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As Central Banks Sell off Record US Debt, Blockchain Offers Cost Cutting for Financial Industry

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Central banks are playing hot potato with America’s debt.

Banking District

The first six months of this year saw foreign central banks sell a net $192 billion of U.S Treasury bonds – double that of last year.

China, Japan, France, Brazil and Colombia have dumped the most in the largest selloff of US debt since 1978.

“Net selling of U.S. notes and bonds year to date thru June is historic,” says Peter Boockvar, chief market analyst at the Lindsey Group, an investing firm in Virginia.

U.S. Treasury’s were the safest asset in the world, as many countries hold their cash in U.S. Government Bonds due to post-World War II economic arrangement via Bretton-Woods world order. By selling their holdings of U.S. Treasuries, the nation’s benefit by putting downward pressure on the U.S. dollar relative to their currencies.  The lesson: the global economy is still weak.

Low oil prices, China’s economic slowdown and a so-called “race to the bottom” as global currencies lose value weigh on what the IMF terms a “fragile” economy in 2016.

Private demand for the bonds has skyrocketed as the US pays historically low-interest rates. The 10-year U.S. Treasury, at a record low of 1.34% earlier this year, bounced to about 1.58%.

Meanwhile, financial institutions celebrate blockchain technology as a potential boon to the global economy. Financial institutions want to streamline trade. Why? They see the above-mentioned problems as a reason to suspect the US Federal Reserve will increase interest rates, thereby increasing the cost of money.

HSBC, upon announcing a partnership with Bank of America Merrill Lynch to experiment with bitcoin inspired technology, told CNBC that the blockchain could be “revolutionary” in international trade and commerce.

Bank of America Merrill Lynch and HSBC published recently published proof of concept showing how blockchain could revolutionize trade.

Global nodes

“Over $2 trillion of trade today depends on the physical exchange of documents,” Vivek Ramachandran, the bank’s global head of product and propositions for global trade and receivables finance, told CNBC late last month.

“What we’ve shown is blockchain has the potential to take away paper, which could be completely revolutionary if commercialised.”

He adds: “(Blockchain) makes the system much more efficient. It’s expensive to adopt it, but the upside is huge.”

Juniper Research reported findings that $290 million of venture capital has been invested in blockchain tech in the first half of 2016 over 30 startups.

“While blockchain technology offers the potential for increased speed, transparency and security across an array of verticals, there has to be rigorous and robust roadtesting in each unique use case before any decision is taken,” research author Windsor Holden stated.

It appears global financial institutions, as Russia and China prove to less likely to bail out the global economy, are turning to the blockchain to streamline the way the world works on the financial level. As the World Economic Forum notes:

“Distributed ledger technology (blockchain) has the potential to drive simplicity and efficiency by establishing new financial services infrastructure and processes.”

Images from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




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As Encrypgen Nears The Finish Line, A Competitor Drops Out

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Several weeks ago, I wrote an introductory article on Encrypgen.  Due to several requests and a major development, I feel a second article is warranted.  I will provide a quick summary but new readers should definitely check out the first article.

Background

Encrypgen (DNA) is the undisputed leader in the genomic blockchain security space.  Last month, Encrypgen released a beta version of its Gene-Chain.  Consumers will be able to safely upload and store their genomic data on the Gene-Chain.  In addition, consumers will be able to earn passive income by selling their data to researchers.  Investors and researchers were eagerly waiting for that release which caused a temporary explosion in the DNA token price.  Encrypgen continues to progress and expects to release the working version of the Gene-Chain within the next few months.

Revenue Generation

A few questions were sent to me about how Encrypgen will make money.  That is certainly the end game for all businesses and crypto is no different.  Let’s first remember that the DNA token is a utility token.  Platform usage will determine the value of each token.  In order to purchase data from consumers, researchers will need to first buy DNA tokens.  Although researchers can certainly buy tokens direct from the exchanges, there will be an easier way.

Researchers will have the option of buying DNA tokens direct on the platform (i.e FIAT to DNA).  Encrypgen will set the rate of each token above market.  The tokens will come from a pre-determined supply (roughly 3 million) that the company currently holds.  Since researchers will need to pay an above market rate, Encrypgen can then use the funds to purchase additional tokens on the market to replenish its supply.  In theory, that will drive up the price of the DNA token while simultaneously providing Encrypgen with substantial profits.  The profits can then be used for additional marketing, development, and other essential corporate activities.

Competitor Drops Out

The genomic space is getting a lot of attention lately.  And with lots of attention and relatively few barriers to entry, competition is natural.  Until recently, Nebula Genomics was seen as the primary competitor to Encrypgen in the genomic blockchain space.  Nebula put together a great team and generated a lot of buzz.  In August, the company received a $4.3 million seed round from several VC firms.

Throughout the process, Nebula was claiming to be a blockchain company.  In Telegram (a popular method for companies to communicate with investors), Nebula was telling people that the future plan was to do an ICO.  However, that has all changed and it appears Nebula has said “goodbye” to crypto.

Telegram Chat confirm no Nebula ICO

Telegram Chat

I took a screenshot of the Nebula chat on Telegram.  In that chat, Nebula appears to be confirming that there will be no public ICO.  However, they strangely leave open the option to sell 50k blocks to investors.  I’m not quite sure I understand that.  But what is clear is that Nebula is not a blockchain company.  They never were and they never will be.

Conclusion

I’ve been confident in Encrypgen’s success for a long-time.  One of the concerns I had was regarding the competition that was entering the genomic blockchain space.  Because of the strength of the team and the marketing, Nebula appeared to be the main threat to Encrypgen.  Now that Nebula has raised the white flag and is dropping out of the crypto market, Encrypgen appears to be full steam ahead!

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Analysis

Has Ethereum Lost Its Cache?

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For all of us believers that asset prices are set by fundamentals rather than fantasy, these are perplexing times.  Crypto prices are not only way off their January highs, they are at the lowest level this year. Progress in addressing issues like scaling and security may be slow, but they are taking place.  The cooperation between crypto and government regulators is improving in big chunks.

Yet, while all this is going on crypto technicals look terrible. Everyday technical analysts use words like downtrend and overhead resistance.  When prices have rallied, the joy is short lived, lasting only for a day or two. Even on good days, the moves are weak on low volume.  This is never a good sign. Long gone are the kind of investor fears about missing out (FOMO) that we saw last year.

There are fundamental reasons for skepticism for long term believers, as the data has not been going in the right direction.  True, projects are progressing a slow pace. This maybe good for avoiding problems with security etc., but for investors who want immediate gratification, right now crypto isn’t ringing any bells.

But truth is, crypto markets appear to be unresponsive even to seemingly good news. Take for example this recent Cryptovest headline: Cardano (ADA) Releases New Version, Price Remains Stagnant.   Today, crypto exchange Coinbase announced it was increasing daily trading limits sevenfold, changing settlement times from days to instantaneous and finishing its beta before accepting Ethereum Classic.

At the time of this writing, Bitcoin had fallen over 8% in the previous 24 hours while ETH was off almost 10.5%.  This marks on of the worst days for crypto in quite a long time.

Drilling down a bit into ETH reveals some core softness.  Since virtually the entire crypto pricing stinks there is more than a single cause to Ethereum’s weakness, but here is a start.

Using DappRadar To Measure Ether Demand

According to Business Insider, there were over 930 ICOs last year that raised anywhere from $3-$5.7 billion depending on which resource you listen to.  In the first quarter of 2018, there were roundly another 200 raising over $6 billion. These numbers make for great headlines but there is one problem.  They have not translated into higher prices for Ether, or any other crypto either.

The Ethereum platform can claim that somewhere between 70%-80% of ICOs that have Dapps built on the ETH platform.  If logic were applied, this should result in greater demand for Ether. But as the truism goes, if everything were logical, men would ride sidesaddle!

One of the clues to unlock this contradiction may rest in the use cases for the most active Dapps.  What I an getting at is this: when the top five Dapps function as exchanges to buy and sell Ether or any other ERC-20 token, that is not a sign of mass adoption. Nor is it good when almost 75% of the activity in the top five is accounted by three Dapps and those are exchanges. And finally when volume on nine out of the top ten are trending down, it is not what investors want so see.

To keep some balance to these observations, there are some positive use cases.  Three of the ten most active Dapps are for gamers, and that is a use case worth it weight in any currency. Also, usage levels tend to be quite volatile from hour to hour so we may have checked on an atypical moment.  But what we want to see are use cases like marketplaces or even gambling where user demand trumps speculators and where activity is growing.

What Is Happening With Augur

And speaking of gambling, Ethereum big gun Augur, which allows users to create prediction markets for just about anything by buying shares and staking ETH in the outcome of an event.  When launched in early July nearly 1,200 were traded in a 24 hour period. At the time Augur appeared to be one of Ethereum’s most promising Dapps.

To be clear, 1,200 is just a benchmark and not proof of success or failure. However, when Augur, one of your most promising Dapps, is being used less than 100 a day with a huge valuation of over $300 million, that is a disappointing moment.

What Ethereum Needs

So what is missing here?  From the insights offered by DappRadar, the answer is that ETH, and for that matter crypto in general, is hungry for valid signs of a breakthrough in mass adoption. In other words, developments in the payments side of crypto could well provide the needed solution. There is no shortage of projects like Bitcoin Superstore and TenX.  And there is always the possibility that the critics of Augur are premature in claiming this potentially game changing Dapp is a disappointment. But so far all of the flashy new whitepapers and highly valued ICOs aren’t connecting with investors. It is time for proof that actual crypto users are getting into game.  And obviously, what is good for ETH is also needed by other players as well.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 106 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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MB Technology and GoChain Partner to Accelerate Innovation on the Blockchain

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MB Technology has recently announced that it is committed to bringing $500 million USD worth of ICOs to the GoChain platform. MB Technology is an expert ICO advisory firm that has advised blockchain projects with a combined valuation of over $2 billion in several industries. Some of the companies that they advised include Fantom, Origo, GoChain, QuarkChain, CoinSuper, Icon and other top ICOs.

The company is committing $500 million to GoChain because it has already launched it’s mainnet functioning at 100 times the speed of Ethereum while being 1,000 times more energy efficient. GoChain is fully compatible with existing Ethereum wallets, smart contracts, dApps, etc. Two companies have already chosen GoChain to launch their ICOs: Solaster Health and Etherprise with a combined value of $63 million.

GoChain has hit the ground running. While many blockchains are still trying to finish up their technical whitepaper or have yet to launch their mainnet, GoChain is way ahead of the curvey. Although blockchains are competing to deliver the fastest Transactions-Per-Second (TPS), they nothing without the dApps that build on them. While speed is important, most blockchains releasing now are more than capable of handling sufficient TPS for production dApps. The dApp ecosystem built on top of a blockchain is just as important, if not more, than the speed of the blockchain itself.

ICOs struggle to build on new blockchains as there are not many well-defined standards. GoChain’s codebase is 100% compatible with Ethereum so any dApp that can or has been built on top of it will easily port to GoChain. This makes it easy for existing Ethereum apps to move over to GoChain and immediately work 100 times faster. A few blockchains build amazingly fast transacting software yet have no use cases or a dApp ecosystem building strategy.

With MB Technology bringing half a billion dollars to GoChain, the coin is extremely undervalued. Compared to other projects on CoinMarketCap, GoChain should be at least in the $100 million market cap range. Competing blockchains talk about overtaking Ethereum, yet GoChain has a working mainnet with dApps being added at a blinding rate. GoChain is one of the most underestimated and undervalued blockchains at this time. Look for GoChain to grow to five to ten times in the next few months from its current market cap of $19.4 million. GoChain is currently only on Kucoin. Look for it to list on other exchanges as it gains daily trading volume.

MB Technology offers advisory services to bring specific solutions designed to boost a project’s outcomes. They also create global investor awareness through their network of partners, influencers, and media outlets.

Disclaimer: Writer does not own GoChain. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 51 rated postsKent Hamilton - Co-Founder of CryptoDayTrader.io, where we are building Pro Crypto Tools




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