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Blockchain Bites: Price Point! Bitcoin at $50K? $60K? $318K?



Traders have begun unwrapping tokenized bitcoins. The U.S. Treasury Department will keep a vigilant eye on digital innovations. And trading volumes on OKEx have plummeted. 

Top shelf

Forced burn
Ripple Chief Technology Officer David Schwartz tweeted the community could force the burning of billions of the protocol’s XRP native tokens held in escrow to prevent the drop in price that would likely occur should those billions in frozen tokens ever flood the market. On Dec. 2 a Twitter user asked the CTO, “If Nodes, validators and the community at large got together and we agree that it’s better for the community to burn the 50 billion XRP Ripple has in escrows, would that be possible?” Responding to the tweet, David Schwartz implied that majority rule would win in such a decision.

Innovation or risk?
The U.S. Department of the Treasury wants state and federal regulators to keep a vigilant watch on digital asset innovation, which could upset the balance of the current financial system. According to a report released on Thursday by the Financial Stability Oversight Council, digital assets are a “particularly good example” of both benefits and potential risks associated with innovation. The report highlighted the ambitions by nations around the world in their experiments with central bank digital currencies (CBDC) as a way to “enhance the global standing of their own currencies and enable faster payments.” 

Unwrapped wBCT
Wrapped bitcoin, the bitcoin-backed token on Ethereum now worth over $2 billion, has seen an increase in burns (or “unwrappings”) by some of its largest users as the Ethereum-based decentralized finance sector continues to cool. BitGo clients including Three Arrows Capital and Alameda Research are exchanging an increasing amount of their tokenized bitcoins minted earlier this year for real bitcoins as the bullish cryptocurrency market continues to center on bitcoin and Ethereum’s decentralized finance takes a back seat for now. In the months following DeFi’s red-hot summer when bitcoins were wrapped faster than they were mined, the sector has cooled significantly.

Not OK
A sharp drop in OKEx’s trading volume and stablecoin reserves – tether in particular – may reveal an ongoing exodus of its users after the popular crypto derivatives exchange unexpectedly halted all crypto withdrawal activities for about five weeks. Data from analytics service CryptoQuant shows the amount of tether held in OKEx wallets has dropped to 6.69 million from 275.0 million between Nov. 25 and Dec. 1, down 97.6% in less than a week. At the same time, total daily trading volume on OKEx has declined significantly during the same time period – down approximately 67.7% from Nov. 25, according to data compiled by CoinDesk. The volume of tether traded on OKEx plunged 70%.

Mirror, mirror
The creators of stablecoin platform Terra announced the launch of the Mirror Protocol Thursday, a way to mint crypto assets that mimic the value of shares in publicly traded companies like Apple or Tesla. The new protocol will also bring a new liquidity mining opportunity to Terra’s Tendermint-based blockchain. Known as mAssets, these tokens will track the price of U.S.-based equities in the real stock market, using an oracle system that’s able to check prices every six minutes. “The retail investor is at the center of this growing demand for U.S. equities and global equity derivatives. The stock market is no longer the exclusive purview of Wall Street’s suits, whether in New York, London or Tokyo,” Arrington XRP argues in its report.

Quick bites

  • FINTECH BANKING: Stripe Partnering With Goldman, Citigroup, Others to Offer Checking Accounts, Services: Report (CoinDesk)
  • BITCOIN BUNCH: This family bet everything on bitcoin when it was $900 – and bought more when it crashed in 2018 (CNBC)
  • DEFINING DEFI: Lex Sokolin: How do you do valuations of open-source software? Recent DeFi acquisitions may shine light. (CoinDesk Opinion)
  • NOT CAPTCHA’D: Human Protocol, the backbone for anti-bot system hCaptcha, announced Thursday it will be expanding beyond Ethereum to a future Polkadot parachain, Moonbeam. (CoinDesk)
  • OMG, RALLY! Genesis Block Ventures acquired OMG Network (an off-chain Ethereum solution) triggering a double-digit rally in the network’s OMG token. (CoinDesk)
  • CENTRALIZED CBDC: Russia’s crypto community fears digital ruble might means going “back to USSR.” (CoinDesk)
  • $41 BILLION: Decentralized finance platforms were responsible for 99% of Ethereum transaction volume last month. (Decrypt)
  • $600 MILLION: One million ETH is now locked up in Ethereum 2.0. (Decrypt)

At stake

Price point!
I was reading that CNBC story on the Dutch family that bet it all on bitcoin. In 2017, a small business owner sold all his assets – company, house and accumulated detritus – and moved his family of five into a van. “We stepped into bitcoin because we wanted to change our lives,” Didi Taihuttu told CNBC. 

That’s wild! The media also quoted Taihuttu’s price prediction for a $200,000 bitcoin by 2022. He’s a man that acts on instinct and knows things in his gut. It’s seemingly worked out for him so far. CNBC went on to quote several price predictions from the respected and respectable folk in crypto.  

Mike Novogratz, CEO of merchant bank Galaxy Digital, reportedly said bitcoin could reach $60,000 by next year. While a Citibank report geared for institutional clients made the case that one BTC could change hands for $318,000 by December 2021. That’s really wild!

Unquoted was Bloomberg’s recent, and more modest, prediction that bitcoin could hit $50,000 sometime next year. That’s more than double the price of bitcoin’s all-time high! And infers a $1 trillion market cap!

A lot of good data gets thrown into price predictions. There’s technical analysis of candles and wedges, there are surveys of high-net individuals and comparisons to similar movements in both bitcoin’s historical charts as well as analogue assets. (Want to understand bitcoin today? Study gold in the 1970s!)

But I wouldn’t put much store in them. This time three years ago, computer whiz and self-declared madman John McAfee had such strong convictions that bitcoin would hit $500,000 within three years (this year, incidentally) he would ingest his genitals. 

After years of target prices that were well off their mark, it’s reasonable to suggest that most claims on bitcoin’s future price are more gut than calculus, more wager than assured. Sometimes it pays off. But understanding that one BTC is always one BTC, you’ll never be wrong.

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Visa to Acquire Payments Startup Currencycloud




CEO of Currencycloud, Mike Laven stated that the combination of Currencycloud’s fintech expertise coupled with Visa’s network will enable both parties to deliver greater customer value to the businesses moving money across borders.

Visa Inc (NYSE: V) has announced that it has agreed on a deal to purchase Currencycloud, a British payments startup. Reports from Visa revealed that Currencycloud is valued at $962 million, (£700 million) and will become the second major fintech acquisition by the payments giants in 2021.

Visa added that it will reduce the sum to be paid for the British start-up firm as it already owns outstanding equity in the firm, leading an $80 million investment round in Currencycloud in the early stages of 2020.

Colleen Ostrowski, Visa’s global treasurer speaking after the announcement stated that the acquisition of Currencycloud will enable Visa to support their clients and partners to further reduce the stress of cross-border payments as well as develop great user experiences for their customers. “Consumers and businesses increasingly expect transparency, speed, and simplicity when making or receiving international payments,” she stated.

Currencycloud was founded in 2007 and has its headquarters situated in London and is regulated in the UK, Canada, the US, and the EU. The company’s cloud-based platform offers a wide array of APIs which enables banks, financial service providers, and fintech firms to process cross-border payments, offer currency exchange services, including real-time notifications on foreign exchange transactions, virtual account management, and multi-currency wallets.

The company has offices in Amsterdam, Cardiff, New York, and Singapore, and delivers simple, clear cross-border infrastructure solutions for clients, working with partners including GPS, Visa, Dwolla, and Mambu.

The British firm boats of a long list of clients including popular banking and payment apps, Starling, Monzo, Revolut, Lunar, and Penta. The payments start-up has raised over $160 million in total from investors including Japanese financial services firm SBI Holdings, French bank BNP Paribas and Google parent company Alphabet’s venture capital arm GV.

Currencycloud currently has 500 banking and technology clients in over 180 countries across the globe. Visa is a statement stated that the company will continue its operations from its headquarters in London as well as retain its currency management team. The deal is however subject to regulatory approvals and other customary closing conditions, according to Visa.

The payment start-up has processed over $100bn to over 180 countries since 2012 working with banks, financial institutions, and fintechs around the world, including Starling Bank, Revolut, Penta, and Lunar.

CEO of Currencycloud, Mike Laven stated that the combination of Currencycloud’s fintech expertise coupled with Visa’s network will enable both parties to deliver greater customer value to the businesses moving money across borders. “At Currencycloud, we’ve always strived to deliver a better tomorrow for all, from the smallest start-up to the global multi-nationals. Re-imagining how money flows around the global economy just got more exciting as we join Visa,” he said.

Visa agreed to buy Swedish firm Tink last month in a deal worth $2.1 billion after it attempted to acquire Plaid, a US rival, a move which was foiled by US regulators.

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Wall Street Keeps Up with Upward Momentum for Second Consecutive Day, Dow Jones Up 280 Points




Dow Jones recovers all losses from Monday with two-day consecutive rallies. Interestingly, the bond market is also fuelling optimism on Wall Street.

On Wednesday, July 21, Wall Street cheered with US stocks climbing for the second consecutive day. The Dow Jones Industrial Average (INDEXDJX: .DJI) was up 0.83% or 286 points recovering the early-week losses of Monday. Now, Dow Jones is just another 1% away from its record-high levels.

This happens as Dow-listed Coca-Cola Co (NYSE: KO) and Johnson & Johnson (NYSE: JNJ) reported better-than-expected earnings.

Earlier on Monday, July 19, Dow Jones tanked 725 points as Wall Street investors feared the growing number of COVID-19 delta variant cases. But the two-day consecutive rally has helped Dow restore its previous levels. In a report on Wednesday, Thomas Essaye of Sevens Report Research said:

“Tuesday was a textbook oversold bounce following Monday’s collapse. Beyond short-term gyrations, however, for value and cyclicals to reassert leadership, we will need to see yields bottom and economic growth beat estimates (two things we think will happen).”

Stocks linked to the growth aspect associated with the reopening of the economy bounced the most. Cruise company Carnival Corp (NYSE: CCL) was up 9% on Wednesday. Similarly, shares of Las Vegas Sands (NYSE: LVS) were up by 3.4%.

Energy stocks also continued to rally as oil prices were up after falling to less than $70 per barrel on Monday. The Energy Select SPDR jumped 3.4%.

Bond Market Fuelling Optimism

As per the CNBC report, the 10-year Treasury yield is currently driving the equity market. On Wednesday, July 21, the yield surged by 8 basis points to 1.29%. Earlier on Monday this week, the yield dropped to a five-month low.

But despite the recent bounce back, the trend is still down. Back in February 2021, the 10-year Treasury Yield was above 1.7%. On Wednesday, Goldman Sachs’ Chris Hussey said:

“The catalyst for why investors have become comfortable with risk assets over the past two days is admittedly elusive. Perhaps investors have just come to embrace the notion that the reaction function to a new wave of the virus is unlikely to be the same as the reaction function employed in the spring of 2020.”

However, some strategists have also warned that markets would stay more volatile going ahead. Thus, they expect deeper pullbacks as investors juggle between inflation fears and rising COVID cases. Matt Maley, equity strategist at Miller Tabak said:

“I think what we’ve seen here are the early warning shots of a correction that we’ll see probably… in late August, September, October”.

But in the last 14 months, the spike in the Covid cases hasn’t much impacted the stock market. On the other hand, rising vaccination is a big positive. Thus, analysts believe that investors will continue to buy the dips.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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IBM Stock Up 4% in Pre-market, IBM Reports Better Than Expected Q2 2021 Earnings




The second-quarter revenue was the largest IBM had ever recorded in three years.

International Business Machines Corp (NYSE: IBM) stock jumped over 4% as of July 20, 2021, at 5:02 a.m. EDT to trade around $143.25. The tweak in IBM stock during today’s premarket trading session was attributed to news that the company reported better than expected second-quarter earnings. During Q2, IBM reported adjusted earnings per share of $2.33 against $2.29 expected by analysts according to research by Refinitiv. Additionally, the company recorded a revenue of $18.75 billion versus $18.29 billion expected by analysts according to Refinitiv.

“The overall spend environment continues to improve,” CEO Arvind Krishna said on a conference call with analysts. “With the economy reopening in many parts of the world, many markets and industries are getting back on track. We see this in North America and select industries.”

Notably, the second-quarter revenue was the largest the company ever recorded in three years. The spike was attributed to a huge demand for cloud computing services as companies push to reach the global market and rebound from the Covid pandemic.

IBM Stock and Q2 2021 Earnings

As a technology-based company, IBM has seen its products gain popularity globally during the coronavirus outbreak. According to market analytics provided by MarketWatch, IBM shares are up 9.41% and 9.56% in the past year and year-to-date respectively through Monday.

However, they are down approximately 5.77%, and 1.68% in the past month and five days respectively through Monday.

Having reported the strongest quarter in revenues, IBM investors anticipate the foreseeable future to be in favor of them. Furthermore, the demand is expected to maintain or heighten as more countries open up their economies.

During the past year, IBM has seen its market valuation sustained over $124 billion. Wall Street analysts are convinced the company can deliver more in the coming quarters. According to a survey conducted by MarketWatch, IBM stocks received an average of a Hold rating from 18 ratings.

Although the company experienced one of its best quarters, the competition is growing in the cloud computing industry. As a result, IBM spent $1.75 billion on acquisitions, the highest in a single quarter since it closed the $34 billion Red Hat deal in the third quarter of 2019.

During Q2, IBM total cloud revenue grew by approximately 13% compared to the same time last year.

”The growth we’re seeing is very encouraging,” Chief Financial Officer Jim Kavanaugh said in an interview. “It’s proof our clients are adopting the hybrid-cloud platform.”

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
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