Updated: Sep 6, 2019
Fidelity’s Opinion Of Crypto
Fidelity, one of the largest asset managers in the world with over $2.46 trillion in assets under management, has made a targeted entry into the cryptocurrency sector and is set to launch a crypto custodian service in the near-term. Fidelity Digital Assets, a new company created by the investing giant last year, is already working with wealthy families and hedge funds on cryptocurrency trading and custody. In January, the company said in an official announcement, “We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”
Hadley Stern at Fidelity told Fortune that the company had been mining bitcoin and ethereum to understand the mechanisms behind the network, consensus, and difficulty levels.
Fidelity has continued to work towards understanding the asset class with the intent of providing an infrastructure to support investors in the crypto market. The enthusiasm towards crypto runs throughout the company, at every level of seniority of the firm, sparking optimism regarding the rate of institutionalization of the crypto market. Jeff Sprecher, the chairman of the New York Stock Exchange said, cryptocurrencies will survive and bitcoin, in particular, has shown that it can endure long-lasting bear markets in the past 10 years.
Fidelity Digital Asset head Tom Jessop said that 20% of institutions surveyed by Fidelity said they are planning to expand their investments in the crypto market. “We just completed a survey of about 450 institutions, so everything from family offices to registered investment advisors to hedge funds. It’s interesting, I think about 20% indicated that they currently allocate to digital assets with an intention to grow that,” Jessop said. Financial institutions, especially multi-billion dollar corporations, do not aggressively move into unregulated markets unless they see significant demand or first mover advantage. The efforts of Fidelity and other major firms indicate that they either currently see overwhelming demand from institutions or they see the asset class growing exponentially in the decades ahead.
PayPal Makes Investment in a Blockchain Startup
PayPal has joined the extension of funding round in Cambridge Blockchain, a startup that helps financial institutions and other companies manage sensitive data using shared ledgers.
PayPal spokesperson Taylor Watson told CoinDesk via email: “We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal. Our investment will allow us to explore potential collaborations to leverage blockchain technology.”
CEOs of Mastercard and Wells Fargo Concur on Blockchain’s Long Term Potential
Top execs at Mastercard and Wells Fargo agreed that blockchain technology has long-term potential, but it has not been realized to date. “If you turned the clock back a few years ago, it should have completely changed the industry — that’s just not the way it works.” Specifically, Banga outlined the potential of the tech to improve the efficiency of supply chains and to address issues around counterfeit goods. Mastercard and Wells Fargo have been actively exploring the benefits of blockchain tech, with Mastercard ranked third company worldwide according to the number of blockchain patents filed. For its part, Wells Fargo entered the Forbes’ list of The 50 Largest Public Companies Exploring Blockchain in July 2018. CEO of global payment giant Visa, Al Kelly, argued that its major competitor Mastercard has to “try harder” in terms of blockchain applications, since they are smaller than Visa. Accenture announced a collaboration with Mastercard to introduce a blockchain-based circular supply chain.
JP Morgan is Biggest Banking Blockchain Employer in Past 12 Months
Jamie Dimon, the investment bank’s chief executive officer, has commented on bitcoin several times over the past couple of years, notably calling the cryptocurrency “a scam” in 2017 – something that has continued to bring a strange, joyful rage to the digital assets press ever since. Despite what Dimon thinks, and it’s not really clear what he does think at this point, JP Morgan appears to be eagerly embracing blockchain technology. Over the past twelve months, JP Morgan listed more blockchain-related roles than any other banking company. The data was gathered by Indeed.com – one of the largest job hunting websites in the world. Not only that, but the investment bank was also one of the top ten blockchain employers over the past twelve months. Other firms in that top ten included consultancies, such as Deloitte and Accenture, and technology firms IBM and Cisco. JP Morgan’s apparent outsized role in the blockchain world likely stems from its efforts at launching JPM Coin. The coin, which was announced last month, is going to be used by the banking giant to make payments between clients.
5G And Blockchain
This year, carriers like AT&T and Verizon will be introducing 5G, the latest generation of cellular mobile communications. The 5G platform brings a high data rate, reduced latency, energy savings, cost reduction, higher system capacity and massive device connectivity. The combination of 5G and blockchain technology has the potential to unleash a surge of economic value. In order to understand this connection between 5G and blockchain, one must think of the relationship as multifold. The power of 5G coverage through its reduced latency, high speeds and capacity allows for IoT devices to become widely used. Simultaneously, these devices can leverage the security, decentralization, immutability and consensus arbitration of blockchains as foundational layers. That means smart cities, driverless vehicles, smart homes and other sensor-driven enhancements will finally have a technology that can handle their needs. As foundational layers, blockchains can provide consensus and security while the majority of IoT transactions and contracts occur on second-layer networks, with the opportunity to settle payment channels and transaction disputes on-chain. The network capacity of IoT, however, will be enabled by the power of 5G coverage.
The rollout of 5G
Network providers have started rolling out 5G within select United States cities, while global coverage is expected to come online in 2020. Verizon will start delivering its coverage in Chicago and Minneapolis from April 11, with services moving to 30 cities throughout the remainder of 2019. On the vendor side, Samsung is expected to release its 5G-compatible Galaxy S10 model next month. Other companies, such as Huawei and LG, have announced models of their own that are expected soon. In terms of modems, we are still waiting to see one that supports both 5G and LTE. Qualcomm is expected to release such a product, the X55, in either Q3 or Q4 of this year. Apple consumers will have to hold off until 2020 before seeing a 5G-compatible iPhone with the company apparently still evaluating market conditions.
Coinbase Launches Cross-Border Payments with XRP
Crypto exchange Coinbase is now offering cross-border payments service to enable customers to transfer funds using Ripple and the stablecoin USDCoin. Coinbase made the announcement on its website, touting the service as fast and convenient: “You can now send money to any user with a Coinbase account around the world using XRP or USDC.”
“By using cryptocurrencies that are optimized for cross-border transmission, you can send and receive money virtually instantly by sending those cryptocurrencies and having the recipient convert them into local currency.” “There’s zero fee for sending to other Coinbase users, and a nominal on-chain network fee for sending outside of Coinbase.”
Reuters: Bitcoin soars 20%, whale buyer seen as catalyst
Bitcoin burst to its highest level in almost five months, sending smaller cryptocurrencies up, with analysts ascribing the move to a major order by an anonymous buyer that triggered a frenzy of computer-driven trading. The original and biggest cryptocurrency soared as much as 20% in Asian trading, surpassing $5,000 for the first time since mid-November. Oliver von Landsberg-Sadie, chief executive of London-based cryptocurrency firm BCB Group, said the move was likely triggered by an algorithmic order worth about $100 million spread across major exchanges - U.S.-based Coinbase and Kraken, and Luxembourg-based Bitstamp. “There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC,” he said. “If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour”. Outsized price moves of the kind rarely seen in traditional markets are common in cryptocurrency markets. So orders of large magnitude tend to spark buying by algorithmic traders, said Charlie Hayter, founder of industry website CryptoCompare. As bitcoin surged, there were 6 million trades over an hour, Hayter said - three to four times the usual amount, with orders concentrated on Asian-based exchanges. “You trigger other order books to play catch up, and that creates a buying frenzy.”
Bitcoin’s surge sent smaller cryptocurrencies, known as “altcoins,” trading higher. Ethereum’s ether and Ripple’s XRP, respectively the second- and third-largest coins, both jumped by more than 10%. Price moves of smaller coins tend to be correlated to bitcoin, which still accounts for just over half of the value of the cryptocurrency market. “Usually bitcoin is the leader of the market and altcoins tend to follow, as far as direction and sentiment is concerned,” said Mati Greenspan, an analyst at eToro in Israel. “Today bitcoin is in the driving seat.”
Bitcoin Can Beat Visa, MasterCard to Top World Payment System in 10 Years
In a report on transactions on the Bitcoin network versus those with Visa, MasterCard and PayPal, the company made the prediction that if Bitcoin’s current rate of network growth continues, it will beat out competition from market incumbents. “If it maintains this pace, in another 10 years, it will surpass all competition.” The basis for that assumption lies in the already far greater number of nodes, lower fees and average transaction size, among other technical factors. Bitcoin, for example, has around 10,000 active nodes, compared with Visa’s 119 data centers, MasterCard’s 98 and PayPal’s 51. At the same time, Bitcoin has fewer users, in line with its only ten-year period on the market; Visa and MasterCard debuted in the 1950s and 60s, while PayPal followed in 1998. There are currently around 25 million Bitcoin wallets, while the number of Visa and MasterCard credit and debit cards in circulation has reached 5.3 billion, the report notes. While the cryptocurrency can only handle around seven transactions per second at present compared to Visa’s 65,000, scaling solutions — principally the Lightning Network — have more than enough time to transform Bitcoin’s utility. Right now Bitcoin’s payment system is much superior to the conventional international payments and wire transfers.
EU Blockchain Group Launches With SWIFT, Ripple Onboard
SWIFT, IBM, Ripple and around 100 other firms and organizations have joined a new blockchain association to promote adoption of the technology across the EU. A European Commission initiative, the new group – the International Association of Trusted Blockchain Applications (INATBA) – is launching Wednesday in Brussels, Belgium. INATBA has been set up as a “global multi-stakeholder forum” aimed to bring together developers and users of blockchain technology to promote mainstream adoption across multiple sectors. The association plans to build a framework to encourage public and private sector collaboration, dialogue with regulators and policymakers and “legal predictability,” as well as ensure “integrity and transparency” in blockchain infrastructures. It will also develop guidelines and specifications for blockchain and distributed ledger-based applications. The group also includes other notable members, including banks such as Barclays and BBVA, consultancy firm Accenture and French beauty product giant L’Oreal. A number blockchain startups are on board too, such as ethereum development studio ConsenSys AG, blockchain tech firm Bitfury, enterprise blockchain firm R3, cryptocurrency hardware wallet maker Ledger and cryptocurrency protocol developer IOTA (which is also on the board).