Institutional Digital Asset Newsletter - March 2020

Newsletters Mar 29, 2020

Once a month, we summarize the best crypto news for Institutional Investors

In this monthly newsletter, we plan to answer questions institutional investors may have about Digital Assets. We won’t offer investment advice, but we hope to make it easier for you to develop your own strategy, and to keep abreast of the fast-paced evolution of an emerging asset class.

In each newsletter, you’ll get a smattering of links from Trakx and from other reputable sources that reveal trends and developments for our sector. We’ll also fill you in on movements of people and companies (we might even mention you!).
We hope that you find this useful. Constructive criticism is welcome, feedback is valued, and praise will just make our day. Please send comments to [email protected]

INVESTING

Bitcoin Faces Another Down Day as Equities Reject Stimulus Efforts

Bitcoin is feeling the pull of gravity as investors offload risk in traditional markets despite the massive global stimulus packages this week.

The top cryptocurrency by market value was trading near $5,100, having failed to establish a strong foothold above $5,500 late Tuesday 17th March, according to CoinDesk's Bitcoin Price Index (today 19th March, positive momentum noticed across Digital Assets).

Still, the stock markets are flashing red, which likely indicates investors are worried that monetary easing and financial aids will not catalyze economic activity. After all, the threat to global supply and demand is not caused by institutional systemic failures, but due to the growing Coronavirus pandemic. As a result, a sustainable price recovery in both stocks and bitcoin may remain elusive until there is a stabilization in the COVID-19 infection curve.

MakerDAO Adds USDC as DeFi Collateral Following ‘Black Thursday’ Chaos

MakerDAO has added a third asset to its decentralized finance (DeFi) platform, USD Coin (USDC), in response to the system’s flagship stablecoin, Dai, continuing to float above its dollar peg. The Coinbase and Circle-backed USDC is now available for use as collateral on the premiere MakerDAO DeFi platform following a governance vote, according to a blog post. Users will be able to deposit USDC as collateral (in addition to the system’s two other underlying assets, Ether (ETH) and Basic Attention Token (BAT) and receive Dai in return.

At the heart of the USDC addition is a pressing issue: Dai’s dwindling supply. Without a larger supply of Dai on the market, the stablecoin went for a premium last week which threatened to capsize the largest DeFi platform.

Dai's peg to $ was broken after only a few million in trade volume. Proponents are looking to USDC to reassert the peg.

Dai Stablecoin Price and daily volume
DAI stablecoin price and daily volume

NEW ASSET OVERVIEW

Launched by the San Francisco fintech company SmartContract in June 2017, Chainlink is described by its developers as a secure blockchain middleware that intends to connect smart contracts across blockchains by allowing smart contracts to access key off-chain resources such as data feeds, web APIs, and traditional bank account payments.

The Chainlink ecosystem revolves around the LINK token and the LINK network. Through the release of APIs and other platforms, the developers continuously develop new applicability and usability of smart contracts across a wide range of business cases. In order to maintain a contract's overall reliability, inputs and outputs that the contract relies on must be secured. And, Chainlink developers provide a reliable connection to external data that is provably secure end-to-end.

PLATFORM

REGULATION

Newly-approved South Korea bill paves way for crypto regulation

The new law introduces a framework for licensing and regulating crypto operators for the first time, which lawmakers hope will energize the country’s emerging crypto sector. Per the new laws, operators in South Korea will now be required to adhere to the guidance set out by the Financial Action Task Force (FATF) on anti-money laundering and counter-terrorism financing.  Exchanges will also be expected to receive approval from regulators before offering services in the country, namely the Financial Services Commission (FSC) and the Korea Internet & Security Agency (KISA).

PEOPLE MOVE

Gary Rebibo

CMO @Trakx