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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: sense who wrote (169985)	3/28/2021 11:08:30 PM
From: TobagoJack	Read Replies (1) \| Respond to of 217591

More stuff to take into consideration something about truer cost of money bloomberg.com Crypto Shadow Banking Explained and Why 12% Yields Are Common Matthew Leising 27 March 2021, 19:30 GMT+8 A swathe of shadow banks in the $1.6 trillion cryptocurrency market have figured out how to generate returns of 12% with minimal risk: Lend U.S. dollars to hedge funds so they can buy Bitcoin. Some of the largest non-bank firms in cryptocurrency including BitGo, BlockFi, Galaxy Digital and Genesis are stepping up to meet investor demand for dollars amid a long-standing weariness by banks to lend to individuals or companies associated with Bitcoin and other digital assets. In this case, they’re lending to hedge funds that need cash to buy Bitcoin for a trade that is almost guaranteed to pay out at annualized returns that have recently hit 20% to 40%. “The people with all the money -- the banks, the brokerages -- they’re not in this space yet,” said Jeff Dorman, chief investment officer for Arca Capital Management, which specializes in digital assets. “Everyone wants to borrow dollars, but there’s not enough dollars in the space,” Dorman said. “There is a huge cash shortage.” While traditional savings accounts offer a measly 0.5% in a world that hasn’t seen interest rates rise meaningfully in over a decade, non-bank lenders that accept digital assets can earn double digit interest due to a severe shortage of traditional currencies like dollars and euros. The wariness of banks to lend to firms or investors for cryptocurrency use goes back as far as Bitcoin itself, with most institutions shunning an industry they saw as enabling money laundering, drug trafficking and other nefarious pursuits. "Over the last few years, the crypto credit market has grown exponentially ... the key players in this market include Genesis, which originated $7.6 billion in loans in Q4 of 2020 alone." https://t.co/FQ0L8c1vbS pic.twitter.com/rqmtw7xoxz — Genesis (@GenesisTrading) March 24, 2021 While those willing to lend cash are being paid well for the risk they are taking, the shadow banks in crypto lack FDIC insurance and other customer protections. There is also little transparency in this part of the financial world, Dorman said. “All these guys are just hedge funds playing a bank on TV,” he said. “Counterparty risk is real.” Read more: Crypto Lender’s Wall Street Ascent Is Born of Wife’s Frustration Here’s how the trade works. It starts with the price discrepancy between the spot price for Bitcoin and the value of derivatives contracts that come due months in the future, what’s known as a basis trade. On March 15, Bitcoin traded for $56,089 while the July future contract on CME Group Inc. was at $60,385. A hedge fund could buy Bitcoin at that spot price and sell the July futures, meaning the derivatives would gain value if Bitcoin fell. Doing so on March 15 locked in a 7.7% spread between the cash and futures price. Annualizing that over the 137 days between March 15 and July 30 when the futures contract expires equates to a 21% annual return. The hedge fund, however, needs cash to buy the spot Bitcoin, so would be willing to pay what seems to be exorbitant rate of 12% for the loan as long as it can earn 21%, or a 9% profit, on the trade. The spread between spot and futures has been even higher in recent months. “The basis trade was paying 42% annually the other week,” Michael Saylor, the chief executive officer of enterprise software maker MicroStrategy Inc. who has bought 91,326 Bitcoin since December worth about $5 billion, said March 17 at the Futures Industry Association conference. One aspect of this trade is that it’s almost risk free, assuming CME Groupdoesn’t go bust as a counterparty. That’s because once the spot and futures prices are locked in, they will converge so that the spread between them is the payoff, minus trading fees. Another indication of the lack of cash in this market is that most loans of stablecoins, which are typically backed by traditional currency reserves or a basket of other digital assets, also earn high yields. That’s because stablecoinssuch as Tether and USD Coin are used just like cash to buy other cryptocurrencies. The basis trade is of course controlled by the market, and the recent fall in Bitcoin from about $62,000 to $55,000 has caused the spread between spot and futures to narrow. If done on March 23 with the August futures contract the basis trade would only return 13.6%. Still, it’s not going away until there’s enough cash in the crypto market to arbitrage away the price difference, Arca’s Dorman said. “That cash and carry trade is huge in Bitcoin and is starting to be in Ether, too,” Dorman said. The irony in the digital assets space right now is that while the global economy is awash in trillions of dollars in new traditional currency, not enough of it can get into the hands of crypto investors. As of Feb. 28, the measure of U.S. money supply known as M1 had increased more than fourfold to $18.4 trillion since the end of 2019. All that money is begging for even a 4% return it can’t get, Dorman said, let alone the double digits available in the crypto shadow banking system. “Those people aren’t in the space yet,” Dorman said. “It’s completely walled off.” Before it's here, it's on the Bloomberg Terminal. LEARN MORE

To: sense who wrote (169985)	3/28/2021 11:18:52 PM
From: TobagoJack	Respond to of 217591

In the meantime, legal fights all around as far as the space is concerned, all publicity good publicity, I guess coindesk.com Ethereum’s Vlad Zamfir Files Injunction Against CasperLabs Citing Copyright Infringement Updated Mar 24, 2021 at 10:18 p.m. Ethereum Foundation researcher Vlad Zamfir has filed a complaint against blockchain startup CasperLabs alleging the company has violated U.S. Federal trademark law. According to a court document filed on March 17, Zamfir is accusing the startup of labeling its proof-of-stake (PoS) protocol “Casper” and for filing for federal registration of the Casper mark. The issue, Zamfir claims, is that CasperLabs has improperly used the mark to benefit commercially while causing confusion and damage because Zamfir’s own PoS research, stretching six years back, is of the same name. Zamfir says he and Ethereum founder Vitalik Buterin developed a PoS protocol called “Casper” in 2015 that was then followed with a first draft version in 2017. The Casper protocol 1.0 specification then went live in 2018, where it was subsequently picked up by CasperLabs the following year after hiring Zamfir as its lead consensus protocol architect. CasperLabs began building a new blockchain based on Zamfir’s version of PoS called the “Highway Protocol.” A licensing agreement was drawn up in 2019, Zamfir argues, that provided limited use of the name Casper and Zamfir’s research. “I … made it clear … I did not consent to CasperLabs’ use of the name Casper,” said Zamfir in the complaint. The Ethereum researcher argues CasperLabs filed a federal registration of the Casper mark without his knowledge or consent. It is alleged the startup later changed the name to “Casper Highway Protocol” and then finally “Casper” when it sought to launch a coin sale on Tuesday. As such, Zamfir has filed a civil action for false designation of origin under the Lanham Act, 15 U.S.C. Section 1125(a) and for the “substantial and related claim” of unfair competition under the common law of California. Zamfir points specifically to Section 43(a) of the act which stipulates that is unlawful for any person to use words or images for commerce that would otherwise cause confusion among others. In a first supplemental declaration filed in the U.S. District Court Southern District of California on Monday, Zamfir said he had first learned of CasperLabs’ U.S. trademark registration and application on Jan. 25, 2021. *See also: Hearing in SEC Case Positive for Ripple, XRP, Says Lawyer* In the declaration, Zamfir alleges CasperLabs changed its Telegram channel name to Casper a month after Zamfir had learned of the registration and application. He provided screenshots of Telegram conversations as evidence. However, CasperLabs via a notice to strike Zamfir’s evidence, argues the screenshots, timing of the evidence and legality around the filing by Zamfir is unauthorized, inadmissible and does not affect the outcome.