Category: Cryptocurrency
Centrifuge Raises $15M, Plans RWA Lending on Coinbase’s Base
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Centrifuge, a decentralized finance platform, revealed its intentions in a Wednesday blog post to establish a lending protocol for real-world assets aimed at institutions on Base, an Ethereum layer-2 network developed by crypto exchange Coinbase.
According to the post, the protocol will enable verified institutions to onboard RWAs and borrow against their RWA holdings.
Anthony Bassili, Coinbase’s head of allocators and tokenization, remarked, “We continue to see significant interest from our institutional clients for easier access to tokenization solutions on-chain.”
This development coincides with Centrifuge’s announcement of raising $15 million in venture capital investment in an “oversubscribed” fundraising round. ParaFi Capital and Greenfield spearheaded the investment, with participation from multiple firms including Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.
Following the announcement, CFG, the protocol’s native token, surged by as much as 14% before moderating gains, as per CoinGecko data. Despite a slight pullback, the token remained up by 5% over the past 24 hours, surpassing the sector benchmark CoinDesk DeFi Index’s 1% decline during the same period.
This development occurs amid intensifying competition in the RWA tokenization realm, as digital asset firms and global banks endeavor to migrate traditional financial products like bonds and credit to blockchain infrastructure to enhance efficiency, settlement speed, and transparency. Asset management firm 21.co projected the market for tokenized assets to reach $10 trillion by the end of the decade.
Centrifuge specializes in bringing structured credit products to blockchain, with rwa.xyz data indicating $270 million in active loans on the protocol.
Ben Forman from ParaFi Capital expressed confidence in institutional adoption, stating, “The Centrifuge team is a leader in real-world asset tokenization, taking a deeply thoughtful approach to design decisions around legal, regulatory, and smart contract architecture.”
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PayPal Adjusts Policies, Removes Protections for NFT Transactions
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In a recent update to its terms of service, PayPal has announced significant changes to its buyer and seller protection policies for non-fungible token (NFT) transactions, effective May 20.
Under the new policy, NFT purchases will no longer be covered by PayPal’s buyer protection program. Additionally, NFT sales exceeding $10,000 will no longer be safeguarded against false claims, chargebacks, or other fraudulent activities that may result in financial losses for sellers.
A spokesperson for PayPal cited the evolving nature of the NFT industry and the uncertainty surrounding proof of order fulfillment as reasons for the policy change.
While the company published a notice about these changes on March 21, the updates went largely unnoticed until now.
According to PayPal’s policy updates page, the revisions to its Purchase Protection Program and Seller Protection Program will come into effect on May 20, 2024. The Seller Protection Program will exclude NFT transactions with a value of $10,000.01 or above unless the buyer claims an Unauthorized Transaction and meets all other eligibility requirements.
Previously, PayPal provided buyer and seller protections for NFT transactions, with the buyer protection program offering refunds for falsely advertised items, and the seller protection program reimbursing sellers affected by payment disputes and fraudulent refund requests.
Despite these changes, PayPal has demonstrated an increasing interest in blockchain-based digital assets in recent years. In 2022, the company introduced support for cryptocurrencies on its platform and filed a patent application for an NFT purchase and transfer system that includes provisions for user royalties.
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Exploring the Niche Market of Gold-Backed Stablecoins
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As geopolitical tensions fuel record highs in the price of gold, one might expect a surge in activity within the gold stablecoin market. However, historical trends reveal a rather subdued landscape in this niche subsector.
Tether’s XAUT and Paxos’ PAXG stand as the major players in the gold stablecoin market. Yet, compared to their dollar stablecoin counterparts, USDT and USDP, their market presence appears minimal. XAUT boasts a market cap of $580 million, while PAXG trails behind at just under $450 million.
XAUT’s supply has remained steady at around 246,500 units since March 2022, contrasting with PAXG’s declining supply from its peak of around 340,000 units in August 2022 to just 182,650 units presently.
Although trading volumes on centralized exchanges for these gold stablecoins have shown some increase, it’s important to note that the rise may be partly attributed to the escalating value of gold.
The 7-day moving average of trading volumes for both stablecoins reached relative peaks in mid-March but has since declined, despite the continued climb of gold prices. These peaks pale in comparison to previous highs, such as during the 2023 regional banking crisis.
While volumes have slowly risen since hitting a low in May, recent events have seen a slight uptick. PAXG experienced a significant jump in volume to $71 million on April 13, the highest level since May 2022, following reports of Iranian drone attacks on Israel. Similarly, XAUT volumes increased, albeit to a lesser extent.
Despite these developments, $71 million in trading volume remains relatively low for a crypto asset. In contrast, larger dollar-pegged stablecoins often transact billions of dollars a day on-chain alone. On centralized exchanges (CEXs), dollar stablecoin volumes are notably higher, given their widespread use as a primary quote asset.
In conclusion, the gold-backed stablecoin market remains a niche subsector, despite the recent surge in gold’s popularity within the broader market.
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Tether and Fuze Partners to Boost Digital Asset Awareness in Turkey and the Middle East
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Tether (USDT) has formed a partnership with Fuze, a digital assets infrastructure provider, to bolster education and awareness about digital assets in Turkey and the Middle East. The collaboration, detailed in an official press release, entails a Memorandum of Understanding (MoU) between the two entities, outlining mutual objectives without legal binding.
The joint efforts between Tether and Fuze aim to cover a spectrum of educational aspects within the digital asset domain, including cross-border payment solutions, compliance, regulatory framework development, and education for local financial institutions.
Initiative to Drive Cryptocurrency Adoption
At the heart of the collaboration lies a set of educational initiatives aimed at nurturing the uptake of digital assets, including Bitcoin, Blockchain, and Stablecoins like Tether (USDT), specifically for facilitating cross-border transactions. These campaigns underscore the efficiency and accessibility advantages of employing digital assets compliantly, benefiting businesses and individuals across Turkey, the Middle East, and North Africa.
Paolo Ardoino, CEO of Tether, expressed enthusiasm about the collaboration, highlighting its potential to democratize access to digital assets in the targeted regions.
Educational Programs and Workshops
Tether and Fuze will collaborate on developing programs and workshops aimed at enhancing awareness and comprehension of digital assets and blockchain technology among local financial institutions and individuals. These initiatives will conform to evolving regulatory standards, ensuring compliance amidst regulatory changes.
Focus on Practical Utility of Crypto
Additionally, the partnership seeks to enlighten merchants and enterprises about the practical usefulness of digital assets such as Bitcoin and Tether for day-to-day transactions. Raising awareness and promoting adoption aims to showcase the tangible benefits of digital assets in routine operations.
Engagement with Financial Institutions
Efforts will extend to engaging local and regional banks and financial institutions, equipping them with knowledge and tools to effectively utilize stablecoins and digital assets for their clientele.
Fuze’s Co-Founder and CEO, Mo Ali Yusuf, emphasized the importance of educating stakeholders across all levels to accelerate the digital assets landscape and maximize opportunities while maintaining security and trust.
Market Performance and Challenges
Tether’s USDT recently surpassed a market capitalization of $100 billion, marking a 9% year-to-date growth. It maintains a substantial lead over its closest competitor, USD Coin (USDC), with a market cap exceeding $71 billion.
However, concerns about the quality of assets backing USDT persist in the crypto space, with a recent United Nations report citing Tron’s popularity in cyber fraud and money laundering activities in Southeast Asia. Tether has refuted these accusations, emphasizing its collaboration with law enforcement agencies and the traceability of its token.
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Shiba Inu Faces Downturn Amidst Meme Coin Market Volatility
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The Shiba Inu (SHIB) price has significantly declined 8% today, dropping to $0.0000216, mirroring a broader 4.5% dip in the crypto market over the past 24 hours. Over the past week, SHIB has fallen by 24%, and in the last 30 days, it has experienced a 16% decline, although it still maintains an 85% gain over the past year. This downward trend coincides with the meme token segment’s first major decline in market cap since March, with tokens like SHIB and Dogecoin particularly affected by the recent loss in market confidence.
Despite this, certain meme coins are defying the trend and showing signs of growth, notably newer tokens that are holding successful presales. However, SHIB remains in a medium-term downturn, with weak indicators and no clear signs of imminent recovery. Both its relative strength index and 30-day moving average continue to decline, indicating oversold territory for the token.
Although a recovery may take a few days, SHIB’s elevated trading volume of approximately $1 billion suggests some market interest. Nevertheless, resistance and support levels continue to trend downwards, requiring patience from traders. Yet, signs of accumulating from at least one whale indicate anticipation of a near-future recovery, potentially boosted by broader market positivity.
The upcoming Bitcoin halving event could impact prices, potentially leading to short- and mid-term declines due to miners facing reduced incomes. However, with Bitcoin ETF volumes and interest rates stabilizing, steady gains are expected throughout the year, benefiting tokens like SHIB, which boasts strong fundamentals.
Shiba Inu Price Prediction
Despite short-term challenges, SHIB remains poised for growth, with potential price targets of $0.00004 in the next couple of months and $0.00006 by the year’s end.
Emerging Meme Coin: Slothana
While SHIB remains a prominent player, Slothana (SLOTH), a Solana-based coin, has emerged as another promising meme coin in the market. With a presale that has raised over $10 million, Slothana has garnered significant attention and is set to close in under 13 days before listing on exchanges. The coin’s popularity is attributed to its team’s successful track record with previous meme coin launches, particularly the Smog (SMOG) token, which saw substantial gains post-presale.
Slothana’s choice of memes, particularly its mascot, the sloth, resonates with investors seeking financial freedom from traditional work obligations. The coin’s presale offers new investors an opportunity to get involved before its listing, which could trigger a significant rally in the coin’s value.
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Bitcoin Depot Thrives Amid Cryptocurrency Volatility
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Bitcoin Depot, the largest Bitcoin ATM operator in the United States, has defied the highly volatile nature of cryptocurrency prices, revealing robust revenues in its recently filed 10-K annual report. Despite the rollercoaster ride of cryptocurrency prices, the company’s revenues in 2023 and 2022 amounted to $689 million and $647 million, respectively, showcasing resilience to Bitcoin’s price fluctuations.
Bitcoin Depot’s success amid market turbulence is attributed to its strategic approach to services primarily used for non-speculative purposes, such as money transfers, international remittances, and online purchases. The company’s user surveys indicate a preference for practical utility over speculative trading. Unlike entities heavily involved in cryptocurrency trading or mining, Bitcoin Depot maintains a relatively low balance of Bitcoin, typically less than $1 million, at any given time, minimizing exposure to volatility.
The company’s proactive measures include purchasing Bitcoin through reputable liquidity providers rather than engaging in mining activities. This approach, coupled with a sophisticated Bitcoin management process, effectively mitigates exposure to price volatility and differentiates Bitcoin Depot from competitors.
Bitcoin Depot’s operational model does not act as an agent or exchange for users in transactions but maintains Bitcoin balances to fulfill user demand from kiosk or BDCheckout transactions. Cash in Bitcoin ATM kiosks represents approximately 21% of the company’s average monthly revenues, highlighting a dual approach to managing Bitcoin and cash balances that contributes to stability and resilience.
Despite a decline in installations witnessed in the Bitcoin ATM market in 2023, Bitcoin Depot remains a dominant player, operating over 7,000 BTMs globally. Its competitors, CoinFlip and BitStop, operate 4,800 and 2,500 machines, respectively. While the overall trend saw a decrease in installed Bitcoin ATMs globally, Bitcoin Depot’s CEO, Brandon Mintz, remains optimistic about the industry’s future, anticipating a rebound following the anticipated Bitcoin halving event. This event, often associated with increased market activity and interest in cryptocurrencies, could further bolster Bitcoin Depot’s position in the market.
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Bitcoin’s Bullish Potential Ahead of Halving: Could the Rally Continue?
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With the upcoming Bitcoin ‘halving’ on the horizon, cryptocurrency traders are abuzz with speculation about whether the digital currency’s current rally is just the beginning of a larger surge this year. The halving, a pivotal event in Bitcoin’s blockchain technology, aims to reduce the rate at which new bitcoins are generated, historically triggering substantial price rallies.
Previous bitcoin halvings in 2012, 2016, and 2020 were followed by significant price surges, with bitcoin soaring over 545% within a year after the May 2020 halving. Scheduled for April 20 according to CoinGecko, the next halving has divided market sentiment regarding Bitcoin’s potential trajectory.
During a halving, the rewards for bitcoin miners are halved, leading to decreased profitability and a slowdown in token production. Some enthusiasts argue that Bitcoin’s increased scarcity adds intrinsic value to the digital asset. Bitfinex analysts predict a potential 160% surge in Bitcoin’s price over the next 12-14 months post-halving, potentially surpassing $150,000.
However, skeptics, such as David Mercer of LMAX Group, caution against overly optimistic projections, suggesting that the impact of previous halvings may not necessarily repeat. Mercer highlights the possibility that Bitcoin’s recent rally, reaching an all-time high of $73,803.25 in March, could have already priced in the effects of the upcoming halving.
Analysts note that while historical precedent is significant, other factors beyond the halving could influence Bitcoin’s price movements. These include looser monetary policies, increased retail investor participation, and the recent introduction of U.S. spot bitcoin exchange-traded funds (ETFs).
Despite differing opinions, many analysts agree that the ETFs could be one of several catalysts supporting Bitcoin’s price post-halving. Additionally, expectations of a U.S. Federal Reserve interest rate cut this year could further bolster risk assets like cryptocurrencies.
As speculation mounts and market dynamics evolve, the crypto community eagerly awaits the outcome of Bitcoin’s halving and its subsequent impact on prices.
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Bitcoin Depot Thrives Amid Cryptocurrency Volatility
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Bitcoin Depot, the largest Bitcoin ATM operator in the United States, has demonstrated remarkable resilience in its revenues despite the volatile nature of cryptocurrency prices.
According to its recently filed 10-K annual report on April 15, the company disclosed revenues of $689 million in 2023 and $647 million in 2022, indicating a strong performance unaffected by Bitcoin’s price fluctuations.
Bitcoin Depot’s Robust Revenue Amid Market Volatility
Despite the tumultuous movements in cryptocurrency prices, Bitcoin Depot has maintained steady revenue growth, showcasing its stability amidst market turbulence. Even during periods of extreme volatility in Bitcoin prices, the company’s revenues remained resilient and unaffected. For example, despite Bitcoin’s 155% surge in 2023, Bitcoin Depot’s revenue growth was a modest 6% year-over-year.
This resilience is attributed to Bitcoin Depot’s strategic focus on non-speculative services such as money transfers, international remittances, and online purchases. Unlike entities heavily involved in cryptocurrency trading or mining, Bitcoin Depot maintains a relatively low balance of Bitcoin, typically less than $1 million, at any given time.
Additionally, the company minimizes its exposure to Bitcoin’s volatility by purchasing Bitcoin through reputable liquidity providers like Cumberland DRW or Abra, rather than engaging in mining activities. This proactive approach to risk management sets Bitcoin Depot apart from its competitors and ensures effective management of principal risk.
Bitcoin Depot’s operational model involves maintaining Bitcoin balances to fulfill user demand from kiosk or BDCheckout transactions, rather than acting as an agent or exchange for users. As users receive Bitcoin, the company replenishes its balance through purchases from leading liquidity providers, ensuring smooth operations and stability.
Furthermore, Bitcoin Depot’s success extends globally, as it leads the Bitcoin ATM market with a network of over 7,000 BTMs worldwide. Despite a decline in Bitcoin ATM installations globally in 2023, Bitcoin Depot remains optimistic about the industry’s future, anticipating a rebound following the upcoming Bitcoin halving event.
Bitcoin Depot’s CEO, Brandon Mintz, remains confident in the industry’s prospects, expecting increased market activity and interest in cryptocurrencies post-halving.
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