Selected articles of the week:
Stablecoins play an important role in the crypto ecosystem. Most often linked to the US dollar, they take the digital form of the largest FIAT currency. This situation inevitably called upon the currency guardians. President Biden called for federal regulation of cryptocurrencies with an executive order this year. Among other proposals, the draft of a comprehensive template for stablecoins emerged, known as the “Stablecoin TRUST Act”. The law would define whether a new license for stablecoin issuers is introduced or the issuers retain their status as money transmitters. Due to protracted debates, the decision on the template had to be postponed until the summer break.
It is foreseeable that in the future a large part of the financial infrastructure will be based on the blockchain and digital assets. The use cases in the field of decentralized finance (DeFi) give a first insight into how a blockchain-based financial system can be designed. As institutional participation in the field increases, so does the demand for reliable infrastructure. After all, the processes involved in dealing with and storing digital assets differ significantly from those in the traditional financial world. In a conversation with CVJ.CH, Salick Cogan, head of research and development at Fireblocks, talks about Web3, institutional developments and the future of blockchain-based financial systems.
Decentralized exchanges (DEX) take up the largest share of the DeFi space. Their operation differs from traditional cryptocurrency exchanges (CEX) mainly in the handling of the liquidity pools. The first and largest decentralized exchange to date, Uniswap, was soon followed by another contender, SushiSwap, in the summer of 2020. The Uniswap copy is aiming for a decentralized leadership structure. But over time, the disadvantages of the fully decentralized model became apparent, which lacked essential leaders and management processes.
What is the typical profile of a German crypto investor and how does it stand with regard to the financial success of his investments? With these questions, the Blockchain Research Lab dealt with in a survey. The interesting results were added together in an extensive study by the institute.
In addition: The increasing institutionalization of the crypto markets has been reflected in the sensitive reaction to macroeconomic factors such as inflation developments and interest rate hikes. As a result, bitcoin volatility now regularly increases by a few percentage points on days of macroeconomic importance – similar to what happens in equities. The phenomenon underscores cryptocurrencies’ record-high correlation with growth stocks since the Fed changed direction in December 2021.
A summarizing review of what has been happening at the crypto markets of the past week. A look at trending sectors, liquidity, volatility, spreads and more. The weekly report in cooperation with market data provider Kaiko.