Crypto markets showed signs of life in February, as bitcoin halted a six-month losing streak and the majors all benefited from a large upsurge in trading volumes. The longest bear market in history doesn’t appear to be going away anytime soon, but the worst of the downtrend may have already passed.
The most exciting development of the past week was a report by the New York Times that said Facebook was already shopping its WhatsApp stablecoin to cryptocurrency exchanges. Meanwhile, London Stock Exchange Group (LSEG) has thrown its weight behind a new blockchain startup that is tokenizing debt and equity, a move that could pave the way for crypto bonds.
Crypto Markets Flatline
After a wild weekend, cryptocurrency markets have traded sideways for the past five sessions, reflecting a lack of committal from the bull and bear camps. The combined value of all cryptocurrencies is hovering just north of $131 billion at the time of writing compared with $135 billion last week.
The crypto market cap swelled to around $144 billion last weekend, the highest in two months, before a sudden bout of profit-taking knocked coin values all the way back down to $127 billion.
Of the top 20 coins, 15 reported losses this week. Bitcoin is down nearly 3% over the past seven days, while losses for Ethereum amounted to 7.7%. EOS and bitcoin cash each dropped nearly 8%.
Binance Coin maintained its leadership pace, climbing more than 3% to $11.11. The native token of the Binance exchange is currently trading at its highest level since last August. Further gains ae likely in the short term. Read: BNB/USDT Could Still Jump another 25-50% in the Coming Days.
Facebook Shops WhatsApp Stablecoin
Facebook’s blockchain arm has reportedly met with several cryptocurrency exchanges to explore listing its forthcoming WhatsApp stablecoin, The New York Times reported earlier this week. According to the report, “The Facebook project is far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers, said four people briefed on the negotiations.”
The WhatsApp cryptocurrency is reportedly pegged to the U.S. dollar on a one-for-one basis and will allow users of the messaging app to send money instantly. At last check, WhatsApp had 1.5 billion active users.
Facebook recently announced that it was merging WhatsApp, Instagram and Messenger infrastructure into one system. If a stablecoin is being developed, it could conceivably be used across all three platforms, opening the door to billions of potential users.
Ethereum Hard Fork Activates
Ethereum’s long-awaited upgrades were finally activated on Thursday, giving the world’s no. 2 cryptocurrency much needed efficiency gains. Constantinople and St. Petersburg, the sixth and seventh system-wide upgrades respectively, went live at 19:57 UTC at block number 7,280,000.
Demand for ether rose sharply in anticipation of the hard forks, but the actual upgrades had no impact on the underlying price. With the upgrades, developers implemented several Ethereum Improvement Protocols (EIPs) that will help remove technical roadblocks.
Constantinople was scheduled to go live in January but was pushed back due to last-minute security vulnerabilities that were identified.
Read more: Ethereum is an Apex Predator like Bitcoin; But Vitalik Still Diversifies His Bags.
Debt on the Blockchain
The London Stock Exchange Group recently led a $20 million investment round in Nivaura, blockchain startup that is seeking to disrupt the bond market. The London-based company is developing a system to tokenize debt and equity, which would allow users to issue and administer corporate bonds, loans and equities. LSEG has reportedly acquired a minority stake in the company, according to Reuters.
Bonds are the latest financial instrument to get the blockchain treatment. It makes perfect sense, too. Automating financial transactions on the digital ledger not only creates a more efficient and transparent system, but also reduces costs and time associated with traditional fundraising process.
One of the most notable use cases of blockchain technology to issue bonds comes from none other than the World Bank and Commonwealth Bank of Australia. Last year, these organizations joined hands to create the Blockchain Operated New Debt Instrument, which raised more than $80 million.
The Week Ahead
The dreaded crypto winter has finally begun to thaw, raising renewed optimism that the market has turned a definitive corner. But at $130 billion, the cryptocurrency market cap is some $80 billion shy of mid-November levels before the bitcoin cash hard fork.
For bitcoin, a re-test of the December high is needed sometime soon to overcome the market’s bearish grip. The bulls failed to break this level last weekend as traders booked sizable profits following the latest rally attempt. At this stage in the game, $4,200 is a major focal point for technical traders as it opens the door to a potentially bigger rally attempt that could finally challenge the bear-market narrative.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.