What has been happening around Blockchain Technology and Cryptocurrencies this week? The most relevant local and international developments as well as appealing background reports in a pointed and compact weekly review.
A key feature of Bitcoin is its clearly predefined monetary policy, which includes not only a predefined inflation but also a limited overall supply. The cryptocurrency thus differs significantly from common fiat currencies, which can be inflated at will through new money creation. In an environment of rising inflation rates, Bitcoin is therefore increasingly coming onto the radar of institutional investors as an inflation hedge. Compared to traditional inflation hedging with the precious metal gold, the cryptocurrency has efficiency advantages in divisibility and transferability due to its digital nature. With Jefferies, one of the world’s largest investment banks with $440 billion in assets under management, recently reallocated its investment portfolio in favor of Bitcoin at the expense of gold. An interesting trend that will most likely be seen more often in the near future.
A shortcoming of current education often includes a broader understanding of money, our daily used medium of exchange and payment. With the advent of cryptocurrencies, the digital financial environment is instantly expanding by a considerable amount, adding a dose of extra complexity. It’s becoming apparent that a basic knowledge around the emerging field won’t hurt. New York’s new mayor, Eric Adams, wants to counter the foreseeable education gap. In the future, educational modules at schools in the city are to be supplemented with blockchain technology and cryptocurrencies. In Adams opinion, Bitcoin is a new form of money that is here to stay.
Thanks to forward-looking policymakers and regulatory institutions, the necessary legal certainty for a thriving ecosystem around blockchain technology and cryptocurrencies was established early on in Switzerland. The first companies to settle in the canton of Zug soon led to the coining of the term “Crypto Valley” in reference to California’s “Silicon Valley”. In the meantime, the ecosystem has expanded into various industries and also geographically, the Crypto Valley has grown far beyond the Zug area. Over the past two months, there have been further developments in the area.
The structure of today’s financial markets presents many barriers to small investors. Early financing rounds of innovative companies in particular are often reserved for “accredited investors”. According to the rules of the U.S. Securities and Exchange Commission (SEC), accredited investors are defined as individuals with net assets of more than $1 million. In this part of the world, the American model has also become prevalent with its definition of a “qualified investor.” The prevailing definition results in the exclusion of an investor from quite a few forms of investments based on the size of his assets. Participation in the exponential growth of disruptive technologies such as blockchain (DLT), artificial intelligence or machine learning is thus often denied to small investors. The emerging field of decentralized finance (DeFi), with its characteristics of permissionless access as well as the elimination of intermediaries, removes this shortcoming and offers a refreshing alternative. Although accompanied by risks, the benefits of the decentralized investment structure are too numerous to ignore.
In addition: Unique digital objects in the form of non-fungible tokens (NFTs) are trending. The new technology opens up enormous potential, which quite a few companies and projects in the blockchain sector are trying to exploit. Obvious synergies lie in the video game industry and the link with the emerging DeFi world. Clam Island is one of the projects that playfully combines yield generation with NFTs. In an interview with CVJ.CH, CEO Sandy Zhang talks about where he sees the greatest potential for NFTs, how the technology can be combined with video games, and the challenges such experiments must overcome.
Selected articles in the weekly review:
U.S. investment bank Jefferies has doubled its Bitcoin allocation at the expense of gold to hedge against persistent inflation.
New York City Mayor-elect Eric Adams said he would like blockchain technology and crypto to be taught in the city’s schools.
The Crypto Valley is known to be one of the most “crypto-friendly” regions in the world. A review of the past two months.
The space of decentralized financial applications (DeFi) creates new possibilities for retail investors and unbanked people around the world.
A conversation with Clam Island CEO Sandy Zhang on the Binance Smart Chain (BSC), NFT gaming and Decentralized Finance (DeFi).
