Buzzing Blockchain

We keep reiterating that ‘Blockchain’ as budding technology and “Cryptocurrencies’ as evolving currency system seems to be the most probable solutions to get rid of bottlenecks that exist in the current system.

The lingering prospects among the Blockchain space has led the keen interest continues to mount everywhere, reputed institutions from Big 4 auditing firms to the central banks of advanced economies, or from manufacturing industries to the shipment companies have been exploring and investing into R&D projects of blockchain gamut.

It is observed that there are currently more than 700 cryptocurrency/blockchain investment funds, as per the research report. Hedge funds or hybrid funds and venture capital firms are having lion’s share in this number.

Tightening But Conducive Regulatory Environment

While the US-SEC maintains the conservative approach on cryptocurrencies by constantly declining bitcoin ETF proposals, they have also been charging crypto/ICO/blockchain scammers substantially for the fraudulent operations.

Besides, the US CFTC reckons ‘Digital Assets and Blockchain Domain’ beeds principles-based regulation over rules. The Commodity Futures Trading Commission (CFTC) has also come up with the new insights of important role to play in determining as to how these new products and technologies evolve, LabCFTC was launched as a result. The new Chair of the CFTC (Commodity Futures Trading Commission) has saidthat Ether (ETH) is a commodity – hinting the room for a plethora of newly regulated derivatives products on platforms like the CBOE.

Recently, the CFTC Chairman Heath Tarbert, at Yahoo Finance’s All Markets Summit in New York, said “it is my view as chairman of the CFTC that ether is a commodity.”

Of late, the tax authorities have been constantly shedding light on crypto-taxation norms.

Recently, the British tax, payments and customs authority, Her Majesty’s Revenue and Customs (HMRC), has updated its cryptocurrency taxation guidelines for businesses and individuals. The U.K. government tax agency who administers taxes in conjunction with the fiscal policy making, have recently updated the tax guidance.

Paradigm Shift of Global Banks’ Interests into Blockchain and Crypto space

Central banks across the globe have shown their interests in their own native cryptos.

The First Deputy Governor of Banque de France, Denis Beau, has recently recommended deploying distributed ledger technology (DLT) for euro payment settlements within the Eurozone.

At the Second Annual Capital Markets Technology and Innovation Conference, Denis Beau advocated the European Central Bank (ECB) that the European Central Bank (ECB) should be liberal in experimenting with distributed ledger technology (DLT) as a way of settling euro-denominated transactions.

The Swiss National Bank (SNB) made an effort by signing an operational pact with the Bank of International Settlements (BIS) to delve into digital currencies in the BIS Innovation Hub Centre established in Switzerland.

While the Chairman of the Federal Reserve, Powell, admitted the trends and said to the US representatives French Hill and Bill Fosters, who had asked whether the Federal Reserve plans to launch a digital currency, in a descriptive letter in reply, he clarifies that they have been observing the trends of digital currencies keenly, though he declined the immediate plans.

Bank of China pilots Blockchain-Based bond issuance programme, while PBoC eyeing on stimulating cryptocurrency and Fintech projects upon their President’s perspectives on Blockchain technology. Huang Qifan, the vice chairman of the China International Economic Exchange Center, announced the name of the digital currency to be launched by the People’s Bank of China, DCEP.

Federal Reserve of the U.S. came up with interest rate cut for the first time since the 2008 financial crash. As a result, the U.S. markets retorted accordingly, subsequently, all three major indices dropped with a great deal.

While investors marched from equities to 10-year U.S Treasuries to bolt their portfolios. Most noticeably, a digital asset of modern era has also joined this sentiment.

Institutional clients seem to be showing their interests in blockchain domain. Very recently, JPM also announced of its JPM coin.

Booming Price Cycles

It’s quite imperative to empathizing about boom cycle of the price behaviour, reminiscing that all asset-class, in every avenue, sense a process of price discovery and cryptos have been no exception.

Since the asset class has been dominated by retail speculation, the Blockchain Capital Partner says it isn’t surprising to see wild price swings.

While the second decade of 21st century has been successful for the major cryptos like, Bitcoin, Ether Ripple and so on if you consider their price, the pioneer cryptocurrency (BTCUSD) has surged from its all-time low price during its inception stage (wasn’t even trading at $1 back then) to spike to hit all-time highs of &19k mark, the current price is at $7,210 levels.

Maturing Derivatives Markets:

We have witnessed constructive developments in the cryptocurrency derivatives market,

CME has come up with the Bitcoin futures which are cash settled.

While the new cryptocurrency start-up, ‘Bakkt’ established by the Intercontinental Exchange (ICE), has launched bitcoin options, futures contracts with physical delivery as well as cash-settled facilities.

Amidst this development, we have noted the gradual maturing of the cryptocurrency space as the influence of institutional investors has grown in the aftermath of the listing of bitcoin futures since Dec 2017. Indeed, a few months ago we noted that the true level of institutional participation was likely greater than widely used trading volume figures implied, as a number of sources suggested. We also have various OTC players, like, BitMEX, OKEx, Binance etc are equipped with crypto-derivatives markets.

Hence, observing all the above-stated driving forces, we wouldn’t be surprised if the crypto-space continue to boom in the 3rd decade as well.