Bitcoin nears record before largest US crypto listing

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Bloomberg

Bitcoin yesterday neared an all-time high as bullish sentiment gathered steam ahead of a listing by the largest US cryptocurrency exchange.

The token rose as much as 2.6 percent to US$61,229, the highest in nearly a month, before falling back to trade little changed.

On March 13, bitcoin reached a record of US$61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.

Representations of virtual currency bitcoin are pictured in an illustration on March 15. Photo: Reuters

Against the backdrop of Wall Street’s growing embrace of cryptocurrencies, the direct listing of digital-token exchange Coinbase Global Inc is fanning interest.

Coinbase is due to go public on the NASDAQ Composite tomorrow, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.

“A crypto company moving to IPO [initial public offering] is a big milestone,” said Nick Jones, chief executive officer and cofounder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”

A growing list of companies are looking at or even investing in bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation.

Tesla Inc earlier this year disclosed a US$1.5 billion investment in bitcoin and more recently started accepting it as payment for electric vehicles.

Elsewhere, Goldman Sachs Group Inc has said it is close to offering investment vehicles for bitcoin and other digital assets to private wealth clients.

Morgan Stanley plans to give rich clients access to three funds that would enable crypto ownership.

The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc and Visa Inc have begun using cryptocurrencies as part of the payments process.

A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1 percent allocation to bitcoin in a diversified multiasset portfolio could be beneficial, given its resemblance to gold and its near-zero correlation to other asset classes.

“In recent months, a clear and emphatic narrative that bitcoin is becoming a store of value in the form of digital gold has developed,” Robeco portfolio manager Jeroen Blokland said.

Other cryptocurrencies, such as second-ranked ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed US$2 trillion.

Bitcoin Nears Record Before Largest U.S. Crypto Exchange Listing

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(Bloomberg) –

Bitcoin neared an all-time high on Monday as bullish sentiment gathered steam ahead of a listing by the largest U.S. cryptocurrency exchange.

The token rose as much as 2.6% to $61,229, the highest in nearly a month, before falling back to trade little changed. On March 13, Bitcoin reached a record of $61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.

Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is fanning interest. Coinbase is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.

Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance’s, known as BNB, rose 23% Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.

“A crypto company moving to IPO is a big milestone,” said Nick Jones, CEO and co-founder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”

A growing list of companies are looking at or even investing in Bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.

Elsewhere, Goldman Sachs Group Inc. has said it’s close to offering investment vehicles for Bitcoin and other digital assets to private wealth clients. Morgan Stanley plans to give rich clients access to three funds that will enable crypto ownership. The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc. and Visa Inc. have begun using cryptocurrencies as part of the payments process.

Story continues

A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1% allocation to Bitcoin in a diversified multi-asset portfolio could be beneficial given its resemblance to gold and its near zero correlation to other asset classes.

“In recent months, a clear and emphatic narrative that Bitcoin is becoming a store of value in the form of digital gold has developed,” according to Jeroen Blokland, a portfolio manager at Robeco.

Other cryptocurrencies, such as second-ranked Ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed $2 trillion.

(Adds paragraph about exchange tokens)

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Thorchain Set to Launch Trustless, Cross-Chain Crypto Trading

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Thorchain, a standalone blockchain for decentralized crypto trading, is set to go live Tuesday, potentially lubricating the gears of a global $2 trillion market six months into a bull run.

Three years in the making (a lifetime in crypto), Thorchain works a lot like other automated market makers (AMMs) such as Bancor and Uniswap, but with an important difference: it enables trades of real cryptocurrencies from completely different blockchains – not “wrapped” or synthetic versions. With each new blockchain that can trade over Thorchain, the so-called “chaosnet” expands.

“April 13 is delivering on the initial promises of the white paper: Delivering on a multichain chaosnet,” Chad Barraford, the technical lead at Thorchain told CoinDesk in a phone call. “You’ll be able to swap freely from one chain to another, one asset to another.”

If it works as intended, users will be able to make such swaps with real currencies (not an ersatz version like wrapped BTC on the Ethereum network) and without having to trust an intermediary. AMMs have been the leading kind of decentralized exchange (DEX) that are key to the decentralized finance (DeFi) boom on Ethereum, the second-largest blockchain.

Bringing trustless trading to many of the biggest chains while skipping the friction of making a copy of a coin on one chain seems likely to drive a lot of activity. Plus, centralized exchanges that hold your assets have a bad habit of losing them.

The Thorchain launch is also a reminder of the long-term competitive threat DEXs pose to centralized venues like Coinbase ahead of that company’s hotly-anticipated stock listing.

Thorchain will start by allowing trades of bitcoin (BTC), ether (ETH), litecoin (LTC), bitcoin cash (BCH) and Binance Chain’s BNB. More will come shortly. For example, Barraford said the code for dogecoin (DOGE) is basically ready.

For details about which cryptocurrencies have been scoped out for addition, interested readers can look at Thorchain’s regular technical updates on Medium.

Thorchain is based on Tendermint, the consensus protocol associated with the Cosmos ecosystem.

Swapping

Thorchain uses a mechanic that’s very similar to that pioneered by Bancor. Sticking with the mythological motif, the native token of Thorchain is known RUNE. Every token in Thorchain is matched with an equal amount in value of its RUNE token.

When a user initiates a trade between, say, BCH and LTC, under the hood it becomes two trades. First, the user trades BCH for RUNE and then the RUNE gets traded for LTC. Provided it’s all done quickly, this should work out to basically the same thing as swapping directly between BCC and LTC.

Bancor does this with its BNT token. Uniswap, in its first version, paired every ERC-20 token it listed with ETH, though in version 2.0, Uniswap became a lot more flexible, enabling pairs of any two tokens.

Unlike Bancor or Uniswap, however, Thorchain is capable of trading the real assets of multiple unconnected blockchains, not representations of them.

“If you want to swap layer-1 real bitcoin with layer-1 real ETH, you can do it,” Baraford said. The team is developing an Asgard X wallet that will be built to interact directly with Thorchain and all its included blockchains, so it can store the coins from those networks.

Cosmos has already launched inter-blockchain communication (or IBC) and Thorchain will integrate with that soon, which will enable it to add many more blockchains. In its most recent developer update, the team reported that “a development partner has been found and will begin building IBC bridges”

While Thorchain’s functionality is not live, its token is available and traded. As of this writing, it’s trading at around $11.20, up almost 90% in the last 30 days, according to CoinGecko.

History lesson

Thorchain has been around a long time. The first version was started and largely abandoned in 2018, according to Barraford.

Since then, a cryptographic innovation known as threshold signatures have been invented and the Cosmos ecosystem has developed much more fully. In 2019 the fundamental idea of trustless exchange between blockchains was revised and redeveloped to incorporate these advances in the technology.

“In a threshold, you have multiple people coming together to make a single signature without anyone having access to the private key,” Baraford explained.

The team that came together around building Thorchain decided to stay largely anonymous and to avoid attention as much as possible.

The core team has a stated goal of disbanding in summer of 2022 and turning everything over to RUNE holders.

Getting involved

Like on any AMM, the project needs liquidity providers to get involved in order to work as effectively as possible. If there are few parties willing to buy or sell an asset, the final price of a trade can vary widely from the participants’ expectations. The deeper each pool is, the less such slippage there will be any trade. Users can post an equal amount of any token it covers and RUNE to the system and start earning trading fees.

“You can provide bitcoin into the network and that bitcoin can earn a bitcoin yield,” Baraford said.

Thorchain also addresses an issue for those who supply liquidity to networks, known as impermanent loss. That is, if the value of one token in a pool goes down relative to the other, the value of their deposit can shrink in fiat terms even though their total deposit in the underlying tokens is increasing.

“One of the important things about this network is it has impermanent loss protection,” Barraford said. As long as you stay in 100 days.

That said, Barraford noted that there’s seldom impermanent loss when liquidity providers stay in that long. However, Thorchain effectively takes a snapshot of the value of any liquidity deposit. If the user’s fiat value has fallen below where it was when they deposited due to rebalancing, Thorchain will make up for it out of RUNE reserves.

Liquidity providers will also earn new RUNE emissions on their deposit. “The amount of RUNE that goes into each pool is dependent on how much revenue has come from that pool in that block,” Barraford said. The freshest RUNE goes to the most active pools.

Very nearly all of the RUNE reserves will be distributed in the first two years of operation.

Multicoin Capital released a report on Thorchain in February, noting that the Austin-based investment firm has a major position in its RUNE token. The co-authors wrote:

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