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Report: Emerging Markets Seen Adopting Cryptocurrency Faster

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  • Report: Emerging Markets Seen Adopting Cryptocurrency Faster

A recent research survey sponsored by Luno, one of the promoters of cryptocurrency, has shown that people who have less finances appear to take greater financial risks, thus confirming the possibility of high adoption rate of cryptocurrency in emerging markets.

The initial findings from the survey tagged ‘Future of Money’, which took the views of more than 7000 respondents across Europe, Africa and South-east Asia helped in explaining the belief on emerging markets and financial risk taking.

As large global tech firms start to move into blockchain and altcoins, the research shows why early adopters, the most important audience for these firms, would probably come from emerging markets.

Analysing the survey report, Luno CEO, Marcus Swanepoel, said: “As some of the world’s largest tech giants announce they are launching cryptocurrency coins, we believe developing markets will be the lead adopters. Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer.”

When asked if a single global currency would make the current financial system better or worse, almost three times as many respondents from Nigeria and South Africa said it would make it better, compared to the UK, Swanepoel said.

According to him, “The data also identified why money is such a focus in emerging markets. When asked why money is important to them, 60 per cent respondents said it was ’to secure my family’s well-being or to ‘pay for my education. In Nigeria 25 per cent of the respondents said same, compared to 8 per cent in the UK. A further question regarding the setting of a monthly expenditure budget found that 80 per cent of people in Malaysia; 65 per cent in Nigeria; 73 per cent in South Africa and 74 per cent in Indonesia, said they do, compared to 54 per cent in the UK. Again, 33 per cent respondents in Indonesia compared to 0 per cent in the UK, are more likely to stay within the budget they set.”

The survey report added: “It is very clear that if money is not simply a ‘nice to have’ and is vital for the future, then people spend more time understanding it, managing it, preserving it and to an extent being creative with how they maximise the use of it. The report therefore asserted that if a cryptocurrency could provide a secure and cheaper means of exchanging value, better than the existing system, it would be used. This is why there is a general belief that as new cryptocurrencies, linked to global brands are introduced they will find an important audience in emerging markets.”

These markets are also more likely to exhibit grassroots level adoption, Swanepoel said, adding “In almost every emerging market country surveyed, over half of the people said they will turn to family, friends or colleagues for financial advice over government organisations which shows that people in these markets rely on information from those closest to them”

The survey presents an overview of a study conducted by Dalia Research for Luno between May and June this year about the future of money. The sample of over 7,000 individuals with internet access was drawn in France, Indonesia, Italy, Malaysia, Nigeria, South Africa and the United Kingdom.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Cryptocurrency

Coinbase to Start Trading at $250 a Share

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Coinbase, one of the world’s leading cryptocurrency exchange companies, will be listed at $250 per share on Wednesday, according to Nasdaq and Goldman Sach

“On April 14, 2021, the Class A common stock of Coinbase Global, Inc. is expected to list on Nasdaq through a Direct Listing using the ticker “COIN”.

“Because this security has not previously traded on any listing market and has no prior day’s closing price, Regulation SHO Rule 201 will not apply to the security until its second day of trading on Nasdaq.

“As a Direct Listing, COIN will be in a regulatory halt until Nasdaq opens trading pursuant to the procedures described in Rules 4120(c)(8) and (9) and 4753. Because COIN has not had recent sustained trading in a private placement market, Nasdaq is required to determine the price to use for purposes of Rule 4753(a)(3)(A)(iv)(b) and 4753(b)(2)(D)(ii). That reference price is $250.00.”

That’s a valuation of $66.5 billion, assuming an estimated 266.2 million shares outstanding.

The reference price is discovered using public financial information along with market sentiment and is usually a conservative estimate. This figure came is 27% lower than what Coinbase last traded at in the private secondary market, $343.58 per share.

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Bitcoin

Bitcoin Sets a New Record High at $63,000 on Tuesday

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Bitcoin surged to a fresh record high of more than $63,000 on Tuesday, as investors awaited the highly-anticipated stock market debut of cryptocurrency exchange Coinbase.

The price of bitcoin climbed 5% in the last 24 hours to hit $63,171, according to data from Coin Metrics, before easing slightly to around $62,653. Ether, the second-most valuable digital coin after bitcoin, also set a fresh record, climbing to $2,222.

Coinbase is set to go public on Wednesday through a direct listing that could value the company at as much as $100 billion — more than major trading venue operators like Intercontinental Exchange, owner of the New York Stock Exchange. Crypto investors are hailing the company’s stock market debut as a major milestone for the industry after years of skepticism from Wall Street and regulators.

“This is really good and really important for the industry,” Marcus Swanepoel, CEO and co-founder of London-based cryptocurrency platform Luno, told CNBC. “It’s going to increase the trust and transparency in our industry.”

“There’s still a bit of distrust in the industry and I think having a company of that size be public is going to help a lot of people realize that this is not just an asset class to take seriously but also a business to take seriously.”

Coinbase, founded in 2012, is the largest cryptocurrency exchange in the United States. It’s seen surging revenues this year thanks to a climb in the value of bitcoin and other cryptocurrencies. The company reported estimated revenues of $1.8 billion in the first quarter of 2021, a nine-fold increase from the same period a year earlier, while profits grew to between $730 million and $800 million.

Bitcoin has more than doubled in price since the start of this year, as mainstream investors jumped into cryptocurrencies. Tesla recently made a $1.5 billion bet on bitcoin and now accepts the digital currency as a method of payment for its cars. Meanwhile, Wall Street giants like Goldman Sachs and Morgan Stanley are looking to offer their wealthy clients some exposure to bitcoin.

Bitcoin bulls view the cryptocurrency as a store of value akin to gold that can be used to diversify investment portfolios in times of economic crisis. But skeptical economists like Joseph Stiglitz and Nouriel Roubini are unconvinced, viewing bitcoin as extremely volatile and a vehicle for illegal transactions.

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Cryptocurrency

Ripple Scores Second Victory As Court Denies SEC’s Request On Financial Records

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A judge has granted a motion to dismiss the U.S. Securities and Exchange Commission’s (SEC) request to peer into years’ worth of financial records belonging to Ripple executives.

A court document from Judge Sarah Netburn, filed on Friday, shows the SEC’s request for eight years of financial data belonging to Ripple’s Brad Garlinghouse and Chris Larsen has been denied.

CEO Garlinghouse and Executive Chairman Larsen asked the courts to quash the request by the securities regulator last month labeling the request as a “wholly inappropriate overreach.”

The development means Ripple has scored a second victory in its fight against the regulator after having won the right last week to look into the SEC’s internal communications over how it classifies cryptocurrency as a security.

Netburn said the SEC’s request for personal financial records, outside of those belonging to transactions relating to XRP (+24.28%), that were already promised by the executives, was irrelevant and disproportional to the “needs of the case.”

“The SEC shall withdraw its requests for production seeking the individual defendants’ personal financial records and withdraw its third-party subpoenas seeking the same,” wrote Netburn.

However, should discovery progress to a point where the SEC uncovers evidence demonstrating Garlinghouse and Larsen lied about their XRP transaction records, Netburn said the regulator may renew its application.

In December, the SEC sued Ripple, Garlinghouse and Larsen alleging the company and its executives had sold XRP to retail investors in direct violation of U.S. federal securities laws.

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