wallet coverage, Kacker said:
“At this point in time, I don’t want to let the cat out of the bag. But I can say it’s in the pipeline.”Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
At least two entities invoiced Telegram for commissions from selling the company’s tokens in the summer of 2018, months after the company’s initial coin offering (ICO), newly released documents show.
The U.S. Securities and Exchange Commission (SEC), which filed the documents Friday in its ongoing court case against Telegram, said the evidence of post-ICO sales undercuts the company’s argument that the offering was exempt from registration requirements.
Investment fund Da Vinci Capital and another entity called Gem Limited requested commissions of $209,783 and $1.1 million, respectively, for “subsequent sales” of purchase agreements for grams, the future tokens for Telegram’s blockchain project TON, the filings show.
According to the invoices presented by the SEC, Da Vinci Capital sold over $2 million worth of grams to a fund managed by its portfolio company, ITI Funds, on June 20, 2018. Gem Limited sold 7.8 million euros ($8.6 million) worth of grams to a firm named Goliat Solutions and $4.5 million to Space Investments Limited on July 2, 2018.
Both sales took place after the offering of grams, which Telegram maintains was exempt from registration under Regulation D, was completed in February and March 2018.
Da Vinci Capital’s investment director Denis Efremov declined to comment. Gem Limited was unavailable for comment at press time.
The filings joined a massive trove of documents the SEC has submitted to the U.S. District Court for the Southern District of New York to support its allegation that grams were illegally sold as unregistered securities, which Telegram has denied.
“These documents undermine Telegram’s claimed affirmative defense that the Offering was exempt under Regulation D. First, Telegram either raised more than the $1.7 billion for which it claimed an exemption, or it did not raise $1.7 billion as of March 29, 2018 and the later funds may have been raised through underwriters,” an earlier SEC filing said, referring to the invoices.
The SEC’s argument is that under Regulation D, the issuer should take reasonable steps to ensure the purchasers don’t act as statutory underwriters (i.e. aren’t selling securities for the issuer for commissions), said Philip Moustakis, a counsel at Seward & Kissel and former senior counsel at the SEC.
In this case, the regulator is saying the companies that invoiced Telegram did exactly that, while Telegram argues that the commissions were finders’ fees to non-U.S. persons and entities for introducing grams to other investors, Moustakis said.
Telegram raised $1.7 billion in the pre-sale of future tokens of the TON project in February and March 2018. The purchase agreement prohibited investors from reselling their grams, but a secondary market emerged soon anyway. However, there were previously no public indications of Telegram’s approval of the later sales.
The SEC sued Telegram in October, ordering it to halt the launch of TON. The regulator is set to meet Telegram in court on Feb 18-19.
In the meantime, the SEC requested full banking records of Telegram regarding the token sale proceeds. On Jan. 9, Telegram asked the judge to grant the company five to seven weeks to prepare the documents to avoid privacy infringement.
A South Korean crypto YouTuber was assaulted at his home, with some suggesting the attackers may have been by upset investors.
Kyu-hoon “Spunky” Hwang was beaten in an elevator in his apartment block at around 01:00 local time on Friday, according to CoinDesk Korea.
Seoul’s Seongdong police station said it was seeking two suspects who attacked Hwang with a blunt weapon and then escaped. While the victim’s injuries are not life-threatening, he’s reported to be receiving treatment in a hospital.
“It is judged to be a planned crime aimed at [Hwang’s] life,” said a community notice from CoinRunners, a trading group run by Hwang’s company Bit Gosu.
The team said in the notice it is “severely shocked” and will focus on security after Hwang’s release from hospital.
The self-described “influencer” has been discussing cryptocurrency on his YouTube channel, Spunky’s Bitcoin Broadcasting. since October 2017 when he launched Bit Gosu, according to the report. The channel has around 59,000 subscribers, making Hwang one of the most popular crypto YouTubers in South Korea.
Bit Gosu has been involved in cryptocurrency-related marketing including ICOs and has a total of 10 employees. It also prompted something of a scandal after CoinRunners members were said to have lost funds.
CoinRunners said in the notice that some members had threatened “to kill employees” as a result.
CoinRunners is a members-only service with around 1,000 subscribers that offers both free and paid “gold” memberships. A representative told CoinDesk Korea members are provided cryptocurrency price analysis from Hwang and receive recommendations on ICO investments.
“CoinRunners, CoinRunners Gold and Bitcoin YouTube channels will be temporarily suspended, and we will decide whether to resume business,” a representative said. At press time, Hwang’s channel is still active.Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Deribit is moving to warmer waters, citing regulatory concerns.
Announced Thursday, the Amsterdam-based crypto derivatives exchange will operate out of Panama as DRB Panama Inc., a wholly owned subsidiary of current platform Deribit B.V., beginning Feb. 10.
The company claimed the Netherlands’ presumed adoption of “very strict” anti-money laundering (AML) regulations applied to cryptocurrency firms spurred the trans-Atlantic voyage.
“If Deribit falls under these new regulations, this would mean that we have to demand an extensive amount of information from our current and future customers,” the exchange wrote in a blog post.
Rumors concerning Deribit’s position within the Netherlands began in October 2019 following CEO John Jansen’s appearance on the Flippening podcast. Over the winter months, numerous Dutch crypto firms engaged in a back and forth with Dutch regulators over the nation’s self-guided implementation of the EU’s 5th Anti-Money Laundering Directive (AMLD 5).
“We believe that crypto markets should be freely available to most, and the new regulations would put too-high barriers for the majority of traders, both regulatory and cost-wise,” Deribit wrote.
Surprisingly, additional know-your-customer (KYC) regulations were also announced by the exchange Thursday. U.S. customers are still barred from operating on the exchange, which does not process fiat currency.
CoinDesk has reached out for comment and will update this piece as necessary.Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
AT&T’s Alien Labs is dipping its toes into cryptomining malware analysis with a new technological breakdown of how a monero miner infiltrates networks.
Released Thursday, the report by security researcher Fernando Domínguez provides a step-by-step walkthrough of how one rather low-profile cryptojacker infects and spreads across vulnerable Exim, Confluence and WebLogic servers, installing malicious code that mines Monero through a proxy. Exim servers represent more than half of all email servers, according to ZDNet.
The worm first injects target servers with a BASH script that checks for, and kills, competing mining processes before attempting to infiltrate other known machines in the network. Crypto-miners often kill off competing miners when they infect a system. And for one very simple reason: the more CPU a different process hogs, the less is left over for others, according to the report.
Breached servers then download the script’s payload: an “omelette” (as the downloaded executable file variable is termed) based on the open-source monero miner called XMRig.
Available on GitHub, XMRig is a malware hacker favorite and a common building block in cryptojackers’ arsenal. It has been retrofitted into MacBook miners, spread across 500,000 computers, and, in 2017, became so popular that malicious mining reports spiked over 400 percent.
This modified miner does its business via proxy, according to AT&T Alien Labs. That makes tracing the funds, or even discerning the wallet address, near impossible without proxy server access.
Frying this omelette is hard. When it downloads, another file called “sesame” – identical to the original BASH script – downloads as well. This is the key to the worm’s persistency: it hitches onto a cron job with a five-minute interval, enabling it to withstand kill attempts and system shutdowns. It can even automatically update with new versions.
AT&T Alien Labs began following the worm in June 2019. It had previously been studied by cloud security analysis firm Lacework in July.
Researchers don’t quite know how widespread this unnamed Monero miner is. Alien Labs’ report admits that “it is hard to estimate how much income this campaign has reported to the threat actor,” but notes that the campaign is “not very big.”
Nonetheless, it serves as a reminder to all server operators: always keep one’s software patched and up to date.Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Blockstream CEO Adam Back image via CoinDesk archives
Stronger privacy is coming to the largest stablecoin, Tether, with a recent blockchain-to-blockchain swap of $15 million worth of tokens.
At 11:27 UTC on Jan. 7, stablecoin issuer Tether conducted a cross-chain swap of some 15 million USDT reserves from ethereum to Blockstream’s Liquid, a federated sidechain running parallel to the bitcoin blockchain. The technical possibility of USDT’s Liquid debut was first announced in July 2019.
Innocuous at first glance, the transfer has implications for both digital asset trading and the larger tether market, which saw a mass migration from Omni, a bitcoin-based protocol, to ethereum and even Tron over the course of 2019.
But what Liquid offers is privacy.
Through confidential assets – a privacy tool which blinds asset values on public ledgers via a protocol called “confidential transactions” – these tether may never see public light again. In fact, it may be the first instance of private digital asset trading at scale.
By hiding tether transfers between off-exchange accounts on Liquid and exchanges themselves, traders can move assets around “without worrying about frontrunning,” pseudonymous Blockstream community manager Grubles told CoinDesk via Telegram.
For example, a trader could move some Liquid-based tether to an exchange, with the intent of buying bitcoin without tipping her hand to others who might drive the price up before she can make the purchase.
“Movements of tether can be tracked in general but also particularly to and from exchanges, which is valuable information. People absolutely trade based on this information,” Grubles said. “Moving from a blockchain that has transparent transactions and onto Liquid is somewhat of a no-brainer in the context of trading.”
Tether maintains a healthy competitive advantage against other stablecoins with nearly 75 times the daily trading volume of the next leading stablecoin, the Paxos Standard (PAX), according to Messari’s Stablecoin Index. Noting its ubiquitous use today by traders, Grubles said a pairing with privacy tech only adds to tether’s competitive edge.
Moreover, tether on Liquid may be the first instance of a semi-private stablecoin, according to Blockstream CTO Samson Mow.
“Services like Whale Alert, that track movements of assets, would not work for confidential assets in Liquid,” Mow told CoinDesk.
However, tether issuances remain public via the Blockstream block explorer, said Grubles, potentially assuaging some of the concerns of Tether skeptics. The stablecoin issuer and its sister company, Bitfinex, are currently under investigation by the New York Attorney General’s Office for allegedly commingling corporate and customer funds.
Shielded tethers
Confidential assets (CAs) were first formally proposed by Blocksteam employees in an April 2017 academic paper penned by bitcoin researchers Andrew Poelstra, Adam Back, Mark Friedenbach, Gregory Maxwell and Pieter Wuille.
As described in the paper, the researchers used Pedersen commitments, a mathematical function capable of shielding input information while proving its overall validity, to “blind the amounts of all unspent transaction outputs (UTXOs, the term for individual blockchain values).”
Through CAs, coins can be both hidden from prying eyes and proven to still exist. Customer demand drove the decision to convert $15 million worth of tether from ethereum to the Liquid version, Tether CTO Paolo Ardoino told CoinDesk.
“With Confidential Transactions you can’t see the amounts being sent from one party to another,” said Mow. “That means that USDT issued in the Liquid Network provides better privacy than USDT on other chains.”
Tether’s blockchain hop
As a vehicle for crypto trading and price volatility protection, it’s likely more USDT will be minted on Liquid given the advantages. And, it’s not like Tether hasn’t played nomad before.
“We may be witnessing the beginning of another Tether migration from ERC20 to Liquid,” said Tales from the Crypt podcast host Marty Bent in a blog post Tuesday. (ERC20 is the standard Tether has used to create tokens on top of ethereum.)
Launched as RealCoin in July 2014, tether is currently issued on multiple blockchains, the largest of which are ethereum, Omni and Tron. As data provider CoinMetrics shows, Tether kicked issuance onto the ethereum blockchain into high gear in April 2019, rising from $60 million to $400 million in a mere four weeks.
Eight months later and a flippening of sorts occured, with tether issuance on ethereum overtaking Omni earlier this winter. As of press time, some $2.3 billion tether is issued on ethereum compared to $1.5 billion on Omni.
While $15 million may be a far cry from $60 million, let alone $1.5 billion or $2.3 billion, Tether’s last year with ethereum demonstrates how fast the tide can shift.
“The impetus for the transition away from Omni to an ERC20 standard is, from what I understand, because their wallet support is [subpar]. What Ethereum has done really well to date is make it really easy for services to spin up a wallet and accept random tokens,” Bent wrote. “One thing the transition to an ERC20 standard hasn’t solved for Tether users is the Whale Alert problem.”Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Increasing global uncertainties and a weak dollar will likely push more investors into bitcoin as it becomes recognized as a store of value. The cryptocurrency’s fixed supply will further drive price increases throughout the year, Bloomberg analysts predict.
Bloomberg’s 2020 crypto outlook report, published Monday, predicts bitcoin’s price could move to the top of its 2019 range and retest the $14,000 high at a time when a weak dollar and stock market volatility continue and geopolitical tensions increase.
“Bitcoin’s initial reaction to the [Jan. 3] U.S. airstrike that killed one of Iran’s most powerful generals was a good test of our premise that the first-born crypto is maturing toward a digital version of gold,” reads the report. Bitcoin jumped to a seven-week high Wednesday as gold rallied to $1,600 for the first time since 2013.
Bitcoin has long been seen as “digital gold,” in part because it is a limited asset that cannot be easily increased to meet changing demand, much like the yellow metal. The halving event expected later this year will reduce block rewards from 12.5 to 6.25 BTC, further adding to supply pressures should demand continue to grow.
Bitcoin’s supply is projected to grow by about 2.5 percent in 2020, which would be an all-time low. That’s partly due to the halving of the block reward – from 12.5 to 6.25 BTC. Supply in 2021 could well fall below 2 percent, analysts say.
Increasing investment in bitcoin could take many forms, believe the analysts. The rapidly expanding derivatives market – a sign of integration into mainstream markets – will better enable institutional investors to gain exposure to the asset class. That could have knock-on effects on price and decreasing volatility, thereby reinforcing bitcoin’s status as a store of value.
Not everyone is convinced bitcoin and gold share such a strong bond. Mati Greenspan, founder of Quantum Economics, which specializes in cryptocurrencies and foreign exchange, called such a relationship “weak” and noted the correlation between the two assets was negative until recently.
Bitcoin has also been prone to periods of short, sharp volatility. The asset surged up above $10,000 after President Xi of China called for his country to accelerate its adoption of blockchain technology before retracing its former range weeks later. For some analysts, that volatility fundamentally undermines the case for bitcoin being a stable store of value, at least for the time being.
But while bitcoin may still be too volatile for many people’s liking, it appears investors in the asset class are increasingly valuing digital assets that can maintain some sort of stable price. The Bloomberg report predicts that tether’s market cap will likely continue expanding this year, with many alternative cryptocurrencies struggling to keep investors as supply outstrips demand.
“Bitcoin should again outshine most crypto assets in 2020 as the unique and appreciating digital version of gold,” the report continues. “Bitcoin is winning the adoption race, notably as a store of value in an environment that favors independent quasi-currencies.”Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Manage Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
