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The Feasibility of Bitcoin as a Savings Option

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The post The Feasibility of Bitcoin as a Savings Option appeared first on Crypto Core Media.

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The growing demand from consumers has led to the rise of a variety of alternative saving accounts that cater to every kind of client. An article by The Balance listed some of the different types of savings accounts which include basic savings accounts, online savings accounts, money market accounts, certificates of deposit, interest checking and specialty accounts.

The providers of these savings accounts have also introduced mobile apps to help customers manage their finances, with many of them incorporating the ability to track spending and glean insights into their financial habits. A blog post by Petal explains the importance of these features – spending charts help make users more aware of their spending patterns; revealing what months were the most expensive, the merchants they spent the most on, and what items are taking up most of their budget are seen as essential steps for building better spending habits. Financial institutions seem to be paying greater attention to helping their customers become better savers and become more financially aware individuals, but for the most part, these efforts have been limited to managing fiat money.

Fortunately, the rapid progression crypto has experienced in recent years has seen several startups offering crypto savings accounts around the world, to be accessed in increasingly convenient ways. One Asian startup even lets customers buy and sell Bitcoin at 7-Eleven stores, making this currency more available for the unbanked demographic. Crypto savings accounts like these are revolutionary pieces of fintech that allow people to protect their finances from threats of inflation and economic instability. To learn more about these kinds of savings accounts, here are some of the startups that have started offering crypto saving accounts in America:

Blockfi

Blockfi is one of the leading digital asset management service providers that allows investors to earn 0.5% to 8.6% annual percentage yield (APY) on their crypto asset holdings. In his article on Medium, Joe Pile explains that the good thing about having a Blockfi savings account is the zero-fee trading feature that allows users to seamlessly trade between different types of cryptocurrency on the platform. Another feature that makes Blockfi really appealing is the compound interest feature that enables the interest you earn to earn interest the next month, helping you build wealth exponentially over time. Of course, if there are perks, there are also drawbacks, including the high withdrawal fees and the long withdrawal time which can take up to 24 hours to be processed.

Celcius Network

Celcius Network allows you to grow passive income by issuing asset-backed loans and lending coins to hedge funds, exchanges and institutional traders. People who are interested in opening a Celsius savings account are free to deposit as little or as much as they want, depending on how confident they are with the platform. Withdrawals are also free and you’ll always have 100% access to your funds due to there being no lock-up protocol. Interest payments are also done on a weekly basis. However, unlike Blockfi, Celsius only offers simple interest and has a $20,000 limit on immediate withdrawals. The platform also requires account holders to pass KYC before they can earn interest and does not have a downloadable earnings statement.

BitLeague

Last year, BitLeague announced the public launch of Bitcoin Term Deposit, which permits global Bitcoin holders to enjoy up to a 9% annual return on their Bitcoin savings if they apply on their website and download their app. Benzinga’s article on BitLeague explained that aside from high-interest rates, this crypto savings account offers many choices on terms, as well as a zero trading commission service to those who buy and/or sell Bitcoin. Unfortunately, all services by BitLeague are Bitcoin-focused, but there are plans regarding the launch of a Libra interest account which will offer an expected rate of 6%.

Source: https://cryptocoremedia.com/the-feasibility-of-bitcoin-as-a-savings-option/

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CBOE files to list Van Eck’s proposed Bitcoin ETF

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Globally leading exchange holding company, Chicago Board Options Exchange, or CBOE, has filed to list the Bitcoin exchange-traded fund proposed by asset manager, Van Eck.

CBOE filed a Form 19b-4 requesting permission to list the ETF from the U.S. Securities and Exchange Commission on Jan. 3. In the form, CBOE emphasizes the benefits an ETF would offer to retail investors over the spot Bitcoin markets, including custody:

“Exposure to bitcoin through an ETP also presents certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust’s bitcoin assets.”

While CBOE did not reveal who its custodian is, the document notes its custodian is “a trust company chartered and regulated by [the New York Department of Financial Services].”

Once the SEC has formally acknowledged it is reviewing the application, the regulator has 45 days to deliver its verdict or extend the assessment deadline. The SEC can extend its deliberation period for up to 240 days before finalizing its decision.

If approved, the ETF would be the first crypto product offered by CBOE since February 2019, with CBOE having then ceased offering Bitcoin futures contracts. In December 2017, CBOE became the first regulated financial institution in the United States to offer Bitcoin futures contracts, beating out the Chicago Mercantile Exchange by just a couple of weeks.

In January, Van Eck filed for SEC approval of a Bitcoin ETF. While Van Eck had previously filed for a BItcoin ETF in 2017, the firm also teamed up with SolidX — a blockchain firm that had been attempting to bring a Bitcoin ETF to market since 2015 — to file for a jointly issued ETF in 2018. The joint application was withdrawn in September 2019, with the two firms parting ways shortly after.

However, Van Eck’s latest filing has become the subject of a lawsuit from SolidX, who alleges Van Eck plagiarized their product.

Van Eck also filed for an ETF tracking the performance of prominent crypto firms on Jan. 21. The product would seek the price and performance of the Global Digital Asset Equity Index — which is run by its subsidiary MV Index Solutions.

As of this writing, the SEC is yet to approve any crypto ETF product.

Source: https://cointelegraph.com/news/cboe-files-to-list-van-eck-s-proposed-bitcoin-etf

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Coinbase custodies 11% of entire crypto capitalization

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Crypto data aggregator Messari has reported that the quantity of crypto assets stored in custody on U.S. exchange giant Coinbase surged in the last quarter of 2020.

Messari Crypto has revealed that as much as 11% of the entire crypto market capitalization was held with Coinbase custody at the end of last year. The Coinbase offers custody services for over 90 crypto assets, roughly half of which are tradable on Coinbase’s exchange.

The value of assets custodied with Coinbase spiked to roughly $90 billion in the fourth quarter of 2020 as the combined crypto capitalization more than doubled to tag $780 billion by 2021.

Despite the wide variety of assets supported by Coinbase Custody, Messari found that Bitcoin and Ethereum account for 83% of the cryptocurrency held with Coinbase.

While Bitcoin consistently represented 70% of the assets custodied with Coinbase during 2019 and 2020, Ethereum increased from 9% to 13% over the same period.

The findings were published in a report examining Coinbase’s anticipated public listing that was compiled by Messari researcher Mira Christanto.

Christanto reported that 95% of Coinbase trading revenues are from retail clients, who pay 30 times more than institutional customers. She also noted a pre-IPO valuation at 7% of the total crypto market cap which would equate to around $107 billion according to the sector’s current market cap of $1.54 trillion.

According to the S-1 report Coinbase submitted to the Securities and Exchange Commission on Feb. 25, the exchange posted a direct revenue of $1.1 billion in 2020 mostly from trading fees.

In a Feb. 25 blog post to its clients, Coinbase revealed that Bitcoin and other crypto assets have comprised a major share of its corporate treasury since the company’s founding back in 2012.

Source: https://cointelegraph.com/news/coinbase-custodies-11-of-entire-crypto-capitalization

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Leverage traders ‘flushed out’ by late-February crypto crash: Glassnode

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According to on-chain analytics provider, Glassnode, the late-February crypto market correction may have purged excessive leverage from the markets.

On March 1, Glassnode published a report analyzing the recent crypto crash — which was only the second significant crypto correction since the markets pushed into new record highs in late 2020.

Glassnodenoted the crash peaked with a 25% fall from the local top of $58,300 to $43,343. As such, the move was weaker than January’s dip which saw a roughly 30% retracement from $42,000 to less than $30,000.

The analytics provider suggested that these pullbacks are positive for the crypto markets overall, attributing the latest correction to liquidated leveraged positions held by risky speculators:

“Significant market corrections are positive events in that they flush out speculation, leverage, weak hands, and test holder conviction.”

The report added that several key market indicators were reset as BTC prices found fresh support, including futures open interest, futures funding rates, and the price premium for Grayscale’s investment products.

Futures open interest, which is the total number of outstanding contracts that have not been settled, dropped almost $4 billion or 22% from its peak of $18.4 billion. Glassnode also commented noted perpetual futures funding rates have also reset close to zero, which could indicate that traders are not willing to enter short positions, stating:

“Previous combinations of decreasing open interest and a reset of funding rates have indicated a flush in speculative trading has occurred.”

However, the report did note that open interest is still hovering roughly $2.5 billion above the previous peak of $3.9 billion on Feb. 21 — meaning there is still significant leverage within the market.

Glassnode also noted that shares in Grayscale’s Bitcoin Trust are trading at a discount compared to spot market prices for the first time ever, with investors paying a nearly 4% discount to access exposure to BTC through Grayscale’s trust.

It added that competing products such as Canada’s Purpose ETF could diminish Grayscale’s premium as more institutional products enter the market and close arbitrage opportunities.

At the time of writing, Bitcoin prices were up 5.3% over the past 24 hours, with BTC currently changing hands for $49,200.

Source: https://cointelegraph.com/news/leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode

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