We are now midway through 2020, and only one thing is certain: the last six months have been a whirlwind of unprecedented circumstances. From the COVID-19 pandemic ravaging global health and economic conditions, to the civil unrest and protests centered in the United States but proliferating to other countries, the world is at a pinnacle point of change.
For the cryptocurrency ecosystem, the atmosphere of global uncertainty has driven a renewed interest in Bitcoin and other digital assets which don’t rely on centralized financial institutions. As the market continues to mature and evolve amidst these unpredictable ‘strange’ times, here are 4 top trends to watch out for in the second half of the year.
Institutional Crypto Custody
Valued at over $200 billion USD and growing, the global digital asset market is an increasingly attractive space for institutional investors. Especially now, with such high levels of global volatility in traditional markets, broker/dealers, banks, hedge funds, and other large asset managers who handle customer funds are looking to digital assets as a viable investment class for their clients. With such an influx of interest in digital asset management by major regulated incumbents, there is a correspondingly high demand for robust custodial solutions that can safely store assets in compliance with institutional requirements.
Regulated entities provide the most reliable custodial arrangements since they are legally mandated to adhere to specific infrastructure, governance, and operational safeguards implemented to protect investors. Because of the stringent levels of oversight and control, regulated custody solutions principally cater to institutional clients who require such extensive infrastructure to meet their own financial obligations. In Canada, registered full-service custodians are called trust companies and are either federally or provincially regulated. In Canada, registered full-service custodians are called trust companies and are either federally or provincially regulated. Tetra Trust Company, an affiliate of Coinsquare, is on the path to becoming the first and only digital asset platform in Canada registered as a trust company. As the formal framework for custodying digital assets evolves both in Canada and globally, Tetra is committed to working alongside regulators to ensure our custodial solution is held to the highest standards. Learn more about the Tetra’s Custodial Solution.
Stablecoins emerged in the crypto market as a solution to the volatility of native digital assets by pegging value to an underlying ‘stable’ asset such as gold, or fiat currency. The relative price stability inherent to traditional assets bridges some of the functional gaps that plague digital currencies and allows for the efficiencies of blockchain-based assets to be fully realized. Due to the fundamental advantages over traditional payment processes in terms of speed, cost, and transparency, stablecoins are predicted to be increasingly used as a mechanism to transact. At present, the global stablecoin market represents a massive opportunity but still remains in its infancy. Already this year, however, there has been steady growth with the total or combined stablecoin supply surpassing the $10 billion mark, reaching a high of around $10.4 billion on May 12, 2020.
XCM Stablecoins Ltd. is a subsidiary of Coinsquare company which created XCAD™, Canada’s leading stablecoin, backed 1:1 by Canadian Dollars. Built on the Stellar Network, XCAD™ is designed to allow you to send money to anyone and anywhere for free including exchanges, wallets, and people and is revolutionizing payment systems through stablecoins.
Crypto-backed lending is another trend continuing to demonstrate growth in 2020. Borrowers can leverage their holdings by collateralizing crypto assets to obtain loans of fiat or more crypto at an agreed-upon interest rate. This is advantageous for users who want access to capital without losing a stake in the market by having to sell their crypto assets. Because interest rates for crypto loans are typically competitively priced and are more easily accessible than traditional institutions, this new type of lending platform is challenging legacy players in the credit space. As the crypto market continues to expand, demand from retail and institutional clients is projected to drive elevated innovation and opportunity within this space 2020 and beyond. Reach out to the Coinsquare Wealth team by emailing: firstname.lastname@example.org to take advantage of crypto loans.
Almost 7 Bitcoin ATMs get installed daily with close to 7,700 already in place worldwide. The country with the most Bitcoin ATMS is the United States with roughly 5,749 machines and 771 across Canada. At the height of the coronavirus pandemic while the public was told to stay at home, Bitcoin ATM operators saw an increase in transactions. Seeing the potential in Bitcoin ATMs, Coinsquare acquired Just Cash (now called Coinsquare Networks), a leading and innovative software provider in the fintech space in July 2019. Just Cash’s revolutionary software enables any ATM to sell cryptocurrency (such as Bitcoin) to customers for the first time. The software allows customers to purchase cryptocurrency through the traditional ATM process without disrupting the ATM network. If you’re in the States, make sure to check out a local Bitcoin ATM.
2020: the year of disruption and growth
The impact of 2020 has created some irreversible changes in society from both a business perspective and on the individual level. While these unplanned disruptions forced us to consider a ‘new normal’ in the way in which we conduct our lives, there is room for positive societal transformations to occur. Particularly within the crypto space, where mainstream adoption is dependent on collective shifts in consciousness on how financial systems operate, the compulsory transition to a more digital landscape incentivizes a greater push towards innovation. Global acceptance of cryptocurrency is already underway, and with technology continuing to advance, the value in this space will only be further realized.
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this email constitutes a solicitation, recommendation, endorsement, or offer by Coinsquare Ltd. or any of its affiliates or representatives to buy or sell any digital assets or other financial instruments in this or in any other jurisdiction.