The ICO era may have ended long ago, but there is a sleeping giant that is making final preparations to enter secondary market trading. Telegram sold Gram tokens in one of the largest initial coin offerings (ICOs), raising $1.7 billion from notable investors including Benchmark and Sequoia Capital, among others. According to most recent reports, Gram tokens will operate with a decentralized structure similar to Bitcoin (BTC), which means Telegram won’t have control over how and where Grams move. Crucially, Telegram promised in legal documents that it would deliver Grams to investors by Oct. 31, 2019, or give back the money. The last time an ICO caused this much of a stir was when EOS began to transition away from ERC-20 and convert raised funds.
What is interesting is that market focus remains firmly on macro trends in the form of the never-ending trade talks between the US and China, alongside other political upheavals such as Brexit. Also, the launch of Bakkt physically settled contracts, and the anxious anticipation of whether the platform will succeed in attracting more of the Wall Street heavyweights into the digital asset space, is being followed scrupulously. However, the potential implication of the Gram token release is not to be underestimated, not only because of its crypto adoption related aspects but also due to the “sterilisation” flow out of Grams into BTC, while others may also want to hedge their long exposure...
In related news, non-custodial and multi-cryptocurrency wallet provider Button Wallet is launching a free testing service on the Telegram Open Network (TON) in a bid to stimulate crypto adoption among Telegram’s 300 million users.
In other news, as China's central bank gets ready to launch its own cryptocurrency, seven institutions will be among the first to receive and interact with it. Included in the initial batch of recipients are Alibaba, Tencent, and Union Pay, an association of Chinese banks. Additionally, the Industrial and Commercial Bank of China and Bank of China, two of the world's largest banks, will also receive the state-issued cryptocurrency.
Elsewhere, Bakkt investor 11-11 Ventures has backed a $200 million venture capital (VC) fund focused on the Algorand blockchain platform. The fund, called Algo VC Fund, will invest in startups building on the Algorand blockchain and those that will help accelerate the use of its native Algo token.
Finally, Brad Garlinghouse, the CEO of Ripple, broke his silence on controversial XRP sales, noting that he was “compelled” to comment on the recent controversies that surround the firm. Specifically, he said that “XRP sales are about helping expand XRP's utility - building RippleNet & supporting other biz building w/XRP ie Dharma & Forte. Reality is we DECREASED our sales by volume Q/Q and since then the inflation rate of XRP circulating supply has been lower than that of BTC and ETH”. As a guide, year-to-date, XRP is down 24.17%, with Stellar also showing losses of close to 40%. For contrarians and value traders out there, this offers an interesting value proposition and one could argue that even with so much new supply that has hit the market this year, the losses could have been far greater...
Thank you for reading,
The BeQuant’s Analytics team