Trump Says The R-word – How Bitcoin Wins From Recession and The Thucydides Trap

thucydides trap trump bitcoin

The R-word – recession – passed the lips of US president Donald Trump yesterday, and despite recent price action, that’s a positive for bitcoin.

The consensus of analyst opinion is that there will not be a recession in the US this year or next.

But, as we shall see, those comforting findings do not tell the whole story and it is one in which bitcoin will be making an appearance.

Bitcoin is currently priced at $10,180 after failing twice in as many days to break above $11,000.

Anthony Pompliano from Morgan Creek Digital Assets was in conversation with Joe Kernen on CNBC yesterday and he was in typically bullish mood, although he does see possible temporary setbacks for bitcoin from regulatory pressures and the of use/entry issues that still haven’t been solved. 

The Pomp didn’t think Libra fallout would affect bitcoin because of the differences between the two. 

In Libra’s defence against the regulators, however, Pompliano said: “It’s going to be hard to label going up from 27 plus to 100 companies anti-competitive behaviour.”

So what’s going to push mass adoption forward asked Kernen? “Every single week we are seeing more and more infrastructure built around bitcoin. Hashrate…, Bakkt – the more infrastructure, the more likely it is that bitcoin will never go away – it will be in every institutions’ portfolio.”

But what are the near-term prospects for bitcoin in this world of inverted yield curves?

The fact that you now have to pay the German government to buy its bonds as the country stares recession in the face, has led to talk of stimulus packages and, for Trump’s part, more tax cuts. The US president spoke yesterday about a possible cut to capital gains tax but was non-committal on a timeline.

Although unemployment is low, inflation is low and the economy is still growing, the deceleration of the US economy is noticeable in durable goods orders and the purchasing managers index readings.

And besides, how long can the US economy hold out in the midst of global shrinkage in commerce and trade?

However, it does not necessarily follow that what is bad for the economy is good for bitcoin.

If people are losing their jobs, companies stop investing and consumer stop spending, then the feel bad factor will have a knock-on effect on sentiment. That would cast a pall over both traditional and nascent asset classes such as crypto.

But the real question is not so much how bitcoin performs in a recession as the interplay of a global recession with the developing geopolitical tensions.

Fear born of economic insecurity will collide with fears of war, both cold and hot. That feels like it should provide the basis for the continued deployment of the safe haven interpretation of bitcoin value.

Bitcoin against such a back drop could remain well-placed to benefit from the haven status, no matter how unjustified that may be given its volatility. 

However, that’s not how it feels right now with bitcoin battling to keep its head above $10,000. Up against gold, bitcoin is, let’s say, a safe haven that is still proving its worth, as opposed to gold having established its trusted store of value status over millennia.

Does that mean abandoned the safe haven theses or instead revise it? It should revised – or emphasised – to apply in a setting which it competes with other haven assets. So when yield curves are inverting – where it becomes cheaper to lend for longer terms compared to shorter terms (a reversal of the norm), that’s a powerful signal not just of recession ahead but of the level of fear.

Bitcoin could not compete with those avalanche-like flows into fixed income. More than that, the recent run-up to $13,800 is still unravelling weeks later as the price struggles to establish a baseline at $10,000.

Bitcoin and the Thucydides trap 

It is difficult to ignore just how dangerous the international outlook is.

As we mentioned yesterday, the US would likely give the green light for the sale of the F-16 fighter to Taiwan, a US ally that China considers to be a renegade province. That has now happened. The Hong Kong protest movement continues on a line of march towards confrontation with mainland forces.

Thucydides wrote the History of the Peloponnesian War 

Recent news of US deficiencies in hypersonic vehicles, in which both Russia and especially China have a substantial lead, underscores for the more hawkish elements in the US the imperative to escape the Thucydides Trap.

The ancient Greek Thucydides wrote upon how Spartan fears about the rising power of Athens made war between the two inevitable.

And in China itself, the nightmare scenario for the rulers is that the Hong Kong revolution becomes an example that other cities and regions follow. 

The advantages in the portability of bitcoin digital gold will not be lost on Chinese investors seeking out a “weightless” currency to store their value in.

Protest might seem n unlikely response by the working people of China, but they have shown themselves perfectly capable of striking over unpaid wages and poor pay or to defend jobs. Expect the pressures of the stand-off with the US and a slowing economy as part of a wider global downturn, to bear down on the Chinese leadership. 

Also, Jerome Powell at the Fed may be running out of road as far as policy tools go but he’s not alone among the central bankers in that respect. 

In Japan nothing has worked to kickstart the country’s economy out of two decades of stagnation, while in Europe the European Central Bank is going to start buying bonds again, despite QEs negligible impact on the productive capacity of the eurozone last time round.

Libra still a positive for crypto

Libra has got central bank digital currencies CBDCs moving rapidly up the agenda; it has also added to the rush to issue stablecoins too. 

Sure, the Libra pushback has the danger of impacting crypto more widely but the Pomp is surely right to say we should’t overstate that. Instead, Facebook’s Libra project is a net positive in the way that it points to a future that many corporations think they need to be a part of.

The fight over which bloc will come out on top in the digital payments race is on, with China jolted by Libra as it looks to guard its lead in the space.

Europe looks like the also-ran in all this. It lacks a homegrown tech success story to rival Facebook, Google or Apple. 

From once leading in mobile telephony, the EU has slipped behind. Although mobile payments is well established in Europe and much more advanced than in the US, the EU has not grown a Venmo, Pay Pal or WeChat. 

And despite worries about Libra, central banks are open to developing distributed ledger technology to improve efficiency and reduce costs. 

With China rumoured to be close to launching a CBDC of some sort, the day is drawing nearer when bitcoin will be stored in the vaults of the Bank of England.

Keep buying the dips?

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Bitcoin Rebuffed at $11,000 But Still In Bull Territory

BTC

Bitcoin has failed the $11,000 test again although it was a
pretty half-hearted attempt.

Touching $10,948 on Coinbase, the price quickly retreated to currently trade at .

Just as the 200 MA on the day chart is providing support, it
is the 4-hour 200 MA that s the resistance that could prove a hard nut for the
bitcoin bulls to crack.

Bitcoin is $1,000 higher since the news  broke of Bakkt bitcoin futures going live on
23 September.

That Bakkt bump looks like it could be running out of breath
in the short-term.

Wall Street analyst Thomas Lee, co-founder of FundStrat noted
the attack on 11,000 seemed to confirm that tripe tops do happen, but he “boom
of the third top ha since sagged.

He also noted yesterday that bitcoin was up despite
subsiding global tensions: “Interesting global tensions de-escalating, but $BTC
up.”

You can just hear them now at FT Alphaville – “they cheer the geopolitical turmoil as causative when bitcoin is up, and when it is down too”.

Trade optimism likely misplaced

So what gives?

Actually, although there is a return of trade optimism, but we should know by now that might only last as long as president Trump’s next tweet.

Alternatively, the optimism is based on a mirage, which seems likely.

Yes, Hong Kong violence has abated, but the mass demonstration
of reportedly 1.7 million people is perhaps more a of a headache for the Chinese
state than being allowed to pursue the “violent radical rioters” narrative,
which seemed to be nearing the point of no return as far as military intervention
goes.

The US and China trade representatives are going to meet soon too, but with Huawei proclaiming today that the trade dispute is a mortal threat to its prospects and China complaining loudly about the US threatening to station missiles in Asian countries and selling advanced fighter jets to Taiwan, China-US tension is the new normal.

This new cold war will keep bitcoin in rude health.

And in the equity markets participants have been cheered by hopes of a steeper interest rate cut to come than the Fed would like and murmurs from German politicians about stimulus spending as the engine of the European economy – Germany – teeters on the brink of recession.

Bitcoin still in bull territory

For a bit of perspective, Peter Brandt showed on 15 August, that bitcoin was still very much in the territory of the 2015-17 bull market as it was still trading above its moving average.

Bitcoin remains above the pace of its 2015-2017 bull run
(for now). The 2015-2017 trend tested its trend MA multiple times (green
arrows). The current trend has yet to do so. $BTC.

Also, as the stablecoin wars hots up, expect to see
established tech players joining Facebook.

But it is from within that the latest stablecoin project has
stormed on to the stage – Venus, the regional stablecoin family from Binance.

This activity, by Binance and others, is likely to generate
positive news flow going forward.

And with the hashrate continuing to grow, the price will follow as crypto booster and ardent critic of mainstream finance Max Keiser would have it.

The 100-day MA on the 1-day chart is providing strong support that suggests a drop to 8,500 is on the back burner for now. That could change if the Bakkt bounce fades

btc usd price chart
(Chart courtesy TradingView)

@bitcoin parts ways with Bitcoin Cash

Everyone’s been talking about the latest faketoshi “Satoshi Reveal’s”  and @bitcoin parting ways with Bitcoin Cash.

So, we leave you with some thoughts from Charlie Lee:

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Bakkt Is Good For Bitcoin And Ethereum Too – The Market Hasn’t Priced That In Yet

Bakkt Cryptocurrency Bitcoin Bear Market

Bakkt’s bitcoin futures and custody platform launch on 23 September is a shot in the arm for crypto, but in addition to boosting bitcoin it could also raise the profile of Ethereum.

The long-awaited physically settled futures should qualitatively shift market composition toward greater institutional influence.

A crypto trading and payments ecosystem, Bakkt is a subsidiary
of Intercontinental Exchange, the owner of the New York Stock Exchange. Bakkt
hopes to quicken the pace of institutional bitcoin adoption. Its custody pitch
for best of class offering comes in its securing of $125 million of insurance protection
for its bitcoin “warehousing” custody arrangements.

The bitcoin price reacted positively on the announcement from Bakkt. As it happens, the timing more than cancelled out the unsurprising news that the US SEC was delaying a decision on the three ETF proposals before it.

Bakkt and a clutch of new entrants from big finance are up against Coinbase, which recently bought industry wallet and custody pioneer Xapo, originally founded by Argentine tech and crypto entrepreneur Wences Casares.

This acquisition has significantly improved Coinbase’s already well-regarded institutional custody service, launched in July last year.

Trying again with the crypto payments opportunity

And, of course, Bakkt is about much more than a futures
product and associated services. The Intercontinental Exchange company wants to
help kickstart crypto payments. It has brought Starbucks and Microsoft on board
to help.

Starbucks along with Apple Pay, are the mobile payments
leaders in the US., followed by Google Pay and Samsung Pay. Contactless payments
has a lot of catching up to do in the US and Bakkt’s wants to be part of the
story when it comes to modernising the industry. Out with cheques (checks) and
cards and in with contactless and mobile is what is needed – and has already happened
in large parts of South East Asia and Europe, but not the US.

Whether buying coffee with bitcoin catches on we won’t know until the ecosystem is in place which will be in a few months, according to Bakkt. Volatility is the big barrier (along with scalability) for crypto payments and Bakkt’s futures are an excellent hedge for merchants and miners, precisely because of its physically settled nature.

Pulling the know-how together and putting the rails in
position could in truth probably be more important than ultimately what runs on
those rails – Bakkt is starting with bitcoin but also wants to be the go-to
place for institutions interfacing with the digital currency asset class in
general.

Bakkt is clearing looking to cover all the bases. And it looks to have achieved that while still beating the competitors with Ledger X prematurely announcing a product launch only for the regulator to slap it down. Bakkt is an exchange business so naturally it has shown itself open to bitcoin as a legitimate tradeable instrument. But although the daily and monthly futures contracts will get all the attention for now, the crypto payments part of the ecosystem could not only prove more interesting but in the longer run the better risk-return proposition.

Just as Bakkt could end up being welcoming to the crypto world beyond bitcoin, similarly it is not holding back in blue sky ambition, as revealed in its choice of partners.

Teaming up with Microsoft is smart. The software giant has recently
brought Ethereum to its suite of Azure cloud tools and services. Indeed,
co-founder of Ethereum Vitalik Buterin made an appearance on stage at this year’s
Microsoft Developer conference.

Ethereum, along with the rest of the altcoin pack, has been underperforming bitcoin since April. The price gap between bitcoin and Ether has been widening, as seen in the chart below, but perhaps a change s coming.

Ethereum 2.0 roadmap intersects with Bakkt – not priced in by market

Like bitcoin, Ethereum has its governance issues, but at
least in Ethereum’s case there is now a way forward to Ethereum 2.0. Bitcoin core
devs have got tech changes coming but they are more piecemeal and incremental,
with an overall consensus roadmap still lacking. The Ethereum community on the
other hand has mapped out a route to a scaled future.

But the market has become accustomed to viewing all Ethereum
roadmap updates as just more noise. That’s fair enough given the chaotic
progress that is the curse of network governance, but in the battle of the
Ethereum rivals none have come close to challenging Ethereum’s leading position
in dapps.

That is important because Bakkt could give the Ethereum 2.0 roadmap the sort of strategic adoption lift that could permanently set it apart from the dapp platform opposition.

None of this has been priced in by the market yet. It is a
value that has been almost completely overlooked, perhaps not surprising with bitcoin
dominance at 68.3%.

Naturally, the bitcoin futures product needs to be bedded in
before Bakkt tries it hand with other cryptoassets, but even if Ethereum’s not
the next to receive the futures treatment it would be a surprise.

Ethereum is the no. 1 decentralised finance platform

However, there doesn’t even have to be a futures to trade – after all Ethereum is first foremost a smart contract platform.

Ethereum has already seen one life as a platform for raising capital in the great ICO bubble. That could be coming around again, less speculatively fuelled, as Ethereum becomes the base layer for a Bakkt tokenised securities platform, for example.

Ethereum is already the number one decentralised finance (DeFi) platform.

A Binance Research report published in June this year highlights the already existing dominance of Ethereum in the DeFi sector, which it defines as:

“An ecosystem comprised of applications built on
decentralized networks, permissionless blockchains, and peer-to-peer protocols
for the facilitation of lending/borrowing or trading with financial
instruments.”

The report goes on to note that: “Today, a large majority of DeFi protocols are being built on Ethereum. Collateral locked on Ethereum-based DeFi applications are collectively worth over USD 500 million (more than 1.5 millions of ether), as of June 5th.”

Claims that the vast majority of EOS transactions are by bots and fears that Tron and its colourful CEO Justin Sun could be losing their way, is good news for Ethereum, despite its own problems of expensive development costs and an unforgiving and unloved smart contract language in Solidity.

Eventually there will be an altcoin rally, albeit not as
broad-based as seen in the past.

The performance of top altcoins continues to disappoint but
when the bitcoin earthquake settles down a little, those platforms with running
applications and meaningfully sized user bases will start to be noticed again.

Ethereum is sure to be first in line for inspection when the
time to diversify away from bitcoin makes sense again.

The Bakkt ecosystem could become one of the vital legs of future price support for Ethereum.

ETH is up 7% over the past 24 hours, trading at $196.

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Blockstream Hash Rate Enough to Concurrently Attack Bitcoin Cash and SV

Blockstream Bitcoin Mining

The Canadian startup, Blockstream, has launched a service named “Blockstream Mining.” The service is a mining equipment colocation provider, powered by the company’s 300MW, energy capacity. Because of this, Blockstream will command about 6 EH of the BTC mining power when working at full capacity. This, according to crypto pundits, is enough hash power to drown both Roger Ver’s and Calvin Eyre’s versions of Bitcoin.

CryptoPanda, for instance, writes:

“Blockstream now controls more than enough hash rate to attack both BCH and BSV at the same time. Can’t wait for more conspiracy theories!”

Another
crypto fan btg_Joseph
adds:

 “They could destroy bch and bsv if they wanted, only thing is they aren’t run by Roger Ver and Calvin Ayre so they aren’t trying to destroy things.”

Bitcoin SV and Bitcoin Cash use Bitcoin’s hashing algorithm. The same type of mining hardware can be used to generate hash power on all three cryptos. This feature fueled the BCH and BSV hash war. Craig’s plan was to bury “destroy” Bitcoin Cash and emerge as the only survivor of their hard fork.

Bitcoin Cash
and SV Hash Rate on the Decline

The hash war
left BSV standing thanks to nChain’s SVPool and Calvin Ayre’s CoinGeek mining
pool. The miners on both sides however did pay a hefty price for that war. BCH
nonetheless did attract more hash power the first few days post the split, but
at times BSV’s hash power would exceed BCHs. Since then, the hash rates on both
blockchains has fallen significantly.

Bitcoin Cash has had as low as 978 PH/s per second on it, while it had 7.8 EH/s before the fork. The bigger blocks proposed to boost the network’s transaction times and lower fees on both blockchain’s haven’t been fully exploited too. Many crypto analysts say that larger blocks such as Bitcoin SV’s 128MB could introduce security issues to the blockchain.

Bitcoin Cash versus Bitcoin SV Hash rate

While both BCH and BSV have bigger blocks than BTC, both forks still have low transaction volumes when compared to Bitcoin. The irony is that these networks are faster and cheaper than their mother chain. Months after the fork, the combined market cap of both BCH and BSV has dropped significantly as has their hash power.

As an illustration, Calvin Ayre’s CoinGeek is BSV’s main mining pool controls 27 percent of the network’s computing power. However, CoinGeek’s hash rates have exceeded 51 percent on a few occasions. Other noteworthy mining pools are SVPool and BMG Pool with 10.42 percent and 22.22 percent of the total hash rate.

Bitcoin SV Mining Pool

Blockstream Stands Accused Of Mining Centralization

In May 2019, two Bitcoin Cash mining pools had to carry out a 51 percent attack on the blockchain to reverse a miner’s transactions. BTC.com and BTC.top acted to stop an unknown miner from accessing BCH after taking advantage of a bug during a BCH upgrade. BTC.top has, at one point controlled over 50 percent of the BCH hash power. Both BTC.com and BTC.top run over 44 percent of the cryptocurrencies hashing power.

Blockstream’s massive BTC mining data centers in Georgia and Canada are as per the company meant to support small scale miners. Crypto fans have however noted that the firm’s 6 EH/s of Bitcoin mining power could have exceeded 10 percent of the BT network hash rate a month ago. Lucky for Bitcoin, its hash rate is skyrocketing.

Blocksteam’s
BetterHash protocol is meant to ensure that “large pools no longer centrally determine which transactions to include
into blocks
.” Some crypto fans have called this a fallacy however
since, the development of their massive BTC mining farm looks more like a move
towards centralization in mining.

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Bitcoin and Cryptocurrency Trading in Iran Illicit

Bitcoin BTC Iran

There have been reports that cryptocurrency miners have
increased Iran’s energy consumption by 7 percent.  The Iranian government has, nonetheless, been
very accommodating to the miners. The West Asian nation has ratified a bill
that officially acknowledges cryptocurrency mining. The Iranian government,
however, has not been so friendly towards cryptocurrency trading.

The ratified bill has failed to give cryptocurrency trading the same merit as crypto mining. As per the approved bill, the Iranian government does not recognize digital currency trading done within its borders as lawful.  Tweeting about the issue, Global Coin Research says:

 “Iranian government claims that it will not recognize as lawful any trade activity carried out inside Iran involving cryptocurrencies. It will also not view the digital coin as legal tender, and the Central Bank of Iran would not guarantee their value.”

More Accommodation for Bitcoin

The harsh stance taken on crypto trading, might not do much to dampen the mood of the growing Iranian interest in digital assets. Iranians are turning to digital coins to enable them to access international currencies. Iran is currently stifled by unending US sanctions targeting the Islamic Republic’s already ailing economy.

Cryptocurrencies have allowed Iranians to bypass the Trump administrations sanctions, over its nuclear deal with other global players. The Bitcoin craze has been the subject of many Iranian newspapers headlines, even discussed by the nation’s top ayatollahs. There also have been police raids on mining farms set up to make a profit from the digital currency.

Many government officials have decried crypto mining’s energy-hungry process. Most miners have also been abusing the nation’s system of subsidized electricity. The threat of raids and conflicting statements from authorities have nonetheless, driven crypto mining into the shadows, with miners wary of identification.

A New Dawn for Iran’s Cryptocurrency Mining

Now as the nation, joins the list of the progressive countries that have acknowledged cryptocurrency mining as a legitimate industry, the situation is bound to ease up. Crypto mining has been a gold mine for Iranians at a time when the rial has tumbled heavily against the dollar.

Iran had banned the importation of mining machines until the
bill on cryptocurrencies was ready. This issue will hopefully change as per the
ratified law.  The new law says that
mining will be allowed under certain conditions.

First, the miners will require approval from the mining
regulators. Additionally, there will be no mining in a 30-kilometer boundary
around all provincial centers. The only exception to the boundary rule is
Tehran, the capital city, and Esfahan, the central city, which has more
stringent restrictions.

The miners are also expected to adhere to rules set by the country’s communications and standardization authorities. This is in the areas about mining machines. There will be fees too that miners will need to cover to mine digital currencies in the country. The base price for energy used on mining farms will be as per the export costs.

Taxes will also be levied on mining farms, now classified as
industrial manufacturing units. There is, nonetheless, an exemption for miners
that return the profit earned from the mining activities back to the nation’s
economic cycle. Iran is also ready to set up industrial zones for foreigners
out to take advantage of the nation’s cheap energy. 

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Ripple (XRP) Price Meaningless, Deep Liquidity Matters

Ripple XRP xRapid

Ripple (XRP) has been trading on a bearish bent barely rising
above the $0.33 price range. Some XRP investors who have been eyeing some
returns with its price are getting a tad frustrated. Toughened XRP holders are,
however telling them that tokens price does not matter in the face of
platform’s increasing liquidity.

Eric Dadoun, for instance, writes:

 “Very bullish seeing the liquidity impact of MoneyGram. Deep liquidity eventually enables real players (IE: banks). You can’t transfer meaningful fund sizes when the order books can’t support a fraction of it while remaining stable. XRP price is meaningless for now”.

During MoneyGram’s Q2 2019 earnings call, CEO, Alex Holmes had a lot of praise for Ripple. Holmes touted the benefits of his company’s agreement with Ripple, saying that they were now transacting on xRapid.

The CEO of the world’s second-largest money transfer firm said that they would keep their partnership with Ripple and use XRP. MoneyGram, however, has not made public the number of transactions or volumes done with xRapid.

Ripple
xRapid Usage on the Rise

Ripple’s xRapid utilizes XRP as a source of liquidity. Ripple has been bringing more businesses on board xRapid. The platform offers businesses cheaper, faster, and more efficient transfer services. Brad Garlinghouse, the CEO of Ripple, has been very confident that more financial institutions will be using xRapid by the end of 2019. Besides MoneyGram, other smaller known firms using xRapid include Cuallix and Mercury FX.

Cuallix is based in Mexico and the States and provides credit and payment processing solutions. xRapid went live on Cuallix on October 2018, and the firm is one of Ripple’s oldest partners. The Ripple platform was tested on Cuallix first before it was released for commercial uses.

Mercury FX, on the other hand, is a remittance startup that focuses on high net worth businesses and clients. Mercury FX uses XRP to move cash remittances to and from Mexico. The platform has its eyes set on the Philippines too.

XRP Use
Rising But Not Price

Despite the growing list of xRapid users, XRP fans have not reaped
much from the token’s prices. A bunch of them have now become uncomfortable and
are instigating a mutiny. They have put up an online proposal asking Ripple to
initiate a token burn of half the XRP there is. Their logic is that the token burn
will cut down the XRP supply, which should increase the token’s prices.

Crypto Bitlord, the trader behind the petition, says:

“Ripple continues dumping billions of XRP on us, crashing the price… Sure we know that XRP is a solid coin with major potential, but this needs to stop!” The petitioner further writes, “Everyday there is good news… A new bank or partnership announced but still, it manages to keep on dumping. The only logical explanation is that Ripple is dumping on us.”

Ripple holds over 50 percent of the XRP supply and systematically
sells it into the market to stimulate the ecosystem’s growth. This has rapidly
increased the XRP supply increasing the downward pressure on its price. Ripple
says they will sell the locked XRP proportionately to the market conditions.
They will, however, sell it a lower price in an effort to safeguard the token’s
price.

The jaded community is, nonetheless, having none of Ripples
assurances and is taking a stand. Unfortunately for the XRP holders, Ripple has
a lot to gain from selling that massive XRP in the vaults. The unsold XRP is
currency valued at $15.5 billion. They, consequently, have no incentive to
initiate a coin burn.

The digital currency is also meant to act as the ecosystem’s growth stimulant. MoneyGram, for instance, could have bought XRP to use xRapid. Some traders have said that when purchasing XRP, an investor needs to buy into Ripple’s long-term plan of facilitating deep liquidity of the platform.

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Ripple Set To Benefit From MasterCard’s Acquisition of Nets

Cory Johnson has posted on Twitter what looks like a significant
Ripple advantage. Mastercard has purchased Nets, a Denmark based payments
platform for $3.19 billion. The crypto influencer and former chief market
strategist at Ripple wrote:

“I know the XRP community is focused on the impact of Facebook’s Libra, but this Mastercard deal could be even more important to Ripple’s ecosystem. If nothing else, it’s validation that real-time payments is clearly the coming wave.”

Mastercard Inc., the financial services corporation, is going to utilize Nets to help move its operations into the faster payments zone. The American multinational principally processes banks payments between merchants and card issuers. Nets is an electronic billing platform, with instant payment and clearing capabilities as well.

Mastercard Joins Faster Payments Race

The race to faster payments processing has quickened. The Federal Reserve, for instance, is planning to build a quicker payments network for the States. The Mastercard acquisition will, therefore, move it beyond cards processing and deeper into account-to-account activity.

Paul Stoddart, Mastercard’s New Payment Platforms president says of the Nets
purchase that “This is really about
the continuation of Mastercard’s expansion into being a multi-rail provider
.”
Stoddart says that the acquisition is a logical step after Mastercard’s recent
purchase of Vocalink.

Johnson, perhaps due to an NDA, left most crypto fans looking for a connection between the acquisition and Ripple. Nevertheless, Mastercard and Ripple do have an indirect connection. They have both invested in Ripple powered SendFriend, a global remittance startup.

Mastercard has also acquired Earthport, an automated clearinghouse and Ripple partner. Now with Nets on its side, Mastercard plan to expand Nets payments prowess beyond its Nordic primary market.

Ripple can give Mastercard on-demand
liquidity

Michael Miebach, the chief product and innovation officer at Mastercard, has said, “Real time is real, it’s here and it keeps growing…What we found in Nets is it’s a business that’s deeply ingrained in some of the most innovative and vibrant payments markets in the world.” Well, Ripple is already a significant player in the real-time payment wave.

Dilip Rao has clarified that there is no connection at the moment
between Mastercard and Ripple as of Johnson’s tweet. Rao, who is Ripple’s
Global Head of Infrastructure Innovation, has however, said that XRP would give
the Mastercard faster payments processes on-demand liquidity.

XRP would, consequently, enable real-time cross border payments
and the crediting of beneficiary accounts. Rao also adds that the acquisition
of Nets by Mastercard is a “good sign” for Ripple. He says that the
purchase will make it evident that financial institutions need blockchain
innovations like XRP to achieve actual real-time settlements.

Mastercard’s other acquisition, Vocalink, brings in infrastructure that underpins faster payments. Vocalink is used in far-flung areas such as Saudi Arabia and Peru. P27 Nordic Payments Platform is one other of the recent Mastercard acquisitions. P27 has been a real-time and batch payments network for the Nordic countries. Nets, however, is its most significant so far, and it brings along 80 percent of the revenues acquired from its Denmark and Norway markets.

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Digital Asset Management Products, Algoz and Alpha Pro, to Test Launch on UltrAlpha Platform

UltrAlpha, the innovative comprehensive digital asset management service platform, announced that Algoz, the cryptocurrency arm of an algorithm-based trading company Fingenom Group, will join its upcoming test platform launch. Alpha Pro, another crypto asset manager with a founding members of being seasoned Wall Street insiders as well as blockchain pioneers, is also launching its digital asset management product on the UltrAlpha.

1.Current Market Development in Digital Asset Management Service Industry

With increasing recognition of digital assets all across the globe, a growing number of professional investment institutions are actively looking for opportunities to enter the digital asset market. However, one of key challenges in the space is that potential investors have limited access to suitable financial products for their investment consideration, while trading teams or digital asset managers find it difficult to get to the right investors for fundraising. This is mostly due to the lack of formal broker dealer structure in the digital asset space.

In the traditional finance industry, broker dealers play an integral role in the capital market where they connect potential investors with eligible investment products, as well as support clients in their trading and capital raising activities. However, this broker dealer function is yet to be fully developed in the digital asset industry with less clarity on overall regulatory framework.

Furthermore, with lack of mature market structure and nascent development stage, the digital asset trading market has been quite volatile with inconsistent liquidity and inefficient price discovery, especially during the recent months of rapid price recovery led by bitcoin after the earlier harsh crypto winter. This unpredictable market condition has proved challenging for certain fund managers to generate consistent return, while turned out to be more opportunistic for other trading firms with volatility-driven strategies.

2. The Strategic Partnership between Two Top-tier Asset Mangers and One Innovative Service Platform

Driven by the market needs, UltrAlpha is seeking to build out its comprehensive product offering and service capabilities as an innovative digital asset management service platform through the strategic partnership with two industry top-tier asset managers, Algoz and Alpha Pro.

UltrAlpha

Building on deep strategic collaboration with all the top-tier digital asset exchanges and brokers, UltrAlpha strives to provide investors with a professional investment platform for selecting quality investment products, as well as to effectively support fund raising and other admin needs of trading teams and crypto funds. The wide range of fund administrative services for trading teams and funds can include but not limited to account management, performance auditing, PL reporting, asset transfer, etc.
UltrAlpha’s core teams of technology and operations come from traditional finance, Internet and Blockchain industries with solid experience in quant modeling, infrastructure buildout and digital asset trading operations. Computer science major from Carnegie Mellon University, Han Liu, CEO of UltrAlpha, has developed his successful career in traditional asset management industry from BlackRock to AQR Capital Management specializing in institutional application and platform development. Christina Jin, CMO of UltrAlpha, graduated from University of Auckland and New York University, with degree in Digital Marketing. Christina co-founded Ankr Network project and was nominated as the first CMO of Ankr project.

AlgoZ

AlgoZ is a part of the Fingenom Group – a company which stands for cracking the code of investments and creating the world’s quality trading algorithms. Equipped with Fingenom’s propriety trading algorithms, AlgoZ team of professional traders, with over a decade of experience in proprietary trading and deep understanding of both traditional and crypto markets, strives to provide AlgoZ clients with well-rounded trading solutions 24 by 7.
For specific trading product as part of UAT test launch, Algoz deploys Long/Short Alpha Links strategy to examine statistical differences and correlations between various crypto asset pairs for trading signals based on Algoz traders’ deep understanding of the crypto markets and their momentum drivers.

Alpha Pro

Alpha Pro will bring its dynamic market making and arbitrage strategies with solid track record to the UltrAlpha Platform. To cope with high volatile market, the trading strategies have more than 20 trading parameters that can be fine-tuned to adapt to a different market within very short period of time.
To balance the risk and optimize the return, the strategies employ strong set of risk control mechanism with built-in delta-neutral consideration, stop loss and adjustable market sensitivity and automatic trading volume control.
Building on its experience with Forex trading, Alpha Pro team aims to create the optimal path of arbitrage loop with efficient price discovery across different exchanges to optimize the return.

3. Conclusion

The strategic partnership of UltrAlpha with both Alpha Pro and AlgoZ trading teams is critical to the UAT platform further building out the necessary market structure to serve user needs as well as to support longer-term platform growth. By connecting potential investors with digital asset managers and providing value-added fund admin services, UltrAlpha has clearly set itself as a pioneer as professional service provider in the expansion and development of this newly developing digital asset management space. “While UltrAlpha aims to build a service platform which provides investors with a broad selection of quality digital asset management products, we do not provide direct investment advice for investors.” said Han Liu, CEO of UltrAlpha. “But it is a wise choice to leverage our platform and identify the products that suit their investment need.”

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Is the European Economic and Social Committee Blocking Blockchain Adoption?

European Economic and Social Committee

The European Economic and Social Committee (EESC), a consultative body of the European Union, maybe cleverly blocking blockchain adoption as per a recent report.

According to
observers, the EESC is both bullish and bearish of blockchain-based products
such as cryptocurrencies. On the positive side, an EESC member noted that
blockchain technology could not be wished away.

For example,
Giuseppe Guerini, a member of EESC, said that the technology could be compared
to the early printing press.

Guerini explained:

“The first book to be printed was the Bible. Now, imagine if people had equated the printing press with a means capable of printing only Bibles. That would have been inaccurate because printing technology revolutionized life in Europe.”

Further, the report outlined possible areas that blockchain could bring a revolution. In the list, for example, EESC included tracing fundraising and donations and enhancing the governance of social economy organizations. Blockchain can be applied in authenticating activities, certificating skills, ensuring secure e-care system and tracing agricultural products.

Blockchain Is Prone To “Speculation and Hoarding”

Unfortunately,
the European Economic and Social Committee have some reservations. The group
fears that blockchain is “subject to
speculation and hoarding
” by a few individuals.

Surprisingly, EESC is ready to hinder the adoption of blockchain due to its effects that don’t favor the traditional finance.

According to
Guerini:

“We [EESC] don’t want to see a digital divide that creates more inequality and injustice. We don’t want to see a new elite emerging, of people who are familiar with the new technologies and end up excluding others from the economy and the market.”

In addition,
the report noted that its borderless nature requires supervision from
regulators in the European Union so that they can “coordinate efforts.” That’s besides, “the large investments required a call for coordinated, structured, European
action
.”

Additionally, the European Economic Social Committee suggested that public measures must be adopted to aid in its development plus the “involvement of civil society is imperative.

What of the “Elites”?

As it would be expected, cryptocurrency enthusiasts fired back with rage. On social media platforms, the enthusiasts noted that the traditional finance system has already created elites. Consequently, the elites have “already excluded others from the economy and the market with accredited investor requirements, and large banks are canceling customer accounts for transferring to exchanges, or any other roadblock.”

Solarguy2003,
a Redditor, said:

“So, what is their (EESC) preferred outcome? Turn the crypto economy into a communist sh** hole where we’re all equal because we all get 80 bucks a month to live on? Or just a bigger ‘better’ version of what we have now, where the top 2 percent own an enormous slice of the pie? They don’t want to give their power/relevance.”

In April 2018, EU countries jointly formed the European Blockchain Partnership (EBP). Consequently, the EBP would help the countries to “cooperate in the establishment of European Blockchain Infrastructure (EBSI) that will support the delivery of cross-border digital public services, with the highest standards of security and privacy.”

Earlier, in Feb 2018, the European Commission launched the EU Blockchain Observatory and Forum. In a tweet, the EU Commission noted that “the EU Blockchain Observatory and Forum…should become one of the world’s most comprehensive repositories of blockchain expertise.”

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Seoul Metropolitan Government: Use Public Services and Earn Coins

Seoul

It is no secret that South Korea is a hotbed cryptocurrency
activity. The support the innovation has received from the private sector has
been top-notch. The nation’s capital, Seoul, has taken this love for crypto a
step further. The city is launching an S-coin based reward system. The point
system will reward the city’s citizens for utilizing public services,
participating in polls and for paying taxes.

The city’s blockchain-based administrative services reward system
is expected to launch in November fully. The launch process has three
significant priorities set. The very first priority is the introduction of the
crypto-based points system.

As per the local news report from Blockinpress,
the reward system will work in conjunction with ZeroPay. ZeroPay is an
innovative government ran QR-code-enabled network. The residents will be in a
position to redeem the points awarded for rewards. They can also utilize the
coins made to purchase goods and services via mobile payments. There are no
merchant charges.

Seoul’s Public Services on Blockchain

Seoul is going to use the blockchain service to solve yet another huddle for its residents. The city is going to use the system to enhance its Seoul Citizen Cards process. The enhanced process will make it much easier for the residents to submit documents. It will eliminate the need for paper document submission through the enabling of digital identity authentication.

Both temporary and part-time worker records of the city are also going on the blockchain system. Their work history, contracts with employers, and recorded time logs will all be accessible from this platform. The November launch will bring about other blockchain-powered projects such as online verification of certifications. Donation management and smart healthcare blockchain ran services will eventually be launched.

The city’s mayor Park Won-soon is pretty blockchain progressive.
In late 2018, he launched a five-year plan that will see $108 million invested in
turning Seoul into a blockchain-powered smart city. The mayor has a Blockchain
Urban Plan in place that covers over 14 public services.

The government-funded budget will drive a large section of the
city’s public services to the blockchain. This includes services such as
vehicle history management, labor welfare, elections voting, donation
management, and certification issuance services.

South Korea’s Blockchain-Friendly Stance

The platform will now act as protection for all part-time workers,
who have had to work without labor contracts. It will assist in ensuring
employment insurance, once the workers register via an app. Once a part-time
employee is logged, the information will be accessed over a distributed network
by insurers and labor welfare organizations.

Park Won-soon’s administration has also put aside $53 million more
to grow the city’s blockchain industry. The funds will build two complexes that
will be home to at least 200 blockchain-based startups. The complexes are
slated for completion by 2021 and will use part of the city’s Mapo Seoul
Startup Hub. Part of the Gaepo Digital Innovation Park will also be utilized.

The city’s blockchain efforts are in line with the country’s blockchain roadmap. The country’s second-most populous city Busan has announced a blockchain “regulation-free” zone. This area, modeled after Switzerland’s Zug, will host public safety, finance, and tourism-related blockchain offerings. Major business entities such as Samsung, Kakao, and Hyundai have also become stakeholders in the crypto industry.

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