The cryptocurrency market has taken a surge in appreciation over the past few days with various factors cited to boost the primary benchmark for cryptocurrencies, Bitcoin, beyond US $ 7,425 per coin.
This is still a far cry from Bitcoin’s historic high of nearly US $ 20,000 per coin set in December of last year, although the recent price spike is linked to the growing development of the industry with the inclusion of the giant. BlackRock asset management and the current crypto exchange Coinbase.
According to CoinMarketCap, the value of the crypto market has grown 11% in the past 24 hours, pushing Bitcoin’s ultimate market cap to $ 127.3 billion.
A major catalyst behind the rising tide of cryptocurrencies has been the revelation that asset management powerhouse and ETF giant BlackRock are potentially considering launching a crypto ETF in the near future.
And it’s not just Bitcoin that has received strong appreciation.
Other cryptocurrencies such as Ethereum and Ripple, second and third after Bitcoin, are also up 6% and 9% over the past day with bullish sentiment seen in 98 of the top 100 cryptocurrencies tracked by CoinMarketCap.
The biggest gains were for the Ardor coin, up 46% and valued at US $ 236 million by market cap.
Impact on ASX shares
Among ASX stocks, several companies benefited from the US-led crypto spike.
DigitalX (ASX: DCC) and Ookami (ASX: OOK) are up around 50% for the week, having clear blockchain-related business models that could benefit well if cryptoassets are in fact commoditized and traded like established securities such as stocks and bonds.
Yojee (ASX: YOJ), which uses blockchain technology in its services, signed a major two-year deal with well-established logistics company Riverwood Logistics and raised AU $ 8 million earlier this week, which didn’t has only increased investor sentiment and expectations. .
A sure sign of the cryptocurrency’s growing influence, DigitalX said that over the past 12 months it has seen its stock price “follow the rises and falls of the cryptocurrency markets, particularly the cryptocurrency market. global Bitcoin market “.
Elsewhere in the crypto-blockchain space, shares of Fatfish Internet Group (ASX: FFG) have risen 23% over the past week, helped in part by the evolution of blockchain and the crypto landscape, but also aided by announcing its intention to invest further in Epsilon Capital Management, a technology fund management firm based in London, UK. The “share subscription” agreement means that a representative of Fatfish will join the board of directors of Epsilon Capital.
Fatfish said the move was intended to combine Fatfish’s blockchain and cryptocurrency experience with the global expertise of Epsilon Capital’s co-founders in corporate finance, fund management, investment banking and capital markets.
Now doubly listed Canada-based Zyber Holdings (ASX: ZYB) is up around 17% this week, with cybersecurity also receiving a strong bid on the crypto-based market theme. Zyber is dynamic after its IPO on the Frankfurt Stock Exchange in Germany in March – clearly benefiting from the rising tide for crypto-blockchain companies on the ASX.
BlackRock goes crypto?
Earlier this week, Financial News and Bloomberg claimed that BlackRock had set up a task force to “examine cryptocurrencies and blockchain infrastructure,” with a potential crypto move neither denied nor confirmed.
BlackRock is a US-based investment management firm, founded in 1988, but has accumulated a US $ 6.3 trillion portfolio of assets under management across various asset classes. The company operates as a manager of institutional fixed income and risk management assets, but was called a “shadow bank” by The Economist in a special report in 2014.
Shadow banking is considered to be the group of companies that provide financial services (other than banks). The entire industry, from short-term lenders to multinational asset management, has been treated with suspicion, and some hedge fund managers would even say disdain, by some regulators since the financial crisis of a decade ago. .
The UK’s Financial Stability Board released a report earlier this year saying its narrow measure of shadow banking could “pose a threat to stability” and rose 7.6% to $ 45.2 trillion in 2016. A larger measure, which includes all financial companies that are not central banks, banks, pension funds or insurers is around $ 99 trillion and accounts for 30% of global financial assets.
The report said the United States accounted for 31% of the risk, followed by China at 16%, the Cayman Islands at 10% and Japan at 6%.
While some would argue that non-bank financing offers a valuable alternative to bank financing and helps support real economic activity, critics of shadow finance claim that it represents an asymmetric brand risk that is chaired by CEOs. always irresponsible and often anonymous company.
According to BlackRock chief executive officer Larry Fink, BlackRock has not sought any “crypto exposure” on behalf of its clients, but has had a crypto “task force” since 2015 that meets periodically to exchange information on blockchain-related developments, including potential new businesses.
Bitcoin values were further bolstered by additional news that Coinbase, a leading cryptocurrency exchange, is moving forward by becoming a full-fledged crypto broker (a much sought-after status in modern financial markets) .
Coinbase says it has received approval from the Financial Industry Regulator to move forward with a trio of acquisitions that could see it become one of the first federally regulated sites for trading in coins digital.
If granted, the statute would effectively classify crypto digital assets as marketable securities, thereby giving them greater influence in the market and potentially affecting entire swathes of modern markets – starting with the financial system and by what means. “Value” is evaluated.
FIRA has approved Coinbase’s purchase of Keystone Capital, Venovate Marketplace, and Digital Wealth LLC, with all of the acquisitions positioning Coinbase to offer “security tokens.”
The downside, however, is that the offering of investable securities brings more federal oversight – a prospect that most government lawmakers are not yet ready for, given the rapid emergence of blockchain technology.
As is normally the case, new technologies attract many innovative ideas and productive opportunities – but – tend to leave regulators behind while established government policy remains uncertain as to how best to respond.
Bitcoin and Ethereum are cryptocurrencies that may become increasingly popular in recent years, serving as a digital medium of exchange between people around the world.
Their entire existence and operational principle are based on blockchain technology and more technically: Distributed Ledger Technology (DLT). Blockchain can facilitate incredibly large databases, faster uptime, more precise cybersecurity, but also provide impeccable transparency and usability to users.
The rapid spread of crypto-based efficiencies has also gradually attracted diverse users from a consumer and commerce perspective, across IT, software, digital payments, logistics, and cybersecurity. The benefits of blockchain technology include cryptocurrencies, but they don’t end there.
There are potential benefits for entire systems, primarily public and large-scale administrative functions that can enable rapid business development and “scalability” for small businesses, including software as a service company REFIND (ASX: RFN), which took a 15% stake. in the blockchain-based loyalty and rewards company Loyyal Corporation.
Bitcoin demand and supply dynamics are to some extent predestined to be engulfed in a perpetual uptrend – given the amount of mathematically limited supply encountered with a brand-driven (and ultimately unknown) level of demand. ), which has been driven by speculation, as much as for technical or functional reasons.
However, blockchain technology is not just about cryptocurrencies or Bitcoin value with multiple companies including large asset managers and online crypto exchanges inevitably moving closer to the mainstream of cryptocurrencies.