OSL Trader View | Weekend Digest
Friday, September 25, 2020
Happy Friday. As regular readers of this piece will know, we have often trumpeted the regulatory advances around the World and lamented the approach taken in the United States - when they have such a clear opportunity to drive this bus. Well, one of the few beacons of light States-side came recently from the Office of the Comptroller of Currency that has been trying to revise their purview from governing financial entities to financial activities against the wrath of the rest of establishment. The latest letter dives deeper into the previous announcement permitting banks to custody crypto - by letting them hold stablecoins as reserves. “Hello Basel III, say hello to my good friend crypto there will be a lot more where she came from.” Evertas’s latest survey covering 50 professional money managers running $78B AUM reveals that ninety percent of respondents expect the long only, pension, and sovereign wealth funds to “dramatically” increase their crypto holdings - and why wouldn’t they? The alternative in the form of the greenback is looking far from attractive these days.
DeFi coins have had their first correction dovetailing with the Uniswap airdrop that had everyone scrambling for their freebies. And while there has indeed been a pullback in the total value locked in cyberspace...
...the astronomical yields are still there to be farmed.
However it is quite clear that things will not continue to scale as they are:
Expect to see a myriad of second layer solutions and the substitute protocols to try and steal the eight billion dollar prize.
Unfortunately the too-good-to-be-true yields are giving birth to plenty of scammers as more opportunists try to cash in on this gold rush and euphoria in the market. The tape bombs have done nothing to deter capital flocking to the space as we hear of yet another DeFi protocol successfully raising $3.6mn.
Twitter PR is back in the spotlight as Michael Saylor, the Microstrategy CEO, tweets he will sell part of his recently converted $BTC and news on India’s renewed ban on crypto (again) turned out to be clickbait.
Bitcoin has pulled back to test $10K as capital markets head for the can but has held on to the $10K support. Skew has pointed out that $BTC has never had three consecutive quarters of gains
It goes without saying, but... you know what to do with a dip!
ATMs have proliferated the space, despite the heavy hand of a regulator and has hit a milestone of their own: 10K machines deployed worldwide.
More news that caught our eye:
- HSBC planning for digitized capital markets and recently reported that tokenized markets could stand at $24 trillion by 2027.
- The Philippines’ central bank embraces digital tokens
- SG Forge set to test a number of blockchains, including Tezos, as it trials digital securities and CBDC activities
OSL Trader View and Weekend Digest are contributed by Stefan Chu, SJ Oh, and Santiago Nazaretti
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