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5 Projects Bringing Institutional-Grade Products to Crypto

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The anticipated flow of institutional capital into the crypto market has been a popular narrative over the last few years, but often with limited traction. Now, in the aftermath of the 2020 macro backdrop, it’s actually happening. Preparations for institutional involvement have been made, and enterprise-level solutions built for crypto custody, digital asset management, and trade execution brokerage.

As the crypto market recently topped $1 trillion for the first time and following projections for that to grow fivefold, it’s more important than ever that institutional-grade rails are in place to capture this critical mass. Some of the projects at the forefront of that task are leading the way for the institutional money flow that will benefit the entire space.

Grayscale

The Digital Currency Group subsidiary Grayscale Investments has been involved in the space longer than most. The GBTC Bitcoin Trust offering from the early adopters was one of the only available institutional products for the legacy market at one time, having debuted back in 2013. Its client base now boasts more than 20 institutions with investments of over $100 million, including Ark Invest and Rothschild Investment Corporation, and it recently hit $20 billion assets under management in its latest milestone.

Until Grayscale encounters greater competition in this area, perhaps in the form of a bitcoin ETF approval this year, its growth is likely to continue expanding at pace. It offers regulated institutional-grade investment products across a range of individual digital assets, including bitcoin, ethereum, and litecoin, as well as cryptocurrency baskets such as its large-cap fund.

Finxflo

Finxflo is the first hybrid liquidity aggregator, going a step further than Tagomi’s solution. It aggregates cefi and DeFi venues through one regulated platform, one KYC process, and one wallet, without the need to open multiple accounts. Its enterprise-level tools deliver the best of both worlds, providing a liquidity sponge for users to execute trades at the best prices via more than 25 exchanges and liquidity providers with minimal slippage, reduced risk, and zero withdrawal fees. It offers the required institutional protection from front running and optimal price without limitations on liquidity supply.

Finxflo also supplies an institutional-grade insured custodial storage solution in partnership with leading provider Fireblocks, ensuring client funds are held in encrypted, segregated vaults with access to insurance.

Adding further utility, the Finxflo ecosystem is fueled by the native FXF token, a blockchain 3.0 asset allowing users to access all the additional features of Finxflo including staking, governance rights, and reduced trading fees. It also opens up the world of DeFi protocols and cross-chain interoperability across the Ethereum and Tron ecosystems, introducing users to yield farming liquidity provision and arbitrage opportunities. With a private sale already sold out, FXF is set to launch on Polkastarter, DEX and CEX in the coming weeks.

Tagomi

Tagomi, acquired by Coinbase last year, is a leading crypto prime brokerage platform providing trading, custody, margin, lending, shorting, staking, and financing in one account. Tagomi brings together access to over 14 exchange and liquidity venues, allowing users to combine balances in different accounts frictionlessly while accessing the best price execution, and advanced trading tools for institutional investors to segregate trading strategies.

Tagomi has already become the platform of choice for several well-known hedge funds and family offices, including Paradigm, Pantera, and Bitwise. By bringing in expertise from legacy finance firms like Goldman Sachs, Citadel, and KCG, it’s building out the foundations to onboard the next wave of institutional investors.

Fidelity Digital Assets

Fidelity Investments, one of the largest financial service organizations worldwide with $3.3 trillion of assets under management, launched Fidelity Digital Assets, helping to bridge the gap between legacy finance and the crypto market. Its new crypto division provides a full service, enterprise-grade platform for secure custody, trade execution, and investment services. More recently, it launched a bitcoin fund for qualified investors made available via family offices, registered investment advisors, and other institutions.

Fidelity’s survey of institutional investors highlighted the 80% of respondents who find something appealing about crypto as an asset class, demonstrating the pent up demand potential of the space, provided solutions like Fidelity Digital Assets can deliver the viable product-market fit required.

Bakkt

The Intercontinental Exchange (ICE), which operates the New York Stock Exchange (NYSE), established a new company, Baakt, in partnership with Microsoft, leveraging its cloud solutions to enable consumers to buy, sell, store, and spend cryptocurrencies on a global network. Bakkt delivers a range of digital asset services including a dedicated wallet and application, secure custody, and trade execution. It also offers bitcoin futures and options in a challenge to derivative products from the legacy provider Chicago Mercantile Exchange (CME), though settled in bitcoin rather than cash.

Building on initial success, Bakkt is set to go public via a merger with a special purpose acquisition corporation (SPAC), VPC Impact Acquisition Holdings (VIH). The deal has a value of $2.1 billion and is expected to close in Q2, providing vital investment to capitalize on growing institutional demand in the space. This follows a similar announcement from the cryptocurrency platform Coinbase and provides greater acceptability towards the digital asset market.

The Institutional Cycle

Central bank money printing has been in overdrive, especially in the US with M1 supply, which includes bank deposits in checking accounts and physical currency, up a staggering 70% year-on-year.

Understandably, institutional players are increasingly concerned at the prospect of inflation, one of the major factors driving greater interest in 2020 towards a crypto industry that can act as a safeguard against it.

This potential gateway use case opens up institutions to further utility in the space, facilitating significant adoption in this coming cycle. The projects at the forefront of this are building out the infrastructure needed for institutions to fulfill that role.

 Image by PIRO4D from Pixabay

Source: https://www.newsbtc.com/news/company/5-projects-bringing-institutional-grade-products-to-crypto/

Blockchain

Coin Metrics Report Details Surges in ETH, Doge Trading

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Digital currency research firm Coin Metrics has released a new report claiming that bitcoin is beginning to lag when compared with the likes of competing altcoins such as Ethereum and Dogecoin.

Coin Metrics: Altcoins Are Taking Over

While bitcoin is still the world’s number one digital currency by market cap (it is currently trading for about $35,000 per unit), the asset has experienced some serious dips over the past month, while by contrast, Dogecoin and Ethereum have exhibited gains and are regularly moving up the digital ladder.

Coin Metrics garnered much of the information for its report by looking at data from Binance, arguably the largest and most popular crypto exchange on the planet in terms of daily trading volume. Additional statistics were gathered from exchanges such as Coinbase and FTX. Coin Metrics points out that thus far, 2021 has been the year for “smaller altcoins,” suggesting that a great many of them have surged heavily between the months of January and early May. From there, however, a serious crypto crash has taken precedence, with Coin Metrics unable to pinpoint what, exactly, might have been the cause.

For the most part, numerous altcoin pairs are offered on Binance, which explains why the company’s trading volume for many of the world’s smaller assets likely overtook that of bitcoin. The report says:

ETH volume surpassed BTC volume on Coinbase by a wider margin than on Binance. Coinbase did not offer Dogecoin trading in May (although they introduced it in early June), so it did not have a Doge rush similar with Binance, but it did have a relatively high amount of volume for some other altcoins, led by MATIC, ADA and Ethereum Classic (ETC)… Continuing the trend, ETH volume edged out BTC on FTX, although not by much, but comparatively, the top altcoins made up a lower percentage of total volume on FTX than on Binance and Coinbase.

Some of the world’s smaller exchanges – such as Huobi – also saw Ethereum and Dogecoin trading surge to levels beyond what people were doing with bitcoin. The report continues to say:

Similar with Binance, DOGE volume surged on Huobi, taking the spot as the third most traded currency by volume.

Bitcoin Hasn’t Been Fully Cut Out Yet

The only place – according to the document – where bitcoin trading appears to remain dominant at the time of writing is the CME in Chicago, Illinois. The company delves in bitcoin futures trading and has recently opened the door to ETH futures, though this is still in its early stages. Coin Metrics writes:

The markets continued to move mostly sideways over the last week. Bitcoin and Ethereum usage both stayed relatively flat, with daily active addresses dropping 2.5 percent and growing by 3.3 percent, respectively. Ethereum daily transaction fees dropped by over 35 percent week over week as gas prices continued to fall, and bitcoin transaction fees followed a similar pattern, dropping by 40.5 percent.

Tags: bitcoin, Coin Metrics, dogecoin, Ethereum Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.livebitcoinnews.com/coin-metrics-report-details-surge-in-eth-doge-trading/

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How will the drop in this metric affect UNI, CAKE, SUSHI, AAVE?

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Bitcoin maximalists are currently gaining from the dropping altcoin market capitalization. Another group in on that is DeFi project traders and HODLers. This weekend, the altcoin market capitalization dropped further. In the past 7 days, the altcoin market capitalization has dropped along with a drop in altcoin prices. BNB, ADA, DOGE, XRP, DOT and CRV have dropped and this has increased the accumulation, investment inflow.

Low marketcap projects have offered high returns over the past 7 days. There are several factors supporting this narrative. Increasing trade volume of DeFi projects has increased in proportion to altcoin market cap. The demand across exchanges has increased and there is an increase in the number of unique wallet addresses and TVL. This may change the narrative of DeFi to bullish.

High market cap projects may lead to the increase in demand and investment inflow proportionate to the interest of their users. The low market cap projects continue to face a correction when traders exit. The drop in altcoin market capitalization has a direct impact on DeFi users.

Is the diminishing altcoin market capitalization bullish for DeFi

Source: DuneAnalytics

The diminishing altcoin market capitalization has had a direct impact on the investment inflow, the number of traders and the demand across exchanges. This is bullish for DeFi projects as the rising number of users and the metrics related to number of trades, wallets and users indicate a growing interest, investment, institutional investment inflow and growth in DeFi market capitalization.

With the rise in the number of DeFi projects, there is a surge interest from institutions. With the upcoming biggest smart contract event of the year, it is likely that DeFi projects like UNI, CAKE, SUSHI, AAVE that haven’t rallied in the past 2 weeks would rally following increasing demand and popularity, social media mentions.

When the average price chart of these projects is observed, and they are ranked in accordance to their ranking of growth in Active users, there is a strong correlation between users and market capitalization. AAVE, UNI, SUSHI have ranked the highest. Though ranking does not have a direct correlation with social volume and price, it has increased following drop in altcoin market capitalization. This builds a bullish case for DeFi in the following two weeks.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/how-will-the-drop-in-this-metric-affect-uni-cake-sushi-aave

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Bitcoin Taproot upgrade finally achieves activation lock-in!

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The much-anticipated Bitcoin Taproot upgrade passed the Speedy Trial, which was a signaling period which gauged support for the upgrade from bitcoin’s mining sector. Since SegWit, Taproot has been touted as the next significant upgrade for Bitcoin.

Data from Taproot.watch, a webpage created by Bitcoin developer Hampus Sjöberg, released an interesting yet hilarious video to announce the completion of the lock-in stage.

On the official page, it read:

“This period has reached 1815 Taproot signaling blocks, which are required for lock-in.”

Different mining pools tweeted their support for the upgrade on their respective platforms with Slush Pool being the first to do so.

AntPool also supported the upgrade.

What’s next?

Bitcoin core developer Pieter Wuille further elaborated on the path leading to the full activation step for Taproot in a series of tweets. He stated:

“As of block 687284, Taproot signalling has reached 1815 blocks this period, guaranteeing that absent very deep reorgs, it is guaranteed to lock in. Following that, it will activate at block 709632, probably around mid-November 2021.”

He also addressed that ‘there is a lot of work left of course’, which included:

a) PSBT extensions to communicate Taproot keys/scripts/signatures,

b) MuSig2 standardization so the software can cooperate in signing,

c) Output descriptors,

Why is it so important?

Fred Thiel, CEO of Marathon Digital Holdings stated:

“With this upgrade, you’ll see Bitcoin to be the settlement network. Funds are transferred from one institution to another, say one bank to another.”

He added,

“The update would lower the data size of smart contracts, in turn lowering transaction costs. Taproot is also expected to enhance smart contract functionality and efficiency.”

Jeremy Rubin, a Bitcoin Core contributor and founder of Judica projected a similar optimistic narrative,

“With taproot, you get optimization of Bitcoin, much different from how people know Bitcoin today- little too inefficient or reveal too much information about what you’re trying to do. Taproot helps to be private and efficient.”


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/bitcoin-taproot-upgrade-finally-achieves-activation-lock-in

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