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CIS Gazette 18/Jan/2021

A summary of the weeks news & events in the  Crypto/Blockchain world

The week of big news in crypto markets

Crypto loans are going worldwide

According to, nearly sixty million people own cryptocurrency wallets. The world of cryptocurrency is booming and people from all over the world show curiosity and interest on the Crypto Markets. Recently, with the rise of DeFi, crypto loans have become increasingly popular. These loan types make the process of borrowing money much easier than traditional methods. For a traditional loan, the process can be lengthy and your credit score is going to be a major factor in determining how much money you're able to borrow. With crypto loans, people are able to get the funds they need even when banks won't give them a chance. Furthermore, many platforms will approve crypto loans within one day. Some crypto lending platforms, especially if it's a peer-to-peer (P2P) network, might take a little longer.  These networks require cooperation between the lenders and borrowers, so the process does not happen as quickly. For crypto loans, loan terms are much more customisable. Borrowers get to choose the loan-to-value ratio (LTV) as well as the fiat currency that will be paid out in. Some of the crypto loan platforms offer extremely flexible repayment terms. Crypto loan platforms also tend to be extremely transparent. This means that the loan terms are going to be laid out clearly. Any added fees are also clearly stated. Needless to say that all crypto transactions are transparent and recorded in the blockchain technology.1

The crypto market reaches above $1 trillion!

The total market value of all cryptocurrencies rose above $1 trillion for the first time in bitcoin's history. Bitcoin’s value raised as governments increase speeding to blunt the economic impact of the coronavirus. This has raised fears about rising inflation and the U.S. dollar debasement as well. The cryptocurrency is also gaining traction with the inflow of more mainstream investors who are increasingly convinced that Bitcoin will be a long-lasting asset, and not a speculative bubble as some analysts and investors feared. Crypto markets analysts underlined that while outsiders may view the cryptocurrency industry being valued at over $1 trillion as an incredibly significant milestone, in actuality, is still in one of its very early stages of development and growth. Whilst the market cap of all cryptocurrencies rose to $1.042 trillion, Bitcoin accounts for around 69% of the total market cap of the total and it is followed by Ethereum with a 13% share.2

Digital wealth management to the main street investors

Goldman Sachs has begun internal testing of a digital wealth management service for the masses, as it continues its push into the mainstream consumer market. Furthermore, set for roll out early next year, the automated investment service is undergoing trials with staff. Employees who sign on to the digital service will pay an annual management fee of 0.15%, according to a company memo. The company is preparing for the public launch in Q1 2021 and pleased to invite consumer and wealth management colleagues to provide early feedback on their beta program. The accounts can be started with as little as $1,000, giving users a choice of three model portfolios composed of ETFs from Goldman and outside providers. It will be integrated with other offerings, including personal finance tools on the app and online portal.3

UK banks ban digital currency deposits!

Digital currency speculators in the United Kingdom are reportedly facing increasing difficulties accessing their gains, with the Country’s major banks shutting down deposits from cryptocurrency exchanges. According to recent reports, banks such as HSBC have already introduced measures that prevent transfers from digital currency exchanges to their accounts, effectively preventing speculators from cashing out any gains. The decision from HSBC, world’s sixth-largest bank and one of the largest by customer numbers in the U.K., is likely to pose significant challenges for digital currency investors and users in the country, who are now unable to freely access funds through their HSBC accounts. This joins other banks and institutions which have prohibited deposits to digital currency exchanges or purchases of digital currency via debit and credit cards. As a result, U.K. residents are already reporting difficulties with fiat to digital currency exchange and vice versa.

The move is expected to push HSBC customers towards new startup banks, which invariably have a friendlier approach to digital currencies and digital assets. Some investors are also relying on decentralised finance and stablecoins, or simply spending their digital currencies without converting to fiat, in order to get around the new restrictions. Nevertheless, the decision by the Country’s leading banks is set to make it even more difficult for individuals to access, spend and convert digital currency within the U.K.4

UBS Wealth warns clients about crypto prices

Strategists at one of the world’s largest wealth managers are issuing a warning to crypto investors plunging into the record rally: "You could still lose all your money". Between regulatory threats and central bank-issued competitors, there’s nothing stopping a wipeout in big-name digital currencies eventually, according to UBS Global Wealth Management. As Wall Street jumps on the Bitcoin rally like never before, the Swiss firm says prices may rise in the near term, but the industry faces existential risks over the long haul. The chief investment officer said there is little to stop a cryptocurrency’s price from going to zero when a better-designed version is launched or if regulatory changes stifle sentiment for global emerging markets. Netscape and Myspace are examples of network applications that enjoyed widespread popularity but eventually disappeared. While famed investors including Paul Tudor Jones and Stan Druckenmiller are entering the industry, critics see gambling, scandal, and manipulation. In the near-term crypto prices could climb a new powered by market momentum, institutional adoption and limited supply. But over the long term, the market risks regulatory intervention, the strategists said, citing the U.K.’s decision to ban sales of certain crypto-derivative products to retail investors. Like most firms, UBS Wealth is sceptical on the real-world utility of virtual tokens, but stop short of calling crypto prices a bubble, given the difficulty of determining a fair value for an asset without cash flows. 5

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