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Libra Coin By Facebook, MoneyGram & XRP, Tether: From Omni to Ethereum
June 18  |  4 min read

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BeQuant Analytics, a daily cryptocurrency market analysis contributor

Bitcoin’s reluctance to break past the psychologically and technically important $10k level continues to frustrate crypto market participants. Interestingly, Tether (USDT) dominance in the stable coin universe has now reached a year-to-date high in terms of market capitalization, with the latest surge said to be coming from China. As highlighted yesterday, Tether's supply is steadily moving from Omni to Ethereum. On March 13th, USDT had close to 100% of usage. As of June 9th, 82.74% of all Tether transactions were enacted in USDT, while 17.26% were enacted in USDT-ETH. As a guide, Eth based USDT has access to any and all smart contracts, including decentralized exchanges (dex) as well as other open finance dapps. The significance of this trend should not be underestimated since further traction towards the Ethereum blockchain will give another boost to an already buoyant DeFi market.

Details of Facebook’s eagerly awaited crypto project have finally been released. Facebook confirmed it will launch a cryptocurrency called Libra in 2020 and released a whitepaper which outlines its vision for the cryptocurrency. The goal for Libra is to create a stable currency built on a secure, open-source blockchain, backed by a reserve of real assets, and governed by an independent association. Although Facebook is building Libra, and plans to helm the project through the end of this year, eventually it plans to cede the project to a larger community. Accordingly, the tech giant has formed the non-profit Libra Association with 27 other partners to oversee Libra and its development in the future. Some of the key points from Facebook’s release are outlined below:

  • Libra is designed to be a stable digital cryptocurrency that will be fully backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network of exchanges buying and selling Libra.
  • It will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.
  • It is important to highlight that this means one Libra will not always be able to convert into the same amount of a given local currency (i.e., Libra is not a “peg” to a single currency). Rather, as the value of the underlying assets moves, the value of one Libra in any local currency may fluctuate.

Elsewhere, XRP, which has underperformed its peers this year, is bucking the trend and is trading up just under 2% in early European trade. This comes after Ripple announced an investment of up to $50 million into money transfer company MoneyGram. Along with the investment, MoneyGram will agree to utilize XRP in its core money transfer business. MoneyGram will also hold an option for an additional investment of up to $20 million by Ripple in the next two years.

In other news, Grayscale Investments, the cryptocurrency asset manager backed by Digital Currency Group, has released a report which supports the notion that Bitcoin can serve as a hedge in a global liquidity crisis, particularly one that results in subsequent currency devaluations. The report opines that Bitcoin ought to be considered a strategic position within long-term investment portfolios considering its transparent, immutable and global liquidity. Bitcoin has a distinct set of properties unlike any other asset, which allow it to perform well over the course of various economic cycles.

Elsewhere, Bloomberg reported that the ICAP unit of the world’s biggest interdealer broker is now acting as an intermediary between customers wanting to buy and sell Bitcoin futures. The firm’s new venture expects to add non-deliverable forwards tied to the largest cryptocurrency and then plans to open desks in Asia and the U.S. ICAP is also exploring a wide array of digital assets, from other cryptocurrencies to tokenized assets -- virtual representations of real-world assets from property to stocks. It has not ruled out trading in the underlying market in the future.

Thank you for reading,
The BeQuant’s Analytics team