Huobi Now Offering Custodian Services, and We’re in Bull Territory with Bitcoin
Newsletter #4: Week Ending August 2nd
This week’s focus is active addresses and news on digitized and tokenized assets. Our research report this week, which you can find live on our site here, also concerns cryptocurrency active addresses and volatility. Read on below for coverage of Bitcoin, Ethereum, Huobi, and more real estate adoption of tokenization!
Bitcoin is above $10,000 due to DeFi and Stablecoins/Altcoins
This week, Bitcoin brought exciting news as it’s price broke the psychological number of $10,000. Does this quash fears that BTC would sink below the $9,000 threshold, leaving it vulnerable to a price freefall? Well, on Monday, BTC was above $10,500, a price threshold which experts say needs to be maintained in order for Bitcoin to have a bull-run. While fears of a breakdown are not out-of-sight and out-of-mind, Bitcoin is certainly in good shape. As to why this has happened, some say it’s owed to DeFi (decentralized finance). According to “Chris Thomas, head of digital assets for broker Swissquote… DeFi is the main reason for the cryptocurrency markets’ move up overall. ‘It’s purely DeFi driven,’ said Chris Thomas.”
Although it should be noted that other factors are contributing to the success of BTC as well, such as the increased market capitalization of stablecoins. However, a more curious factor has to do with altcoins. Because there has been an influx of Bitcoin into exchanges while its overall presence in the crypto market is around only 61%, “market analysts [are suggesting] that Bitcoin is flowing into exchanges to be traded for the altcoins that power DeFi platforms.” However, it is important to note that Bitcoin’s surge signals that whales and institutional entities may be favoring large-cap and high DAA (Daily Active Addresses) cryptocurrencies. This, coming from crypto analytics firm Santiment, who also asserts that due to the high DAA of Bitcoin, the “shift could be long lasting”.
Ethereum’s Active Addresses
This week, Ethereum also saw a huge increase in price, reaching a level that is its highest since 2019. However, Ethereum’s price also outpaced its active addresses. This isn’t to say that its active addresses have declined recently- in fact they’ve been increasing. The price surge, like Bitcoin’s price, is attributed to the adoption of DeFi applications. It should be noted, as we talked about in last week’s newsletter, that Ethereum’s still high fees do not bode well, this time for its number of active addresses.
Huobi is Diving into the Digital Assets Sector
Crypto exchange company Huobi recently launched its digital assets custody platform in an effort to capitalize on a feeling shared by many exchanges including Huobi that institutional investors are and will increasingly adopt the use of digital securities. In an interview with cointelegraph.com, Huobi’s Head of Global Markets, Ciara Sun, made the assertion that as regulatory processes become clearer, institutional adoption of digital securities will increase. It is interesting to note that Ciara Sun attributed the overall lack of current institutional adoption to a lack of infrastructure in spaces like custodianship. This move seems like a direct addressing of said lack of capital market services currently in the digital assets space.
Tokenized Securities
This week also brings further adoption by the real estate market of tokenized securities as St. Regis Aspen’s holding firm announced that it would be opening 19% of the property, which is worth around $18 million, to the private market through asset tokenization. This comes as our partners at tZero form a partnership with Elevated Returns LLC, the aforementioned holding firm. It is a very emboldening sign that a very notable real estate security is opening itself up to the private market. The firm’s founder and president, Stephane De Baets, cites the ease of having “access to a regulated, transparent and hopefully liquid product” and the fact that “anyone can actually go into the tZero ecosystem, …open an account and… buy or sell a digital representation of a share of an actual, equity-ownership in the St. Regis Aspen” as reasons why this is such an advantageous move for the property.
The Upshot:
- Bitcoin shoots past $10,000 as some cite adoption of DeFi as the reason.
- Bitcoin’s high DAA is thought to have the potential to keep its rise going.
- Ethereum is also on the rise, though its active addresses are wanting, and its fees may threaten to shrink them.
- Crypto exchange platform Huobi is jumping into a digital assets custodian role- something that may very well attract more institutional adoption of digitized assets
- More adoption of tokenization in the real estate sector through St. Regis Aspen’s holding firm and our partner, tZero.
Thanks for reading and be sure to share the knowledge to make sure your friends stay in the loop!
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About RedBlock
RedBlock Inc is a digital investment and fintech firm leveraging blockchain technology for asset digitization and management, from issuance to secondary liquidity. Its global network of capital market participants, including issuers, broker-dealers, secondary exchanges, funds, liquidity providers and custodians, are supported by its end-to-end blockchain-powered asset management platform. RedBlock also manages an investment fund to support companies in its ecosystem that align with its investment thesis. With a growing track record and pipeline, the RedBlock team hails from top tier global investment banks, venture capital firms and blockchain technology companies.
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