These are surely good times for Stabelcoins. The world’s largest economy’s banking regulator.
In a detailed letter released yesterday, permitted national banks to hold reserve currencies for stablecoins (Tether, Circle). The letter which was released by the Office of the Comptroller of the Currency (OCC) responds to questions regarding the application of stablecoin-related bank activities. It concludes that national banks and federal savings associations may hold “reserves” on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets.
“National banks and federal savings associations currently engage in stable coin-related activities involving billions of dollars each day,” Acting Comptroller of the Currency, Brian P. Brooks, said. “This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”
The letter addresses the use of stablecoins backed by a single fiat currency on a one-to-one basis, where the bank verifies at least daily that reserve account balances meet or exceed the number of the issuer’s outstanding stablecoins.
What are Stablecoins?
Stablecoins are cryptocurrencies created to minimize the price swings that occur in a crypto asset. They are usually pegged to fiat currencies and often exchange-traded commodities.
Stablecoins give owners a sense of security as users can store their assets whenever there is high volatility in the crypto-verse or other financial markets.
Consumers can also with great ease convert from unpegged cryptocurrencies to stablecoins when they are worried about where the markets are heading next, eliminating the need to return to a fiat currency.
These conversions can also be less expensive than when switching between crypto and fiat, as it takes the transaction fees of payment processing providers and banks out of the equation.
Global Investors and traders are using it to give their investment portfolios exposure to the US Dollar during these times when uncertainty is high, as a result of the worst pandemic (COVID-19) known to man.
Sequel to this landmark statement, Nairametrics about a month ago, detailed the importance of stablecoins in modern-day finance.
“Stablecoins like Tether are particularly useful for capital flight, as their USD-pegged value means users selling off large amounts in exchange for their fiat currency of choice can rest assured that it’s unlikely to lose its value as they seek a buyer,” Chainalysis said in the report.
Most profitable asset in a decade, Bitcoin up over 26,600,000%
Bitcoin, from $0.06 in September 2010 exploded to its current price of around $13,000, representing a surge of over 26,600,000%.
The odds are now playing strongly in favor of the world’s most popular crypto – Bitcoin.
Data retrieved from a well-known crypto custodian firm Blockchain showed how Bitcoin from $0.06 in September 2010 exploded to its current price of around $13,000 – representing a surge of over 26,600,000% in a span of 10 years.
Meanwhile, the same couldn’t be said about its closest performing rivals, which included the Yellow metal and the S&P 500, which climbed 103% and 233% respectively over the same stretch.
Why this matters
The flagship crypto seems to run hot on many prevailing macros, not forgetting that the general economic law states that when demand is high and supply is limited, prices of such products will usually go up.
- Bitcoin has established a robust support level at $13,000,
- It should also be noted in the past few years, that Bitcoin holders are refusing to sell and instead use it for wealth preservation.
- Also, another strong sign giving crypto traders bullish bias include Bitcoin’s Active Supply 3y-5y (1d MA) just reaching a 23-month high of 1,840,755.050 BTC, as seen from Glassnode – a popular analytic firm
A previous 23-month high of 1,840,745.362 BTC was observed earlier today.
What this means
Nairametrics earlier broke the news on how the world’s flagship crypto continues to gain traction at the speed of light. The renowned financial data media company, Bloomberg Intelligence, gave critical insights on why bitcoin, in just about five years’ time, could hit a valuation of $100,000.
“Bitcoin’s foundation is firming for further price advances if its history is a guide. Since initially reaching $10,000 in 2017, the benchmark crypto corrected about 70% and remains in an extended period of consolidation around that level,” the report said.
Why U.S biggest Bank, JP Morgan Chase is bullish on Bitcoin
America’s JPMorgan Chase has given valuable insights on why it believes the odds are with Bitcoin.
America’s biggest bank, JP Morgan Chase, recently released a rare statement on the world’s flagship crypto, where it said that Bitcoin has what it takes to challenge gold’s status as the go-to alternative financial asset.
When compared to other financial assets like gold and crude oil, Bitcoin looks relatively small, considering that it has a market capitalization of $242 billion, compared to the precious metal’s (Gold) $2.6 trillion market value. However, this means the crypto has more room for upside and can potentially compete with gold as the preferred alternative currency.
In a report credited to Business Insider, America’s most valuable bank, JPMorgan Chase, gave valuable insights on why it believes the odds are with Bitcoin to keep rising in value.
“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price,” JPMorgan Chase said.
And over time, Bitcoin could be held for other reasons such as for making payments, not just for being a store of wealth as gold is, according to JPMorgan Chase.
“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value,” JPMorgan Chase explained.
What you should know
It’s important to note that such a bullish call by an American elite bank is coming on macros that BTC has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2 million left to be mined.
- Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs’ owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15 million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins. This means that as BTC becomes scarce and more popular, it is only a matter of time before crypto asset valuation will hit the roof.
- As the general economic law states, when demand is high and supply is limited, prices of such products usually go up.
- Another strong fundamental increasing the odds on the world’s most popular crypto is that it’s almost impossible to forge, and has strong durability characteristics.
- Thanks to its complexly designed decentralized blockchain network, it will take you more than a supercomputer to make such an attempt. Also, you have to confuse all players in the blockchain network, in accepting such forged digital coin.
$100,000 bounty offered to catch crypto hacker
Harvest Finance, a major decentralized finance protocol, has recently tagged a $100,000 bounty as a result of a $24 million attack.
Harvest Finance, a major decentralized finance protocol, has recently announced a $100,000 bounty, as a result of a $24 million attack targeting its liquidity pools.
In a recently released tweet seen by Nairametrics, Harvest Finance disclosed there is enough data so far to identify the attacker, “who is well-known in the crypto community.”
“Also, for the BTC addresses which hold the funds, there is now a significant amount of personally identifiable information on the attacker, who is well-known in the crypto community.
“We are putting out a 100k bounty for the first person or team to reach out to the attacker,” Harvest Finance tweeted.
Why it’s happening
Harvest Finance’s $100,000 bounty is coming on the back burner when it observed its protocol was apparently hacked, with the cyber hacker reportedly exploiting about $24 million from Harvest Finance pools and swapping for renBTC (rBTC).
Hence, Harvest Finance affirmed the hack, stating the protocol is “working actively on the issue of mitigating the economic attack on the Stablecoin and BTC pools.”
The report reads,
“We are working actively on the issue of mitigating the economic attack on the Stablecoin and BTC pools and will update this thread in realtime as soon as additional details are available.
“The economic attack was performed through the curve y pool, stretching the price of the stablecoins in Curve out of proportion and depositing and withdrawing a large number of assets through harvest.
“To protect users, we’ve pulled y pool and btc curve strategy funds to the vault
“At this point, all Stablecoin and BTC funds are in the vault (not deployed in a strategy). No other pools are affected.
“To be specific: to protect users, 100% of Stablecoin and BTC curve strategy funds have been withdrawn from the strategy to the vault.”
What you should know
Harvest, a new (DeFi) platform created on the Kava blockchain, plans to launch a product that will enable users to earn more on Bitcoin, XRP, Binance coin, and two other cryptos.
Harvest offers crypto users the platform to supply crypto assets for lending, and earn interest on them, as well as, use their crypto as security for borrowing,; this is according to Brian Kerr, Kava’s co-founder and Chief Executive.