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DeFi’s money markets are finally luring in institutional investors

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Bitcoin’s bull run from last year has caused even some of its biggest skeptics to soften their stance. From economists to hedge fund managers, the world is opening itself up to technology, and at the center of this movement is decentralized finance, or DeFi. While the market capitalization of all cryptocurrencies has hit $2 trillion, worth as much as Apple, it’s the promise of DeFi — a small corner of the blockchain industry today — that’s grabbing the attention of institutional investors.

As Bitcoin’s (BTC) bullish trend persists, interest-bearing crypto products have become all the rage. Some services offer up to 8% returns on Bitcoin holdings. For investors who are already expecting a rise in value, this can be incredibly useful for maintaining cash flow without selling any assets.

The three main factors solidifying institutional interest in Bitcoin are the current historically low interest rates, the inflation rate and geopolitical instability. With near-zero interest rates expected for the foreseeable future, investors are gearing up to move their funds into alternative locations for securing wealth.

The United States Federal Reserve’s 2% inflation target has incited concern in investors fearing devaluation, and with tensions between the U.S. and China on a precarious edge, portfolios denominated in U.S. dollars are becoming riskier by the day.

A market for money

Buying, storing and using cryptocurrencies securely is still quite a complex ordeal — far more involved than setting up a bank account. However, according to Larry Fink, the CEO of BlackRock — a global investment management fund with nearly $9 trillion in assets under management — Bitcoin could evolve into a global market asset and achieve new highs in the upcoming years.

In the traditional financial system, money markets are parts of the economy that issue short-term funds. They usually deal with loans for periods of a year or less, and offer services like borrowing and lending, buying and selling, with wholesale trading taking place over the counter. Money markets are composed of short-term, highly liquid assets and are part of the broader financial markets system.

Money markets are traditionally very complicated, with expensive overheads and hidden fees pushing most investors to hire a fund manager. However, their existence is paramount to operating a modern financial economy. They incentivize people to lend money in the short term and allocate capital toward productive use. This improves the overall market’s efficiency while helping financial institutions meet their goals. Basically, anyone with extra cash on hand can earn interest on deposits.

Money markets are composed of different kinds of securities, such as short-term treasuries, certificates of deposits, repurchase agreements and mutual funds, among others. These funds generally consist of shares that cost $1.

On the other hand, capital markets are dedicated to the trade of long-term debt and equity instruments, and point to the entire stock and bond market. Using a computer, anyone can purchase or sell assets in mere seconds, but companies issuing the stock do so to raise funds for more long-term operations. These stocks fluctuate, and unlike money market products, they have no expiration date.

Since money market investments are virtually risk-free, they often come with meager interest rates as well. This means that they will not produce huge gains or display substantial growth, compared with riskier assets like stocks and bonds.

DeFi vs. the world?

To hedge against currency risk, institutions have started using Bitcoin, and retail investors are following their lead. More than 60% of Bitcoin’s circulating supply hasn’t moved since 2018, and BTC is predicted to push well above $100,000 in the next 24 months.

If the current trend carries forward, investors will continue to stockpile BTC. However, while much of the supply of the world’s first cryptocurrency remains in storage, the DeFi industry is constantly producing alternative platforms for interest-bearing payments through smart contracts, which increases transparency by allowing investors to view and track on-chain funds.

The average return for DeFi products is also much higher than in traditional money markets, with some platforms even offering double-digit annual percentage yields on deposits. From asset management to auditing smart contracts, the DeFi space is creating decentralized infrastructure for scalable money markets.

According to Stani Kulechov, co-founder of the Aave DeFi protocol, rates are high during bull markets because the funds are used to leverage more capital, with the cost of margin pushing up the yield. “New innovation in DeFi is consuming more stablecoins, which further increases the yield. Unless there is a new capital injection — these rates might stick for a while,” he said.

The Ethereum network currently hosts most of the DeFi applications, and this has barred tokens that aren’t available on the network from participating in decentralized finance. Bitcoin, for example, despite being the largest cryptocurrency by market capitalization, has only recently found its way onto DeFi platforms.

Related: DeFi yield farming, explained

With Kava’s Hard Protocol, investors can yield farm using Bitcoin and other non-ERC-20 tokens like XRP and Binance Coin (BNB). Backed by some prominent names (Ripple, Arrington XRP Capital and Digital Asset Capital Management, among others), the platforms allow users to stake their cryptocurrencies into a pool of assets, which is lent out to borrowers to generate interest.

The team also plans to add support for Ethereum-based tokens in the near future. The network’s upgrade to Kava 5.1, which was postponed to April 8 after failing to reach the required quorum, will also introduce the Hard Protocol V2, bringing powerful incentivization schemes and enhancements to its governance model.

Most loans in DeFi are overcollateralized, meaning the pool always has more money than it lends out. In case the value of the issued token drops, funds in the pool are liquidated to compensate.

According to Anton Bukov, co-founder of decentralized exchange aggregator 1inch, blockchains are the first-ever unbiased executors in human history — very limited, but ultimately fair — and could deliver new services and new flows of interactions in future. “Developers are doing their best to solve potential dishonesty issues of existing flows and invent new flows by replacing intermediaries,” he said.

By creating an automated platform to borrow and lend assets, decentralized finance enables money markets without intermediaries, custodians or the high fees that stem from high infrastructural costs.

Honest work

Of the many trends DeFi has set into motion over the last few years, yield farming has attracted quite a lot of attention. Yield farming is when the network rewards liquidity providers with tokens that can be further invested into other platforms to generate more liquidity tokens.

Simple in concept, yield farmers are some of the most vigilant traders out there, constantly switching up their strategies to maximize their yield and tracking rates across all platforms to ensure they’re getting the sweetest deal. The potential rate of return can become obscenely high, but it’s still unclear whether yield farming is just a fad or a phenomenon in the making. Kulechov added:

“Yield farming is simply a way to distribute governance power to users and stakeholders. What actually matters is whether the product itself would find protocol market/fit. Most successful governance power distributions with yield farming have been with protocols that have found protocol market/fit before such programs.”

Yield farming has an incredibly positive feedback loop, with an increase in participation pushing the value of its governance token up, driving further growth. According to Kava CEO Brian Kerr, while this feedback loop can produce very positive results in bull markets, it can have entirely the opposite effects in falling markets:

“It will be up to the governance groups of the various projects to navigate bear markets effectively, by ratcheting back rewards before a full-on death spiral occurs. Regardless of bull or bear markets, yield farming will be a mainstay in blockchain projects for years to come.”

Money markets are the pillars of our global financial system, but most of its transactions occur between financial institutions like banks and other companies in time deposit markets. However, some of these transactions do find their way to consumers through money market mutual funds and other investment vehicles.

Decentralization is the next frontier for finance, and as prominent investors continue to engage with the DeFi space, a decentralized economy seems all but inevitable. Participating in the burgeoning environment may be a risky bet today, but what decentralized finance platforms learn now will be the foundation of the robust DeFi applications of the future. According to Bukov, the higher interest rates of DeFi platforms are “absolutely sustainable.” He added:

“Higher profits are usually involved with higher risks. So the risk-profit model of all these opportunities is always nearly balanced. Normalizing risks would decrease profits because more participants will join to share the rewards.”

From smart contract malfunctions to the unauthorized withdrawal of community funds, the DeFi space is a place of both miracles and nightmares. DeFi-based yield farming platforms are still in their very early stages, and while the numbers can be all too tempting at times, it’s crucial to do your own research before investing in any platform or asset.

DeFi’s money markets are finally luring in institutional investors

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Actionists reinventing art: As it ever was, so shall it ever be (even in crypto)

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Art trumps money. Always. It is important to remember this amid the current crypto art hype. Nonfungible tokens have given digital art the benefit of provable ownership, scarcity and programmability, allowing digital creators to promote and sell their work in ways never before possible.

With the blockchain industry growing and markets becoming more liquid, crypto art has seen a flurry of incredible primary market sales. The ICO-like fear of missing out has inspired collectors and artists to chase scarcity, and even destroy art in the process, as was the case with the creation and auction of the Banksy print NFT.

Still, what may seem like a marketing ploy may be one of the greatest actionist performances the art world has seen to date.

Chasing scarcity

The rarer something is, the more it is coveted. That seems to be the basic principle of any collectible items and applies to crypto art as well. A quick look at single vs. multiple-edition sales shows that the market favors uniqueness.

This chase for scarcity has taken on many forms, from limiting the number of editions of a particular art piece to finding “firsts” in a sea of things — as was the case with Jack Dorsey’s tweet.

Major stars from the art world and music industry have started to experiment with NFTs, making six-figure drops a seemingly commonplace occurrence. From Paris Hilton’s $17,000 picture of a cat to Grime’s $389,000 Death of the Old to Beeple’s landmark Christie’s auction, sales and awareness are on the rise.

The allure of mega sales

Despite the incredible primary market sales, the secondary market, for the most part, has been relatively quiet. Looking at data from SuperRare, we can see that secondary market sales counts are a fraction of the number of primary items sold.

The fact that artists’ royalties are dealt with differently on different platforms and rarely function cross-platform further forces both creators and collectors to focus on initial sales for near-term success.

Bridging the gap

The blockchain industry has seen and continues to see many attempts to bridge the physical and digital worlds. With respect to art, the initial attempts were focused on tokenization of physical art and pieces by famous painters, with price tags that made them highly illiquid. The hope was that fractionalizing the expensive pieces through tokenization would lead to greater engagement from people who were previously priced out of the high-end art market. This would make the paintings more liquid investment vehicles.

To this point, the attempts have had very limited success. This may be due in part to the mismatch in audiences: Traditional collectors don’t operate crypto wallets, and digital natives feel less attached to physical items held by a centralized party.

However, what if someone could take a physical art piece and make it digital? The Injective Protocol team has tried to do just that. It acquired a Banksy screenprint “Morons (White),” only to burn the physical artwork (while streaming the event) and minting the image as an NFT.

The seemingly barbaric ritual was supposed to ascend the Banksy screen print to a blockchain and earn the team a tidy sum in the process. The second goal was clearly achieved. The original piece was acquired for $95,000 and auctioned off on OpenSea for around $400,000. However, it can be argued that what happened was a transfer from the physical to the digital world.

Rather, the Injective Protocol team destroyed a Banksy screenprint and created an entirely different work of art.

Vandals or actionists?

It is easy to write off the burning of the Banksy NFT as a successful marketing ploy, but on closer inspection, there is so much more there.

On the surface, there is a tip of the hat to the original artist, who himself has destroyed his own piece at an auction for the sake of creating new art. However, that is just the beginning.

Consider that art has a rich tradition of actionist events where an art installation was damaged for the sake of a statement, effectively creating a new piece of art. The most comparable example is probably that of Alexander Brener, who painted a green dollar sign on Kazimir Malevich’s white cross at a museum exhibition.

Brener was making a statement against “corruption and commercialism in the art world.” Now look closer at the Banksy screenprint and read what it says: “I can’t believe you morons actually buy this shit.” That cannot be an accident.

At a time when a Beeple work sold for $6.6 million, while a Vincent van Gogh (albeit a disputed van Gogh) went for $650,000, the Injective Protocol team made a statement by burning this particular Banksy piece and selling the NFT, which no longer represents a physical artwork but the memory of that artwork, at an auction.

To top it all off, the team streamed the burning of the piece… in true performance art fashion.

Did the market miss the point?

While the market has been debating whether the merits of the destruction of art, the nature of scarcity and the price mechanics of crypto art, the Injective Protocol team may have pulled off one of the most spectacular actionist art statements in history.

This was a performance art piece, a vandalistic ritual and an ironic auction all in one.

The market may be chasing scarcity for the sake of scarcity, without even pausing to consider what just happened. It may even be that the Injective Protocol team did not intend for all of the hidden meanings to be there. However, that is the power of art.

Years from now, after the FOMOs and FUDs settle their scores, we will be looking at this not as another six-figure NFT auction, but as perhaps the first instance of actionist art in the crypto space.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ilya Abugov is an experienced analyst with a background in equity analytics, international management consulting and IT. He incorporates his traditional industry experience in his approach to data analysis and project evaluation. Ilya is the former head of research at Crypto Briefing and is an advisor at DappRadar. He is especially interested in the DeFi, art and collectibles sectors of the crypto industry.

Actionists reinventing art: As it ever was, so shall it ever be (even in crypto)

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Banking Industry Execute A Smart Blockchain Test

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Codezeros

Blockchain, also referred to as the Distributed Ledger Technology, marks the history of digital assets unalterable and transparent with the use of cryptographic hashing and decentralization. Blockchain is a high-tech alteration for Bitcoin, and as it emerges as a piece of evidence for transactions globally, it thus is highly essential. Transactions get stored on a ledger across the network and can be verified by users among networks.

Banks, along with other institutions, have traditionally served as the guardians of financial activity. It aims to safeguard accounts, extend credit while facilitating payments. By keeping the commercial wheel running and in place, the model enables several financial institutions to perform several services such as account balancing, fraud detection, and more.

What is blockchain?

In simpler terms, blockchain can be referred to as a technology creating a distributed ledger of transactions on a specific network that is easily accessible, secure, and tamper-proof. Being made by a large series of data blocks, it comprises a complete set of transactions.

The blocks are chain together electronically and are locked with cryptography along with a public record of transactions being established. With an increased block, there is a lesser probability existing where blocks can be altered.

How does blockchain work?

This emerging technology comprises three distinct concepts, including nodes, blocks, and miners.

The block comprises multiple blocks where each has three distinct elements:

  • The data in the block
  • A hash: It is a 254-but number and essentially starts with a huge number of zeroes.
  • A 32-bit whole number known as nonce gets generated randomly with the creation of a block. This then generates a block header hash.

When it is created, a cryptographic hash is generated. On the other hand, the data in the block gets tied to the nonce and hash.

Miners:

These create new blocks on a chain and with the help of a process known as mining. With every unique nonce and hash, mining blockchain is not easy and especially on significant chains. Miners make use of special software that solves incredibly complex mathematical problems. As the nonce is only 32 bits with the hash being 256, four billion nonce-hash combinations need to be mined before finding the right one. With this, miners are said to have found golden nonce, and the block gets added to the chain.

Nodes:

Decentralization is one of the essential concepts, and it is a distributed ledger that gets connected to the chain. The nodes can be any electronic device that maintains blockchain copies while ensuring the functioning of the network. The nodes must have their copy with the network algorithmically approving newly mined blocks for the chain to get trusted, verified, and updated. The participant offers a unique identification number reflecting the transactions.

How can the banking industry execute a smart blockchain test?

Over the past years, the pace of innovation has increased and across industries at large. Specialized advances in storage, networking, computing power, and more have produced an array of innovative technologies and business models.

Prominent organizations such as banks and financial firms have undergone a long-running blockchain test involving a smart contract prototype developed by blockchain. Enterprise blockchain solutions from Axoni reveal a test that processed over-the-counter equity swaps.

This took place following the months of testing. A varied banking organization took part in the test, from JP Morgan, Barclays, Credit Suisse, and City with eminent financial industry firms such as Thomson Reuters and IHS Markit. It was also graced by consultancy firm Capco.

There were several fortnightly meetings conducted among participants, especially during the testing month period. The testing went for as long as four months that witnessed rigorous testing. It witnessed Axoni’s blockchain prototype that was installed by organizations on the premises along through a cloud environment. One can rely on Smart Contract Development Services to execute the operations effectively.

Smart contracts for Blockchain:

What smart contracts can do is streamline the complicated process involving intermediaries due to a lack of trust among participants. With the identity stored, the lenders can make credit-related decisions. Hence, a smart contract gets created between the bank, the dealer, and the lender.

The blockchain smart contract is generated through several combined trades as submitted by dealers on the blockchain network. This also comprises inputs based on simulated legal confirmations. Thus, the golden record has been typically established in a proper synchronized manner and across the distributed ledger, although traditionally, it was only possible with the help of a trusted third-party clearinghouse. It is time to head to a smart contract company to explore the operations of blockchain.

Conclusion:

It is recommended that you get in touch with a professional, smart contract service provider to better understand the industry and its new relation with blockchain. Earn the right knowledge to stay ahead in your realm of operation.

Banking Industry Execute A Smart Blockchain Test

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Simplify’s Bitcoin ETF Would Invest in Grayscale’s Trust and U.S Stocks

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The U.S  Securities and Exchange Commission’s (SEC) reluctance to approve a Bitcoin exchange-traded fund (ETF) doesn’t seem to discourage issuers these days.

One such is Simplify Asset Management, which has gone ahead to find ways to structure its products. The firm plans to roll out a Bitcoin product that’s not entirely focused on bitcoin. And why should they? The regulators still don’t trust the crypto sector.

Simplify’s U.S. Equity PLUS Bitcoin ETF

Simplify has filed its Equity PLUS Bitcoin ETF with the financial regulator. According to the filing, the Simplify U.S. Equity PLUS Bitcoin ETF will invest up to 15% of its assets in cryptocurrencies, either “indirectly and solely” through Grayscale’s Bitcoin Trust.

The rest of the funds would be put into U.S stocks. BNY Mellon would be the ETF’s administrator and asset custodian, while the ETF would trade on the Nasdaq exchange, if approved.

Simplify is not the only entity that has been looking for creative ways to structure its products in the U.S. Investment giant, JP Morgan, also recently filed with the SEC to launch its own “Cryptocurrency Exposure Basket.”

Simplify’s move of buying shares of Grayscale Bitcoin Trust, which invests solely in Bitcoin, provides access to the largest cryptocurrency’s price movements without physically purchasing Bitcoin.

Bitcoin ETFs In the U.S

For many years, Bitcoin ETFs in the United States have been met with rejection.

From the Winklevoss twins to VanEck’s, Bitcoin ETF filed with the SEC has so far been met with a brick wall. Years down the line, the story has still not changed.

The regulators continue to drown attempts of approving a bitcoin ETF giving reasons such as the bitcoin market is too volatile, it lacks sufficient surveillance and that it is too easily manipulated.

While the U.S regulators continue to reject Bitcoin ETF issuers, Canada’s financial regulator the Ontario Securities Commission (OSC) has approved two ETF issuers to invest directly in Bitcoin and other cryptocurrencies. They are the Purpose Bitcoin ETF (BTCC) and the Evolve Bitcoin ETF (EBIT) who have both been listed on the Toronto Stock Exchange.

Another bitcoin ETF called the CI Galaxy Bitcoin ETF by Mike Novogratz’s Galaxy Digital Holdings has been launched on the Toronto Stock Exchange. If approved, this would make the third Bitcoin ETF in North America.

As the U.S regulators continue to tread carefully, market participants and crypto enthusiasts seem to be optimistic that with Canada leading the way, a full-fledged ETF could soon be operational within the country.

Simplify’s Bitcoin ETF Would Invest in Grayscale’s Trust and U.S Stocks

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Tokenization of assets is not taking off, but it really should

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For years, experts have been talking about how tokenization — the act of creating a digital representation of an asset on a distributed ledger — of a financial or real asset can unlock trillions in illiquid assets, giving retail investors access to investments with previously high minimum capital requirements thanks to fractional ownership or settle trades on a distributed ledger instantly. 

But if we investigate the current tokenization offerings, none is truly taking off and attracting the masses. If the theoretical advantages are true, millions of investors must be onboarding on exchanges that offer tokenized assets. However, this is not the case.

What is the problem of most tokenization offerings?

Let us take the example of tokenized equity to showcase the current issues and hurdles. The tokenization lifecycle of an equity consists of multiple steps. The first is the legal structuring followed by the minting (creation) of the tokens, in most cases with ERC-20 tokens on the Ethereum blockchain. Contrary to many beliefs, minting is one of the easiest parts of tokenization — the bigger challenges follow. As the purpose of the equity tokens is to be traded, we need to have a marketplace. With this comes the questions of token custody, liquidity, settlement and regulatory compliance.

If we look at the current service providers in this space, there is nearly no one who can offer all the steps of issuance, custody, marketplace, liquidity, settlement, etc. in one integrated offering. This has some major implications for why tokenization is not taking off — namely, that issuers and investors must deal with multiple service providers. Most probably these service providers are also located in different jurisdictions, which adds a whole new dimension to it, as equity tokens should ideally be able to be traded internationally just like traditional equity. And that is not possible as regulation differs from country to country.

Another major problem of tokenization marketplaces is liquidity. Currently, there is very low liquidity on tokenized marketplaces if we are to look at the trading volumes while the volumes of cryptocurrencies are currently reaching new all-time highs on a weekly basis. A reason for this is that the few exchanges that are on the market cannot attract enough investors. The easiest solution to solve this issue is for tokenized asset marketplaces to be connected to traditional exchanges and to leverage their customer base as they already have the desired liquidity.

This is only possible if the UI/UX is equal to traditional exchanges, and the investors do not see and interact directly with the blockchain. If investors need to set up their own wallet and deal with the blockchain directly, then we will never see a big inflow of mainstream investors into tokenized assets, as this makes the whole process more difficult and inconvenient, which is the exact opposite of the end goal.

A good UI/UX is very important in tokenization offerings as opposed to crypto applications such as DeFi platforms, where the UI/UX may not be the best. But despite the fact that the product is revolutionary, the masses are unwilling to deal with tokenization because it’s inconvenient and not seen as a groundbreaking innovation.

Another big topic in tokenization is regulatory clearance. If we continue with our example of tokenized equity, there is the question of how to deal with a digital representation of a security. In most jurisdictions, a token is not a security by itself. Rather, the token just represents the right to own the equity, but the equity still also exists in its “traditional” form. In other jurisdictions, however, there is even less clearance.

While tokenization is without question one of the most promising use cases of blockchain technology, the current setup is in most cases worthless, as it renders things more complicated rather than effective. To change this, we need a clear regulatory environment, such as in Switzerland, for example, to integrate all elements of the tokenization lifecycle into one offering, and have a “traditional” UI/UX for the investors. If we can get these three elements right, there is nothing to stop tokenization to become a major game-changer and open many new asset classes to the market. I believe that tokenization marketplaces should partner up with traditional exchanges to offer liquidity, especially for tokenized equity.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Darius Moukhtarzadeh is in the sales and clients team of Sygnum Bank. Sygnum is a digital asset bank that received a Swiss banking license from the Swiss Financial Market Supervisory Authority in August 2019. Prior to Sygnum Bank, Moukhtarzadeh worked for Ernst & Young in blockchain consultancy and for several startups in the Swiss Crypto Valley.

Tokenization of assets is not taking off, but it really should

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Tesla buys BTC, Mastercard supports crypto, DOGE founder speaks out: Hodler’s Digest, Feb. 7–13

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Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bitcoin hits all-time highs as Tesla invests $1.5 billion

The past week is going to go down as one of the best in Bitcoin’s history. It all began when an SEC filing revealed Tesla has invested $1.5 billion in BTC and planned to start accepting crypto as a payment method.

BTC’s price immediately leaped to record highs on the news, surging by 20% in 24 hours. The announcement came weeks after Elon Musk added #bitcoin to his bio and revealed he supported the cryptocurrency.

Tesla’s Bitcoin exposure represents about 7.7% of its gross cash position, and the news has sparked hopes that other major corporations will follow suit. Galaxy Digital’s Michael Novogratz predicted that “every company in America” will emulate the electric vehicle maker by allocating part of its balance sheets to BTC.

But some treasury experts have been left scratching their heads over the change in Tesla’s investment strategy, with critics describing the move as “unusual” and “risky.” JPMorgan also piled in and said the purchase might not trigger a ton of similar investments.

Mastercard announces support for crypto on its network in big week for adoption

Tesla was just the tip of the iceberg, with a flurry of announcements proving that Bitcoin is now firmly in the mainstream.

Mastercard unveiled plans to start supporting crypto this year, paving the way for almost 1 billion people to spend digital assets at more than 30 million merchants. The company said the move was about giving its customers choice.

Elsewhere, PayPal revealed that its crypto service is going to be rolled out in the U.K., making it the first international market since a successful launch in the U.S. last fall.

Twitter, home to crypto-friendly CEO Jack Dorsey, confirmed it is looking into how it might pay employees who wish to be compensated in Bitcoin. Chief financial officer Ned Segal added that the social network is exploring whether it needs to have BTC on its balance sheet.

There was more to come. BNY Mellon, America’s oldest bank, announced that it will offer crypto custody services for institutional clients. Its chief executive, Roman Regelman, told the WSJ: “Digital assets are becoming part of the mainstream.” Other major banks, such as JPMorgan, now believe they’ll eventually have to get involved in BTC.

Speculation is now growing that Apple will be one of the next companies to embrace Bitcoin. The cherry on top of the cake came when the crypto-focused fintech platform BitPay revealed that card owners can now pay for goods and services using Apple Pay.

Key Bitcoin price metric signals traders are positioned for $50,000 

BTC surged beyond $43,000 without breaking a sweat on Monday, besting last month’s all-time high of $42,000. As the week progressed, Bitcoin managed to hit $48,900.

Many high-profile analysts openly predicted last year that $50,000 was a realistic price target for 2021. Just six weeks into the year, BTC has come tantalizingly close to this level.

Despite Bitcoin’s value trebling in the space of just three months, several crypto traders believe that the scene remains exceedingly bullish… and those looking for a local top might end up being disappointed.

One analyst, Cheds, told Cointelegraph: “In my view, bulls are still in complete control, and every day, we get more news of institutional adoption and demand and that, more than anything, will be the driving force.”

Another, CryptoWendyO, described $50,000 as “inevitable,” adding that a Bitcoin tweet from Musk could send BTC to $54,000.

Ethereum hits a new all-time high as CME futures go live

ETH broke $1,800 this week, setting new records several times along the way. All of this came as Ether futures made their long-awaited debut on CME.

It’s also been a very lucrative few days in the altcoin markets. Cardano has surged 71% over the past seven days, and Polkadot is up 49%, with Binance Coin crushing the competition after clocking gains of 103% in the space of a week. Even XRP managed to break $0.60 once again, which has the Sword of Damocles hanging over its head.

BNB’s gains are undoubtedly linked to the record levels of traffic coming to the Binance exchange, with the platform suffering an outage on Thursday as it went down for maintenance.

The total value locked in decentralized finance also managed to crack $40 billion this week. However, much of this surge is likely down to the soaring value of Ether rather than a dramatic explosion in activity.

Founder of Dogecoin sold everything in 2015 for “a used Honda Civic”

Not everyone is rolling around in $100 bills as a result of the crypto bull run. Dogecoin founder Billy Markus has revealed that he sold off his DOGE stash in 2015 for an amount equivalent to a used Honda Civic.

All of that means that he missed out on the Dogecoin mania that has helped the joke cryptocurrency gain 900% since late January, fueled by tweets from Elon Musk.

Writing on Reddit, Markus said that he can’t comprehend the prospect of DOGE ever reaching $1, writing: “That would make the ‘market cap’ larger than actual companies that provide services to millions, such as Boeing, Starbucks, American Express, IBM.”

Musk recently revealed that he had bought some DOGE for his nine-month-old son so he can be a “toddler hodler,” but there are fears that his days of tweeting about crypto could be numbered. Legal advisors have warned the billionaire that his social media activity and public statements could come under scrutiny from the SEC.

Winners and Losers

At the end of the week, Bitcoin is at $47,592.20, Ether at $1,836.68 and XRP at $0.60. The total market cap is at $1,477,578,548,979.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Avalanche, BitTorrent and The Graph. There’s just one altcoin loser in the top 100 this week: Ampleforth.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis. 

Most Memorable Quotations

“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.”

Sani Musa, Nigerian senator

“Elon Musk has exposed Tesla to immense mark-to-market risk.”

Peter Garnry, Saxo Bank head of equity strategy

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

Janet Yellen, U.S. Treasury Secretary

“New account registrations are still open, not sure for how long. Also seeing ATH on this. Better get an account soon.”

Changpeng Zhao, Binance CEO

“It would not be surprising — given the focus on the chief executive’s tweets, Bitcoin pricing and recent dramatic market moves — for the SEC to ask questions about the facts and circumstances here.”

Doug Davison, former SEC enforcement official

“Digital assets are becoming a more important part of the payments world. We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”

Mastercard

“Bought some Dogecoin for lil X, so he can be a toddler hodler.”

Elon Musk, Tesla CEO

“The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.”

JPMorgan

“We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in Bitcoin, how we might pay a vendor should they ask to be paid in Bitcoin, and whether we need to have Bitcoin on our balance sheet.”

Ned Segal, Twitter chief financial officer

“Markets are going up heavily, but we’ll be seeing some downwards momentum as well. Nothing goes up in a straight line.”

Michaël van de Poppe, Cointelegraph Markets analyst

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey. You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not.’”

Michael Sonnenshein, Grayscale CEO

“The target for consolidation is near $52k, where I’m expecting a bit of a correction but the measured move overall should take us towards $63,000.”

filbfilb, Cointelegraph Markets analyst

“Any wallet that won’t give you your private keys should be avoided at all costs.”

Elon Musk, Tesla CEO

“Central banks should ban the trading of it, and force anyone who holds Bitcoin and wants to use it in any transaction, to exchange it for another currency that does not have such a damaging side effect.”

Nick Boles, former British MP

“ETH futures go live on the CME today. This is huge. This is a bridge to institutions. This is a green light from U.S. regulators. ETH is becoming globally accepted commodity money.”

Ryan Sean Adams, Ethereum researcher

“If [Apple] decides to enter into the crypto exchange business, we think the firm could immediately gain market share and disrupt the industry.”

Paul Steves, Royal Bank of Canada Dominion Securities

“We expect to begin accepting bitcoin as a form of payment for our products in the near future.”

Tesla

Prediction of the Week

Bitcoin price poised to hit $63,000, says trader filbfilb

The popular analyst filbfilb has declared that “the game has changed” for Bitcoin — and has revealed what he thinks will come next for the world’s biggest cryptocurrency.

The Cointelegraph Markets contributor has said that he’s anticipating “a bit of a correction” once BTC hits $52,000 but believes “the measured move overall should take us towards $63,000.”

And on the matter of corporate adoption, he wrote: “I really don’t think people understand that S&P 500 companies owning Bitcoin means that by default people’s pensions are exposed to Bitcoin. The % of people invested in Bitcoin has already reached the masses, they just don’t even know it.”

FUD of the Week 

Ethereum-based social media project shuts down as ETH fees approach new highs

An Ethereum-based project has ceased development due to rising gas prices, as the cost of transacting on the blockchain continues to push new highs.

Unite, which aimed to offer social media tokens, said the original idea for the project has been rendered unfeasible by the recent spike in fees, with the average cost of using Ethereum rising by a staggering 35,600% since last January.

The startup intended to allow social media users on sites such as Twitter and Discord to distribute Ethereum ERC-20 tokens to their audience and community. Developers also confirmed that they have decided against building the platform on a layer-two solution.

FTX CEO claims competitor responsible for racist messages delivered to Blockfolio users

Blockfolio’s Signal feed was briefly compromised this week, with some users receiving racist messages within the company’s app.

Now, FTX CEO Sam Bankman-Fried, who acquired Blockfolio for $150 million last August, has shed light on what happened following a security review.

He claimed that the offensive content was produced and published by a competitor exchange that maliciously gained access to someone’s account.

Bankman-Fried didn’t name the culprit but stressed that funds were not jeopardized at any time. He also confirmed that Blockfolio has now fixed the vulnerability that led to this situation.

The executive has been praised for his handling of the situation, and he has apparently added $10 to the trading accounts of affected users, as well as donating to organizations dedicated to fighting racial and societal injustice.

India’s crypto ban is coming, hodlers to be given transition period: Bloomberg

An unnamed senior finance ministry official has claimed that India will soon completely ban crypto assets.

It’s reported that the use of cryptocurrency in all forms will be prohibited under the new law — meaning transacting through foreign exchanges won’t be allowed either.

Crypto exchanges have reacted with dismay to the news. Unocoin co-founder Sathvik Vishwanath said: “If government goes ahead with banning all cryptocurrencies, except the one backed by the state, it will not make sense to continue our business in India. But we’ll have to wait and watch.”

The Indian government has been determined to clamp down on crypto use after the supreme court overturned the RBI’s blanket ban on local banks providing services to businesses dealing with crypto.

Best Cointelegraph Features

Moment of truth? Tesla purchase is the moment Bitcoin has been waiting for

Despite some expected near-term volatility, Tesla’s exploration of the crypto realm will likely help the industry scale up to new heights.

Coincidence? Company stocks rise after they buy Bitcoin as a reserve

The market caps of most companies that bought Bitcoin have increased recently, but is that solely thanks to BTC?

A new trend? Non-crypto CEOs and celebrities embrace Bitcoin on Twitter

Are business leaders signaling the technological future they believe is coming to pass — an international and decentralized one?

Tesla buys BTC, Mastercard supports crypto, DOGE founder speaks out: Hodler’s Digest, Feb. 7–13

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