Autor Cointelegraph By Brian Newar

Terra founder reveals what will happen to UST if Bitcoin price crashes

Terra founder reveals what will happen to UST if Bitcoin price crashes

Uverejnil používateľ | apr 1, 2022 |

Terraform Labs CEO Do Kwon has conceded that a crash in the price of Bitcoin (BTC) would be “negative” for the stability of the TerraUSD (UST) stablecoin but that he expects Bitcoin to go up.Terraform Labs is the entity behind the Terra blockchain platform which plans on buying a total of $3 billion BTC as a reserve for UST. Kwon made the comments in an interview on the Unchained podcast on Tuesday. Host Laura Shin asked Kwon what the short-term implications of holding so much BTC will be for the stability of UST. Kwon said “the worst case would be if we were buying Bitcoin and a crash happens six months later, and it’s correlated with a massive fall in demand for UST,” which would be, as he modestly put it, “negative.” However, that scenario isn‘t keeping him up at night:“I’m sort of betting that the long term scenario of Bitcoin going up and the reserves being strong enough to withstand UST demand drops is the more likely scenario.”Kwon has been buying Bitcoin to hold in Terra’s treasury as 40% of the collateral for UST. So far, Terra has acquired 30727.9 BTC and most recently purchased 2,943 BTC on Tuesday. This makes Terra the third-largest single-wallet BTC holder. Crypto YouTuber danku_r argued to his 54,000 followers in a Wednesday tweet that the addition of BTC to Terra’s treasury would help mitigate the impact of a sudden retraction in UST demand. He said that Terra’s move would help avert a “death spiral due to market uncertainty” by helping the treasury “swallow the supply contraction of UST.”One of Kwon’s stated goals for the treasury, known as the Luna Foundation Guard (LFG), is to make Terra “the largest single-wallet holder of BTC.” In order to dethrone the current leader, Michael Saylor’s MicroStrategy, Kwon will need to amass more than 125,051 BTC, according to Bitcoin wallet tracker Bitcoin Treasuries.According to @stablekwon, @terra_money is a Layer 2 solution for BTC where “Bitcoin only needs to be good at being one thing, being an asset.” What do you think – will Terra be the layer 2 for bitcoin?Episode link: https://t.co/T2nVfg7VyC pic.twitter.com/Thi9nVKUHv— Laura Shin (@laurashin) March 31, 2022Later in the interview, Kwon lived up to his reputation as an instigator by proclaiming that Terra is a layer-2 solution for the Bitcoin network. He argued that with Terra, Bitcoin has a bridge that allows it to be used “across a multitude of applications from DAOs to NFTs to DeFi.”“And in terms of the expressivity, the transaction capabilities, the throughput, all those things can happen on Terra.”Related: ‘Hold my beer’ — Terra already up $165M from buying Bitcoin as BTC stash nears Tesla’sKwon’s comment drew the attention of the crypto community. In a tweet, Ethereum developer antiprosynthesis responded by asking if all entities that use BTC to back a stablecoin should be considered layer-2 solutions. He said, “Even I don’t believe that Bitcoin‘s standards have plummeted to such extent.”A layer-2 solution helps a layer-1 blockchain to scale up its operations by moving many transactions to an alternate network to reduce congestion.BTC is trading at $44,463, down 5.61% over the past 24 hours, according to Cointelegraph Price Index.

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VanEck says Bitcoin could hit $4.8M if it became the global reserve asset

VanEck says Bitcoin could hit $4.8M if it became the global reserve asset

Uverejnil používateľ | apr 1, 2022 |

American investment firm VanEck believes that Bitcoin (BTC) has double the upside of gold and could be worth as much as $4.8 million per coin if it becomes the global reserve asset.That’s a big “if” of course, and VanEck thinks the Chinese yuan is a more likely contender.The lofty assessment for BTC came in a Thursday insights piece written by VanEck’s head of active EM debt Eric Fine and chief economist Natalia Gurushina, who attempted to compare the price implications for gold and Bitcoin if either were to be adopted as the backing for global currency regimes.VanEck’s analysis found that the implied price for BTC ranged from $1.3 million to $4.8 million. The lower prediction was based on BTC as a monetary base (M0), which investment database Investopedia says includes all circulating supply of a currency and bank deposits but is not a common marker for economists to look at. One colleague’s view. Interesting analysis. https://t.co/Ua7vTqPU1w— Jan van Eck (@JanvanEck3) March 31, 2022The higher prediction came from the more common M2 assessment, which Investopedia considers to be a measure of the money supply that includes all bank deposits with a currency and its ability to be converted into cash. In their assessment of gold’s per-ounce price, Fine and Gurushina leaned more toward the M0 price prediction of $31,000 as a reliable starting point because “a very big number of central banks have little or no reserve gold.” The lack of deposits skews the M2 prediction to a much higher and less reliable $105,000 per ounce of gold.Recent geopolitical unrest has already led Russia to consider using different currencies including Bitcoin to transact for oil with their “friendly” partners China and Turkey. The trend could apply to more nations’ central banks, and likely see the United States dollar’s dominance take a hit. Fine and Gurushina believe that the Chinese yuan should be considered the top prediction for a new reserve currency, but nations will probably reshuffle their holdings no matter what.“Central banks are likely to change their reserve mix to the detriment of dollars (and euros and yen) and the enhancement of something else, to one extent or another […] As a result, some central banks — and private actors — will be diversifying their reserves.”The analysts urged readers to bear in mind that the predictions are merely starting points for investors to formulate a framework for how to value gold and BTC in the extreme instance either becomes a global currency. It noted that there are alternatives such as finite real estate, infinite equities and even emerging market currencies that could serve the function of gold or BTC. Related: SEC pushes decisions on WisdomTree’s and One River’s applications for spot Bitcoin ETFsVanEck has a stake in the crypto industry with its Bitcoin Strategy exchange-traded fund (ETF), which is a Bitcoin futures exchange-traded fund that has $30.1 million in total net assets. The firm also recently filed with the Securities and Exchange Commission (SEC) to launch a new ETF that focuses on gold mining and crypto mining companies.

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Washington state passes bill aiming to expand local blockchain adoption

Washington state passes bill aiming to expand local blockchain adoption

Uverejnil používateľ | mar 31, 2022 |

Three years and one veto after it was first proposed, Washington state Governor Jay Inslee has signed a bill into law today that aims to expand the state’s adoption of blockchain technology across various financial and industrial sectors.The law saw Governor Inslee order the formation of the Washington Blockchain Work Group which will “examine various potential applications for blockchain technology.” The Work Group will be composed of seven government officials and eight leaders of various trade associations across the state. It will study practical applications of blockchain technology and present a report on its findings to Governor Inslee by Dec. 1, 2023. Republican Senator Sharon Brown, who originally proposed the bill, stated in an announcement that Washington state is showing that it’s ready to utilize blockchain technology “for the benefit of all Washington residents, employers, and workers,” adding:“This new law is a vital first-step in creating an environment that is welcoming of new business prospects, eager to seek out new applications, and willing to identify potential supply-chain management and STEM-education opportunities.”This bill has had a turbulent history through the state’s legislature. It was first proposed in the Senate in 2019, but was eventually vetoed by the governor in April of 2020. State lawmakers then spent nearly two more years fine-tuning it.Washington is the latest among a number of U.S. states to have embraced blockchain technology or cryptocurrency at large, including New York, Texas and Wyoming.Wyoming has gained a reputation as a forward thinking regulatory haven for blockchain companies. It is the home of crypto exchange Kraken’s bank and has recognized decentralized autonomous authorities (DAO) as legal entities. New York state is one of the biggest sites for crypto mining in the U.S. by contributing 19.9% of the country’s total Bitcoin hashrate, according to CNBC. Related: Is Austin the next US crypto hub? Officials approve blockchain resolutionsTexas is also a major hub for crypto mining with over 14% of the country’s hash rate due to its cheap electricity and abundance of land. The state is experimenting with data centers that have flexible power sources, which allow them to switch to renewable energy sources when the regular power grid is stressed.

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DeFi, Web3, CBDC still unknown for most: Survey

DeFi, Web3, CBDC still unknown for most: Survey

Uverejnil používateľ | mar 30, 2022 |

A new survey by polling agency Morning Consult found that fewer than one third of ordinary Americans have heard of DeFi compared with 77% of crypto owners.Considering that about 87% or 290.9 million Americans did not yet own crypto through 2021 according to Statista, awareness of decentralized finance (DeFi) among non-owners is limited to about 90 million Americans and still has a long way to go.Morning Consult’s survey also found that the level of awareness of central bank digital currencies (CBDC) and Web3 is even lower at 30% and 21% of non-owners, respectively.The survey was conducted between Feb. 16 and 23 of this year. It included 4,404 United States-based adult respondents. Although discussion within the crypto industry often looks to highlight the rapid growth of the DeFi space over traditional financial service providers, it is easy to overlook the echo chamber.However, the survey’s most optimistic finding was that 91% of Americans have heard of cryptocurrency, a number tantalizingly close to representing the entire population.The report, written by Morning Consult’s analyst Charlotte Principato, states that 40% of respondents agreed that there is a lack of innovation in existing traditional financial services and are actively diversifying the financial services and providers they use. While there is demand for more services, it is not necessarily a factor driving users out of traditional finance.However, people have become accustomed to managing more aspects of their lives thanks to the at-a-touch accessibility their smartphones give them. Principato believes this idea applies to the decentralization of one’s own finances across multiple service providers. She states, “using products from multiple providers offers superior service and is more cost effective than working with just one.”Related: Interoperability-focused Stargate Finance (STG) aims to kick off DeFi 3.0That familiarity with self-direction could translate into the financial realm. Though it may not lead to the automatic adoption of DeFi, it is a behavioral and attitudinal shift that the report says financial service providers should watch evolve or risk falling behind. “Industry leaders need to pay attention to these attitudinal and behavioral shifts — but, more importantly, they must continue to innovate product offerings that can rival those of their DeFi counterparts.”Traditional banks like Goldman Sachs and Bank of America have begun exploring the crypto-based services they can offer to their clients to try to demonstrate better innovation. Principato believes that coupling crypto awareness with traditional services that utilize crypto and demand for financial decentralization could eventually push consumers out of the traditional finance sector entirely and into DeFi.As for now, the status quo remains fairly intact as the vast majority of Americans rely on traditional banks for their financial services and only a small minority own crypto.

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Voyager ordered by New Jersey to 'cease and desist’

Voyager ordered by New Jersey to 'cease and desist’

Uverejnil používateľ | mar 30, 2022 |

The New Jersey Bureau of Securities has issued a cease and desist order against Voyager Digital for selling unregistered securities through its Voyager Earn program.Voyager Digital (VGX) is a centralized, crypto-based staking, trading, and lending platform.The order claims that each of the crypto staking and lending accounts issued through the program since 2019 are unregistered securities because of their promise of interest rates as high as 12%. The Bureau cites as evidence for the claim messages on Voyager’s homepage encouraging users to “grow your portfolio” and “journey to the new frontier of investing.”New Jersey claims that about 52,800 accounts and $187 million in assets are from users based in the state, out of roughly 1.5 million active accounts and $5 billion in assets on Voyager in total.The New Jersey Bureau of Securities issued a cease and desist order to Voyager Digital.Voyager’s marketing tactics were also criticized, with the regulators stating promotions for the program failed to disclose that Voyager’s parent company Voyager Digital LLC is a publicly traded company in Canada, not the U.S. The order claims that this “creates a misleading impression with respect to Voyager Digital, LLC’s regulatory status.”The Bureau also alleges that while Voyager claimed to be licensed, it was only licensed in some states to act as a “money services business,” which the Bureau states does not allow for the sale of unregistered securities. It added the claim “may convey the misleading impression to unsophisticated investors that Voyager is “licensed” to offer and sell such securities.”At least five other states, Alabama, Oklahoma, Texas, Kentucky, and Vermont, have slapped Voyager with various orders, or demanded the company explain how it is not issuing unregistered securities if it wishes to stay in business in their respective states.This incident is one in a growing list of such cases or orders against crypto companies that offer interest-bearing accounts to users. In February, crypto lending platform BlockFi was hit with a similar cease and desist order from Washington state and a $100 million penalty for selling unregistered securities in the form of its interest-bearing accounts.Related: Class action suit against Coinbase alleges unregulated securities salesLast September, the Securities and Exchange Commission (SEC) threatened to sue crypto exchange Coinbase if it launched its long-awaited Coinbase Lend program. This program would have resembled Blockfi and Voyager’s interest-bearing accounts for crypto lenders. At the time, Coinbase CEO Brian Armstrong called the SEC’s behavior “really sketchy,” as the threat came without any legal overtures.

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