Markets started out on a positive trend last week, before succumbing to fears of a second spread of coronavirus. With countries such as the US displaying some frightful numbers, there are very real worries globally that mismanagement of the crisis means there will be further lockdowns and thus damage to economies.
A raft of positive news stories pumped up both the sentiment towards and the price of many of the leading cryptoassets last week, before the aforementioned fears saw the majority of cryptos take a hit. There were a number of key announcements and developments contributing to positive sentiment around price consolidation.
Paypal pals up with crypto
Perhaps the biggest story last week was the news that PayPal is supposedly planning on rolling out sales of cryptocurrencies on its platform and its sister money sharing app Venmo. According to CoinDesk, which cites three sources familiar with the plans, PayPal already has a number of positive relationships with cryptoasset exchanges such as Bitstamp and Coinbase. However, details surrounding the move are scant and all parties involved have declined to comment on such speculation.
In my view, the most interesting thing will be if (and how) PayPal utilises its pre-existing arrangements with various physical and online retailers. Given that a massive swathe of online retailers already have some deep integration with PayPal, will the firm begin to offer payment directly with crypto? That would be exciting indeed and would be a huge step towards seeing cryptoassets, such as bitcoin and its forks, being used to pay for everyday goods and services.
After the news broke, Bitcoin hit a very respectable $9,699, dropping off towards the end of the week as markets got spooked about the spike in coronavirus cases in some parts of the world.
Cardano’s Shelley excites as the existential Ethereum threat
In altcoins, the market continues to react positively towards Cardano’s Shelley upgrade; it’s looking to compete with Ethereum as the go-to decentralised finance platform. ADA hit a high of $0.0865 on Wednesday, and currently sits at $0.0635. While the end goal is the same as Ethereum — to become the go-to place for decentralised applications — what differs with Cardano’s approach is that the team behind Cardano, which includes ex-Ethereum bod Charles Hodgkinson, have taken a highly technical and scientific approach by using academics, developers and InfoSec experts in a strategy that focuses on correcting potential issues discovered through extensive review processes.
If Cardano can become the go-to home for DeFi projects, it can overtake Ethereum in both number of projects listed on the platform and market capitalisation. Add to this the hard-capped amount of ADA in circulation, and you can understand why the Cardano enthusiasts have been vocal of late.
Wider adoption needed for bitcoin to join gold as inflation hedge
Gold was the flavour of the month in June, with investors looking to hedge market volatility and protect themselves from a potential second Covid-19 outbreak. So why haven’t people piled into bitcoin in a similar fashion? To me, the answer is awareness of bitcoin as a hedge.
Those of us who talk crypto daily are aware of the benefits that bitcoin can bring to a portfolio in terms of hedging against inflation, but many investors, particularly those more used to traditional asset classes, are not. In my view, once bitcoin grows as a payment system, and concerns around custody, market manipulation and price volatility are addressed, I fully expect bitcoin to feature more prominently in many investment portfolios.
China utilises Chainlink for ambitious Blockchain Service Network
In the East, China’s Blockchain Service Network announced it would be implementing Chainlink’s oracle service into its ecosystem. Chainlink will be providing the BSN with the ability to have real-world data work with smart contracts. This partnership could have real significance, as the Chainlink service is being used on a national blockchain network in a way that could prove to be a blueprint for other countries looking to create a similar network.
LINK reacted positively to the news, reaching an all-time high of $5. The price has since dropped off slightly and is currently trading at $4.50, however, we still finished the week up 9% from the one before.
About the Author: Simon Peters is a crypto market analyst at eToro
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