Aussie bank makes stablecoin history | BetaShares

Aussie bank makes stablecoin history

BY Justin Arzadon | 5 April 2022

It was another week in the black for bitcoin and most of the crypto market, momentarily breaking the US$48K level mid-week, before pulling back and trading at $46,347 at the time of writing.

Ether outperformed bitcoin for a second consecutive week, up 10.72% vs bitcoin’s 3.79% over the last seven days.

Bitcoin’s market cap rose to $880B, market dominance fell slightly to 40.83%, and the entire crypto market is valued at $2.16T.

Price High Low Change from previous week
BTC (in US$) $46,347 $48,086 $44,403 3.79%
ETH (in US$) $3,489 $3,521 $3,130 10.72%

Source: CoinMarketCap. As at 03 April, 2022. Past performance is not indicative of future performance. Performance is shown in U.S. dollars and does not take into account any USD/AUD currency movements.

Source: Glassnode. Past performance is not indicative of future performance.

News we are keeping an eye on

The ANZ Bank became the first bank in Australia – and possibly in the world – to create a stablecoin used in a real transaction. The stablecoin will be pegged to the Australian dollar, and Australian dollar cash will be held $1 for $1 in a trust to fully back the A$DC (pronounced “A dollar DC”). ANZ initially created the stablecoin for its client, the investment company Victor Smorgon Group, to send $30 million to a digital asset fund manager, Zerocap, within 10 minutes. Traditional methods usually take days and involve a lot more conversion costs. A stablecoin is a cryptocurrency, the price of which is pegged to fiat money like the US or Aussie dollar, or to an exchange-traded commodity. ANZ expects strong demand for its A$DC and sees itself changing the form of money, without creating new supply.

In another world first, Goldman Sachs executed the first over-the-counter crypto transaction by a major U.S. bank through Galaxy Digital, a blockchain and cryptocurrency financial services provider. Galaxy Digital helped Goldman Sachs execute an over-the-counter Bitcoin non-deliverable option. A non-deliverable option is settled with cash at the maturity of the contract, rather than by delivery of an underlying asset. “This trade represents the first step that banks have taken to offer direct, customisable exposures to the crypto market on behalf of their clients,” said Galaxy co-President, Damien Vanderwilt.2

Japanese crypto exchanges are looking to play catch-up with their international peers and expedite new crypto listings, after falling behind in terms of token listings. The exchanges will look to simplify the process for approving new cryptocurrency listings, to increase the number of digital assets that can be traded in the country. The Japan Virtual and Crypto Assets Exchange Association (JVCEA) plans to release a ‘green list’ of 18 popular crypto assets such as Bitcoin and Ethereum before the end of this month, to allow them to avoid the difficult screening process in order to be listed for trading in Japan.3

On-chain metrics

Bitcoin: Purpose Bitcoin ETF Holdings shows the number of bitcoin in the Purpose Bitcoin ETF. This ETF is the largest spot bitcoin ETF in the world, and flows into and out of the fund are sometimes used as a gauge of retail sentiment.

Looking at data from on-chain analytics company Glassnode, the number of bitcoin in the Purpose Bitcoin ETF has started to uptick dramatically over the last two weeks, a trend that started more broadly on 9 February after being flat since the latter half of December. The total amount of BTC held in the Purpose Bitcoin ETF reserves has climbed from approximately 28,854 BTC on 9 February to 35,000 as of 31 March.

Source: Glassnode.

Bitcoin: Percent Supply in Profit shows the percentage of circulating supply in profit i.e. coins whose price at the time they last moved was lower than the current price, as a percentage of total coins in existence. A threshold of 95% + might be considered helpful to identify market tops, whilst below the 50% threshold might be useful to help identify market bottoms and convenient entry points.

The percentage supply in profit has risen from 62.77% to 77.85% in the last two weeks. Even with the significant increase, according to this metric the bitcoin price has room to move higher before the network would appear to be hitting a ‘top’.

Source: Glassnode.

Altcoin news

Do Kwon, the founder of Terraform Labs, the entity behind the Terra blockchain platform, is aiming to buy up to $3 billion of bitcoin, with the intention of buying a total of $10 billion worth of bitcoin (BTC) to serve as a reserve currency for UST, Terra’s flagship stablecoin. As of March 31st, the wallet owned by The Luna Guard Foundation, a non-profit dedicated to the Terra (LUNA) ecosystem, owned 30,727.97 BTC (approx. $1.4B). Some experts believe the spot purchasing of bitcoin could be a catalyst for a significant bull run. BTC will be set aside to act as a backstop for UST and other Terra stablecoins in case they lose their pegs. Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of BTC, and offers fast and affordable settlements.

Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets.

Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment.

Any investment in crypto assets or crypto- focused companies should only be considered as a very small component of an investor’s overall portfolio.





Off the Chain will be published every Tuesday, and provide the latest news on bitcoin and the rest of the crypto market along with analysis and insights into the world of crypto.

It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.

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