Positive news for the cryptocurrency market as financial institutions and stable coins foster growth Bybit Follow Oct 11, 2018 · 5 min read

Market Trends

After a month of consolidation, the market slowly turned around from its downward trend, the panic subsidized, and multiple currencies went up, driven by news coverage.

In the last month, the currency market stabilized, and major currencies started to rebound. XRP continued to fluctuate at a high level. BCH was stimulated by the listing of Bitmain, also rebounding sharply and maintaining its current high market position. Ethereum rebounded too by 30% from its lowest point.

BTC’s fluctuation was rather minor, therefore it was relatively stable.

Concerning the media, negativity was slowly being replaced by more positivism, while those in the currency circle steadily maintained their work.

Trend Analysis of Stable Currencies

The effects of stable currencies were assessed in the September 16th issue of the weekly report. The market has a lot of trust-based expectations towards stable currencies, and a lot of institutions are beginning to issue stable currencies.

Stable currencies have been repeatedly emphasized, particularly concerning its link with the U.S. Dollar. Credits linked with the dollar are in direct conflict with the right to print money. The institutions that have issued stable coins this time were mostly traditional institutions or institutions that were under strict supervision. The licenses for legally operating blockchain-related projects that these institutions possess are extremely hard to obtain, and the regulation is strictly maintained in developing other services. So-called stable currencies are in reality only deposit slips, not currencies of their own.

Stable coins are strictly regulated points of entry. How each dollar is converted into crypto currency, and how the crypto currency is converted back in to U.S. dollars must be reported to the regulatory authorities through stable currency issuers. That is the intention behind stable currencies.

Although there is no direct inflation, the compliance of these investment channels still has positive correlations for the healthy development of the currency market. Attracting the support of cautious developers for long-term development is the current task that is being faced.

Dynamic Analysis of the Yale Endowment Fund

The flagship of macro allocation funds, the Yale Endowment Fund, invested in blockchain projects which was subsequently widely reported in the market.

The Yale Endowment Fund and the Harvard Endowment Fund have since teamed up to rewrite a long-term configuration framework; creating an impressive return of more than 20% per annum from the late 1970s to the present. The Yale Endowment Fund’s investment methods are a classic reference for long-term investment institutions in Europe and America.

The Yale Endowment Fund entering this market has yet to show clear implications. The values of these top investment institutions can clearly be seen from Yale’s cautious investment methods. Targets chosen by Yale may become a future model for the blockchain investment field.

One of the two investments that was disclosed in the news was done through a veteran venture capital enterprise that invested in a fund headed by former federal prosecutor, who had a strong legal and government background. The other was a number of top venture capital institutions that have been involved in investment funds for years. The two funds were focused on blockchain industry projects that were still in their early phases.

The emphasis on compliance by the world’s top institutions, in addition to the emphasis on projects in the early phases, confirm the role that legitimacy and value creation play in the long-term development of blockchain. This gives the overall market a clear goal. It is believed that the first projects to display exemplary success will receive the market’s approval to a great extent.

Large-scale Stimulation of Dynamic Analysis

Large-scale incidents have been a frequent occurrence of late, with trade wars, the Federal Governments interest rate hikes, and the Chinese Central Bank’s RRR cuts being a few examples. The impact on the currency circle has yet to be the subject of debate. The difficulty is doing the topic justice using the limited space given.

In general, a large proportion of assets are directly affected by the availability of global liquidity. Perhaps, in addition to more generic points of view, more attention should be paid to the specifics of the currency market.

On the one hand, RMB investment channels have narrowed significantly from strict supervision. As was mentioned earlier, the issuance of compliant stable currencies is very positive for broadening investment channels. But markets with poor investments will be affected by these monetary policies.

On the other hand, monetary policies have normal distribution and transmission mechanisms in place (commercial bank, currency creation, etc.), and the growing economy needs more capital. Whether these various assets will benefit from these policies remains to be seen. The Central Bank has also emphasized this point.

Conclusion

In summary, with the increase in positive news coverage like BitCoin’s IPO, stable currency issuance, and the entrance of top investment institutions, investors are more confident now; market panic is subsiding and more are exploring these currencies. All of which is positive.

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