by Samuel Mbaki | Aug 7, 2023 | Markets
Key Points
- Coinshares has released a report showing that investors are profiting from digital assets markets, with Bitcoin being the main focus.
- The report shows that over the past seven days, BTC had an outflow of $111M, while digital assets products saw outflows topping $107M.
Coinshares have released a report showing that investors spent the past week taking profits from their digital assets as Bitcoin recorded a $111M sell-off and Digita asset products followed closely with a combined sell-off of around $107M.
Coinshares releases report showing taking profit sentiment from digital assets markets over the past week
The report by Coinshares shows that the summer YoY trading volumes are down 36% on average, with on-exchange YTD average trading volumes plummeting by 62%.
The regional outflows per Coinshare’s report were focused on two ETP providers, Germany and Canada, which saw outflows of $71M and $29M, respectively. In the same period, Bitcoin led in sell-offs, recording total outflows of $111M. This outflow is the highest ever recorded since March.
On the other hand, Ethereum recorded an outflow of $6M through other improving altcoins throughout the study. The report indicates that the highest inflows/ buys were recorded on Solana, which received $9.5 M, its largest weekly inflow since March when the US SEC began wide crypto regulatory crackdowns.
by Samuel Mbaki | Aug 7, 2023 | Cryptocurrencies
Key Points
- Coingecko has introduced a tracking list of the top alleged coins by the US SEC to be securities.
- The list spans 48 coins and is expected to grow as the authorities keep cracking down on the crypto space.
The new index by Coingecko tracks the biggest crypto assets that the US SEC sees as securities despite there not being a binding crypto regulatory framework in the country. Binance’s CoinMarketCap is also tracking a similar list.
CMC and Coingecko shed light on More coins as SEC sharpens its radar
Coingecko has Joined CoinMarketCap to introduce an index that tracks the crypto assets the US SEC has labeled ‘securities.’ Starting on Monday, Coingecko will be showing the performance of the coins and adding to the list in case the US SEC decides to declare more assets as securities.
The US SEC has been on a hunt since 2020, intensifying its efforts and asking for bigger budgets from the US government to ‘flush’ out bad actors from the US markets. In the process, it labeled assets like XRP, BNB, Cardano, and Solana as securities.
As such, it expects the issuers of these coins to follow securities laws when trading them in the US. It also expects investors and exchanges that trade these assets to be vigilant and do as the law requires. As a result, these coins have been experiencing shaky markets every once the regulator uses them in a major crypto lawsuit.
Due to the price fluctuation, on-chain data platforms CoinMarketCap and Coingecko have decided to add the coins in separate lists from the others so investors can view and use the data for better investment strategies.
Keep watching Fintech Express for updates on this and other fintech-related developments.
by Samuel Mbaki | Aug 5, 2023 | Banking
Key Points
- JP Morgan, one of the largest banking institutions in the world, has called off its signal for a possibility of a recession in the US this year.
- JP Morgan had signaled that the US economy could be in danger of economic contraction due to heightened risk but has now hit a turnaround after the economy showed signs of rebounding.
JP Morgan, one of the most prominent banking institutions in the US and the world, has called off its signal that the US economy could be set for a recession in 2023 after noticing a reduction in pre-exposure risks. However, it still doesn’t believe that all risks are entirely off the table, citing the dangers of the Fed rates policy that has seen 11 hikes so far.
We doubt the economy will slip into a mild contraction in the next quarter- JP Morgan
The US economy has been rocked by high inflation in 2023 and multiple other economic maydays like the banking system collapse and debt ceiling crisis which sent signals of a possible recession. JP Morgan & Chase bank was one of the first financial services providers to signal in 2022 that a recession could be on the horizon for the world’s largest economy.
The weakening of pre-exposing factors to a recession in the United States has sent a wave of hope across international markets that the US economy would be safe from a recession after all. The country’s inflation rate is back at 3% while the labor and jobs sector remains strong. The country’s 11 fed rate hikes are sustainable without too much market constraint.
Additionally, the Banking system collapse has been partially averted, with banks providing over $110 billion in working capital credit funds to keep them afloat. Also, President Biden struck a deal with Congress to lift the US Debt ceiling till 2025 to give a chance to resuscitate the economy and avoid it being plunged into untold economic havoc.
Michael Feroli, the chief economist at JP Morgan, told their clients that recent metrics indicate that Q3 2023 would see the US economy grow at about 2.5% compared with their previous forecast of 0.5%.
“Given this growth, we doubt the economy will quickly lose enough momentum to slip into a mild contraction as early as next quarter, as we had previously projected,” Feroli wrote.
He also mentioned the aversion to the aforementioned economic crisis as an integral part of giving the US economy another chance at growth and development. He also highlighted productivity gains due in part to the broader implementation of artificial intelligence, which has seen industries grow alongside softened hirings and positive jobs market reports.
Rates still keep recession possibilities alive.
Rate hikes bring more pain to the market as investors borrow money at a higher cost. As a result, productivity decreases as investors tend to limit their expenditures. In connection with this economic concept, Ferolli said that rates hike in the US currently keep the recession possibility alive.
The country has seen 11 interest rates hike since March 2022, totaling 5.25 percentage points, yet the inflation rate remains above the Central Bank target of 2%. As such, it calls for more rates hike or sustenance of the current policy for extended periods, which means borrowing will remain expensive in the markets.
“While a recession is no longer our modal scenario, risk of a downturn is still very elevated. One way this risk could materialize is if the Fed is not done hiking rates,” Feroli said. “Another way in which recession risks could materialize is if the normal lagged effects of the tightening already delivered kick in.”
He, however, expects the Federal Reserve to start cutting rates around Q3 2024, which keeps the possibility of reversed economic growth alive. He also noted that current market pricing strongly points toward a recession.
A New York Fed indicator shows that the difference between 3-month and 10-year treasury yields indicates a chance of a contraction in the next 12 months. This concept is drawn using the inverted yield curve predictor method, which has been reliable in forecasting recessions since 1959.
Keep watching Fintech Express for more updates on Banking and other Fintech-related developments.
by Samuel Mbaki | Aug 4, 2023 | Blockchain
Key points
- Matter Labs have denied allegations that it copied “performance-critical components” from Polygon Zero’s “Plonky2.”
- Matter Labs CEO Alex Glochowski says the allegations against them are unfounded, misleading, and disappointing
Matter Labs CEO Alex Glochowski has responded to an August 3rd report from Polygon Zero that claims they copy-pasted their code when building Boojum. Polygon Zero claims that Plonky2’s code was seen on the latest product by Matter Labs dubbed “Boojum,” which did not attribute to the original code’s author.
Matter Labs CEO Alex Glochowski denies Polygon Zero plagiarism claims
Expressing disappointment Matter Labs CEO Alex Glochowski has denied Polygon Zero’s allegations in a Twitter post, saying that their decisions on building zkSync were based on integrity and transparency.
Polygon Zero posted a blog post on August 3rd claiming that Matter Labs copied its code without proper author attributions. It said such behavior harms the developer ecosystem and could hurt smaller development teams across the industry as better-funded companies take advantage of their work.
While Matter Labs CEO Alex Glochowski debunked the claims, he did not completely assert that Boojum did not use Plonky’s code. He said that they only based 5% of their code on Plonky2. He also added that they had some reused code that they worked with and gave clear attribution.
“Only ~5% of the Boojum code is based on the code of Plonky2. For the reused code, a clear attribution is provided in line #1 of the main file of the module,” he said.
He also said that he was very “disappointed” in the Polygon Zero team since it had also committed a similar mistake, and Matter Labs did not take it as a major issue. In his argument, Matter Labs CEO Alex Glochowski said that Plonky2 and Boojum are implementations of RedSHift construction, which was introduced by his team 3 years before Plonky2 paper 2.
As such, the Plonky2 team never gave matter labs credit though they referred to RedShift in their white paper. However, Matter Labs never bothered as it was glad to see someone else build on and improve their work.
However, he also conceded that there are either attribution standards that they should have used and will be more mindful of going forward. Additionally, he also called out Polygon Zero for going straight public with claims that made it look like Boojum was a total copy-paste work.
“Open Source is all about genuine cooperation. If the Polygon Zero team wanted additional credit, the easiest way would have been to submit a pull request which we would have happily accepted. Going ahead with public accusations of a complete lack of attribution (even if it was true, which is not the case here) is anything but the spirit of the Open Source movement. If you’re not happy about others – including potential competitors – using parts of your code, maybe Open Source is not for you?” Part of the tweet reads.
Keep watching Fintech Express for more updates on crypto and other Fintech related developments.
by Samuel Mbaki | Aug 2, 2023 | Cryptocurrencies
Key Points
- MicroStrategy has added another 14.5M worth of Bitcoin after adding 12,333 in June.
- The company says it plans to raise upwards of 750 million dollars to invest in the currency, among other corporate duties.
MicroStrategy’s Bitcoin buying spree continues as the company bags 14.5 million dollars worth of Bitcoin amid a bigger plan to invest over $ 750 million more in the coin. The increased interest from MicroStrategy comes as its chair Michael Saylor thinks the next wave of institutional investments is imminent.
Saylor keeps filling MicroStrategy’s Bitcoin bags
Saylor’s MicroStrategy now holds 152,800 bitcoins worth over $4.53 billion after adding 467 more coins at $14.5 million. The company has also released a filing indicating that it plans to raise as much as $750 million via share sales to invest in the coin, among other general corporate purposes.
The $750 million would be allocated to Bitcoin investment and other roles like working capital deployment and debt repurchase. Saylor has been vocal about investments in Bitcoin for multiple years now. He started buying Bitcoin in 2020, citing the need for the company to hold cash due to an eroding threat of inflation.
He was bashed for the company losing millions in unrealized losses over the bear market from November 2021 through 2023. However, MicroStrategy continued “filling its bags” till Q2 2023, when it added over 12.3K bitcoins. It has now added 467 more coins and plans to keep buying as it is raising money to add to its capital.
Saylor is a strong believer in Bitcoin, and now that BlackRock and other TradFi institutions have started flocking into Bitcoin ETFs, he thinks that it’s “the best thing that ever happened to Bitcoin,” meaning he would keep buying the coin. Keep watching Fintech Express for more updates on this and other fintech-related developments.
