Author: Kayla Turner (Page 7)

Recently, the Central Bank of Nigeria (CBN) published an open letter. It was in support of the one released in 2017. This letter obligates financial institutes to terminate accounts consisting of crypto-related transactions. Otherwise, CBN threatens to impose severe regulatory sanctions on them.  The director of banking supervision Bello Hassan signed and certified the letter. As a result, the regulation created a ruckus in the Nigerian crypto market.

Is it related to the 2017 Bill?

On Jan 12, 2017, CBN released an identical letter to create similar prohibitions. To stop local financial institutes from making payments or dealing in crypto transactions. It states that any cryptocurrency including BTC is not a legal tender of this country.

The letter released on 5th February serves as a reminder to the financial institutes. Therefore, they no longer allow such transactions. On the contrary, in September Nigeria’s SEC had something else to say. It stated that they are going to regulate crypto transactions.  Also, make it easier to understand. SEC said this measure will protect investors and make transactions more transparent.

Official Reason

CBN is yet to publish any official reason for such an abrupt decision in the biggest crypto hub of Africa. But, a strict regulatory decision like this cannot pass due to one reason. This step is a result of multiple complications. Some of the possible causes for this can be:

• A decline in Inflow:

The direct remittance into Nigeria decreased from $2 Billion to $50 Million in 2020. There are speculations that a drastic decline of more than 95% cannot be a fluke. It is due to the increase in crypto transactions. Experts speculate that CBN is using this to Nigerians using crypto-based remittance channels.

• Due to EndSARS Protests:

In October, a major protest broke out in Nigeria. Amidst, opposing police brutality by the Special Anti-robbery Squad (SARS). These protests were not favored by the government. So, CBN blocked any local payment gateways from accepting donations for the protests. After this, the protesting organizers started asking for anonymous donations via bitcoins. CBN came across this after few days which was in some way a breach of its decision. So, this incident can also be a reason for prohibiting crypto transactions.

How are people reacting to the ban?

• Most of the major banking institutes have begun to comply with CBN’s directive. They are actively working to prohibit crypto-related transactions.
• This news led to a panic in the crypto space of Nigeria. It was a nightmare for new crypto investors. But, most of the trades occurring in the Nigerian market are p2p (Peer-to-peer). The decentralization factor ensured that most traders are not affected, said the chief officer of a Defi platform.
• The letter surfaced on the internet in few hours. After this many crypto users from Nigeria started tweeting #wewantourcryptoback. This tag was re-tweeted more than 25000 times.

In an interesting interview of a Blockchain engineer. He said CBN’s aim is not to ban cryptocurrencies. Instead, its end goal is to make Niara more adoptable. This is possible when financial institutes regulate crypto transactions. Furthermore, dis-allow users from dealing in crypto directly on exchanges like Binance.

Many types of analysis are presently available now for doing good research. Basically, it has two major categories. One is fundamental analysis and another is technical analysis. Both involve different technology and analysis process. However, both got used for predicting the future of crypto markets. So, it is essential to understand the basics of both types of analysis.

Fundamental Analysis Concepts

While doing the research, through fundamental analysis, one considers multiple factors. This analysis gives the intrinsic or inherent properties of the specific crypto. In this analysis, one tries to find the impact on the share’s integral value. One has to do thorough research to understand the factor that affects the price of the crypto. This gives the analyst an idea about the Competency of the correctness of the crypto’s price. It considers the macro and microeconomic factors that have an influence on the cryptos. One uses the qualitative as well as quantitative metrics for this type of research.

Different metrics used for Fundamental Analysis

Some of the qualitative metrics include:

1. Competency of the management
2. The intangible assets the company has
3. Company’s working strategy
4. Global acceptance of the business
5. The industry’s customer base
6. The competitive edge the company has

Some of the quantitative metrics include:

1. The company’s annual revenue
2. The total profit of the company
3. Tangible assets of the company
4. The accounting ratios of the company

What we know after fundamental analysis

Using this analysis, the analyst predicts if the price of the security as compared to the market. He will be able to know if the crypto’s price is more or less as compared to the market. A higher value is an indication that the estimated value is more than the actual and vice-versa. After this analysis, traders decide to buy or sell their shares. If it is undervalued crypto, traders prefer to buy that crypto and vice-versa.

Technical Analysis

The major difference here is the consideration of the past history of the crypto. The analyst considers the crypto’s historical data to predict the future price. So, this analysis includes the past prices, the company’s returns, and the volume of trade. The price prediction is based on the crypto’s historical movement. So, it is basically the trend of the movement of the crypto’s price.

What we know after technical analysis

In this analysis, the analysts refer to the range of price of the cryptos. This helps in generating a profitable trade. This helps them to understand whether to buy or sell the cryptos. If crypto is moving towards the lower range, the trader will buy the cryptos of that company. The reason is once the price hits the bottom of the range, it will move upwards. The exact opposite will happen when the price is moving upwards. So, the traders sell their cryptos to gain profit.

Conclusion

Both analyses are for determining the future price of the cryptos. The technical analysis is for short term trading mostly. The fundamental analysis is for long term trading predominately.

Some interesting news about known universities in the world came to the front. As per Ian Allison, many Ivy League universities are showing interest in cryptocurrencies. They are buying and investing in cryptocurrencies. These universities include the University of Michigan, Yale, Brown, and Harvard. In addition, these prominent schools and colleges are supporting crypto exchanges. Coinbase and many other trading platforms are getting benefited from this. Also, the reporter explained that many colleges and universities are buying digital currencies. They are purchasing the cryptocurrencies from specific exchanges.

The report

The endowment programs of these reputed universities are quietly buying cryptocurrencies. In addition, he found from her sources that quite a few universities are doing this. Some of the colleges are allocating a small number of their funds to cryptocurrency. Sources also confirmed that some colleges have stored funds on the crypto exchanges for a year or so. Also, there are few other notable things that came from the sources. Since mid-2019, universities and colleges are into the crypto business. Most of the colleges are doing this for at least a year. Expectations are that the colleges will open up this year about this investment. Above all, the colleges will have expectations of getting high returns. Due to this investment at this point in time, they will be expecting much higher profits. It is all because of the increasing market price of cryptocurrencies.

Few important incidents

It is evident that many well-known universities and colleges are purchasing bitcoin. They are also investing in other cryptocurrencies. They are into the crypto funds for their endowment programs. The University of Michigan invested in cryptocurrency back in February 2019. The university did this of its requirements for endowment programs. In addition, the investment in cryptocurrency got managed by Andreessen Horowitz. Reports stated that Ivy League school Yale invested in cryptocurrency in May 2019. Yale did the investment in crypto fund Paradigm. Yale has the second-largest endowment program in higher education currently.

Status from all around the world

A lot of colleges around the globe are putting their hands into cryptocurrencies. The recent boom in the crypto world triggered these incidents. More and more universities and colleges are going in this direction. For a long time, colleges are investing a small portion of their funds into cryptocurrencies. Many high net worth individuals made donations to universities and colleges in cryptocurrencies.

Conclusion

A number of universities accepted digital currency donations. Some schools have crypto backers funding them regularly with digital assets. Many other schools also accept bitcoin and cryptocurrencies. Some colleges also have elective courses on blockchain technology. Few of the colleges are Standford, MIT, Cornell, Puget Sound, and Princeton. This might prove to be a revolutionary step in the crypto world. In conclusion, the support from big universities and schools would help the growth of cryptocurrencies. It won’t be wrong that many universities will only accept cryptocurrency in the future. These events stand in favor of the crypto market. This shows that the bright future and global acceptance of cryptocurrencies.

According to the latest news, Bitcoin is trending currently in the digital market. Digital currency and assets are in demand. Digital assets are trying to change the financial face of the globe. Recently, Mrs. Janet Yellen also provided her opinions on cryptocurrencies. Yellen is a nominee of Joe Biden’s Treasury Secretary. In addition, she will be holding an important post in Biden’s cabinet if selected. Her comments on cryptocurrency changed significantly in the recent few days.

The preliminary thoughts

She was against cryptocurrency. Moreover, she mentioned that digital currency is a real concern. The digital currency has its usage majorly for illicit financing. She focused on the technology that we need to adapt to deal with the crypto world. She said that we need to have new methods to deal with the matters like tech terrorist financing. We should adapt as per the trends. Moreover, we have to be ready to deal with the crime these technologies will bring. She thought of staying away from crypto.

Cryptocurrency is a magnet for cyber thieves. The blockchain is anonymous and nobody gets caught. There is no control over the blockchains. No individual agency can control these financial networks. Above all, there is no law enforcement agency or regulatory body to regulate its activities.

Her recent meeting at the senate

Mrs. Janet Yellen made a follow-up comment after two days on cryptocurrency. Her opinion in her statement seemed quite contrary to the previous one. Now, she showed a lot of confidence in the potential of digital currencies. After that, she presented her views in the senate committee on finance.

Questions imposed on her

She got few questions to answer regarding new technologies in the senate committee. The question is to present her view on the new emerging technologies. She has to answer on the potential benefits and threats of these on the U.S. national security. Also, she got asked to propose ways to safeguard and regulate digital and cryptocurrencies. She mentioned the wide array of benefits cryptocurrencies have brought in today’s world. Digital currency has the potential to improve the efficiency of the financial system.

Yellen’s changed opinion

She gave emphasis on the legitimate use of Bitcoin. Also, she focused on developing a regulatory framework to effectively use digital assets. As per her, we have to find ways to encourage the use of digital currency for legitimate purposes. With that, we have to also prevent its usage for illegal and malign activities. Yellen wants to co-ordinate with the Federal Reserve Board. In addition, she wanted to implement a regulatory framework for cryptocurrency and digital assets. Above all, she wants the co-operation of federal banking and securities regulators for this step.

Conclusion

Janet Yellen’s concern regarding cryptocurrencies is actually valid. The reason is the risks involved with cryptocurrencies. Along with the risk factor, multiple thefts and hacking also take place. Moreover, there is no regulatory body overseeing the complete digital world of finance. The wide acceptance of crypto payments has also increased complications. The involvement of cryptocurrency in scams is high in today’s world. This is majorly due to its decentralized nature. Most of the time, the funds lost are never retrieved.

About Ethos

Ethos is one of the leading cryptocurrency service providers. It is a platform that is like a bridge between blockchain and financial institutions. Ethos provides multiple products for the crypto world. Some of them are Ethos Universal Wallet, Ethos Bedrock, and many others. The Universal Wallet provides security to its users to keep their crypto assets safe. It provides its services for free. The Wallet is on the Bedrock platform. Bedrock is the foundation that makes the blockchains more accessible. It provides security for the users and the financial institutions. Ethos has a global presence and its headquarters is in Singapore.

Bedrock – The foundation platform

Bedrock is a very sophisticated high perform platform that provides blockchain financial services. Its main aim is to make blockchains and cryptographic protocols easily accessible. With Bedrock, financial institutions will safely use the best of digital technology. The institutions could also use multiple crypto financial services. The services include custody, liquidity, brokerage, and lending. However, as mentioned earlier, the Universal Wallet works completely on Bedrock. Bedrock is up and running and supporting many customers. Till now, it supported 90,000 users across the globe. It helped to perform more than 400,000 transactions seamlessly. Above all, these transactions involve multiple blockchain networks.

Expert Opinion

The founder and CEO of Ethos are  Shingo Lavine. He provided his views on this. He said that most of the fintech firms see blockchain as the next big thing in the digital finance world. But there is a lot of things that are very complex and not accessible. They are a wide range of blockchains and crypto protocols and frameworks. So, Bedrock is the platform that combines all this. Moreover, it provides a framework that is very easily accessible. So, with Bedrock, a lot of blockchain-based products and services will be available for the users. He believed that this technology will provide enormous power to the digital economy.

Its Uses

Bedrock has a wide array of functions. It supports multiple functionalities for the financial institutions. In addition, it provides the platform for financial institutions to create their own crypto wallets. It helps to provide a lot of services like liquidity, custody, and many others. Also, it provides customized solutions. These are blockchain integration, alerts, identity, and transaction monitoring.

The technology behind it

The technology used for the bedrock platform is very complex and sophisticated. The platform uses open peer-reviewed standards like BIP32, BIP39, and BIP44. It is with the help of these standards that help users keep their digital assets safely. It also has an abstraction layer. This offers support to multiple blockchains and custom digital wallets.

The Ethos token powers up the Bedrock platform. This token provides access and utility to the complete Ethos ecosystem. So, the business partners can utilize the Ethos token to get access to the system. They can also pay fees and get discounts. Therefore, it is such a platform that created a win-win ecosystem for both its users and business partners. In conclusion, it operates seamlessly and cost-effectively delivering all the benefits to both parties.

Binance’s Burn Down for BNB

BNB is a cryptocurrency launched in 2017. It got its funding from Binance. BNB is a cryptocurrency offered as a discount token. With the use of this token, the users used to get discounts on trading fees till today. The number of tokens generated initially was 200 million. Binance promised to destroy some BNB tokens every quarter to fight against inflation. This in turn results in increasing the price of BNB tokens.

The 14th Burn of BNB

This quarter (i.e. Q4 2020) marked the 14th burndown process for BNB tokens. This time it is quite remarkable in a lot of ways. This is the first time Binance burned more tokens than actually promised. Changpeng Zhao is the CEO of Binance. He made an announcement regarding this quarter’s burn down. He mentioned that this is the first time ever that so many tokens got burnt. It is 3.6 million BNB burned this time. That is worth $166 million. He also said that this process will continue in the future. He added that to reduce the BNB’s total holding from 200 million to 100 million, it will take longer. If he goes on the promised path, it will take another 27 years to do it.

Its impact

Due to the burn program, Binance is gaining profits again. Binance, the world’s largest cryptocurrency exchange is on the path to success. The price of BNB tokens skyrocketed after the burn program for Q4 2020. For the first time in history, BNB tokens touched the $47 mark. This is its all-time highest price. So, the burn program gave direct benefits to the BNB tokens.

A reputed analyst Larry Cermark gave his opinions on this incident. As per him, Binance increased its spot in the market by 50 percent in Q4 2020. The volumes for the future also increased to 140 percent. Binance is now trying to become the market leader for the crypto world. He estimated that Binance’s total revenue for Q4 2020 is more than $470 billion.

Binance CEO’s outlook on the crypto market

Zhao wrote that BNB and Binance are on the way to success in a very positive environment. He predicted that it would be foolish to sell Bitcoins at a lower price than $10,000. He got a lot of criticism for this comment. Recently, he said that he will go with his prediction. He told that Bitcoin might reach $100,000 and $249,000 in the future. He mentioned that the investors should also invest in altcoins. The investors should not disregard altcoins. The crypto market has a lot of room for other projects apart from Bitcoin. He added that there will be thousands of blockchains and millions of tokens in the future. So, Binance will also be in demand and will make profits as it is a crypto exchange platform.

CZ gave a forecast of a bright future for BNB tokens. BNB tokens are no longer just discount tokens. It plays an important role in Defi, DApps, and decentralized crypto exchanges. CZ didn’t provide an estimated price of BNB in the future. However, it would not be wrong to expect $100 per BNB in the future.

Recently, there is a high boom in cryptocurrencies. Many big investors are looking forward to encashing this opportunity. Cryptocurrency can provide high returns in a short period of time. This is definitely a lucrative offer for many corporate and investors. People are trying to derive huge profits from this situation. In all this, the Financial Conduct Authority (FCA) warns all crypto investors. It says people investing in cryptocurrencies are at risk of losing their money. It warns the people running after higher returns in a short time. The investments and lending products related to cryptocurrency are at very high risk. It made people aware of the frauds happening with cryptocurrency. Due to high volatility, crypto frauds are most likely to happen.

Message from FCA

The FCA is fully aware that few firms are taking advantage of this situation. Due to this, few firms are promising higher returns to their customers. Some firms are offering very good offers for investment in crypto assets. This is also related to lending and investments linked to crypto assets. The FCA stated that people investing in these types of products should be ready to lose their money. As crypto assets are high-risk commodities, people should be aware of them before investing in them.

The market condition

Bitcoin is reaching new heights recently. Last week, it’s value is at $41,973. Other cryptocurrencies are also surging in their value. There is a sudden increase in its value. So, there is a huge demand for cryptocurrency in the market. Investors are comparing it to gold in terms of valuation. Many experts claim that the wild rise of bitcoin could be a market bubble. Moreover, due to its volatile nature, the market bubble is going to burst very soon. Bitcoin has been increasing in its value in the last 12 months. It is over 300% rise in the last 12 months. Bank of America mentioned this market situation to be the “mother of all bubbles”.

The policy

The FCA is showing its concern and trying to protect the investor’s money. So, it provided a few guidelines. All the firms offering these products must meet all the regulatory requirements. The authorization of the firms with FCA is also a requirement. If any firm is operating without registration, it is a criminal offense. From 10 Jan 2021, the firms registered with FCA should tackle risks with money laundering.

Steps to follow before investing

The FCA mentioned a few steps to follow before investing in cryptocurrency. Also, the customer should be able to identify if someone contacted him suddenly. The customer should be able to figure out if someone is trying to pressurize him to invest quickly. The customer should sense if the scheme is too good to be true. Before investing, the customer should check if the firm got registered with FCA. If the firm is not registered, then the customer should question the legality of the firm. The reason is, after 10 Jan 2021, the firm will be operating illegally, if not registered with FCA. So, customers should be fully aware of the risks involved. They should also perform a few checks before investing.