After a week of confusing crypto narratives, we round up the big reads trying to make sense of the market and more.
Making Sense of a Terrible Week
This was one of the worst weeks for all markets – including crypto – in recent history. Crypto trader Scott Melker guests on The Breakdown, where Nathaniel Whitmore asks him what the crypto markets demonstrated this past week and whether we can expect more of the same in March.
Plus, Andreas M. Antonopoulos, Stephanie Murphy and Adam B. Levine discuss the coronavirus and its potential impacts or disruptions to the decentralised world of bitcoin:
Bitcoin for Safety?
What a timely report. Digital Asset Research have looked at the “risk-on”/“risk-off” question, and show that bitcoin generally outperforms in drawdowns, but less so than usual, and that over past year, bitcoin has increasingly acted like a risk-off asset. Key takeaway here is that bitcoin has only traded during a bull market, so finding “risk off” scenarios to evaluate relative performance is difficult. The past week could hint at some looming real-world testing of the risk-on/risk-off theories that abound, and at the very least will contribute another important data set to add to the analysis.
Retail Crypto and Stock Traders Buy the Dip, Even as Banks Sound Alarm
Anxieties about the economic impact of the coronavirus continued to grip global markets as Citigroup and Goldman Sachs are warning their clients that the current market rout has yet to hit a bottom. However, it’s not preventing retail traders from buying the dip according to estimates from a Robinhood spokesperson, amongst others.
Stablecoins Are Evolving to Make Crypto Assets Irresistible to Wall Street Investors
A look at how Stablecoins have risen in popularity to become a major source of liquidity in the cryptocurrency market. They provide an on-ramp to enter the crypto markets and an off-ramp to exit the cryptocurrency market. The rising popularity of stablecoins is a function of their inherent stability relative to other types of cryptocurrencies.
Crypto Cards – A New Sector?
Sharing his thoughts with Cointelegraph, Hugh Kingon, our advisor here at BCB Group, stated: “most crypto organisations have experienced being let down by their banking partners at some point in time,” clarifying that the process is complex for all parties involved: “Many of the bin sponsors have a difficult life, needing to keep good relations with a wide range of regulators and, therefore, being a touch conservative.” He’s pretty well-placed to comment, given his previous roles at Mastercard and Visa.
Swiss Stock Exchange Invests in Institutional Trading Platform for Digital Assets
Switzerland’s leading stock exchange SIX Swiss Exchange has announced that it has invested in institutional trading platform Omniex, with plans to use it as a “gateway” into the digital asset space. So one of the largest stock exchanges in Europe has invested in a smart order routing platform for the crypto asset market, which in theory it will use to help clients trade across various crypto exchanges. This is intriguing – but at first glance doesn’t gel with the long-talked-about plans to launch a trading platform themselves. This launch has been delayed by over a year – perhaps the strategy has shifted.
Bank for International Settlements (BIS) Publishes Quarterly Report, Analysing Securities Tokenisation, Future of Payments and Central Bank Digital Currencies
Yesterday the Bank for International Settlements (BIS), the global body for central banks, published its quarterly report, which looks at how technology is impacting banking and financial markets.
The paper explores different technical design approaches to Central Bank Digital Currencies. One of them is whether it should use DLT or not. Another is whether it should be account or token-based. The conclusion is that more hands on experience with the different design choices is needed. It notes that central banks around the world are experimenting with a vast array of designs which should help to build a picture.
Crypto-plumbing with Arwen CEO Sharon Goldberg
In 2019, centralised crypto exchanges were hacked to the collective tune of $300M. The ever present threat of exchange hacks has led to the rise of DEXs, which allow for trade without handing over custody to a third party. While DEXs have seen impressive growth, the liquidity available at their centralised counterparts remains orders of magnitude greater. Arwen protocol’s aim is to achieve the holy grail of giving prospective traders access to centralised exchange liquidity without having to give up custody of their assets.
In this conversation, Arwen CEO Sharon Goldberg details her path from academia to cryptography to Bitcoin. Sharon gets into the inner workings of crypto exchange, custody, settlement, cross-chain atomic swaps while providing a digestible overview of how it all works.