Coinbase has announced that it will now support the Circle stablecoin USDC. The cryptocurrency exchange announced on a blog post that the coin had begun trading yesterday, the 23rd October. The move is significant as it is the first time Coinbase has shown support for a stablecoin and it also comes only a week after tether had seen a panic spike lower as traders continue to question the legitimacy of the coin’s 1:1 peg. The addition of USDC could be seen as a vote of no confidence in tether. This follows news last week that Binance was expanding its stablecoin offerings to four.
The underlying technology of the USDC coin was actually co-developed by Coinbase and Circle under the CENTRE banner.
The company’s blog stated, “The advantage of a blockchain-based digital dollar like USDC is easier to program with, to send quickly, to use in dApps, and to store locally than traditional bank account-based dollars. That’s why we think of it as an important step towards a more open financial system.”
USDC will also be added to the Coinbase Pro platform in coming weeks. The stablecoin already supported on the Coinbase Wallet, which supports ERC20 tokens.
The move to a stablecoin is a further sign that Coinbase are becoming more aggressive in their listing policy. Competitor exchanges have wider offerings and competition is heating up in th ecryptocurrency space.
Basic Attention Token (BAT) has been soaring in the last ten days as traders anticipate a possible Coinbase listing.
BAT has moved from lows near $0.17 to trade at highs around $0.30. The move has extended recently, following the addition of 0x to the Coinbase exchange. The cryptocurrency exchange had talked of “exploring” five coins in the past apart from 0x: Stellar Lumens, Cardano, ZCash and BAT. BAT has moved to number 31 in the list of coins by market cap but is still valued at more than 50% lower than its nearest competitor on the list in ZCash.
Basic Attention Token is a project that aims to decentralize the digital advertising market. The token is created on the Ethereum platform and can be exchanged between publishers, advertisers and users. The goal of the project is to eliminate middlemen, trackers and fraud.
The BAT token works alongside the Brave browser , which is an open-source, privacy-focused browser that blocks trackers and also contains a ledger system that captures user attention to reward publishers.
The token’s utility is derived from — or denominated by — user attention.
Worldwide Digital Ad Spend 2010-2018
The Basic Attention token currently has 1 billion tokens in circulation, so the current price represents a market cap of $280 million. Global digital ad spending is currently over $550 billion so there is a huge market for the project to pursue.
Maximum control of the digital ad world would make BAT tokens worth $550. This figure should be adjusted for share of the market. Even a 5% share of the ad market would give BAT a valuation of $25 – 100x its current valuation.
CCN has reported that tether pulled $610 million of the stablecoin’s market cap out of circulation since the beginning of October.
The tether coin saw heavy selling on Monday as the U.S. dollar peg cracked, with the coin trading at only $0.92. The move spurred a spike higher in Bitcoin and there was also a move above the $1 mark in Gemini’s new stablecoin, Gemini Dollar (GUSD).
The recent moves are indicative of trading activity around the news, where traders are becoming nervous at the “stability” of the stablecoin. Bitfinex was rumoured to be insolvent, which the exchange firmly denied, whilst tether had faced accusations that its dollar reserves were not enough to back the peg at 1:1 with the current market cap of over $2 billion. The two organisations share the same management team, so with new stablecoins appearing, there is competition and a potential safe haven for worried tether holders. As CCN highlighted, “Tether has not issued any new tokens in October, and the last time that new tokens entered circulation was on Sept. 21, when the treasury sent 50 million USDT to Bitfinex.”
Billionaire crypto investor Mike Novogratz also criticized tether’s role in the problems due to their poor attempts at transparency. Novogratz said the company should stop printing new reserves of USDT and focus on reassuring investors. He saw the lack of transparency as continually hurting tether’s brand. Novogratz was still positive on the role of stablecoins in the crypto market.
Tether has tried to calm the market by providing an update on the reserves situation. This seems to have worked so far but it’s a reminder that the risk of a tether sell-off is still possible. Traders don’t often show patience when there are rumours and a lack of clarity. The fact that the company has halted all new tokens and altered the circulation is maybe a sign that there is some work to be done to convince the market further.
Tether Peg Cracks
The cryptocurrency market rallied on Monday after a crack in the tether stablecoin led to a surge in the price of Bitcoin. A fall of 3% in tether saw Bitcoin rallying from $6,300 to blow through previous resistance at $7,250 before settling lower on the day. The move led to gains across the entire spectrum of digital currencies with only tether showing a loss amongst the top twenty coins. The sell-off in the USDT peg is the latest twist after a bout of rumours regarding the Bitfinex exchange and problems surrounding tether wire transfers.
Tether (USDT) is a token that its creators claim is backed 1:1 by U.S. Dollars, yet this has been questioned by traders in the past. Despite spending the early years of crypto trading as the dominant stablecoin tether is now seeing some significant competition appearing on the horizon to take the throne. Binance have recently announced their backing for the $32 million Terra project, whilst the U.S. tech giant IBM have also backed a stablecoin project which will run on the Stellar network. The Gemini project, which was founded by the Winklevoss twins has also joined the recent stablecoin party with the arrival of the Gemini Dollar (GUSD).
The real competition for tether may be seen with the arrival of Circle and its USDCoin (USDC), which started trading only a few weeks ago, which the company’s CEO stated was, “basically a dollar that operates on the blockchain.” The goal is to allow a stable bridge between buying and selling cryptocurrencies from standard bank accounts. The key difference with Circle’s offering is that the customers are required to hold $1 for every USD coin in order to provide price stability.
Why is Circle a company to watch? The company was seeded by investment banking titan Goldman Sachs. Never one to miss a bull market or dodge a bear market, Goldman joined a group of illustrious investors, including Accel, Baidu and the Chinese bank CICC in a $250 million financing round. Circle has made aggressive moves in the past months to acquire the Poloniex exchange, quickly adding new coins and alongside the USDC project the company has been putting the finishing touches on some retail products.
Not content with its plans to dominate the crypto space, representatives of Circle also found time to attend a cryptocurrency roundtable hosted by Congressman Warren Davidson at the end of September as lawmakers seek to get control over the nascent financial revolution. Is it possible that Goldman Sachs sees imminent crypto regulation and a flood of retail and institutional money appearing in the space? And is it a coincidence that the tether peg is starting to crack only weeks after the arrival of Circle’s own USD stablecoin?
Show us your dollars
Coincidence or not, tether is now backed into a corner and may be forced to show their hand on the claims that they hold enough assets to back the $2.25 billion market cap that sees the coin hold seventh spot in the cryptocurrency list. A refusal to do so may see an exodus to new stablecoins and a potential rout in the stablecoin. Tether have since released a statement to reassure investors that the dollar reserve, “…remains in surplus of the 1:1 backing of USDT and has more than the necessary currency on deposit to redeem all existing tethers.”
I don’t think they know how this game works!
IOTA looks set to announce another partnership in the automobile industry, this time with CarVertical, a company that is seeking to reduce used-car fraud by decentralizing ownership data.
The impending news release was announced on Twitter by CarVertical who promised both communities a “huge surprise” that will bring benefit to consumers through Internet of Things (IoT) technology. IOTA have branded themselves as “The first open-source distributed ledger that is being built to power the future of the Internet of Things.”
The CarVertical/IOTA is most likely an announcement that will see the car data firm utilizing the IOTA blockchain and although that news may not blow the minds of many in the blockchain community, it does at least highlight another use case for IOTA as they continuie to gain first-mover advantage in the potentially huge automobiles industry, while the rest of the crytpocurrency community seem to be chasing either big finance, or other small niche operations.
IOTA reeled in a much bigger fish in February of this year with an announcement that they would be partnering with the European car giant Volkswagen, to collect and evaluate performance data. The Digital CarPass service was later scheduled for release in early-2019 and it was noted that a further five pilot projects were underway. The link between all three companies is in the knowledge that CarVertical won a competition to incubate their start up in Volkswagen’s Dresden incubator.
Volkswagen has previously shown interest in ledger technology and the company has employed its own “Head of Blockchain” to spearhead their projects. The German company sees “enormous potential” in blockchain, which they expect to see used in areas such as “maintenance, logistics and self-driving vehicles.” One spanner in the works for IOTA was announcement last week that Volkswagen were partnering with Microsoft to create an automotive cloud system that will aim to provide seamless transition between vehicles and homes.
The tie-up between the two companies will also see VW set up a base close to Microsoft’s headquarters in Redmond, WA, where Microsoft will provide technical assistance and staff. This maybe highlights a potential drawback for IOTA in their attempts to dominate IoT, where they would end up competing with the might of a Microsoft.
IOTA is still the only large-scale crypto project that is targeting the automobile industry, which gives them first run at securing some valuable use cases and enticing the other car giants to use the technology. It’s possible that their blockchain could even creep into other IoT joint ventures like the one mentioned but for now they should seek to gain further traction in the manufacture and maintenance space.
IOTA are the first-mover in a valuable industry that nobody else is watching so it is currently theirs to dominate. That outcome is far from secured, but will be interesting to follow in the months ahead.
IOTA currently sits at number twelve in the list of coins by market capitalization with a value of $1.6 billion, only $250 million away from tenth spot.
0x has blasted higher as rumours of an imminent Coinbase listing appeared to be confirmed. Posting screenshots on a Medium article, users spotted that the ZRX coin had been added to the reporting section of the Coinbase platform.
ZRX was 16% higher on Monday as investors digested the news and anticipated a surge in volume through the addition to one of the largest and mainstream cryptocurrency exchanges.
The 0x protocol seeks to facilitate the the trading of any type of asset and have been prominent in gaming and prediction markets. In a Medium post in June, the project’s co-founder Will Warren stated their ambition to tokenize financial assets saying,
We envision a world in which all forms of value are tokenized on public blockchains. This includes fiat currencies, stocks, bonds, commodities, debt instruments, real estate, video game items, digital collectibles, software licenses, reputation and much more. …we can build a global financial system that is more efficient, transparent, and equitable than any system that has existed in the past.
ZRX has moved 50% higher from the September lows and is testing resistance near $0.80. Key resistance for ZRX will be around the $1.25 level.
ZRX may continue higher, however this rally highlights the short memory that traders often display. Despite an inital rally, Ethereum Classic (ETC) is 38% lower from its own Coinbase listing announcement in July, however we can give 0x the benefit of the doubt this time as the Ethereum blockchain has been under continued pressure with project’s like Tron surpassing Ethereum’s performance.
Bloomberg has reported that institutions are using a back door for cryptocurrency purchases and states that these investors may be more prominent than previously expected.
The report highlights that firms such as Hedge Funds have replaced large private investors for purchases of over $100,000. Circle, the Goldman Sachs-backed startup has also seen a rise in “over-the-counter” trades (OTC), with the company’s CEO Jeremy Allaire stating, “We’ve seen triple-digit growth enrolling in our OTC business… That’s a big growth area.”
The Bloomberg report added that, “Large buyers and sellers like private sales because transactions on exchanges can move coin prices. In a private sale, parties can fix the price in advance, instead of worrying about a sudden plunge or spike just as the transaction takes place.”
The key takeaway from this article is that smart investors are piling into cryptocurrencies and are doing so through private sales, in order to avoid volatility on the exchanges. The arrival of intermediaries to help instituions find suitable blocks of coins shows an imbalance between supply and demand and thus far this has not translated to price rallies. It may need regulation or a retail wave before we see big changes in price, however the arrival of the “smart money” hints that this development may be just around the corner.