In COVID-19’s Wake, the New Normal Creates Crypto Opportunities

In COVID-19’s Wake, the New Normal Creates Crypto Opportunities

In a global economic recession, individuals and institutions have been turning away from traditional assets and seeking opportunities in cryptocurrency.

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The COVID-19 pandemic has been a challenge for everyone, but it has created many opportunities for us in the blockchain industry. In most industries, sales vectors are declining, as bankruptcies and layoffs rule the day. But companies in the crypto and blockchain space have been expanding, hiring and applying for new licenses. 

The pandemic has caused suffering in this industry, as in others, but the fundamentals of crypto are better than those of traditional financial markets. We will experience some reshuffling, but the crypto and blockchain industry will become stronger through this crisis. Newmarket participants are looking for derivative and margin products, and they’re increasingly looking to trade on their phones and mobile applications. 

A second wave

The next wave of COVID-19 would eviscerate new, underdeveloped companies. That’s why sustainability is very important. Soon, there will be a crash test not just for crypto players but for everyone. Those efficient companies will persist, however, and the industry may become stronger for it. 

Traditional investors fear whether a second wave will again plunge the traditional market into turmoil. In March, Bitcoin’s (BTC) price fell to approximately $3,000 and promptly rebounded to over $9,000, even briefly hitting $10,000. By regaining its pre-pandemic level, we see how Bitcoin bounced back a lot faster than other financial investments. I anticipate crypto prices to collapse and quickly rebound in the event of a second wave of COVID-19.

Crypto will continue to grow strong despite a global economic recession though many still suffer from COVID-19 and the effects of lockdown. In a global economic recession, individuals and institutions have been turning away from traditional assets and have been seeking opportunities in cryptocurrency.

Traditional and institutional to become more aggressive in crypto

Therefore, traditional investors will continue to turn toward crypto assets, especially family offices and asset management companies. The market will only mature, particularly initial exchange offerings, decentralized finance and traditional financial markets. We see traditional investors becoming more aggressive when investing in this space, as well as building incubators for blockchain projects. 

Multinational companies and even banks have set up new investment arms for blockchain technology and cryptocurrency, looking to diversify into these alternative assets. According to a recent Fidelity survey, 80% of institutional investors found digital assets appealing, while 60% of them have been proactively looking at Bitcoin as part of their usual portfolio investment. 

In the survey, 74% of United States institutional investors and 82% of European investors saw cryptocurrency as appealing. Meanwhile, 36% of institutional respondents were attracted to cryptocurrency because it is “uncorrelated to other asset classes,” and 34% were attracted by the innovative nature of the technology. And 33% liked the high upside potential. 

Commenting on the survey, Tom Jessop, the president of Fidelity Digital Assets, said: “These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class.” He also added:

“This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions.”

Work from home is an opportunity for crypto

The shift of offline business and physical activities to an online setting to crypto and blockchain startups. From here on out, we will see discussions and debates over cryptocurrency investment from billionaires and traditional investors. Whether they support it or not, they will keep a closer eye on crypto and blockchain technology. 

In the “new normal,” blockchain technology can be applied to the Internet of Things, medical systems, supply chains, and can be used for transparency in financial markets, charity and nongovernmental organizations. In Asian countries, for instance, little is known about how NGOs spend their money, and how many middlemen take a cut. 

Related: The Future of Philanthropy Lies in Blockchain Technology

Sometimes, only 10% of a donation reaches those who truly need it. If this process is put on a blockchain, then everything is on-chain and transparent. There is no black box, and we can track donations to ensure that they are going where they were initially intended to go. After companies adopt blockchain technology for these purposes, only then will they begin to discuss tokenization. 

For now, to be certain, most of the attention remains on Bitcoin. In a post-COVID-19 world, diversifying portfolios will become increasingly important, especially for asset management companies and banks. COVID-19, therefore, is an opportunity for crypto to penetrate new markets, to work with big banks and to attract mainstream investors.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Kiana Shek is the chief experience officer of DigiFinex. Having served in top management positions for several public listed companies, Kiana has extensive experience in Big Data, AI, finance and international business development. DigiFinex is a global cryptocurrency exchange leader based in Hong Kong with seven offices worldwide, serving 4 million global users.

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In a global economic recession, individuals and institutions have been turning away from traditional assets and seeking opportunities in cryptocurrency.

Blockchain Jobs Continue to Rise Despite Global Recession

Blockchain Jobs Continue to Rise Despite Global Recession

Despite the global recession blockchain jobs continue to rise at a rate of 3%

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Trillions of dollars have been injected into the global markets in an attempt to revitalize the world economy. The U.S. alone recently hit its highest unemployment rate in history.

The whole world seems to be falling apart except for blockchain

Kraken, one of the largest cryptocurrency exchanges in the United States, is looking to increase its job force by 10%, despite the recent dips in crypto price, according to Forbes on March 26.

Kraken’s team, currently 800 members strong, is adding an additional 67 hires to the company over the coming weeks. Many of the company’s openings are for people who are hospitality professionals with skill sets focused around the liberal arts. displayed approximately 114.5 per million blockchain-centric jobs last December, right before the first new coronavirus case was reported. By February 2020 that number had increased 3% to 118.4 per million.

Optimism In Blockchain Industry Booms Despite Global Recession

Blockchain industry experts are bullish towards the crypto market. Jihan Wu, Founder of Bitcoin mining giant Bitman, gave his first interview of 2020 at a Chinese blockchain media event, revealing his continued optimism for a crypto market bull run over the coming year. He explained that:

“There are two reasons: first, from China and its neighboring countries experiences, coronavirus can be obtained and taken under control in about 2 months. Secondly, countries around the world are adopting great quantitative easing monetary policies.”

Tyler Winklevoss, co-founder of the Gemini cryptocurrency exchange, also stated on Twitter yesterday that Bitcoin is the “only vaccine in the world that can give you immunity to the money printing disease.”

Cointelegraph reported previously that blockchain will be the most in-demand hard skill in 2020, along with cloud computing, analytical reasoning, and artificial intelligence.

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Despite the global recession blockchain jobs continue to rise at a rate of 3%

Market Recession Was a Long Time Coming, Not Coronavirus Surprise: Research

Market Recession Was a Long Time Coming, Not Coronavirus Surprise: Research

Market research firm Crebaco that the current market recession was long coming and was not caused by just the Coronavirus

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Analysts had predicted a recession for years and it should not come as a surprise, according to crypto-focused market research firm Crebaco.

Crebaco claims in a report shared with Cointelegraph that the recession that has taken hold of the markets was anticipated by many analysts over the last several years. The document reads:

“The Global markets have been correcting since [the] last few days. Some blame it on CoronaVirus, some curse on crude oil.”

As the report points out, Bitcoin (BTC) corrected by over 50% in 36 hours while the CAC, DAX, S&P500, Nasdaq, HK Stock Exchange and Nikkei and few other global equity markets collapsed at the same time by about 20% on average. Furthermore, oil-related stocks have also seen a downturn because of the price war on crude oil between Saudi Arabia and Russia.

Year curve analysis had long predicted a recession

According to Crebaco researchers, the U.S. economy is the best indicator as to whether a recession is taking place or not. Per the report, the U.S. yield curve — which consists of the long-term and short-term interest rates given by the treasury — is “an incredibly accurate tool for understanding and predicting recession and US economic conditions.” The document reads:

“[A] flattening yield curve is not looked at with positivity. But when short term interest rates become higher than long term interest rates, it is usually an indication that the economy is in recession.”

Crebaco researchers point out that the short term interest rates are currently about 0.5% for 10 year and 1% for 30 years, on average. The firm also suggests that a recession was due since the historical charts suggest that one correction of the global financial markets takes place every 10 years, on average.

Bitcoin failed to perform as a safe haven

Bitcoin is often called digital gold by many of its proponents, who suggest that it is a digital alternative to the most popular safe haven asset. Still, the report points out that “all were struck by surprise when Bitcoin fell by 50% in 36 hours.”

The researchers suggest that the reason why Bitcoin reacted so violently to the market downturn was because the Bitcoin and crypto market size was less than $265 billion dollars at the time, while global economies were in trillions of dollars. The report reads:

“It is too tiny to handle something like this as it is Bitcoin’s first recession. Due to the market size, institutions were not involved in trading and providing liquidity to the crypto market. The market plummeted due to the spread in trade prices at several exchanges which trade digital assets like Bitcoin.”

In other words, Crebaco researchers suggest that “the market fell drastically as there was a very thin order book in major exchanges and they didn’t have liquidity providers to support the sudden crash.” Still, researchers point out that also the king among safe haven assets — gold — corrected by about 8.5% in two days “which is massive for a 3000 year old stable commodity.”

Still, some suggest that Bitcoin could have a hard time recovering after this correction. Notorious Bitcoin bull and Galaxy Digital CEO Mike Novogratz recently suggested that investors have lost confidence in Bitcoin. He said:

“[Bitcoin] was always a confidence game. All crypto is. And it appears global confidence in just about anything has evaporated.”

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Market research firm Crebaco that the current market recession was long coming and was not caused by just the Coronavirus

Bitcoin Reclaims $13,000 as NY Fed Says Recession Risk Highest Since 2008

Bitcoin Reclaims $13,000 as NY Fed Says Recession Risk Highest Since 2008

Highest-ever monthly close potential for bitcoin sparks countdown to July 31

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Bitcoin (BTC) hit $13,000 again on June 10 as the 2019 bull market delivered fresh reasons to celebrate for traders and HODLers. 

Market visualization

Market visualization courtesy of Coin360

Data from Coin360 showed BTC/USD hitting $13,130 in early trading Wednesday, the pair reclaiming almost $1,000 in 24 hours. 

The past days have surprised markets, with analysts previously warning a major correction should set in after bitcoin closed below $11,450. 

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

Now, sentiment is trending to the upside, with regular commentator Josh Rager eyeing July’s monthly close as a significant yardstick for price.

“The monthly close is still a few weeks away but you can’t deny the bullishness if Bitcoin can close above the previous ATH close at $13,863,” he wrote on Twitter as $13,000 returned. 

“On high-time frames it will be clear skies with no price history resistance overhead, only support[.] Countdown to July 31st.”

At press time, BTC had slipped slightly lower to hover around $12,950. Weekly gains are now at 12.9%, while over the past month, investors have seen 68% growth. 

The new price highs coincided with data showing the risk to the U.S. of entering a recession was now the most severe since the 2008 financial crisis. The alarming findings came courtesy of Bloomberg journalist Tracy Alloway, who uploaded data from the New York Fed’s Recession Indicator.

Bitcoin meanwhile further regained a record share of the cryptocurrency market cap at 65.1% – a figure not seen since April 2017.

Altcoins were thus predictably in the red Wednesday, almost all suffering losses as attention continued to focus on bitcoin. 

Ethereum (ETH) shed 2.3% to trade at $309, while others lost similar amounts. The exception was exchange Bitfinex’s unus sed leo (LEO) token, which conversely gained several percentage points. Tezos (XTZ) also performed better than most. 

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

Keep track of top crypto markets in real time here

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Highest-ever monthly close potential for bitcoin sparks countdown to July 31

As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain

As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain

Brazil loves crypto, so regulators and banks are looking toward understanding and regulating it

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Brazil’s weak economic growth and inflationary pressure have led to more than 13 million Brazilians currently out of work. The unemployment rate currently stands at 12.5%. While the country runs the risk of recession, cryptocurrency’s low barrier for entry and promise of large returns appeal to Brazilians. Bruno Peroni, chief sales officer at Atlas Quantum, told Cointelegraph:

“We have a higher number of people investing in crypto than on the local stocks markets. The most recent estimates show that there are 1.5 million Brazilians investing in crypto, whereas the local stock markets, called B3, has just reached 1 million investors.”

Authorities explore blockchain, regulation

Timeline of Recent Developments in Brazil

A draft bill requiring public administrators to promote blockchain, as Cointelegraph Brazil reported, was filed by a group of 10 federal officials from different political parties and states in the lower house of the National Congress of Brazil on June 11.

The new draft bill, titled the Digital Provision of Public Services in Public Administration – Digital Government, requires federal and state government divisions to explore technologies like artificial intelligence and blockchain to improve public services.

Federal Deputy Tiago Mitraud of the libertarian Brazilian political party called the New Party signed the bill, as well as officials from various other parties, including the Brazilian Socialist Party (PSB). It’s not the only recent action by Brazilian authorities on the cryptocurrency and blockchain front.

The president of the Brazil’s Chamber of Deputies, furthermore, ordered a commission to consider cryptocurrency regulation for the country. The country is also establishing a regulatory sandbox, according to reports from June 13.

Also, within a space of just a week, Brazil’s Department of Federal Revenue published a manual on June 18 that obliges all exchanges in Brazil to report 100% of user transactions to the supervisory.

In January of this year, the Financial Supervision Council of Brazil announced it would regulate cryptocurrencies using Brazil’s Anti-Money Laundering laws, including fines as high as $5 million for violators.

Banks сlose down brokerage firms with cryptocurrency ties

Brazilian merchants, meanwhile, are still dealing with a lack of regulatory clarity. There has been an ongoing dispute between banks and companies operating in the cryptocurrency space.

Banks closed the accounts of various brokerage firms with cryptocurrency ties. Fernando Furlan, president of the Brazilian Blockchain and Cryptocurrency Association (ABCB), told Universo Online, a Brazilian news website:

„We are competitors and we are also users of the banking system, banks can not act unilaterally, they claim that it is not possible to guarantee that there is no money laundering.“

“While the government and the banks are always boasting about their projects involving blockchain technology, many crypto-related companies have their bank accounts closed,” he added.

Campos also adds that the focus of the crypto industry should shift in the near future, saying, “By following strict rules, we hope that the government understands that crypto is not a safe haven for criminals and that it should strive for Brazil to be a big player in this new era of decentralized finance.”

Regulators, banks and international blockchain consortiums developing the nation’s distributed ledger Infrastructure

While regulators explore cryptocurrency regulations, the Central Bank of Brazil (BCB), the Securities and Exchange Commission (CVM), the Superintendent of Private Insurance (SUSEP) and the Ministry of Economy’s Special Secretariat for Finance are working to digitize the financial, capital and insurance sectors of Brazil by integrating blockchain technology. The official statement said:

“The use of innovative technologies as distributed ledger technology, blockchain, robo-advisors and artificial intelligence has allowed the rise of new business models, reflecting a bigger offer and reach.”

Vice President of Brazil’s largest bank, Bradesco, revealed that major banks will introduce a unique blockchain platform, which it is developing alongside distributed ledger consortium R3, and the bank Itau. The platform is focused on foreign trade and insurance, as Cointelegraph reported on June 11. Bradesco told Cointelegraph in a written statement:

“Bradesco has been studying Blockchain/Distributed Ledger since 2015 and since then has carried out pilot projects in areas related to payments, Know Your Customer (KYC), fraud prevention and Certificate of Deposits (CDB). The platforms used so far are Corda, Hyperledger Fabric, Ethereum, and Ripple. Through these projects, we have tracked the evolution of technology regarding processing and reconciliation capacity for future large scale applications.”

The bank has also recently joined IBM’s Blockchain World Wire solution for international remittances, the Marco Polo trade finance consortium and the National Financial System Network, the first Brazilian blockchain network, which is managed by the Interbank Payment Chamber (CIP).

Bradesco believes that blockchain and distributed ledger technologies could help “in terms of agility, security, transaction transparency, and costs in existing services, as well as enabling the development of new services.”

Keiji Sakai, the country head for Brazil at R3, told Cointelegraph in an emailed statement:

“While we are very excited about these projects, the potential for Corda stretches well beyond financial services. Corda removes costly friction in business transactions across every industry. It enables institutions to transact directly using smart contracts, while ensuring the highest levels of privacy and security. Its applications stretch from financial services and healthcare to oil and gas and we’re always looking to capitalise on those opportunities in Brazil and beyond.”

In early June, CIP launched its blockchain ID platform on Hyperledger Fabric through a partnership with IBM. Nine banks are participating in the project, called Device ID, which is designed to authenticate and verify digital signatures with mobile devices. The project is to be integrated into Brazil’s domestic clearing system, the Brazilian Payment System (SPB). Regarding this, Joaquim Kiyoshi Kavakama, director of Febraban, Brazil’s national banking association, told Cointelegraph:

“Brazilian banks have been studying blockchain technology applications for a long time, but they weren’t all together. So we decided to create a group and unify all actions, which is very important to achieve standardization to all banks. We are now in the forefront when it comes to blockchain.”

In addition to the Device ID anti-fraud solution headed by CIP, Bradesco has projects related to international remittance, trade finance, insurance, investments, customer registration and payments, among others.

Ripple, an enterprise blockchain software company, recently opened an office in Brazil as a first step to expanding its footprint in South America. The company has already partnered with more than a dozen Brazilian financial institutions and money transfer companies — including Santander Brazil, international payment service BeeTech, Banco Rendimento, etc.

Ripple says its 2019 focus includes growing its presence in not only Brazil, but across South America, to countries like Chile, Peru and Argentina. The company is also working with Brazilian universities — such as the University of São Paulo and Fundação Getulio Vargas per its University Blockchain Research Initiative. Luiz Antonio Sacco, managing director for Ripple in South America, shared his thoughts with Cointelegraph:

“We believe that academic institutions will play a key role driving the blockchain industry forward. USPand FGV are innovative, forward-thinking institutions that are investing in blockchain research to explore new use cases and help prepare students for future jobs in this space.”

Peroni of Atlas Quantum says it’s hard to know the cause of Bitcoin’s growth in Brazil. “Our guess is that the low barrier to entrance and the prospect of exponential returns might be one of the reasons why so many Brazilian investors are gearing towards crypto,” he said.

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Brazil loves crypto, so regulators and banks are looking toward understanding and regulating it