Coinbase Acquires Xapo’s Institutional Business: “Institutions Are Depositing Between $200 and $400 Million per Week”

Andres Chavez
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Coinbase Acquires Xapo’s Institutional Business: “Institutions Are Depositing Between $200 and $400 Million per Week”

One of the missing ingredients for cryptocurrencies to become a mainstream phenomenon is, or was (depending on your stance on whether that has already happened or not) its adoption by institutions. According to the chief executive officer of a prominent crypto exchange, that has already materialized.

In his official Twitter account @brian_armstrong, Brian Armstrong, the CEO of Coinbase, stated that institutional adoption has become a reality, and that 2019 has showed a pretty obvious trend on that end.

“Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers,” was the first message he tweeted following the exchange’s latest business venture.

Coinbase Acquirs Xapo’s Institutional Business

Armstrong’s tweets came just after Coinbase Custody announced the acquisition of Xapo’s institutional business in recent hours. “Coinbase Custody is now the #1 crypto custodian for institutions! Excited to carry on the torch with Xapo’s institutional business, one of the great early crypto companies,” he wrote.

Xapo is known around the industry as a pioneer in crypto assets storage, developing security techniques that have kept its clients’ assets safe for five years now.

The move to acquire the global operations of storage firm Xapo provides Coinbase with a crucial boost, as it puts it on the top of the institutional manager list for crypto, with roughly $7 billion of assets under custody.

A “Tremendous Period of Growth and Innovation”

The acquisition, per Coinbase’s blog post, “caps off a tremendous period of growth and innovation for Coinbase Custody. In just over one year since launch, Coinbase Custody has grown to over $7 billion in Assets Under Custody (AUC) stored on behalf of more than 120 clients in 14 different countries.”

According to the published news release, the acquisition of Xapo’s institutional business makes Coinbase the “largest, most globally recognized and most trusted institutional crypto custodian in the world.”

The exchange also wrote that “from the start, our goal has been to build the trusted foundation for institutional investment in Bitcoin (BTC) and crypto assets in general. We’re thrilled to help enable some of the tremendous demand for this emerging asset class.”

The Future is Bright, According to Armstrong

Bitcoin recently experienced a furious bull run that say the price surpass $12,000. That run has somewhat stalled, but despite that fact, Coinbase and Armstrong specifically seems to believe that better days are ahead, in a moment in time in which various new institutional investment products are being greeted to the market.

Among the mentioned investment products are Bitcoin futures offerings, coming from Bakkt and Binance. “In addition to custody, we’re excited to explore new ways to monetize and leverage crypto assets such as staking, borrowing against crypto portfolios and lending crypto to trusted counterparties,” Coinbase wrote about its future plans.

By Andres Chavez

Correlation between Gold and Bitcoin Increases due to Tensions between the US and China

Willmen Blanco
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Correlation between Gold and Bitcoin Increases due to Tensions between the US and China

The correlation between both assets reached 0.827 at the beginning of August 2019. Analysts indicated that a similar pattern was recorded after the Brexit in the year 2016.

The correlation between gold and Bitcoin has increased in recent months, a pattern that could be related to the current tensions between the US and China. Analysts suggest that both gold and Bitcoin are being used as safe haven asset to limit their losses during periods of market instability and crisis.

At the time of writing this article, gold is priced at US $ 1,520.55 per ounce. On the other hand, Bitcoin currently is valued at more than US $ 10,340 per unit. Both assets have shown an increase in prices and marketing volume since May 2019, says Bloomberg columnist Tim Culpan.

The reporter highlights that these two markets have had similar behaviors in recent months, considering that this pattern does not occur randomly. The correlation between Bitcoin and gold last year was 0.496, according to Bloomberg’s calculations. However, since the month of May this correlation has increased to 0.827.

Culpan explains that if two markets have a correlation of 1 it would mean that both have exactly the same behavior. On the contrary, if this figure is expressed in -1, it would mean that two assets have totally opposite market behaviors. If Bitcoin and gold have a correlation of 0.827, I would imply that both markets have similar volume and value variations during the same periods of time.

Why is causing it?

The increase in the correlation between the gold and Bitcoin markets might be caused by the current trade war between the US and China, says Culpan. The residents of both nations, especially those of China, might be using both assets for the protection of value in the face of economic instability. This is a somewhat irrational idea, since the price of Bitcoin skyrocketed above US $ 11,700 after the fall of the yuan.

This is not the first time that the correlation between gold and Bitcoin has soared due to a global economic event. In 2016, both markets began to have similar patterns after the United Kingdom decided to leave the European Union (Brexit). At that time, it was already being speculated that Bitcoin could be an alternative safe haven asset, a hypothesis that seems to be confirmed with this second event.

In the document, Culpan notes that, despite the fact that these values ​​are not random, other events and market elements such as Tether trade also affect the price of Bitcoin. However, the increase in the correlation between Bitcoin and gold is a phenomenon that has been recently discussed by market analysts, who believe that the cryptocurrency par excellence is increasingly moving away from the altcoin market behavior.

All the data explained above could be indicating that a larger number of users prefer Bitcoin as a safe haven asset. This occurs in situations of social, political and economic instability, such as those in countries such as Venezuela and Zimbabwe.

By Willmen Blanco

Lottery Agency in Venezuela Would Pay Prizes in Cryptocurrencies

Maria Rodríguez
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Lottery Agency in Venezuela Would Pay Prizes in Cryptocurrencies

Lotería del Zulia will allow making the payments of the bet ticket and receiving prizes in Petros or Bitcoins, as it was announced by the governor of said State.

Recently, the Venezuelan Governor of the Zulia State, Omar Prieto, made an announcement at an event at the local mass media, communicating that Lotería del Zulia (Hereinafter, Lottery of Zulia State)Companywas relaunched. During said activity, Prieto announced that now, Petros (the national cryptocurrency) and Bitcoins can be accepted as a payment method for buying said lottery tickets. Also, the prizes with these cryptocurrencies will be claimed as well.

In addition to allowing the use of crypto assets in the sector, Prieto also mentioned that new games of chance will be activated to be in charge of the lottery store. These new games could be played through the virtualloto.com website. The governor also added that they are prepared to change the current financial mechanisms to give way to new technologies and, thus, avoid what he mentioned as “economic blockade against the people”.

According to several local media reports, the governor explained that “to overcome the blockade, it is necessary to innovate and create new financial alternatives”.

The new mechanism of payment and payment in cryptocurrencies for the lottery of that town is accompanied by the launch of updated and digital versions of gambling that were previously popular in the state, such as betting chips with animals, the so-called “Triple Zamorano” and “Triple Zulia”.

Need for Printed Tickets

In spite of this new digital modality, there is a great confusion since, for the lottery in the South American country, the laws specify that the lottery tickets must be printed to be valid in the territory.

Therefore, online bets do not appear to be contemplated in the law, since for the collection of the prize, participants must have a physical ticket that validates their participation in the draw.

About the online modality, it was known through a press conference made to local media that the association with Virtualloto.com is a novel measure that will allow citizens to access more than 68 games of chance on the web, including gambling live, something that will allow users to place certain bets in real-time.

Despite this association with the Zulia Lottery, it was not clear if this portal web will accept bets with cryptocurrencies or receive payments with Petros or Bitcoins.

This measure conducted by the local government is anchored to a series of movements supported by the national government to promote the use and flow of its official cryptocurrency (Petro) and improve financial alternatives.

Among other actions used by the government to support the use of Petro is to incorporate it into the flow of financial operations within the national bank. This measure was taken after the proposal made by the Superintendence of Cryptoactive and Related Activities (SUNACRIP) to the Superintendence of Banking Sector Institutions (SUDEBAN).

In this sense, SUDEBAN said that an association between exchange houses and financial institutions is necessary to attract potential clients and; thus, define other measures that authorize the installation of points of sale for cryptocurrencies in commercial establishments.

By María Rodríguez

IBM Will Patent a Browser that Will Use Blockchain ​Technology

Maria Rodríguez
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IBM Will Patent a Browser that Will Use Blockchain ​Technology

The new browser that IBM hopes to launch on the web will allow users to keep their data stored in a blockchain system and away from sharing it with companies and third parties

Currently, blockchain technology has managed to penetrate many sectors of society, especially in finance, thus promoting the ideal environment for the development of cryptocurrencies. However, this technology has made a difference in other aspects that are very important in sectors where information management is vital or in places where security must be improved when transmitting valuable data.

Little by little, this technology is taking a presence in previously unthinkable sectors. Blockchain has become something of important relevance in the support and management of medical records in the health sector, the improvement of information of outstanding students. Additionally, this technology is a great help to benefit the sustenance of education in vulnerable countries and it brings support to a payment platform for public and private transport in some countries.

Although this technology has brought many benefits in some sectors of the new industrial era, it has also been used for illicit purposes. It is for this reason that many large companies have dedicated themselves to improving their safety by investigating blockchain fortification.

For this reason, some companies that handle large flows of information due to their orientation towards technology have focused on researching and adopting these new advances.

Recently, the multinational technology company IBM announced that it has registered a patent related to a browser that will be powered using blockchain technology. This, according to the publication about the subject, will allow users of this browser to keep the data shared on the web in safekeeping. Therefore, blockchain would increase the protection of personal information on the Internet.

It is known that this new browser will have characteristics very similar to other blockchain management systems, that is, that it will have the Peer to Peer (P2P) network system, which will help the user to protect their information by generating data that will be transferred to their partners within a blockchain network intended for this browser. In this way, the data will be placed and confirmed within a specific block, this without the need for a centralized system that handles all the information.

According to information provided by the development team, using this browser will improve the privacy of users within a decentralized system which is directly protected by blockchain technology. This system does not need to be controlled by any company. It will improve the safety of those who use this tool.

According to the application for patent registration in theUnited States Patent and Trademark Office, it is explained that the new tool will keep all user information safe from third parties. “The present invention provides a system for storing navigation information so that privacy is preserved and placed in the hands of a user rather than in the hands of a third party”, it says.

By María Rodríguez

Spanish University Will Create a Blockchain System to Storage Large Size Data

Maria Rodríguez
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Spanish University Will Create a Blockchain System to Storage Large Size Data

This blockchain platform will allow having rapid access to data within the network, as well as facilitating the development of applications

According to recent data, the University of Alicante Foundation (Fundeun) will put into operation a project called BlockchainIND4.0, which has been approved by the AVI (Valencian Innovation Agency). The objective is to quickly promote the development of the application system within the network using BlockchainFUE, a public information storage network that is supported by the University of Alicante and its BAES Research group.

The Director of the Blockchain Lab BAES Interuniversity, María del Carmen Pastor Sempere commented, in a recent interview, that in the tests performed to stabilize the operation of the network, some defined parameters were established for each node, explaining its functionality. “Four validator nodes, two boot nodes and four client nodes with client API will be used. Once the tests are finished, the boot and client validator nodes will be expanded with all the foundations”, she said.

Pastor Sempere also talked about the companies that will be responsible for administering each node, so she explained that only foundations that have a data processing capacity will be in operation. These institutions will comply with all the requirements necessary to establish consistent security and required stability.

“Otherwise, they will be provided with a node hosted in one of the chosen data centers. The management of the nodes follows the same principle. The organization will have a security and management team available to foundations that need it”, she explained.

The Director talked about another aspect of the project. She talked about the main characteristics of this new network of blockchainIND4.0 and mentioned that “Blockchain BigchainDB 2.0 is configured to be able to keep arbitrarily large records”. In this way, users will have large storage capacity and large data processing.

Easy Access to Programming Interface

Among other details, it was explained that the system will have an Application Programming Interface (API), this will give access to the data and to the mechanisms that will give rise to compliance with the GDPR, (General Data Protection Regulation).

It should be noted that the plan is in perfect capacity to keep the nodes updated in speed and capacity so that the project has the necessary support to its characteristics, in terms of security and range of operations.

Among the main benefits that this network will have for companies that manage similar platforms is that this tool will allow easy access to the different programming interfaces that allow creating applications within the network and adapt the existing ones. Also, the main function of this platform is to provide quick access to the different indexed data, as well as to store records in JSON formats and cryptocurrency functions.

This new network will facilitate the Spanish application industries related to these fields and those focused on information networks and cryptocurrencies to improve the times for the development of blockchain tools. Among many other functions that will gradually be explored and expanded.

By María Rodríguez

Morgan Creek’s CEO Mark Yusko: “Bitcoin Is a Chaos Hedge, or Schmuck Insurance”

Andres Chavez
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Morgan Creek’s CEO Mark Yusko: “Bitcoin Is a Chaos Hedge, or Schmuck Insurance”

A common event, especially for novice traders and investors, is checking at the price of Bitcoin on a daily basis. Sometimes, they check it several times in a span of 24 hours, which is both mentally exhausting and time consuming.

Regarding that, Mark Yusko, who is the Chief Executive Officer at Morgan Creek Capital, shared his thoughts with news platform CNBC in the Fast Money space. The interview, aired this week, served Yusko to explain that it did not make a whole lot of sense to check the price every day.

A Store of Value, Not a Short-Term Asset

The aforementioned executive called Bitcoin (BTC) “chaos hedge, or schmuck insurance,” in the interview. As the journalist observed that people have been talking about the current bullish turn of the market and that there is an apparent correlation with international turmoil, she went on to say that turmoil is worse and BTC has also gone down.

Yusko’s replied that the point of Bitcoin was not about the daily price. “The whole idea of Bitcoin is it’s a store of value. It’s a chaos hedge, or schmuck insurance, as I like to call it,” suggesting that people need to look in the future and analyze long term trends and making it clear that it would be better to own a piece of the network.

According to Yusko, it would be a wise decision for any investor to embrace Bitcoin’s role as a counterweight agent to regular, more traditional financial markets. That is what he refers to when he calls BTC a store of value or, in his own words, chaos hedge.

A Hedge against Market Problems

Regarding that, he stated: “You want to have 1, 2, 3, 5% of your net worth in this asset as a hedge, against all the problems that we see in the fiat markets and the equity markets.” He thinks that BTC must be seen as insurance when the markets go down or crash.

In the interview, Yusko explained that he believes the American bond market is similar to a bubble, and it is about to explode.

Yusko is famous around the industry for his stance. In May, he observed that Bitcoin needed to be included in every investor’s plan, in a time that has seen BTC’s prominence soar. However, some notable personalities in the business world have projected a conservative stance and have backed out of cryptocurrency investments.

A Famous Bitcoin Bull

He is famously bullish on Bitcoin. Earlier this summer, he highlighted that Bitcoin holds the potential to reach as high as $100,000 in 2021, with the possibility of going even further in the upcoming years.

It is noteworthy, however, that Yusko’s remarks about investing up to 5% of a person’s net worth seems somewhat conservative, at least in comparison with those ones from the Founder of Morgan Creek, Anthony Pompliano, who has revealed that over 50% of his net worth is stored in BTC.

At the moment of writing this piece, Bitcoin was by far the most prominent digital asset and was exchanging hands at $10,327.12, following a 1.74% price gain in the last 24 hours, with a trading volume of $184,635,875,644 in the last day.

By Andres Chavez

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