Proof that crypto is bigger than just price
2nd August 2021 |
Two weeks is a long time in crypto. And unless you’re constantly on the beat, it’s easy to miss some of the more significant positive pieces of news.
As I regularly remind you, the crypto market right now is more than just “What’s the price of bitcoin?”
The development and progress in the crypto markets tells a richer story which I believe will lead the whole space to bigger and better things.
If it plays out as I expect, the prices of cryptos will take care of themselves.
So to show you exactly what I mean, take a look at just some of the things in the last two weeks that have been developing…
Amazon lists a job for a “Digital Currency and Blockchain Product Lead”
This job posting you can see here is a pretty significant sign Amazon is at least trying to figure out how digital currencies and blockchain networks can fit into their wider product offering.
This did also lead to speculation Amazon was about to imminently start accepting bitcoin. That speculation was quashed pretty quickly. But it’s not a stretch to think at some point in the shortish-term that must be on the cards.
German institutional funds are now allowed to hold as much as 20% of their assets in cryptocurrencies
Spezialfonds are German funds that are only available to institutional level investors like pension funds and insurance companies.
A law was passed in July which means that, as of 2 August, these funds can now directly get into crypto.
While I expect that those that choose to do so will first look to bitcoin, others may become involved with other large and well known cryptocurrencies as well.
Goldman Sachs filed an application with the US Securities and Exchange Commission (SEC) for a new “Innovate DeFi and Blockchain Equity ETF”
This is good and bad. It’s good because, on the face of it, Goldman Sachs is looking to open access for investors to this entire industry and the companies around it.
The bad is that it’s not going to be direct crypto holdings. As the application outlines, the themes of the investment strategy will be,
Blockchain Technology is defined as the technology underlying distributed ledgers applicable to payments, currencies and other fields and industries that depend on a trusted intermediary. Digitalization of Finance is defined as the digital transformation of traditional financial services, including the support and delivery of payments, transaction services, lending and insurance.”
That means they’ll likely be investing in blockchain-focused listed companies. And probably fintechs – technology companies which do things that were traditionally the exclusive preserve of traditional financial institutions.
DeFi – which stands for “decentralised finance” – actually seems to mean “digitisation of finance” over at Goldman Sachs.
In other words it seems the ETF name is a PR stunt using “DeFi” to attract investment. But the reality is this will be a more traditional ETF, albeit at least focused on companies that are likely active in or near the crypto world.
So, the initiative combines both good and bad…
Crypto exchange FTX raised $900 million in funding to give it a valuation of $18 billion
FTX is a crypto exchange with its own token, the FTT token: it is what I consider to be an early mover in the future of exchanges, markets, investing and trading for everyday investors.
FTX straddles both the crypto economy and, with this capital raising, the traditional economy as well.
That’s not a bad thing: this kind of capital injection gives FTX huge scope to expand, grow and ultimately to become a global giant.
It’s further proof that traditional money, big institutional and venture capital money is more willing than ever to get involved in the crypto space and to back exciting promising projects.
It’s also for that reason why I’ve decided to add a new “Crypto to Know” in our growing list…
New Crypto to Know – FTX.com (FTT token)
FTX is like Binance: it is a cryptocurrency and digital assets exchange.
You can find the exchange website at ftx.com.
FTX has exploded in popularity and usage in the last two years. The exchange only came into existence in 2019.
What has helped its meteoric rise to fame is the kinds of trading tools and products that have been offered to users.
What makes FTX quite unique is that it has created all kinds of markets for investors to access.
What helped bring a lot of attention and growth to the exchange was the implementation of prediction markets.
For example, during the 2020 US presidential elections you could actually trade a “TrumpWin” or “TrumpLose” token. The value of the token that was correct would be redeemable for US$1.
The value of these tokens would swing depending on the likely outcome of the race.
So for instance, when early results started coming in showing a lead to Trump and a likely win, the TrumpWin tokens were close to $1 par value and TrumpLose tokens were trading for cents.
However, as the postal votes started coming in and slowly but surely it looked like Trump would lose, the value of the tokens swung the other way delivering multiple-times upside for those who had bought TrumpLose tokens low.
Eventually those holding TrumpWin tokens at the end of it all had their tokens redeemed for $0 and TrumpLose tokens were redeemable for $1.
That’s just one example of how FTX has been able to provide innovative token markets for trading.
Another huge drawcard for FTX (in addition to their crypto markets) has been tokenised stocks.
That idea of tokenised stocks is relatively new and novel. With FTX you can trade tokenised versions of the actual stock. The stock itself is backed by shares in the actual company held in custody by a company in Germany (CM-Equity).
For example you can trade tokenised Square Inc. stocks on the platform. Square is Jack Dorsey’s publicly listed payments company.
The Square stock you trade on FTX is a tokenised version of the actual stock held in custody. But if the stock price of one Square stock is $239, you could buy 0.1 Square stock if you wanted, which would be $23.9 worth.
This new approach to stock trading and investing in conjunction with crypto trading and investing is something that, we think, has a lot of potential.
It also opens up traditional markets to people who perhaps would otherwise not have access or funds to invest in some of the world’s biggest companies.
FTX could grow into a hugely important part of not just the crypto world, but also the traditional market: it can bridge the two and create one of the world’s biggest and most valuable exchanges.
Considering the size of Binance (around $55 billion current market cap, based on current circulating token supply) FTX at just $3.4 billion current market cap might just prove to be one to watch over the next year or two.
For these reasons we’re adding FTX and the FTT token (the platform’s native token) to our crypto to know list.
You can find more info on FTX platform , the FTT token and the kinds of markets they offer here.
And you can find and access the site here.
“Crypto to Know” watchlist
- Bitcoin – bitcoin.it/wiki/Main_Page
- Ethereum – ethereum.org/en/what-is-ethereum
- IOTA – docs.iota.org
- Tezos – tezos.com/get-started
- Uniswap & 1inch – uniswap.org/faq & help.1inch.exchange/en
- Filecoin – docs.filecoin.io
- Cosmos – v1.cosmos.network/intro
- Binance – binance.com/en/about & research.binance.com/en/projects/bnb
- FTX – ftx.com & help.ftx.com/hc/en-us
Sam Volkering
Editor, Sam Volkering’s Crypto Network
