CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
In spite of the low volatility and flat performance, bullish fundamental arguments continue to stack up for cryptocurrency. The crypto ecosystem continues to develop and mature. A few items we would point out:
1) Improvements In banking: Banking for crypto on/off-ramps has been a challenge since crypto's inception. Over the last 2 years that situation has improved drastically. Crypto-friendly banks such as Deltec and Silvergate provide reliable, professional backstops for the ecosystem while new large players such as JP Morgan announce initial forays into the space.
2) Exchange stress focus On derivatives: While there have been a number of regulatory flash-points we've pointed out around trading venues in past weeks, the focus has switched to derivative providers instead of spot exchanges. SEC and CFTC settlements with crypto currency app developer Abra and changes to the BitMEX user interface for certain regions have highlighted additional regulatory scrutiny on unlicensed derivatives providers in the digital asset space. This focus on derivatives, over spot exchanges, we believe is beneficial to the ecosystem. Crypto/fiat gateways provide an avenue to grow the crypto space with additional funds while many of these derivative platforms which focus on offering high-levels of leverage to retail investors, while providing important liquidity pools, add risk.
3) Growing avenues for procurement/spending: The ecosystem allowing crypto owners to use their currency as a form of payment has continued to mature. Mainstream payments firm Square was one of the key additions to the crypto infrastructure in 2019. Now it is reported that Paypal, which owns the popular Venmo app, will also follow suit. Beyond such channels the amount of major firms accepting crypto as payment in some capacity continues to grow.
While these represent some fundamental growth points within the crypto ecosystem, we have also written about the investment case for crypto in the face of ballooning Central Bank balance sheets and a post-Covid world.