Spurred by anticipation of Coinbase’s upcoming public listing, major digital assets across the board saw strong growth and new records
Bitcoin achieved a new record value just below $65,000, remaining above $60,000 since Sunday, with a current value of $63,040—a 10% weekly increase
Bitcoin’s market capitalisation exceeded $1.2tn for the first time on Wednesday as it reached new all-time highs
Ethereum had another strong week, eclipsing its previous all-time high by more than 10%, rising to a current value of $2,480—representing 22% weekly growth
The entire market saw strong growth, with 16 of the top 20 coins (excluding stablecoins) seeing at least double-digit percentage growth
Binance Coin and XRP saw especially significant growth amongst major altcoins; each growing by more than 35% over the course of the week
The overall market cap of the asset class increased by over 10%, to a new record value of $2.26tn
Decentralised Finance achieved new record values in line with the rest of the market, thanks to over $71bn in total value locked into DeFi applications
The digital asset market experienced a record week as Coinbase’s public listing provided a watershed moment confirming the legitimacy of this new asset class. Major names from traditional finance increased their exposure to crypto assets; UBS, JP Morgan, and Mastercard directly invested in Ethereum infrastructure, State Street (America’s second oldest bank) announced plans for digital asset trading, and BNY Mellon (the only American bank older than State Street) announced their support for a Bitcoin ETF.
COIN listed on Nasdaq, with day one closing was priced at $328, a gain of over 30% from its $250 reference price. During the session, the stock hit a high of $429, corresponding to valuation of over $100 billion, eclipsing the market capitalisation of NYSE and Nasdaq combined.
Several analysts, such as CNBC’s Jim Kramer, see Coinbase’s listing as a watershed moment for digital assets, with a researcher from John St Capital noting that the company’s Q1 results were impressive, and that “The 56 million user number is bigger than CashApp & Venmo and significantly larger than RobinhoodApp & eToro. That's greater than every bank apart of JP Morgan”
State Street, the second-oldest bank in the US, is following BNY Mellon (the country’s oldest bank) into the world of digital assets
With more than $3tn in assets under management, State Street’s move signals an increasing acceptance of digital assets within the frameworks of traditional finance, particularly as they aim to create institutional trading platforms
In a press release about the collaboration, David Newn of State Street Global Markets said “Currenex is thrilled to leverage our experience and expertise in the FX and digital asset trading marketplace to provide Pure Digital with robust technology and infrastructure for this exciting digital currency trading initiative”
State Street and Pure Digital expect to begin trading from “the middle of 2021” onwards
Consensys, a major developer of technology for the Ethereum ecosystem, this week confirmed a $65m funding round with participation from major financial institutions
As well blockchain-focused companies like Alameda Research and the Maker Foundation, the funding round included giants from traditional finance, including UBS, Mastercard, and JP Morgan
Primarily, this is seen as a move by traditional finance companies to gain exposure and access to the rising tide of decentralised finance (DeFi) built on the Ethereum blockchain
In a statement, Consensys founder (and Ethereum co-founder) Joseph Lubin said “ConsenSys’ software stack represents access to a new automated objective trust foundation enabled by decentralized protocols like Ethereum. We are proud to partner with preeminent financial firms alongside leading crypto companies to further converge the centralized and decentralized financial domains at this particularly exciting time of growth for ConsenSys and the entire industry”
UBS’ head of group technology Mike Dargan noted “Our investment in ConsenSys adds proven expertise in distributed ledger technology to our UBS Next portfolio”
Mastercard’s Raj Dhamodharan (executive vice president of digital asset and blockchain products) stated “Enterprise Ethereum is a key infrastructure on which we and our partners are building payment and non-payment applications… Our investment and partnership with ConsenSys helps us bring secure and performant Enterprise Ethereum capabilities to our customers”
After announcing a “deep dive” into digital asset education last month, billionaire Third Point hedge fund manager Daniel Loeb appears to have been convinced of its potential
Third Point LLC currently hold over $17bn in total assets under management
Regulatory filings reveal that five of Third Point LLC’s funds hold crypto assets with Coinbase
BNY Mellon stated that “As the world's largest asset servicer, we take great pride in working with our clients to bring new, innovative products to market... growing interest in digital assets presents a compelling opportunity to allow investors to explore cryptocurrency and we are proud to work with First Trust to bring their new Bitcoin ETF to market
JP Morgan commented on the potential impact of digital asset ETFs in a report this week, noting that “Launching a Bitcoin ETF in the U.S. will be the key to normalizing the pricing of bitcoin futures, in our view”, potentially shrinking the 25% premium present in June contracts recently listed by the CME
In a regulatory filing this week, digital asset advocate Michael Saylor’s Microstrategy revealed that as part of the company’s “commitment to Bitcoin”, non-employee directors on their board will henceforth receive payment in Bitcoin rather than cash
Microstrategy are one of the highest profile voices behind institutional investment into digital assets, and this move followed news of another $15m Bitcoin purchase by Microstrategy this week, bringing their total holdings to 91,579 Bitcoins
The company’s commitment to Bitcoin has led to significant returns; a day after the disclosure about board Bitcoin payments, the company’s share price grew 10%, for a current market capitalisation of around $7.5bn
One of the longest-running arguments used by opponents of Bitcoin is that it might be used in covert financial dealings
Former CIA director Michael Morrell published a paper of his research on the subject, finding arguments about Bitcoin’s role in illicit finance untrue
Morrell noted that he went into his research expecting traditional arguments to be proven correct, but found that these were significantly overstated, and that “the illicit use of cryptocurrencies in general and Bitcoin in particular, as a share of total market activity, is certainly not higher than it is in the traditional banking system and is most likely less”
In concrete terms, he believes that below 1 per cent. of transactions on blockchain are related to illicit activity, whilst “illicit activity in the economy as a whole, overwhelmingly conducted through traditional financial intermediaries and with traditional fiat currencies, are on the order of 2 to 4 per cent. of global GDP”
Furthermore, thanks to the open and transparent nature of blockchain, he believes that use of digital assets can actually prove useful in reducing financial crime, noting “[It] is easier for law enforcement to trace illicit activity using Bitcoin than it is to trace cross-border illegal activity using traditional banking transactions, and far easier than cash transactions”
In an interview with Forbes ahead of the report’s release, Morrel said he sees blockchain and digital assets playing a key role in the future financial infrastructure of the world: “we [the United States] need to make sure that the conventional wisdom that is wrong about the illicit use of Bitcoin doesn't hold us back from pushing forward the technological changes that are going to allow us to keep pace with China”
The wider Turkish economy is experiencing inflation of over 16%, and the unemployment rate exceeds 12%
Although the Guardian notes that president Erdogan has “called for Turks to invest in gold and foreign currencies to shore up up domestic financial markets”, there appears to have been a far greater growth in digital asset trading instead
Data from Reuters reveals that year-on-year, trading volumes in digitals have increased approximately 23-fold, and Google search results for the asset class are also at all-time highs
Grayscale, one of the largest institutional investors in digital assets, have partnered with Time Magazine to produce a series of educational videos about digital assets for their readership
Grayscale CEO Michael Sonnenschein noted that as part of this deal, Time have agreed to be their first partners to take payment in Bitcoin, with the intention of holding it on their balance sheet rather than immediately converting to cash
On Thursday, China and Hong Kong-listed technology company Meitu disclosed another major investment into digital assets, purchasing $10m of Bitcoin at approximately $57,000 per coin
This brings their total digital asset investments over the last two months to around $100m, split almost evenly between Ether ($50.5m) and Bitcoin ($49.5m)
Although crypto investment by companies in the global West has become increasingly commonplace over the last year, Meitu is the first significant corporate buyer of digital assets in China
As part of their latest purchase, the company’s board provided a rationale for their investment, praising Bitcoin’s issuance rate and maximum supply; “these features potentially even render Bitcoin as a superior form to other alternative stores of value such as gold, precious stone and real estate”
Court documents published on Friday revealed that a federal judge in the US has denied the SEC’s request to examine the personal finances of the founders behind the digital asset XRP
This marks the second legal victory in quick succession for Ripple (the company that created XRP), after the same judge ruled a few days earlier that they would be granted access to the SEC’s internal communications concerning their crypto asset
Ripple’s XRP has rallied strongly in response to this news, reaching its highest levels since early 2018
What happened: CBDC development continues globally
How is this significant?
In an announcement on Thursday, the European Central Bank revealed the results of a public consultation concerning the development of a digital Euro
Over 8,200 responses were received, and the report found that privacy was the most important feature for 43% of respondents, followed by security (18%), and implementation across the Eurozone (11%)
Although a digital Euro likely remains 3-4 years away, the document should be important in shaping its development, with ECB executive board member Fabio Panetta noting “We will do our best to ensure that a digital Euro meets the expectations of citizens highlighted in the public consultation”
Russian mining company BitRiver has become the latest miner to create a token offering holders access to their mining infrastructure
American company Gryphon Digital Mining raised $14m for environmentally-sustainable mining infrastructure
According to data from crypto analytics firm Glassnode, Bitcoin miners are accumulating coins for the first time since December, with 30-day holdings on miners’ addresses increasing—indicating that miners would rather hold in anticipation of future value increase than immediately cash out for overheads and expenses
METACO, a Swiss digital asset custody firm, announced on Tuesday that they have launched a platform allowing private banks to easily integrate and access DeFi applications
Their “METACO Harmonize” solution is intended to provide “an end-to-end digital asset orchestration system for institutions”
According to their CEO Adrien Treccani, “The launch of METACO Harmonize is driven by the exponential growth of the digital asset economy, from an increase in the number and types of assets which are being tokenized, an increase in the number of counterparties trading those assets, and an increase in the relevance of decentralized finance applications… METACO Harmonize was developed together with our customers and provides institutions with a platform which will enable them to scale their digital asset operations with the requisite flexibility”
What happened: Digital finance platforms experience digital asset growth
This takes the total number of coins and tokens supported by Revolut (on a custodial basis) to 18
Several of the tokens added to their platform, such as Uniswap (UNI) and Yearn Finance(YFI), are relatively new entrants to the space, created during the rise of DeFi last year
As an online-only bank, Revolut was one of the first financial institutions to add custodial support for digital currencies, beginning with Bitcoin, Ether, and Litecoin in 2017
Robinhood currently features custodial trading for 7 different digital assets
In the first quarter of 2021, Robinhood had 9.5 million customers trading crypto assets through their platform; more than quintupling the number from the last quarter of 2020
Digital asset manager New York Digital Investment Group (NYDIG) secured $100m of growth capital from the insurance sector, including Liberty Mutual and Starr Insurance
According to a report in the Insurance Journal, this is part of a wider move to bring digital assets into the insurance field; “Mike Sapnar, a 30-year insurance industry veteran of insurance and former CEO of TransRe, is joining NYDIG as global head of Insurance Solutions to focus on accelerating bitcoin use in in the global property/casualty industry”
The report also notes that “According to NYDIG, life, annuity and P/C insurers now own, in aggregate, more than $1 billion of direct and indirect bitcoin exposure facilitated exclusively by NYDIG and held on NYDIG’s platform”
On Wednesday, Bloomberg released their monthly digital asset report, with April’s title reading “Rising Bitcoin Adoption Tide”
As suggested by the title, the report is overwhelmingly positive on the potential of crypto assets, with Bloomberg analysts forecasting a possible price of $400,000 per Bitcoin, based on movements experienced in the 2013 and 2017 bull markets
Whilst past performance is no guarantee of future results, they noted that “history may rhyme”, citing the reduction in new mining rewards created by last May’s “halving” as a significant factor when it comes to supply vs demand, saying that “The year after a supply cut (halving) is what 2021 has in common with 2017 and 2013, along with subdued volatility”
Analysts also believed that macroeconomic factors favour Bitcoin ahead of traditional stores of value like gold, writing that “Rising real yields are a headwind for gold prices, but less so for bitcoin, still in its price-discovery stage… Gold is fighting a battle with Bitcoin, which can earn 6%-8% in crypto savings accounts and is well on its way to becoming a global reserve asset in a digital world”