There are around USD 8.5 million worth of tokenized bitcoins on Ethereum platforms. There are at least four forms of tokenized bitcoins on the Ethereum network.

The decentralized finance (DeFi) ecosystem is increasingly growing on Ethereum. The number of tokens with the support of Bitcoin that traders use on their platforms is doing so too. There is already a total of 169,991 tokenized bitcoins (about USD 8.5 billion) on the Ethereum network.

Data from analytics firm Arcane Research and the Bitstamp exchange indicate that this figure represents an increase of 3.175% since June 2020. Since then, there were just over 5,000 tokenized bitcoins on the Ethereum blockchain until a few days ago.

Those figures appear in the report “Banking on Bitcoin: The State of Bitcoin as Collateral.” There, the firm delves into the use of the pioneering cryptocurrency as collateral in loans, derivatives trading, and the DeFi ecosystem.

According to the researchers, users are increasingly interested in using their bitcoins as collateral, rather than spending or selling them. For that reason, the amount of bitcoins deposited on platforms that use that support for the “vast DeFi ecosystem” has grown significantly.

Analysts say that there is not only the possibility for users to use their bitcoins without selling them directly. They conclude that the growth of this industry “has incentivized users to tokenize their bitcoins on Ethereum”. In this way, they will be able to “use them as collateral in the wide range of services that the different DeFi platforms offer.”

Different Types of “Bitcoins” Are at the Service of DeFi

There is currently a great diversity of platforms that offer DeFi services on Ethereum. Furthermore, the ways of handling Bitcoin as collateral vary, always with the support of tokens under the ERC-20 standard.

Arcane Research mentions four types of Bitcoin collateral in Ethereum DeFi: custodial, hybrid, synthetic, and decentralized. Three of them have the direct support of Bitcoin, but the basic difference lies in the way to protect them.

Most of the bitcoins in the DeFi ecosystem belong to the category of third-party custody-supported tokens. According to the research, 70% of the bitcoins in DeFi belong to WBTC (wrapped BTC).

“Using Bitcoin as collateral in DeFi is less straightforward than in centralized loans.” However, most of the supply of WBTC is currently running on DeFi lending platforms, according to the study. The Compound, MakerDAO, and Aave protocols dominate this market, with almost 50% of WBTC deposited on their platforms.

There is a growing trend of Bitcoin users choosing to use their funds as collateral, without spending or selling them. The Arcane Research report estimates that there are already more than 400,000 BTC pledged on centralized loan platforms.

The total number of bitcoins serving the DeFi ecosystem and their percentage growth show the relevance of the pioneering cryptocurrency. It is no surprise that the first cryptocurrency maintains the dominance of more than 60% of the cryptocurrency market capitalization. That is despite the growing number of this type of assets, of which there are more than 8,000 to date.

By Alexander Salazar

The recent red candlesticks rangeup to USD 10,000 of difference. Bitcoin reached a new all-time high above USD 58,000.

In recent days, the cryptocurrency market became red as the price of Bitcoin (BTC) had a correction of more than 20%. The pioneering cryptocurrency fell from USD 57,500 to less than USD 45,000 at its lowest point.

Bitcoin had the worst red candlesticks in its history, ranging over USD 10,000 between its highest and lowest points. In one day, the candlestick was still above USD 9,000, according to market data from TradingView.

In a single day, the price of Bitcoin hovered between USD 54,000 and USD 44,845, the latter being its lowest point. Although it rebounded to around USD 47,000, the drop remained more than the previous day.

Those two candlesticks had a greater range than the largest green candlestick in history. On that occasion, the price of Bitcoin rose by more than USD 8,000 in one day, remaining the most profitable day for the cryptocurrency.

The current correction has seen Bitcoin drop by more than 18% from its most recent all-time high above USD 58,000. However, it remains above the price that it reached on February 9^th with support above USD 40,000.

More than USD 2,000 Million worth of Bitcoin Are Liquidated in One and a Half Days

Bitcoin maintained a powerful bullish pace for days, so its correction seems to have taken everyone by surprise. In just 36 hours, more than USD 2 billion in long positions in the Bitcoin derivatives market were liquidated, according to data from ByBt.

Since it is a prediction market, the user speculates on positions, predicting price movements in certain time ranges. In this case, the trader risks his capital if the price of Bitcoin contradicts his prediction.

When the crypto asset exceeds a certain price in the opposite direction to what is expected in the position, the risk capital is liquidated in favor of the platform. In recent days, thousands of long positions were liquidated due to the fall of Bitcoin in a short time.

Given that the vast majority of cryptocurrencies have maintained their correlation with Bitcoin’s behavior, they have also fallen considerably. Considering the cryptocurrency derivatives market, the long positions liquidated amount to more than USD 5 billion in just a day and a half.

The first week of January, there was a record of liquidations of bullish positions on Binance. At that time, almost USD 200 million were liquidated on the platform in a period of just 10 minutes. There was recently a liquidation of more than USD 270 million in 15 minutes. In that same period, another USD 177 million were liquidated on the Huobi exchange.

A “Healthy” Correction for Bitcoin

Analysts see this sudden drop as a necessary correction for this Bitcoin bullish cycle. Trader and market analyst Peter Brandt said that a 20% correction “may be enough for the market to be healthy again.”

Additionally, he calculated possible levels of a larger correction, up to 35%. He referred to corrections from last bullish cycle, which culminated in Bitcoin’s all-time high near USD 20,000 in 2017.

Brandt estimated that Bitcoin could finish correcting to about USD 37,938. However, he considered that USD 41,986 could be a good entry price before Bitcoin resumes its bullish trend.

Willy Woo had previously assessed this stage as the consolidation phase of Bitcoin as an asset of USD 1 trillion by market capitalization. The recent correction brought Bitcoin below that level again, but the total bitcoins in circulation could again be worth above USD 1 trillion.

By Alexander Salazar

Between the end of 2019 and 2020, the amount of BTC as collateral doubled. In a year and a half, the volume of the loan market has grown 1,170%.

Bitcoin as collateral or guarantee for loans on centralized platforms is now an overall operation. Currently, more than 2% of the bitcoins in existence would serve this purpose.

The figure, which represents about 420,000 bitcoins (BTC) or about USD 20,000 million, comes from the report “Banking in Bitcoin: the status of Bitcoin as collateral.” In this study, both organizations studied the leading cryptocurrency uses on the market as collateral to serve various purposes; among them the loans, decentralized finance platforms (DeFi), and derivatives trading.

During the first-mentioned period, the total of bitcoins in this market did not reach USD 2 billion, while by the end of last year, the amount was equivalent to more than USD 24 billion, highlights the report with data from Credmark. This company follows the cryptocurrency lending ecosystem.

These Secured Loans are Also Available to anyone who can Meet the Collateral Requirements

The study notes that “there are several reasons why bitcoin and cryptocurrency loans have grown over the years.” But it particularly highlights the fact that it is a mechanism that grants total access to loans more quickly and easily “than going through a bank and mountains of paperwork.”

These secured loans are also available to anyone. Such loans only need the collateral requirements. There is no need for credits or any other evaluation from the user’s bank, making loans available to more people. These are also available worldwide, and users don’t need a personal relationship with their local bank to receive a loan.

Those users that can access these loans are not necessarily asking for money for daily expenses. Among multiple reasons to use bitcoin as collateral for loans, Arcane Research sees that many users are looking for credit without selling their holdings of bitcoin or other cryptocurrencies.

By receiving a loan in dollars, either fiat or through a stablecoin, the user avoids selling their bitcoins directly. If the price suffers an increase, that user will have managed to increase their BTC position once they pay off the loan.

The BTC secured loan ecosystem is not exclusive to small users. The institutional sphere has also played an important role, as the report points out. This sphere also includes exchanges in the cryptocurrency ecosystem, which use this mechanism to maintain liquidity.

Variety of Lending Platforms with Collateral in Bitcoin

Research from Arcane Research also points that a variety is growing in centralized platforms offering collateralized loan services in bitcoin. Some centralized platforms are more significant than others. Users have plenty of options. Some of these platforms serve as the provider of services at the institutional level, while other companies focus on a particular market; Companies such as BlockFi, Nexo, Celsius, Len, Coinloan, LendingBlock, Unchained Capital, YouHodler, or Genesis, pioneers in this industry’s panorama.

In this scenario, Genesis stands out due to its growth in 2020. According to the report data, this platform had a year-on-year increase of 245% in its loans during the past year.

By: Jenson Nuñez

The Federal Reserve and the US Treasury will join forces to create a CBDC. With a digital dollar, the FED would respond to the excitement this move would provoke around bitcoin.

Jerome Powell, the Federal Reserve (FED) president, treats the digital dollar as a “high priority project.” Powell confirmed in a hearing before the Senate Banking Committee that there is a high chance for the United States to issue its central bank digital currency (CBDC). Several nations worldwide are also considering the same fact.

Powell believes that approval from the US Congress will be a requirement to develop a digital dollar. Although “it is unclear until we see in which direction we are going.” But Powell was convinced that 2021 would be a crucial year to move forward with this project.

The FED president also added that there are political and technical elements to solve before launching this nature project. He said: “A public dialogue is going to happen.” This dialogue intends to ​​know the position that all the groups interested in the project could have.

Powell acknowledged that a digital dollar could contribute to greater financial inclusion. Still, his concern seems to revolve around the fact that today’s the United States has a functioning banking and monetary system and a strong capital market. He stated that the Fed must be careful by creating a digital dollar.

In October of 2020, the United States seemed quiet about issuing its digital version of the dollar. Powell pointed out that it was more relevant to focus on studying the risks better than to be the first to publish a CBDC. However, at that time, some said that “something” would end up replacing the US currency as a global store of value.

Most Americans Can’t Access Simple Payment Systems or even Bank Accounts

Jerome Powell’s firm position regarding the issuance of a digital dollar; his work relates with Janet Yellen, the Secretary of the treasury of the United States, who, on Monday, February 22, claimed to be in favor of keeping the research and the seeking of the possibility of a CBDC.

“It makes sense for central banks to look at it [CBDC],” he said, as reported by Forbes. “We have a financial inclusion problem. Too many Americans do not have access to simple payment systems or bank accounts, and I think a digital dollar could help. I think it could lead to faster, safer, and cheaper payments,” Yellen said.

Yellen also sends some suggestions about how the digital dollar could be appropriate for the FED to respond to the excitement that circles around bitcoin, both for its new historical price records and the announcements of large companies such as Tesla, Square, or Microstrategy of invest in cryptocurrency.

In any case, everything seems to show that a partnership between the Federal Reserve and the US Treasury could be happening to create a digital currency that the central bank could issue without obstacles.

By: Jenson Nuñez

In addition to bitcoin, it will trade cryptocurrencies such as Ether, Bitcoin Cash, and Tezos. Bordier & Cie bank promises access to a wide range of products linked to digital assets.

The Swiss private bank Bordier & Cie SCmA, an institution working for 177 years with traditional banking services, is currently considering the massive demand for cryptocurrencies and decided to take a step towards the future of finance by exploring the bitcoin market.

The bank, whose foundation took place in Geneva in 1844, recently joined the B2B banking platform Sygnum Bank, one of Switzerland’s first banks that trade digital assets.

To make it easier to develop new services, Sygnum will incorporate its system into the Bordier platform that offers crypto assets. In this way, traditional bank clients will find it easier to buy, sell, exchange, and protect cryptocurrencies like Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Tezos (XTZ).

“With this, Bordier speaks for a more solid offer that includes strategies regarding trading with options, and the chance of investing in assets that were previously hard to reach through tokenization,” the company reported in its statement published on February 24.

The Growth of the Bitcoin Market Attracts More Traditional Companies

After seeing the total value of the cryptocurrency market grow almost four times in 2020, reaching a trillion dollars and motivated by the great demand for these assets, the association between Bordier and Sygnum has managed to complete the project in 60 days, the note says.

The platform also includes research, education, and access to a wide range of digital asset products. Besides, it offers custody of private keys, connectivity with liquidity providers, anti-money laundering digital assets, and transaction monitoring. In this case, Sygnum provides its knowledge in digital assets, while Border participates with the customer service experience.

“Bordier continues its 177-year tradition of keeping safe client wealth for future generations by offering the ‘next generation’ of assets to its clients,” said Mathias Imbach, CEO of Sygnum Bank Group.

Crypto industry and its Increasing Acceptance in Switzerland

Several Swiss banks and institutions have chosen to join the digital assets world and take advantage of its financial improvements. A good example was the partnership between Julius Baer, ​​a traditional bank, and SEBA Crypto AG.

Digital assets have a good reputation as financial products on the stock exchanges of Europe and other parts of the world. Every day, new institutions take part in a movement that no longer looks like just a trend but a profound revolution within the financial system worldwide.

On the other hand, there is a relevant case. The former Swiss financial institution Lombard Odier, which in 2020 created a fund, works with a service that solely focuses on the tokenization of real estate assets, companies, and copyrights. The transactions can even get registration in a blockchain.

By: Jenson Nuñez