30 October 2020

Fidelity Bitcoin ETF

The last week in cryptocurrency has been exciting as Bitcoin (BTC) consolidates its position as a potential hedge while holding strong above $13,000 levels despite the recent sell-off in the U.S. Stock market.

On the other hand, JPMorgan makes its native digital JPM Coin available for commercial use and making global payments. Fidelity Digital Assets – the crypto arm of Fidelity Investments – looks to expand its crypto custodial services in the Asian markets.

JPM Coin Goes Live for Commercial Use

Wall Street banking giant JPMorgan finally released its native digital currency JPM Coin for commercial use for its clients. Takis Georgakopoulos, JPMorgan’s global head of wholesale payments said that a large tech client will be using the JPM Coin for the first-ever time for making cross-border payments.

The banking giant announced its JPM Coin last year in February 2019. It is nothing but the bank’s Stablecoin pegged 1:1 with the U.S. Dollar. This is a blockchain-based digital currency used by JPMorgan for instant payment settlements and facilitating large value transactions across the border.

JP Morgan is the First Bank to Launch a Stablecoin (JPM Coin)
Source: Medium

Currently, JPMorgan moves more than $6 trillion as daily payments across 100 countries. The bank launched this JPM Coin to move away from the existing payment solutions that require a few days as the settlement period. Georgakopoulos said that focus on using its digital currency is eliminating different hurdles for its wholesale payments.

JPM Coin offers a better and cost-effective alternative wherein the bank can save hundreds of millions of dollars every year. To support its blockchain and cryptocurrency efforts, JPMorgan also unveiled a new business unit dubbed Onyx with a dedicated staff of more than 100 employees. Earlier in the week,  Georgakoulos told CNBC:

We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business.”

To further streamline the banking process, JPMorgan has also rebranded its Interbank Information Network as Link that can validate payments before they’re sent. Umar Farooq, the CEO of JPMorgan’s Onyx division said that although banks might charge a few cents to confirm data before each transaction, they will still save money on remediating mistakes.

Also, it will completely eliminate the process of paper checks which involves manual involvement of handling mails at physical locations. The Onyx division will entirely digitize this process.

“We’re talking about hundreds of millions of checks being sent,” Georgakopoulos said. “Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”

Fidelity Digital Assets Announces Expansion in Asian Market

Fidelity Digital Assets – the cryptocurrency arm of the financial giant Fidelity Investments – announced its expansion in the Asian market for offering crypto custodial services to institutional players and high-net-worth individuals.

For this, Fidelity has partnered with Singapore-based startup Stack Funds that offer custodial services to traditional financial institutions. Fidelity Digital Assets has been making quick moves as more and more institutional players join the crypto market. Back in August 2020, Fidelity filed with the Securities and Exchange Commission to bring a Bitcoin Index Fund into the market.

Commenting on its latest move to enter the Asian market, Christopher Tyrer, head of Fidelity Digital Assets Europe told Bloomberg: There is a critical need for platforms which have a deep understanding of what local and regional investors are looking for [Something that] has historically been lacking in the digital asset space”.

Stack Funds co-founder, Michael Collett, also noted that Fidelity’s entry to the Asian market brings along a number of benefits to local investors in Asia. The two companies plan to offer services like digital currency insurance along with monthly audits.

This is an opportune time for Fidelity as a number of big-players from traditional markets have entered the crypto market in recent months. Last week, payments giant PayPal also announced it entry in the crypto market and plans to soon start its crypto trading service in the United States.

Bitcoin Strongly Holds Above $13,000 Amid Stock Market Correction

Bitcoin and the overall cryptocurrency market has done fairly well this week despite a strong correction in the U.S. stock market. Bitcoin continues to hold its position strongly above $13,000 levels.

BTC/USD October 30 2020
Source: BTC/USD Price on October 30, 2020 (TradingView)

At press time, Bitcoin (BTC) is trading at a price of $13,294 with a market cap of $246 billion. At this price, BTC is trading at a 90% premium year-to-date, beating the performance of some of the top-performing tech stocks for 2020.

Bitcoin is also consolidating its position as a potential hedge and continues to further extend its market dominance that is now above 63%.

Interestingly, Bitcoin is also extending its lead against its hedge-alternative and competitor gold. Market analysts say that Bitcoin is turning more favorable against gold and will further extend its dominance in the next 18 months.

Gold vs Bitcoin - Raoul Pal
Source: Raoul Pal (Co-founder of Real Vision) –Twitter

Analysts from J.P. Morgan’s Global Markets Strategy group recently noted that Bitcoin’s popularity as a gold-alternative is rising among millennials. If the trend continues, analysts expect that BTC price can easily double or triple from here.

In its research note accessed by the Fortune publication, the analysts wrote: “The older cohorts prefer gold, while the younger cohorts prefer Bitcoin as an ‘alternative’ currency. Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the Bitcoin price from here,” they added.

But for the short term, the analysts have advised to proceed with caution: “For the near term, Bitcoin looks rather overbought and vulnerable to profit-taking.”

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Edmund McCormack
Tech industry veteran and blockchain technology investor. Simplifying cryptocurrency for almost a decade.

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