Cryptocurrency Analyst
Summary: Several leading international banks are close to launching their cryptocurrency custody solution. Furthermore, MasterCard is joining Visa in the race to include cryptocurrencies on their network, and the biggest decentralized exchange hit an all-time volume of $100 billion.
Leading banks with cryptocurrency custody in the pipeline
Over the past week, several leading banks have publicly announced their plans to offer custody for cryptocurrencies. The world’s largest custodian bank, BNY Mellon, announced its plans last week to launch a cryptocurrency custody solution for the larger cryptocurrencies. The offering is set to launch some time this year. BNY Mellon added that they might add prime brokerage later if their clients request it. The bank will be joining other well-known banks like JPMorgan, Citi, Goldman Sachs, and Deutsche Bank, who allegedly have cryptocurrency custody in their pipeline, also expected for launch in 2021. Whether they intend to add brokerage is unknown. Notably, JPMorgan has formerly been quite severe on cryptocurrencies. JPMorgan’s CEO Jamie Dimon called Bitcoin “a fraud” in late 2017. Late last year he was, however, more diplomatic when saying that Bitcoin is just not his cup of tea. The launch of crypto offerings at traditionally respected banks signals a broader adoption across the financial industry. Furthermore, it indicates that there is a demand for such services, which the traditional banks are most likely afraid of missing out on.
MasterCard is joining Visa
Last week, we wrote about Visa planning to launch a cryptocurrency product targeted banks, enabling them to facilitate cryptocurrency trading for their clients. MasterCard has now officially joined Visa in the race to launch a cryptocurrency offering. On a note on MasterCard’s website, they disclosed their plans to add selected cryptocurrencies to their network later this year. The plan is reportedly to allow the settlements of merchants in selected cryptocurrencies – allegedly predominantly in stablecoins. It is expected that MasterCard at least will include the second biggest stablecoin called USDC. USDC is also the stablecoin which Visa has sealed a partnership with to bring on their network. MasterCard added to their announcement that they work with several central banks to potentially add their digital currencies – known as CBDC’s - to their payment systems. It is quite significant for the crypto-market to have the two biggest payment processors respectively working on various offerings within cryptocurrencies.
Uniswap hits $100 billion in total volume
Yesterday, the biggest decentralized cryptocurrency exchange, Uniswap, hit an all-time volume of $100 billion. The volume for the past 24 hours on the exchange was slightly below $1 billion. Decentralized exchanges are often referred to as the key aspect of decentralized finance – known as DeFi. Speaking about Uniswap, the decentralized exchange was launched in late 2018 and is driven on the Ethereum-network, where traders are able to convert between Ethereum-based tokens. The most-traded tokens on Uniswap are often stablecoins against tokens like Chainlink, Wrapped Bitcoin, and WETH. Uniswap has contributed heavily to the surge in number of Ethereum transactions – and thereby, the fee for processing transactions on the network. Therefore, to some degree, Uniswap is currently a victim of its own success. The high transaction fees have left room for other decentralized exchanges on alternative chains. Especially, the chain from the world’s biggest centralized cryptocurrency exchange Binance, known as Binance Smart Chain has gained popularity over the past months for this purpose. The decentralized exchange on Binance Smart Chain called PancakeSwap is currently handling half the volume of Uniswap daily – but depending on how long it takes to fix the scalability on Ethereum with ETH 2.0, it will most likely overtake the daily volume of Uniswap in the foreseeable future.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
