3 Reasons Ethereum Is About to Skyrocket

]

Arrowings ascending on a chalkboard

While Bitcoin gets all the attention, its peer has had a much better run over the past year. Ethereum’s value has surged 1,272% since March 2020. Meanwhile, Bitcoin is up only 806% over the same period.

This year, Bitcoin’s smaller rival could widen the gap in performance. Three emerging trends could push the value of Ethereum much higher, which is why investors should watch the lesser-known crypto.

Visa adoption

Yesterday, payments juggernaut Visa announced it would start settling transactions in cryptocurrency. The company has partnered with Crypto.com to pilot a settlement layer based on the Ethereum network.

With over 200 markets and compatibility with 160 currencies, the global Visa network is the largest payment platform in the world. The company processes 65,000 transaction messages every second. If the pilot project is successful, many of those transactions could be shifted to the Ethereum network.

As usage expands, the value of the underlying ETH is likely to skyrocket. However, payments are just one of the many ways this blockchain could be useful. Over the past year, Ethereum has seen immense adoption in another sector of the economy — digital art.

NFTs

Non-fungible tokens (NFTs) are based on the Ethereum network. These are easy-to-create digital pieces of art that can be stored, bought, or sold like digital collectibles. Think of trading cards, limited edition books or exclusive soundtracks that live on the blockchain.

In 2020, the National Basketball Association adopted the technology to create TopShots — a marketplace to buy and trade moments from live games. Imagine buying an NFT video of Michael Jordan’s first slam dunk and seeing the value of your collectible appreciate as Jordan became a superstar.

My example isn’t perfect because I’m not into sports, but you get the idea. NFTs are already starting to gain mainstream adoption. If this continues, the Ethereum network could be the bedrock of an entirely new industry worth several billions of dollars.

Story continues

While adoption and usage is surging, the developers of this cryptocurrency are about to cut supply drastically.

Supply cut

The upcoming Ethereum Improvement Proposal (EIP) 1559 upgrades the system to lower the costs of transactions. If implemented, EIP 1559 will eliminate some ETH every time a transaction occurs. This helps maintain a low, flat fee for activity on the network. However, it also reduces circulating supply, which should boost the value of ETH.

The culmination of these two demand-side and one supply-side factor should propel ETH to the stratosphere in the months ahead.

How to buy Ethereum

Canadian investors can add ETH to their portfolio directly via brokerages like WealthSimple. However, if you want to hold crypto in your Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), the Ether Fund (TSX:QETH.U) is your best option.

Each unit of the fund represents 0.01756762 ETH. That makes it a convenient, cost-effective way to add exposure without dealing with the complexities of cold storage, transaction fees, or tax implications of crypto.

Bottom line

The Ethereum network is poised for higher demand and lower supply, which could magnify its value. Add the Ether Fund to your portfolio for exposure.

The post 3 Reasons Ethereum Is About to Skyrocket appeared first on The Motley Fool Canada.

Visa Settles USDC Transaction on Ethereum, Plans Rollout to Partners

]

Visa has processed a cryptocurrency payment directly on the Ethereum blockchain as part of a new service the payment giant plans to introduce to its partners later this year.

The move, the latest sign of increased adoption of digital currencies by the old-guard financial industry, bumped the price of bitcoin and ether roughly 5% each.

Per a press release shared with CoinDesk, Crypto.com sent a USDC stablecoin transaction on Ethereum to an account at Anchorage custody under Visa’s name. Crypto.com issues “crypto-backed” Visa cards that allow its users to spend the coins in their Crypto.com wallet.

Related: Don’t Follow the Suits, Follow the Weirdos

United States dollar coin, or USDC, is a stablecoin pegged 1-to-1 with the dollar. It is the second-largest stablecoin with an $11 billion capitalization.

Usually, Crypto.com has to sell cryptocurrencies to cover its obligations to Visa in cash, but this new program will allow the company to pay in USDC. The pilot could be a bellwether for mainstream acceptance of crypto-native payment methods because it marks the first time Visa has accepted a cryptocurrency payment in lieu of cash for its services.

“Crypto-native fintechs want partners [that] understand their business and the complexities of digital currency form factors,” Visa Chief Product Officer Jack Forestell said in the press release. “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”

Visa goes in on bitcoin, crypto

Of the credit card giants, Visa has been pushing the most aggressively into crypto.

Related: Bitcoin + Ether: Risks and Rewards

The payment network’s fast-track program has furnished dozens of crypto companies with resources and Visa cards. In addition to Crypto.com, crypto companies BlockFi, Fold, Bitpanda and others have Visa cards with bitcoin-back rewards. One upstart called Moon allows its users to buy prepaid digital cards with Bitcoin’s Lightning network to use at any Visa-accepting online merchant.

Story continues

Visa’s USDC settlement with Crypto.com comes almost two months after news surfaced that the payments company is building out APIs for banks and financial institutions to buy and sell cryptocurrencies for their clients using Visa’s network, the Ethereum blockchain and Anchorage’s custodial services.

Going forward, Visa plans to flesh out its crypto-native services by “support[ing] reconciliation and currency conversion for stablecoins such as USDC” and creating “settlement reports” with blockchain wallet addresses to verify transactions.

Visa also said in the press release that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”

“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.

UPDATED (March 29, 09:58 UTC): Updates with price of bitcoin moving on the news.

Visa will settle transactions in USD Coin via the Ethereum blockchain

]

March 29, 2021 3 min read

This story originally appeared on ValueWalk

Visa Inc (NYSE:V) will start allowing the cryptocurrency USD Coin to be used for payment settlements on its network. It’s the latest sign that mainstream financial companies are starting to accept digital currencies.

Q4 2020 hedge fund letters, conferences and more

Visa Starts Using USD Coin For Payment Settlements

According to CNBC, Visa launched the pilot program with Crypto.com, a payment and crypto platform. The companies plan to offer the option to use USD Coin to more partners to settle transactions later this year. The USD Coin’s value is pegged to the U.S. dollar.

Mastercard, BlackRock and Bank of New York Mellon have also embraced cryptocurrencies recently, so many have started to speculate that they will become a standard part of investment portfolios soon. Tesla CEO Elon Musk announced last week that customers could use bitcoin to buy their electric vehicles, a key step toward broader use of the cryptocurrency in commerce.

Visa’s crypto chief, Cuy Sheffield, told CNBC that they are seeing growing demand from consumers globally to be able to access, use and hold digital currencies. He also said they are seeing demand from their clients “to be able to build products that provide that access for consumers.”

How the partnership with Crypto.com will work

Previously, when customers chose to use a Crypto.com Visa card to pay for something, the cryptocurrency had to be converted into fiat currency. The cryptocurrency wallet deposits traditional money into a bank account, and it’s then wired to Visa at the end of the day to settle transactions. The process increases costs for businesses and makes things more complicated.

Visa’s new plan will be completed on the Ethereum blockchain. It eliminates the need to convert digital currencies into fiat money for the settlement of the transaction. The credit card company said it partnered with Anchorage, a digital asset bank, to complete the first transaction involving USD Coin this month, using Crypto.com to send the digital currency to Visa’s Ethereum account at Anchorage.

Visa Chief Product Officer Jack Forestell said in a statement that today’s announcement “marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency.”

Anchorage co-founder and President Diogo Monica said in a statement that Visa came to them in 2019 with the idea to “make secure, efficient and seamless settlement payments possible in digital currency.” The payment company wanted to connect its treasury with Anchorage’s custody platform, providing “the next generation of crypto native issuers the option to directly settle with Visa in a digital currency over a public blockchain.”

follow us