Bitcoin was driven to new record highs Tuesday morning – trading above $48,000 – as investors continue to pile in on the news that Tesla bought $1.5bn worth of the cryptocurrency.
A filing with the U.S. financial regulator on Monday reveals that the electric car company run by the world’s richest person, Elon Musk, has made the massive purchase of the digital asset which has jumped more than 300% in a year.
The surge in the price of Bitcoin and other cryptocurrencies, including Dogecoin – which was also fuelled by an endorsement by Musk on Twitter over the weekend – comes as digital currencies become mainstream due to soaring interest from both retail and institutional investors, increasing levels of mass adoption, and as global interest rates remain at historic lows.
But how does a new crypto investor choose a platform on which to buy, sell, hold and exchange?
Nigel Green, an influential cryptocurrency expert and CEO of deVere Group, one of the world’s largest independent financial advisory and fintech organizations, says there are five fundamentals.
He says: “More and more people are wanting to invest into cryptocurrencies, knowing that they are the future of money.
“But many, even those who have extensive knowledge of the stock market, have concerns about selecting the right cryptocurrency exchange.
“The total capitalisation of the cryptocurrency market is now an estimated $1.2 trillion, but it is still lightly regulated. This means that it’s vital that investors know what to look for in an exchange.”
He continues: “There are five fundamentals for your checklist.
“First, security. The system of a private exchange for saving consumer documents as well as funds should be as decentralised as possible as if it’s all on a couple of web servers, that makes them easy hacking targets.
“Investors should also look for a system that utilises two-step verification throughout login, such as a password, and also quick-expiring codes received through the app.
“Avoid exchanges which offer cheap trade costs or services but are based in areas around the world where investor security is weak.
“In addition, investors ought to assess exchanges as well as the businesses behind them as they would certainly do with any other organisation that they would depend on to protect their money.”
“Second, costs. Some exchanges are proficient at addressing costs in advance, while others hide them. Go for the exchanges that are upfront and transparent.
“Third, simplicity and ease of use. Take into account that you’re not always going to trade from your desktop. In fact, finding an exchange that focuses on ‘on-the-move’ trading via a secure app is often a better option.
“Fourth, dependability. Does the exchange run efficiently when trading quantity is high, or when the currencies rate is see-sawing? Some exchanges are notorious for their system accidents and trading stops.
Fifth, client service. Make sure an exchange has a chat or fast communication service integrated.”
Mr Green concludes: “Whilst Elon Musk’s Tesla, and other institutional investors, including PayPal amongst others, will have teams of crypto experts behind them, retail investors can also get involved.
“Investing in cryptocurrencies remains highly speculative and it is not for everyone – but one of the keys to success would be selecting the right crypto exchange.”
Yield Team Raises $10M To Build Out DeFi Bond Market
Yield, a project building out a bond market for the DeFi world, has raised $10 million in fresh funding in a round led by Paradigm.
The project, which was incubated by Paradigm, introduced fixed-rate lending to Ethereum, allowing market participants to borrow at fixed rates as well as issue tokenized bonds that resemble Wall Street’s zero-coupon bonds. Such instruments are issue by firms as a way to raise capital and trade at a discount until the point of maturity.
Other investors in the round, announced Wednesday, include Framework Ventures, Symbolic Capital Partners, and CMS Holdings.
The fresh capital will allow the project to expand its team to finish the development of the second version of the protocol, according to Allan Niemberg, who co-founded Yield with Paradigm’s Dan Robinson.
“We are growing the team to continue working towards v2 and to address the many opportunities we see in trying to make fixed rates a fundamental DeFi building block,” said Niemberg, who previously was an analyst at a trading shop DRW.
Ultimately, Niemberg is hoping that Yield becomes a key DeFi building block. Already, the project has worked with Rari to navigate a complicated hack. Rari has issued zero-coupon bonds to users impacted by the hack through Yield, which designed the bonds and built a market for them to trade on. The tokenized bonds are called fyTokens—short for fixed-yield tokens.
“They are giving out bonds to make their users whole. They really have been making the best of a tough situation,” Niemberg said. “I think that this is something that may be more common in the future, as hacks aren’t going away, but they aren’t always life-ending for protocols.”
Hacks are not the only use-case. Projects could issue bonds as a way to raise capital instead of selling assets out of their treasury.
Similar to many other projects in the DeFi space, Yield has an end goal of becoming a decentralized autonomous organization.
“Long term, our goal is to make Yield Protocol owned and managed by its community,” Niemberg added.
Binance to Launch NFT Marketplace With Sale Featuring Works by Warhol and Dali
Crypto exchange Binance is kicking off its non-fungible token marketplace this Thursday with a premium auction that will feature NFTs of two artworks by Andy Warhol and Salvador Dali.
The auction, titled “Genesis,” will feature an NFT of Andy Warhol’s “Three Self-Portraits,” as well as a newly digitized NFT of Salvador Dali’s “Divine Comedy: rebeget.” According to a press release, the theme of the auction is meant to usher in “a new wave of Renaissance with NFTs.”
“NFT technology has revolutionized the world art for good, bringing the concept of digital ownership to life for the very first time,” the press release read. “The ‘Genesis’ auction represents this idea and brings two valuable pieces that represent ‘wind of change’ periods in history.”
The auction will also feature the first-ever Binance NFT “Mystery Box,” a new way for users to access special NFTs. Each box is guaranteed to contain one NFT, and its contents can vary in rarity. The first Mystery Box collection will feature 16 “tokidoki” characters, toys from the Japanese-inspired lifestyle brand created in 2006 by Italian artist Simone Legno.
The auction is a part of Binance’s recently announced “100 Creators” program which features 100 artists handpicked by the exchange to spearhead the launch of the NFT marketplace. Only these selected creators will be able to sell their artworks in the first week following the marketplace launch.
The exchange announced it was launching a marketplace for creating and trading NFTs in late April this year, calling it a “strategic move” by the exchange to further its commitment to NFT technology.
“We aim to build the largest NFT trading platform in the world by leveraging the fastest, cheapest, and most secure NFT solutions powered by Binance blockchain infrastructure and community,” a company spokesperson told The Block.
Goldman Begins Trading on JPMorgan’s Repo Blockchain Network
Goldman Sachs Group Inc. has joined the blockchain-based network created by JPMorgan Chase & Co. for repurchase agreements that use smart contracts and a digitized version of the U.S. dollar.
Its first trade came on June 17, when it swapped a tokenized version of a U.S. Treasury bond for JPMCoin, JPMorgan’s internal representation of a digital dollar, according to Mathew McDermott, global head of digital assets for Goldman’s global markets division. He declined to give the value of the trade.
“We see this as a pivotal moment for the digitization of transactional activity,” McDermott said Tuesday in an interview. Unlike in the traditional repo market, the exact amount of time the banks took to complete the transaction was quantifiable. In this case, it was 3 hours and 5 minutes.
Knowing the precise time is a big step up from the current market, as is the way the collateral and cash are interchanged simultaneously and immediately, McDermott said.
“We pay interest per minute,” he said. “We firmly think this will change the nature of the intraday marketplace.”
JPMorgan created the new repo market using its version of the Ethereum blockchain, with its first trades in December. It has since gone on to trade more than $1 billion a day through its Onyx blockchain platform.
The firm is speaking with more than 10 banking and investing clients about joining the repo network, according to spokeswoman Jessica Francisco. Bank of New York Mellon Corp. served as the custody agent for the trades.
Transactions in the $2.4 trillion repo market raise cash overnight or for a few days, but are difficult to arrange within the same trading day. The digitized upgrade provides that ability to JPMorgan, using so-called smart contracts on an Ethereum-based blockchain that allow cash and Treasuries to be returned instantaneously.
Wall Street began experimenting with blockchain about five years ago. In addition to JPMorgan, a blockchain pioneer among Wall Street banks, Paxos Trust Co. is using it to settle some equity trades in near-real-time. Arca is offering digital shares in a U.S. Treasury fund, showing that distributed-ledger technology can help streamline finance.
McDermott said Goldman Sachs’s participation in the JPMorgan market fits in broadly with how it’s thinking about enterprise blockchain, a system where all participants are known to one another.
“There’s the growing focus on the potential of this technology,” he said. Then he added something rarely heard from rival bankers: “It’s been great working with JPMorgan and BNY on this.”
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