n Tron wont be able to manage the transaction volume needed to tokenize BitTorrent, according to Simon Morris, former chief strategy officer at BitTorrentn
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Wall Street Still Throwing Billions At Bitcoin, But There’s Still A Ways To Go
Since Bitcoin volumes began to dissipate in late-2018, which came alongside price plunges, the crypto’s curious investors have sought to determine where the money has fled. For the longest time, it was assumed that over-the-counter (OTC) desks picked up where spot exchanges, namely Bitfinex and Coinbase, were slacking. Yet, a recent company update from Circle has touted OTC statistics that could be deemed lackluster.
Related Reading: Circle CEO: Bitcoin Price Will Boom In Years To Come
Circle Trade Bitcoin Volumes May Indicate Lacking Institutional Demand
Last week, the Goldman Sachs-backed, Boston-based Circle, a leading player in the nascent OTC market, released its year in review, compiling pertinent data from fiscal 2018 in an apparent stab at transparency. Circle Trade, the startup’s OTC arm, reportedly transacted billion in notional volumes across 10,000 transactions, which serviced 36 distinct crypto assets and 600 counterparties.
Alex Krüger broke down the statistics in-depth via Twitter. Krüger, a leading crypto researcher and commentator, noted that assuming 75% of Trade’s volume was the BTC/USD pair, million was traded each day on average.
In 2018 Circle's OTC desk traded an average of million /day. Most OTC is bitcoin => assume 75% of that was BTCUSD => that'd be million /day.
In contrast Bitmex traded an average of .1 billion /day (XBTUSD), and Bitfinex 8 million /day (BTCUSD). https://t.co/g34sC9KoBK
— Alex Krüger
(@Crypto_Macro) January 5, 2019
While Trade’s figures aren’t shabby by any means, as they accentuate the fact that institutions are still throwing billions at Bitcoin, there’s much to be desired. Krüger explained that “in contrast,” BitMEX and Bitfinex, traded an average of .1 billion and 8 million each day respectively. Even discounting leverage trades on these platforms and volume from competing BTC/fiat exchanges, there’s still an ostensible gap.
And considering that Trade is the pinnacle of OTC desks, the figures are that much more harrowing, especially if you factor in the optimistic talk that Wall Street is going all-in on Bitcoin.
Maybe It’s Not Too Bad After All
However, considering that no other preeminent dark pools or OTC markets have divulged their trading statistics, there is a chance that Circle makes up a mere percentage of this subsector, contrary to community sentiment. Moreover, a recent statement from Christine Sandler, head of coverage at Coinbase, indicates that this little-known segment of the cryptosphere is still doing alright. Sandler, admitting that Coinbase’s OTC launch was “opportunistic,” stated:
“We found that a lot of institutions are using OTC to on-ramp [their fiat] for crypto trading. And so we felt that this was a huge benefit for our clients to leverage our exchange and our OTC desk.”
Speaking with Ran NeuNer of CNBC Africa, Changpeng Zhao, the chief executive at Binance, recently noted that the volume drought of 2018 can be attributed to the rise in dark pools. Citing sources, Zhao noted that OTC markets could be “at least as large as the live recorded volumes [on CoinMarketCap].” If the Binance chief’s comments are accurate, this could indicate that commentators en-masse have been overestimating Circle’s impact. So, maybe Wall Street hotshots are still emptying their bank accounts to buy cryptocurrencies after all.
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Crypto Doom and Gloom: Banking CEO Says There’s “No Interest” from Institutions
The CEO of Revolut has claimed that large institutional clients, which are often cited as the drivers of the next crypto bull run, have shown very little interest in investing in assets like Bitcoin and Ethereum.
Revolut CEO: Institutional Investors Show “No Interest” in Crypto
While speaking at the Web Summit 2018 in Lisbon, Portugal this week, Nikolay Storonsky, CEO of digital banking startup Revolut, revealed that institutional investors aren’t yet ready to enter the cryptocurrency market as speculators believe. This is due to an overall lack of appetite for and interest in cryptocurrencies, reports Bloomberg.
“There is no interest from big institutional investors so far,” Storonsky said.
“Unless these big institutional investors and hedge funds move heavily into the crypto world I just don’t think banks will move because they simply try to make money from their clients,” he explained.
The cryptocurrency community, which has been battered and beaten during the ongoing 11-month-long bear market, has held out hopes that institutional investors would show interest in cryptocurrencies – even more specifically Bitcoin – once the market found its bottom and showed some stability.
However, as the market begins to show behavior that suggests the bottom may be in, pundits like Storonsky and Larry Fink, BlackRock’s CEO, are still skeptical their clients have interest in the emerging asset class.
Fink recently expressed his skepticism, stating that his firm wouldn’t launch a crypto-related ETF until the market became more “legitimate.” San Francisco-based cryptocurrency exchange and services provider Coinbase, was recently rumored to have tapped BlackRock’s expertise in preparing to launch a crypto ETF.
Institutions Not Interested in Crypto? Wall Street Prep Proves Otherwise
The comments made by the two CEOs should be respected and considered valid given their position of power and influence, and due to their deep understanding of their client’s needs.
However, the fact that Wall Street mainstays like Fidelity, Goldman Sachs, and others, are ramping up efforts in aggressively establishing crypto trading platforms appears to prove that institutional clients are indeed showing interest.
Last month, Boston-based asset manager responsible for .2 trillion in customer assets, Fidelity Investments, launched a separate new branch focusing on cryptocurrencies like Bitcoin and Ethereum called Fidelity Digital Asset Services. The firm revealed it was already working on on boarding some 13,000 clients.
Related Reading: Fidelity Becomes First Wall Street Firm with Crypto Desk
Multinational investment bank Morgan Stanley, in their latest update to a report dubbed “Bitcoin Decrypted: A Brief Teach-In and Implications,” claimed that Bitcoin was a “new institutional investment class,” and had been for the better portion of the last year.
Not only that, but parent company of the New York Stock Exchange, ICE, is preparing to launch their Bakkt trading platform that offers physically-settled Bitcoin futures contracts in the next month, which many believe could start a bull run.
Goldman Sachs, Barclays, Nasdaq, Citigroup and many more traditional banking firms have all expressed interest in preparing their own cryptocurrency products. Long-standing businesses like these evolve and stay competitive by developing products that their customers will buy into.
With a seemingly endless slate of traditional investment firms eager to enter the space, some type of appetite for investing in cryptocurrencies must be present – no risk averse company would go into a project expecting their customers to give it a hard pass.
Featured image from Shutterstock.
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Regulators Are Landing Punches, But There’s a Long Crypto Fight Ahead
From ShapeShift’s capitulation to KYC to the New York Attorney General’s critical look at exchanges, officialdom is striking heavy blows. Stay tuned.
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There’s a Problem With Crypto Funding And Vitalik Just Might Have a Solution
A new paper by Vitalik Buterin and other researchers proposes a novel way to finance the public goods a decentralized ecosystem needs.
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There’s a Facebook Alternative, It’s Called Self-Sovereign Identity
The answer to Facebook’s fiasco isn’t a new platform. It’s an open standards-based infrastructure that centers on people and fosters a new ecosystem.
CoinDesk
Cryptocurrencies Are Doomed to Fail, But Theres Money to be Made, Says Credo CIO
n With the amount of new cryptocurrencies launching every day, the bulk of them will fail, but that does not mean you cant profit from them. ANALYSISn
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There’s More Than One Way to Be Bitcoin Rich
Missed out on the bitcoin bubble? You might have gotten rich (in spirit) along the way.
CoinDesk
Forking Hell: There’s a Lot of Hard Forks Coming to Bitcoin
There’s rarely a dull moment in the cryptocurrency space but recent months have been about as dramatic as they come. The forking saga that began in August of this year with Bitcoin Cash attempting to keep a version of Bitcoin without second layer scaling solution Segwit has continued and this month reached unprecedented levels of bewilderment, surprise, and intrigue. On November 8, the main supporters of a controversial second hard fork that was scheduled for later in the month declared that they had called off their plan. They had sought to fork the Bitcoin blockchain to increase the block size from 1MB to 2MB. However, they announced that a lack of support had caused them to abandon the project.
As with any big news in cryptocurrency, the calling off of Segwit2x, as the proposal had come to be referred to as, led to a lot of volatility in the markets. Firstly, the price of Bitcoin soared to all-time highs before topping out and starting to decline. Many alt-coins had a brief pump as money started to flood out of Bitcoin’s market cap. However, the biggest gainer from the chaos that ensued was undoubtedly Bitcoin Cash. From it’s price point of between 0 and 0 at the news of the Segwit2x fork being called off, it had surged to an alt-time high of over ,300 on the early hours of Sunday morning. It has since settled to just over ,000 at the time of writing.
Some are claiming it as a massive success story for Bitcoin Cash. However, it’s hard to tell how high the market cap of the original chain would be if the scaling debate had long been solved through consensus. It’s therefore impossible to tell how much money would have entered or left various markets in the months since the BCH fork had it not taken place at all.
Many seem keen to have a pop at stealing Bitcoin’s thunder by way of hard fork. Thanks to the decentralised, open source nature of the network, literally anyone can use the code and create their own version of Bitcoin. Whether it retains any value following the fork is another matter. There are now planned forks for Bitcoin Diamond that’s due to occur at block number 495,866, Bitcoin Silver with plans for greater decentralisation via a new PoW algorithm at some point in December, Bitcoin Unlimited claiming to be “a voice to all stakeholders in the Bitcoin ecosystem”, and Super Bitcoin who are planning on adding smart contracts to their fork of the chain from early 2018. It’s unclear how successful these projects will be, and whether they are even intended to be anything more than a quick money grab from developers hoping to cash in on the Bitcoin brand name.
It appears that software engineer and crypto analyst Jimmy Song was correct with his thesis that 2018 would be the year of the hard fork. Although, just how fractured Bitcoin will become remains to be seen. Will one coin snatch the community’s approval from the currently dominant BTC chain? Or, will the new offshoots dwindle into insignificance with less hype around each one as forks become the norm, and efforts receive little community attention? For now, we have to wait and see.
Image: PixaBay
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Mario Draghi States There’s no Need for Bitcoin Regulation in Europe Right now
Europe is a rather controversial region when it comes to Bitcoin and cryptocurrencies. Up until this point, there is no hint of any regulatory measures whatsoever. That isn’t necessarily a bad thing, but ignorance shouldn’t be rewarded either. ECB president Mario Draghi feels Bitcoin isn’t mature enough to warrant regulation. An interesting choice of words, … Continue reading Mario Draghi States There’s no Need for Bitcoin Regulation in Europe Right now
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