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How Blockchain Technology is Disrupting Financial Sector

Cryptocurrencies and Blockchain Technology are paving the way for digital transformations in the current world. Moreover, the global financial economy is already transformed into higher levels. This is with the implementation of Blockchain Technology in them. It is emerging in its full operational deployments and disruptions of fundamental processes. This is particularly related to the […]

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Blockchain in Finance Industry
How Blockchain Technology is Disrupting Financial Sector

Cryptocurrencies and Blockchain Technology are paving the way for digital transformations in the current world. Moreover, the global financial economy is already transformed into higher levels. This is with the implementation of Blockchain Technology in them. It is emerging in its full operational deployments and disruptions of fundamental processes. This is particularly related to the buying & selling of goods. 

Additionally, the financial services industry contributes around 20% of the global GDP it seems. As the global financial system deals with a plethora of data every day, it is important to make them secured. 

These financial sectors have a lot of intermediaries to process the operations. This includes Stock Exchanges, Payment processors, Money transfer services, etc. Thus, Blockchain could be a feasible solution to get rid of the major problems involved here.

Why Blockchain in Financial Sector can be beneficial?

Here are the four major reasons why Blockchain can be adopted than other popular technologies in the financial industry:

  • Payment and data transfers facilitated by central authority are still the same. It has been more than a decade. Moreover, international transfers would take more than four days. With this, there are risks associated with credit/debit cards, exchange rates, etc. 

In addition to this, industry too will involve a high amount of transaction fees. With Blockchain Technology, all these transfers can be made cheaper & faster which other technologies lack.

  • Most of the industrial processes are delayed for an upgrade or other issues. This is to withstand security, hacks, higher volumes, etc. 

Thus, by implementing Blockchain Technology, the process becomes more feasible as there is no centralized system involvement.

  • There are greater chances that people would start making smaller transactions and payments. Hence for a smaller transaction, having a larger transaction fee won’t be better. With Blockchain, we can expect higher volumes and lower transaction fees.
  • Blockchain Technology will also enable further disruptions of the traditional banks with fintech. Legacy problems, new participants, etc can utilize the blockchain platform to remain benefited. 

In addition to this, Blockchain can be beneficial with the following factors:

  1. Accessibility
  2. Security
  3. Encryption
  4. Privacy
  5. Interoperability
  6. Scalability

Let me explain to you these main challenges and how blockchain can solve them in brief in the upcoming section.

Challenges in the Financial Sector & How Blockchain solves them efficiently:

  • The Need for Decentralization

Most conventional financial systems are based on traditional centralization. As we have discussed earlier, it involves a great number of intermediaries to facilitate the transactions. This can, in turn, take additional time and cost for operation. 

In addition to this issue, centralization lacks security. Security plays a couple of roles here. Initially, higher-level managers & individuals have access to employee and customer data. There are chances that they can use it for their beneficiary purpose. 

While on the other hand, data are equally considered as gold. With centralized systems, customer’s sensitive data is held in central servers. This means that even a single breach of data can lead to the access of millions of records for the hackers. 

Blockchain Solution:

With Blockchain in Financial Sector, one can eliminate the intermediaries by cutting down & saving time and money. The decentralized nature of Blockchain Technology will eliminate both these risks. 

A consensus on a decentralized platform involves an agreement. This should be accepted by all the network participants. Hence, the decisions are not made by a single party but a set of individuals with the desired expertise. 

Moreover, the data is not stored in a single server. They are spread out and encrypted throughout the network. So, there are no chances of fraudulent activities to take place. To hack this, hackers have to access the complete record of data which is impossible. Thus, Blockchain’s decentralized nature can secure the data efficiently. 

  • Cost-Savings for Border Payments

Because of its cost-saving benefits, the industry of finance is experiencing high-level changes. International Payments have become more expensive in recent years. These border payments include a lot of intermediaries to operate them. Hence, the cost involved will also be a bit higher. 

Blockchain Solution:

By implementing Blockchain in Financial sectors, transactions can be completely streamlined leading to efficient yet instant transactions. It not only makes the cheaper but also safe & secure. This is done by handling the transactions over a reliable blockchain network and eliminating the intermediaries. 

According to a recent report, it is stated that Blockchain technology could save up to $12 billion every year. Thus, Blockchain solutions can cut off additional and unwanted costs with international payments.

  • Invoice Management & Billing

Managing a huge amount of data is always a daunting task not only in Finance but in every sector. Most of the financial companies have started adopting electronic invoicing. However, this equipment lacks the standards that are required to execute invoicing in the financial sector. 

An Invoice usually contains a couple of steps:

  1. Verifying and tracking the information
  2. Forwarding & receiving the invoice information

Thus, while processing these two steps, it is important to store and maintain the data effectively & securely.

Blockchain Solution:

Financial companies can now upload their invoices with Blockchain through Smart Contracts. Invoice information such as Due date for payment, the total amount to be paid, the client’s personal details, are stored in the Blockchain Network.

Once the person pays his/her bill, the smart contracts update the data accordingly as “Paid”. Hence, Blockchain can help to make the decision if the client is safe to get started with trading.

  • Know Your Customer (KYC)

Banks and financial firms have implemented strict concerns with the cost involved with KYC & AML. These tasks consume a lot of time and money for the banks for every single individual.

One of the popular mass & information media firms called Thomas Reuters unveiled that the overall expenditure of this process ranges from $60 million to $500 million every year. Moreover, financial institutions should now have to upload the KYC data to their central repository to perform these.

Blockchain Solution:

With the adoption of Blockchain in Finance, the individual verification of each client by a financial organization will be accessible for other banks as well. This means that the duplication can be completely eliminated with Blockchain Technology. 

In the same way, all the updates of the client’s will be visible to all the financial institutions. This would result in the reduction of Admin efforts & costs from the financial department representatives.

  • Trade Finance

Trade Finance is considered to be one of the most useful applications of Blockchain in Finance. All the involved parties go with a complex mode of transactions Financial companies are planning to use Blockchain to save the immutable funds of finance-related information such as profits earned, MoM, financial history, etc. 

Blockchain Solution:

With Blockchain in the financial sector, all the participants in the transactions will have access to the information shared by exporters, importers, banks, etc. Once the particular conditions are met, smart contracts start executing. Hence respective parties can view all the actions performed.

One of the popular statistics states that an Israel-based startup along with Barclays has successfully executed a trade transaction that takes around 7 to 10 days. But with Blockchain Technology, it was a matter of just 4 hours. Thus, when comparing to the traditional architecture, the usage of blockchain can drastically reduce time as well as the cost.

The future of Blockchain in Financial Sector:

The future of blockchain in finance is drafted every single day to make it reach higher levels for an efficient process. Once these Financial firm starts adopting Blockchain Technology, they can taste real success in them.

More and more intermediaries start emerging, Financial sectors would realize the importance of Blockchain Technology. Added, Liquidity is one factor that is entirely rendered by Blockchain compared to other technologies. Undeniably, with these top-notch facts, we can expect the Blockchain development company worldwide to cater to all these resources.

To put it all together, we can notice a very bright future for Blockchain Technology in Financial Sector. This technology would effectively enable financial transactions a bit easier, cost-effective by enhancing liquidity.  

Author Bio

Robert Kroos

Crypto Writer at a leading blockchain development company. I love to share my ideas & thoughts on Blockchain & Cryptocurrency in a simple & readable manner.

Source: https://coinweez.com/blockchain-technology-application-finance-industry/?utm_source=rss&utm_medium=rss&utm_campaign=blockchain-technology-application-finance-industry

Blockchain

TA: Bitcoin Price Back Below 100 SMA, Why BTC Could Retest $45K

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Bitcoin price failed to stay above $50,000 and $49,000 against the US Dollar. BTC is now below the 100 hourly SMA and it is likely to continue lower towards $45,000

  • Bitcoin started a fresh decline below the $50,000 and $49,000 support levels.
  • The price is now trading well below $50,000 and the 100 hourly simple moving average.
  • There is a connecting bearish trend line forming with resistance near $49,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could extend its decline towards $45,000 as long as it is below $50,000.

Bitcoin Price Turns Red

After forming a short-term top near the $52,600 level, bitcoin started a fresh decline. BTC traded below the $51,200 and $50,000 support levels to move back into a negative zone.

There was also a break below a major bullish trend line with support near $49,500 on the hourly chart of the BTC/USD pair. The pair even broke the $48,000 support level. There was a clear break below the 50% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.

It is now trading well below $50,000 and the 100 hourly simple moving average. It seems like the bulls are trying to protect the 61.8% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.

Bitcoin Price

Source: BTCUSD on TradingView.com

If they fail and the price trades below $46,500, there are chances of more losses. The next key support is near the $45,000 level, below which the bears might aim a test of the $43,000 support zone.

Fresh Increase in BTC?

If bitcoin stays above $46,500, it could correct higher. An initial resistance on the upside is near the $48,000 level. The first major resistance is near the $49,000 level and the 100 hourly simple moving average.

There is also a connecting bearish trend line forming with resistance near $49,000 on the same chart. To move into a positive zone, the price must clear the trend line resistance and then gain pace above the $50,000 barrier.

Technical indicators:

Hourly MACD – The MACD is now gaining momentum in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level.

Major Support Levels – $46,500, followed by $45,000.

Major Resistance Levels – $48,000, $49,000 and $50,000.

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Source: https://www.newsbtc.com/analysis/btc/bitcoin-btc-could-retest-45k/

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Analyst tells Tesla to dump Bitcoin for buybacks as shares plunge alongside MSTR’s

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A former equities CIO of Goldman Sachs drew an strong response on Twitter after suggesting Tesla should sell its Bitcoin and buy back company shares.

The price of TSLA shares have fallen 28% from $863.42 to $621.44, since news broke on Feb. 8 that Tesla had made a $1.5 billion BTC acquisition.

MicroStrategy’s shares have fared even worse in the short term. The company, which is headed by Bitcoin bull Michael Saylor and just completed its latest acquisition of $15 million in BTC on Mar. 3, is now down 50% from its all-time high of $1,315 from Feb. 9.

Tesla’s share market woes are likely due to a number of factors. In early February, it was reported that Tesla had been reprimanded by the Chinese government over quality control issues after receiving consumer complaints. The broader stock market has also experienced volatility, with the S&P 500 down 4.1% in the last 30 days. 

But the tweet from longtime Tesla analyst Gary Black, who has several decades of financial management experience, sparked a debate on whether Tesla’s purchase of $1.5 billion in Bitcoin last month had benefited investors.

“I don’t want them buying back stock,” said Twitter user Techgnostik. “I want them investing in growth, and making another billion on their BTC position.”

Black countered by suggesting TSLA would also draw inclusion by more fund managers with a share buyback program, considering it of greater value to the investor than buying BTC “with excess cash.”

Some users on Twitter agreed that a stock buyback seemed to be a more appropriate use of funds, while others felt too much attention was being paid to what Tesla did with 8% of their cash reserves.

It’s not easy to ascertain the impact buying Bitcoin has had on a company’s bottom line. While MicroStrategy’s share price has halved in a month, shares of MSTR are still up 340%, (from $146.63 to $645.66), since the company announced its first purchase of 21,454 BTC on Aug. 11, 2020. The price of BTC is currently up 310% from the same date.

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Source: https://cointelegraph.com/news/analyst-tells-tesla-to-dump-bitcoin-for-buybacks-as-shares-plunge-alongside-mstr-s

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Experts divided on BTC predictions: Bullish or super bullish?

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Despite the current battle between Bitcoin bulls and bears around the $50,000 price mark — and an 8.7% pullback over the past 24 hours — a raft of analysts and commentators have got out their crystal balls to tip a glittering future for Bitcoin prices.

On Mar. 4, Senior Commodity Strategist for Bloomberg Intelligence Mike McGlone pointed to historical data to suggest that Bitcoin is on the way to $100,000.

McGlone’s logic revolves around the growing discount for shares in the Grayscale Bitcoin Trust which is at the same level as last year’s Black Thursday collapse. The discount refers to when shares in the Grayscale Bitcoin Trust trade for less than the value of the underlying Bitcoin (normally they trade at a premium).

Looking at historical data, said that

Twitter user “Lee Hendricks” wasn’t convinced, suggesting the catalyst for Grayscale’s discount could be the result of pressure from upcoming ETFs and other crypto funds. (Although that’s arguably bullish too.)

The Bloomberg strategist isn’t the only expert with high expectations for BTC, with influencer and YouTuber Lark Davis stating on Mar. 4 that “we are just now past the first major price wave,” with two more, larger waves to come.

On March 2, technical analyst Kaleo posted a chart predicting BTC will hit $100,000 near the start of April this year.

It’s a follow-up on his “Bitcoin Halving Reward Era Price” analysis chart two years ago predicting the price would reach $200,000 around mid-2021. He tweeted two weeks ago that he still has faith in it:

“It is by far the most accurate, long-term chart prediction I’ve ever seen for Bitcoin… $BTC will hit $200K+ this cycle.”

Another analyst who goes by the Twitter name MasterChangz, told his 10,000 followers he believes Bitcoin will hit the $200,000 mark even earlier than mid-2021, potentially at the start of April. The next rise, he said, is to $77,000 over the next two weeks.

Other predictions are even bolder with Kraken CEO Jesse Powell stating the cryptocurrency could reach $1 million or even “infinity” in a Bloomberg television interview on Mar. 4, adding that it will eventually become the world’s currency.

“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”

Kraken Head of Growth Dan Held, echoed this prediction on Mar. 5, claiming on Twitter that:

“Bitcoin is more likely to hit $1,000,000 than $0.”

Even past Bitcoin skeptics are becoming crypto converts with investment firm Sanders Morris Harris CEO George Ball admitting to Yahoo Finance on Mar. 4 that he believes cryptocurrencies are now “attractive” as a “small part” of any portfolio.

“With the cryptocurrencies, I think there is a fundamental hydra-headed shift that makes them attractive as a part, a small part, of almost any portfolio,” Ball said.

Despite this wave of optimism, history also suggests March could be a bloody month, with Bitcoin’s price falling across the month in six of the past nine years by an average of 5.8%. The most recent of these occurred last year on Black Thursday when the price plunged by 50%. That said, the second-biggest monthly candle in BTC history happened in March 2013, when the price shot up 179%.

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Source: https://cointelegraph.com/news/experts-divided-on-btc-predictions-bullish-or-super-bullish

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