DAILY NEWS RECAP - PAPAヽPANDA (05/05/2021)

 

Bitcoin is a ‘disgusting’ product that comes ‘out of thin air,’ says Charlie Munger

“I hate the Bitcoin success, and I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth,” said the billionaire.

In the Berkshire Hathaway Annual Shareholders Meeting streamed live on Saturday, Munger addressed questions from investors alongside his fellow billionaire. While Buffett said he would intentionally dodge a question on whether cryptocurrencies were “worthless artificial gold,” Munger’s response was more direct, positing that the questioner was just “waving the red flag at the bull” in addressing him.

“Of course I hate the Bitcoin success, and I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth,” said Munger. “Nor do I like just shuffling out a few extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air.”

Buffett acknowledged there might be “hundreds of thousands of people watching that own Bitcoin,” and only two shorting the coin, leading to his reticence in saying anything bearish on crypto. However, the billionaire investor has previously said “cryptocurrencies basically have no value” and he will never own any himself.

Munger, a 97-year-old worth more than $2 billion, is also a known Bitcoin (BTC) critic, claiming in February that the crypto asset is “too volatile to serve well as a medium of exchange.” The billionaire investor called cryptocurrencies “totally asinine” during a Daily Journal annual meeting with shareholders in 2018.

Ripple Client Tranglo to Power Payments Between Australia, China and Southeast Asia

Tranglo, which received investments from the Ripple crypto behemoth in late March of this year, is now preparing to launch transnational payments and remittances from Australia to China, Vietnam, etc., in collaboration with OmiPay.

Ripple acquired a 40 percent stake in the leading international payments platform Tranglo in late March of this year.

The company now uses RippleNet's ODL service for XRP-based transactional payments. Tranglo has now partnered with Australia-based OmiPay firm to help it set up payment corridors to China and the Southeast part of Asia using its Tranglo Connect solution.

OmiPay is available in all big cities in Australia and Tranglo has provided it with the chance to expand on the continent and beyond it as well.

Tranglo will help OmiPay to set up payment corridors into China, Vietnam, the Philippines and Indonesia. In addition, the two companies are collaborating to make cross-border payments more affordable and accessible in Australia.

Tranglo and OmiPay now want to extend their reach to international students, who always seek cheap and convenient ways to pay for their tuition at Australian colleges.

Tranglo will be using various payment methods for this, including e-wallets. As for OmiPay, this payments operator has already integrated such payment options as Visa, Alipay, WeChat pay and Mastercard.

Tranglo operates in more than 100 countries with offices in London, Dubai and a few other major locations.

Stellar and Visa Join Forces with Fintech Startup to Bank the Unbanked

Financial services giant Visa, the Stellar Development Foundation and payments technology company Circle have all partnered with California-based fintech firm Tala to boost cryptocurrency adoption in emerging markets, according to a May 5 announcement.

With the new partnership, Tala customers will be able to use the USD Coin (USDC) stablecoin to make cross-border payments and purchase other cryptocurrencies.

Visa will also issue cards that will allow spending of USDC at tens of millions of supported merchants.

As per data provided by World Bank, over 1.7 billion adults around the globe remain unbanked.

Tala was launched back in 2014 to offer small uncollateralized loans to people who do not have access to a bank account, in countries like Tanzania, Mexico, Kenya and India. Throughout these years, it has loaned money to over four million customers.

In lieu of credit history, Tala relies on mobile use data (SMS receipts, call length, etc.) to determine the level of risk with the help of its machine learning algorithms. It usually takes only a minute to approve a loan.

In 2019, Tala's valuation increased to $750 million after wrapping up a $110 million funding round that had PayPal among its participants.

ETH Futures set a new Daily Trading Volume Record of $90 Billion Amid Surging Spot Price

Ether ($ETH), the second-largest cryptocurrency by market cap had quite an eventful past couple of weeks where it recorded a new ATH every other day and breezed past the key resistance of $3,000 to set a new ATH of $3,523. While the spot market continues to thrive, the rising demand is now started to reflect in the derivative market as well.

ETH Futures recorded its biggest single-day trading volume of $90 billion amid surging spot prices and growing demand from institutions and spot traders alike. The second-leg surge in ETH comes post many wrote it off amid surging gas fee, however, the on-chain metrics and network fundamentals remain strong as many Ether proponents now believe the altcoins is not stopping until $10K.

Novogratz’s Galaxy Digital will buy BitGo to become first full-service digital assets platform

In breaking news today, it was announced by Galaxy Digital Holdings Ltd, that it has agreed to buy BitGo, the leading independent digital assets infrastructure provider. 

The acquisition of BitGo will see Galaxy Digital positioned as the preeminent global full-service platform for institutions. It will now be able to offer crypto products and services at scale to institutions seeking exposure to the cryptocurrency sector. 

Mike Novogratz, CEO of Galaxy Digital said of the acquisition: 

"The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology," 

"The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital."  

BitGo, founded in 2013, was the first independent regulated custodian, purpose-built for digital assets. It counts among its products prime lending, trading, portfolio management, and tax solutions. 

With over $40 billion in assets under custody, BitGo is one of the leading custody providers for more than 150 exchanges and over 400 institutional clients.  

It processes more than 30 billion transactions a month and is custodian of around 400 cryptocurrency coins and tokens. Its insurance is one of the most comprehensive on the market. 

The BitGo products are complementary to those of Galaxy Digital so that the combined businesses will now be able to serve all clients’ needs in the areas of custody and transacting of cryptocurrencies.  

"Joining Galaxy Digital represents an exciting new chapter for our business, as our current clients gain access to a wide set of financial solutions," said BitGo CEO and Founder, Mike Belshe. "We will now be in a position to offer our best-in-class digital asset infrastructure capabilities to significantly more corporate, institutional, and high net worth investor clients." 

The acquisition of BitGo will offer Galaxy Digital many new benefits. Chief among these are over 400 new institutional clients, Institutional-grade levels of security and operational performance, 50 engineers and key product and security infrastructure personnel, an expanded geographical reach, and revenue synergy opportunities. 

South Korean regulators seek to tighten grip on cryptocurrencies

South Korean regulating authorities are now asking financial institutions such as banks to provide full details of their cryptocurrency businesses, and in particular their dealings with cryptocurrency exchanges in the country. The news comes as South Korean authorities attempt to investigate illegal activities in the cryptocurrency sector. 

According to media reports in the country, South Korean financial regulators are demanding that banks provide full information on their dealings with cryptocurrency exchanges and how they are monitoring them. 

In a story reported in the Korea Herald this morning, it was explained that the task was a lot more difficult than might be imagined. 

“Currently, cryptocurrency exchanges can operate without permission from the government, which is why it is difficult to identify the exact number of cryptocurrency exchanges,” said an official at a local cryptocurrency exchange who asked to remain anonymous. “One way to find out is to track corporate bank accounts that collect customers’ funds.” 

It appears that a main thrust of the investigation is to find the exact number of cryptocurrency exchanges operating in the country. Currently, the hazy estimate of between 100 to 200 exchanges is the only figure available. 

Once the financial authorities have the complete list of exchanges, they can then impose sanctions on those that are unregistered. The exchanges have a period of grace until September 24 in which to be registered. This is when a new law on “Reporting and Using Specified Financial Transaction Information” comes into force. 

The new law will require cryptocurrency exchanges to have information security management systems in place and to form partnerships with banks. 

Crypto exchanges that fail to comply with these demands look out – the sanctions are very strict and include “a jail sentence of up to five years or a fine of up to 50 million won ($44,000)”. 

As also reported in the Korea Herald, the government crackdown on crypto led to a recent police raid on an exchange called V Global, resulted in the exchange’s funds being frozen. V Global is accused of running a Ponzi scheme which attracted 1.7 trillion won in customer funds.  

Only whales move DOGE: Data suggests major Dogecoin wealth gap

It was Doge day afternoon all over again on Wednesday as Dogecoin (DOGE) continued its assault on the cryptocurrency market capitalization rankings. The meme coin overtook XRP to become the fourth-largest cryptocurrency by implied market capitalization after climbing to a per-coin valuation of $0.69 — a target that was specifically set by traders on social media.

But cryptocurrency’s latest media darling may not be as wholesome as it seems. For all the hype surrounding Dogecoin (and its de facto master, Elon Musk), publicly available data suggests relatively few people are actually using the blockchain, and those who do use it account for an incredibly large portion of its overall activity.

Consider that the dollar value of coins sent across the Dogecoin blockchain on Tuesday exceeded $58 billion. That figure was 70% higher than the amount transferred on Bitcoin ($34 billion) and 260% higher than on Ethereum ($16 billion).

Digging into on-chain data further, we see that despite Dogecoin moving a higher value of coins than the two largest cryptocurrencies in the world, it achieved this with a mere fraction of their transactions.

Over 1.4 million transactions were counted on the Ethereum blockchain yesterday, according to data from Bitinfocharts, while close to 300,000 were counted on Bitcoin. Compare this to just 76,000 recorded on the Dogecoin blockchain, and an apparent wealth gap begins to emerge.

Indeed, when looking at Dogecoin’s average transaction value on the day in question, it stood at almost double that recorded on Bitcoin (BTC). The average DOGE transaction value stood at $800,000, compared to $420,000 on BTC. Its statistics relative to Ethereum paint an even more dire picture — Dogecoin’s average transaction value exceeded Ethereum’s by 8,000%, despite processing only 5% of the number of transactions.

Combined with the long-standing reality that one single address holds 28% of all coins in existence, while just 12 account for 67%, it becomes clear that Dogecoin isn’t exactly the people’s champion that interested parties would have the public believe.

A recently published report by Galaxy Digital piled on the misery regarding Dogecoin’s general lack of authenticity as a true cryptocurrency project. Titled “Dogecoin: The Most Honest Sh*tcoin,” the report highlighted the fact that Dogecoin’s GitHub repository (where updates to the blockchain’s code are logged by developers) hasn’t been touched since 2017. What’s more, the number of fully synced nodes (computers running copies of the Dogecoin blockchain) is just 26% of the overall node count, suggesting few people are willing to make the effort to maintain the blockchain’s network security.

But even if the Dogehouse seems like a ghost town, the glaring reality remains that Dogecoin is the best performing digital asset in the cryptocurrency space. The coin has recorded 14,000% growth since Jan. 1, when it was priced at a fraction of a cent.

Both credit and blame for Doge’s seemingly irrational ascent have been placed on the “Dogefather” himself, Elon Musk, who has taken great pleasure in posting Doge memes to his 52 million followers on Twitter throughout much of 2021.

However, it should also be noted that the coin’s recent peak of $0.69 is the same price target set by Reddit traders intent on artificially pumping DOGE’s valuation. The price point was originally intended to be reached on April 20 — a joke on top of a joke on 4/20 day. Dogecoin only reached a price of $0.420 at the time (boom), but now, a little over two weeks later, it has finally achieved its jocular goals. The ultimate price point being pursued by traders is $1.

If more evidence is needed that markets are not always rational, look no further than this year’s GameStop pump, where the share price of a near-dead brand increased by over 9,000%.

“Dogecoin has always been a joke, and the joke keeps getting funnier,” stated the Galaxy Digital report. Author of the report and head of firmwide research at Galaxy Digital Alex Thorn did praise Dogecoin for its lack of pretense, noting that the coin’s fortunes weren’t tied to foundation announcements or developer promises and that its only goal was to elicit a reaction.

“Dogecoin’s longevity is ensured so long as one truism remains: people love a good joke,” Thorn ended.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.