Global Digital Assets News

TORONTO, CANADA, May 1, 2020 — Global Digital Assets (GDA), the first merchant bank in North America to focus on blockchain and digital assets, announced today that it will be joining the DigitalBits ecosystem to further enterprise adoption for branded cryptocurrencies.  GDA, in collaboration with other ecosystem participants, will provide the infrastructure necessary for consumers, merchants, brands and payment providers to benefit from branded cryptocurrencies, inclusive of the emerging subcategory of branded stablecoins.  

GDA and its subsidiaries have worked with fortune 500 companies, such as Toronto Dominion Bank, governments in North America, the Caribbean, Africa and Asia, as well as some of the world’s largest digital ecosystems, such as TRX and the ONT networks.  Founded through the combination of MLG Blockchain and Secure Digital Markets, GDA bridges enterprise solutions with digital markets to accelerate the adoption of blockchain technology within mainstream society.  GDA will facilitate and support select enterprises focused on the generation and deployment of branded cryptocurrency solutions, inclusive of capital for the procurement of DigitalBits’ XDB tokens.    

Sharing a common vision with DigitalBits to introduce blockchain to the average user, GDA seeks to introduce the skew of branded cryptocurrencies to existing clients and enterprises alike, generating further support for the emerging asset category of branded stablecoins.      

“Brands and corporations may spur the next wave for banking the unbanked, and we believe that branded currencies may be the first glimpse of achieving this.” said Michael Gord, GDA CEO.  “With DigitalBits, we intend to bring this emerging asset category together with today’s digital banking solutions.”

Global Digital Assets

Global Digital Assets (GDA) is a global blockchain & digital assets focused merchant bank based in Toronto & New York City founded during the combination of MLG Blockchain and Secure Digital Markets. GDA offers a full-suite of services spanning from ventures and capital to markets and liquidity in order to provide end-to-end solutions to disruptive and cutting-edge blockchain projects. 

Global Digital Assets and its experienced management team has experience that spans the entire blockchain industry. This includes venture capital, capital markets, trading, blockchain technology, token development and issuance. Our team has played a significant role in taking dozens of tokens to market for clients around the world; having led million dollar marketing and activation campaigns, and completing over three billion dollars of private placement or OTC transactions. We have worked with a variety of firms ranging from family offices and HNWI, Fortune 100 enterprises, startups and global governments looking to accelerate their countries’ adoption of the blockchain.

DigitalBits

DigitalBits is a blockchain protocol and network layer designed for consumer digital assets, specifically branded currencies. DigitalBits is focused on supporting innovators with driving enterprise adoption of cryptocurrency and its use in enhancing the consumer experience and corporate social responsibility initiatives. For more information, please visit www.digitalbits.io.

The Halvening, What You NEED to Know

If you have been following our previous DAD issues or just regularly follow the crypto market, you’ve probably heard of “the halvening” and its supposed impact on the price of Bitcoin starting in May. This is a unique event that happens every four years, and barring extreme circumstances, Bitcoin’s halvening is scheduled to occur on May 11th-12th of this year. Today, we want to give an overview of the halvening and offer an evidence-based view of its impact on Bitcoin’s trading economics.

An unfortunate amount of online commentary centered around the halvening borders on lies, speculation and pure myth. Our goal in this edition of The Digital Asset Digest is to separate the facts from fiction, so you can make an educated decision in your own portfolio.

Before we jump into the halvening, we need to talk about mining. Mining is the process by which cryptocurrency transactions are anonymously verified, and new cryptocurrency enters circulation. Mining follows the verification protocol known as Proof-of-Work (POW).

Every day, hundreds of thousands of Bitcoin transactions are performed and broadcasted to the Bitcoin Network. These transactions are bundled together into what we call blocks. Bitcoin is effectively thousands of blocks linked together in a chain, which is where the term blockchain comes from.

For a block to be accepted by the rest of the network, each miner must submit a proof-of-work along with the block. To generate a proof-of-work, a miner must input the block’s contents into a hash function and generate a hash that is smaller than a target set by the network. Miners do this by adding a number to the block (called a nonce) that changes the block’s hash. Since miners are competing against each other to submit a proof-of-work and earn the block reward, they will spend substantial amounts of capital on equipment and electricity, so they can have a faster throughput and be the first to submit the proof-of-work. If/when a miner successfully accomplishes this, the miner announces it to the network, who verifies this by trying the nonce themselves. If the nonce is valid, the miner is rewarded with Bitcoin, which is how new Bitcoin is put into circulation.

The elegance of the proof-of-work protocol speaks to the elegance of bitcoin and decentralization. Proof-of-work creates a dollar value on the securitization of the network. To compromise a blockchain you need to control 51% of the miners hashing power. So, based on how much each miner spends on electricity and equipment to mine, you can determine what the dollar cost attached to their hashing power is. From this, you can calculate how much it would cost to control 51% of the network’s hashing power. For advanced networks such as Bitcoin though, this is a near-unimaginable sum.

An important figure with respect to mining is Bitcoin’s hash rate. In short, the hash rate measures how many hashes are being performed over a set period. The higher the hash rate, the higher the mining activity across the Bitcoin network. Currently, the standard unit for measuring hash rate is terahash per second, or TH/s. One terahash is equal to a billion hashes, so if the hash rate on a certain date is 20 TH/s, there are 20 billion hashes being performed on the Bitcoin network every second. As expected, given the lower reward for mining, the hash rate tumbles as miners’ incentives drop. As such, there is a direct correlation between the hash rate and price and the hash rate is often used as a key indicator for market performance.

What does any of this have to do with the halvening? When we talk about the halvening, we really mean that the number of Bitcoins a miner receives for submitting a proof-of-work is going to be halved. Bitcoin was designed so that a halvening would occur every 210,000 blocks. Since a block is mined approximately every 10 minutes, a halvening should occur every four years. The halvening this May will be the third halvening in Bitcoin’s history. Currently, miners are rewarded 12.5 BTC for successfully mining a block. Post-halvening, this reward will drop to 6.25 BTC.

The reason for instituting a halvening mechanism is to limit the total number of circulating Bitcoins, creating artificial limits on supply, and preventing miners from owning a disproportionate percentage of all Bitcoins. As you may be aware, Bitcoin’s supply is capped at 21 million, and as of today, over 18.3 million Bitcoins have already been mined. This means more than 87% of all Bitcoins have been mined into existence. With over 620,000 blocks mined, had there been no halvening mechanism in place, we would have surpassed Bitcoin’s supply cap by 10 million.

The impact of Bitcoin’s halvening this May is highly contentious. We have two prior halvening’s to analyze, but the crypto landscape has changed significantly over the last four years and it’s debatable whether we should expect the same to occur this time around.

The traditional argument is that Bitcoin’s price should rise as the halvening approaches. Proponents of this argue that while the demand for Bitcoin remains the same, the incoming supply will shrink, boosting Bitcoin’s price. They point to rallies before previous halvening’s as evidence of this.

“Imperium Investments is a Private equity fund focused on monetizing energy. We use Bitcoin, via one of the largest mining operations in North America, as the arbitrage vehicle to convert energy to cash. We maximize results by being the lowest cost Bitcoin producer. We achieve this through our expertise in international capital markets, financial products, and large scale industrial operational excellence. 

Imperium Investments believes Bitcoin miner capitulation is likely to occur given the current macroeconomic backdrop (COVID-19). We believe it is unlikely that retail investors prop up Bitcoin’s price, in the form of speculation, as free cash flow is contracting for the global consumer. The majority of the middle class no longer has the ability to put more money to work in the form of financial investments and this free cash flow is being used to pay monthly expenses. Instead, the driver for future Bitcoin price increases will be from real supply-side shock both from the guaranteed 50% decrease in block rewards as a result of the halvening (12.5 to 6.25 Bitcoin per block), as well as the intentional decision of industrial-scale miners with strong cash balance sheet positions not to sell. 

Imperium Investments believes there will be a multi-month capitulation effect that will come into play post-halving as the majority of Bitcoin mining businesses are forced to liquidate their holdings to weather the storm of depressed prices. Therefore It is the opinion of Imperium Investments that there is a high likelihood of bankruptcies and consolidation to occur across the global landscape of Bitcoin mining. However, after this large consolidation event occurs our team believes that we will be seeing Bitcoin reach all-time highs 6-18 months after the end of the capitulation event. This will result in significant opportunities for well-positioned mining firms to capitalize on in the form of distressed asset purchases.”

halvening

The sheer existence of the halvening will undoubtedly have a psychological impact on the market. The irreversible decrease in block-rewards has attracted corporate and retail entities to Bitcoin, and we expect those adoption trends to continue in the wake of the third halvening.

Moreover, the halvening is an event that creates a lot of attention around bitcoin. No matter the spin, this is a positive for the asset. Like in any industry, promotional/marketing activities are key for growth so the more focus the news-cycle puts on the halvening, the larger the audience and the greater the chance someone will hear about bitcoin and decentralization for the first time, so we view the upcoming halvening as an excellent growth opportunity for Bitcoin. 

We expect this year to be no different, forecasting that hash rates will tumble post-halvening. However, we expect the 2020 halvening to be notable as the mining landscape has become increasingly competitive. Hobbyist miners have long been pushed out and large-scale operations have had mixed results due to Bitcoin’s volatile performance over the last year. At current levels, transaction fees make it difficult for miners to scale their operations and compete with the larger firms, so post halvening we expect the consolidation of the mining industry to continue.

There are some experts that think  the market has already accounted for retail excitement and that this anticipated influx in trading volume is already priced into current figures.

All this being said, we are still bullish on Bitcoin as the halvening approaches, albeit cautiously and with a skeptical eye. We expect increased volatility similar to prior halvening’s and warn against letting fear dictate trading decisions. Since the halvening is a catalyst for Bitcoin alone as opposed to the broader cryptocurrency market, we expect Bitcoin’s dominance in the market to improve (as of today, BTC accounts for 64% according to CoinMarketCap).

For investors with a higher tolerance for volatility, increasing exposure to Bitcoin over the next few weeks is a sensible manoeuvre in our view. However, with the crypto markets ubiquity and accessibility, bull & bear runs happen quickly. Therefore, we encourage readers to find a reliable liquidity on-ramp ahead of the halvening.

With just under 2-weeks left until the halvening, GDA will be focusing its resources on analyzing the market to make sure our readers are as well-positioned as they can be. Make sure to tune in next week and to follow our twitter to stay updated on all halvening news and analysis!

Global Digital Assets, a leading blockchain focused capital markets firm in North America, and Markchain, a leading blockchain advisory & marketing firm in France, have announced a partnership to collaborate on capital syndication and distribution for digital asset offerings through mutual portfolio and investor networks. The partnership between the two firms brings together complementary networks and geographic synergies in an attempt to provide disruptive blockchain technology companies with broader access to North American and European capital markets.

Global Digital Assets was founded last year as a joint venture between MLG Blockchain and Secure Digital Markets, to amalgamate two of the leading blockchain firms in Canada and streamline their operations to provide additional value and added services to the clients of both companies. GDA works with companies looking to access capital through blockchain markets through issuing digital assets and building blockchain ecosystems or public markets through mergers and acquisitions and bridges the gap for hedge funds and institutional investors to access top quality blockchain investment opportunities. 

Markchain provides innovative marketing solutions for early-stage blockchain projects (including IEOs, ICOs, and STOs) all the way to established cryptocurrencies and blockchain events. The core services include bringing projects to market, community management, communications, investment strategy, and high-level consulting services. By offering clients a high level of availability and bringing in years of consulting and a high degree of expertise in the blockchain space, Markchain has been able to stand out and offer their clients superior service. As a result, Markchain has a 100% customer satisfaction rate. 

CEO of Markchain, Quentin Herbrecht commented on the partnership by saying: “We are also very excited to start our collaboration with Global Digital Assets. This will allow our customers to reach the North American capital markets more easily with local experts such as Michael Gord and the entire team at GDA. On our side, we are now fortunate to be able to introduce North American based projects to our investor networks in Europe and specifically, France”.

The partnership provides more international geographical coverage to both firms. GDA’s global headquarters are in Toronto and NYC which is complementary to Markchain, whose global headquarters are located in Rennes, France. Both firms will now be able to access more global information, dealflow and successful project implementations from their combined business development efforts around the world.  

“We are excited to partner with Quentin and the Markchain team who are leaders in the blockchain ecosystem in Europe to provide our clients with wider exposure for digital asset offerings. Quentin has a great track record of bringing innovative projects to market that we are excited to introduce in North America”, said Michael Gord, CEO of Global Digital Assets. 

Global Digital Assets

Global Digital Assets (GDA Capital) is a global blockchain & digital assets focused merchant bank based in Toronto & New York City. GDA offers a full-suite of services spanning from ventures and capital to markets and liquidity in order to provide end-to-end solutions to disruptive and cutting-edge blockchain projects. 

Global Digital Assets and its experienced management team has experience that spans the entire blockchain industry. This includes venture capital, capital markets, trading, blockchain technology, token development and issuance. The team has played a significant role in taking dozens of tokens to market for clients around the world; having led million dollar marketing and activation campaigns, and completing over three billion dollars of private placement and OTC transactions. GDA’s work with a variety of firms ranging from family offices and HNWI, Fortune 100 enterprises, startups and global governments looking to accelerate their countries adoption of the blockchain.

Markchain

As a premier firm based in France, Markchain focuses on providing expert consulting services to a range of blockchain companies who are in need of funding and growth. This fits closely with GDA’s service offerings and the crossover will help them assist each other in giving their clients more coverage.

CEO Quentin Herbrecht founded Markchain in late 2019 and has been consulting in the blockchain sector for much longer than that. A passion for new technologies is what guided Herbrecht’s to the world of cryptocurrencies. Last year, Forbes interviewed the French native about his ICO advisory work success during a bear market and mentioned him as the best ICO advisor in France. At only 24 years old, his career is remarkable. He is an independent Blockchain Expert and evaluator for the European Commission, professor of fintech/ Blockchain in business school and regularly appear in summit or in the media to discuss about his favourite subject, blockchain and cryptocurrencies.

Welcome to Volume #3 of The Digital Asset Digest. The last two weeks have been a whirlwind for crypto and if you did not get a chance to read last week’s edition of the Digital Asset Digest feel free to get caught up here.

This week both the fiat and digital asset markets underwent extremely volatile trading periods, hopefully creating some lucrative opportunities in the market which we address below: 

MARKET SUMMARY

Digital AssetsBitcoin closed at $7,110 on Friday, seeing low levels of activity as it continued its consolidation within the $6,500 to $7,500 range for the third week in a row. Ether saw comparatively higher levels of growth, closing up 8.4% for the week at $172. XRP trailed Bitcoin, ending up 1.3% over the same period.

Commodities – WTI crude closed at a staggering -$13.10 on Monday. On the heels of OPEC’s announcement that demand for crude will fall to its lowest level since 1989, coupled with the lack of storage cause from this demand drop-off, the market spoke volumes about current consumer sentiment. In other commodities news, Gold rallied earlier in the week before selling-off on Friday, closing down 1.2%.

Indices – The S&P 500 continued its rally this past week, rising 3.0% for the week as President Trump unveiled a three-stage process for states to end the coronavirus shutdown. Conversely, U.S. jobless claims rose to over 22 million for the month and China’s Q1 GDP contracted 6.8%, the first decline since the country began publishing quarterly data in 1992.

NEWS OF THE WEEK

Binance Chain releases white paper for a smart contract-enabled blockchain
Source: CoinTelegraph
“Binance Chain developers have proposed specifications for a new blockchain that would enable complex smart contract functionality within the Binance Coin (BNB) ecosystem. The specifications are available in its white paper, released on April 17… The Smart Chain will thus allow projects in the Binance ecosystem to build complex DApps based on Ethereum’s Virtual Machine. The team said that this was an often requested feature from projects in its ecosystem.”

Facebook-backed association revamps Libra following regulatory concerns
Source: TechCrunch
“The Libra Association, the consortium created by Facebook to oversee all things Libra, has updated its white paper to make some changes. The association is abandoning its original plan to create a global stablecoin directly tied to a basket of fiat currencies and securities. The Libra Association now plans to release several stablecoins — each of them will be backed by a fiat currency, such as USD, EUR, GBP or SGD. There will be a multi-currency Libra “coin,” but it won’t be a cryptocurrency per se — it’ll be a digital composite of those single-currency stablecoins.”

Grayscale now holds 1.7% of Bitcoin supply after record $500M quarter
Source: CoinTelegraph
“Almost 2% of the world’s Bitcoin (BTC) supply is now under the control of a single company: Grayscale and its Bitcoin Trust (GBTC). In its latest quarterly report on April 16, Grayscale revealed that GBTC now contains 1.7% of the circulating supply of Bitcoin. In terms of assets under management as a proportion of the total cryptocurrency market cap, Grayscale controls 1.2% of the world’s crypto… Overall, Grayscale’s ten crypto funds attracted over $500 million in investments, making it its best quarter on record.”

TOKEN HIGHLIGHT:
ENIGMA (ENG)

Enigma is a decentralized, open-source protocol specializing in privacy for DApp development. Smart contracts on traditional blockchains are public and cannot use data that must remain confidential. Enigma circumvents this issue by introducing the concept of a secret contract. The Enigma protocol does this by breaking up encrypted sensitive data and distributing it across “secret nodes” on the network. This way, nodes perform computations on seemingly random pieces of data, but never the data in its entirety, so the raw data is never exposed.

The concept behind Enigma was first described in 2015 by CEO Guy Zyskind’s MIT thesis. The firm has an ongoing R&D partnership with Intel to improve privacy preserving computation technologies using Intel SGX (Software Guard Extensions). As of today, ENG trades for $0.16 with a market capitalization of $11.7 million.

MARKET MOVERS

TOP GAINERS

TOP LOSERS

Source: CoinMarketCap
*Only includes top 100 cryptocurrencies

BITCOIN ANNUAL PERFORMANCE

Source: CoinMarketCap

CRYPTOCURRENCY PRICES

Source: CoinMarketCap

INDICES & COMMODITIES

digital asset digest
Source: S&P CapitalIQ

WEEKEND READING: OPINION

First mover: Coronavirus trillions get Bitcoiners wondering if halving still matters
Source: CoinDesk
“Before the coronavirus hit, bitcoiners were looking forward to next month’s “halving” – a once-every-four-years reduction in new supplies of the cryptocurrency – as the primary factor that would drive prices higher, potentially even a 13-fold increase from current levels. Since the coronavirus pandemic hit, however, the market’s focus has shifted instead to the trillions of dollars of emergency aid and money injections pledged by the world’s governments and central banks. Those are seen as enhancing bitcoin’s appeal as a hedge against inflation, similar to the traditional arguments for buying gold.”

TECHNICAL REVIEW

Indicators on Bitcoin are neutral for the upcoming week as the cryptocurrency continues to consolidate within the $6,500 to $7,500 range. An ascending channel has clearly formed and as Bitcoin trades near the lower bound, this may be an indicator of some upwards potential. However, with the ADX near its low YTD, we find this trade uncompelling. A breakdown in the lower end of the channel may indicate a reversal and confirm our bearish sentiment from last week.

QUOTE

“The Web as I envisaged it, we have not seen it yet. The future is still so much bigger than the past.”
Tim Berners-Lee

The market seems to be going green, red and everywhere in between. What is happening across commodities borders on unprecedented. However, we have never been in a situation where a natural disaster has prevented mass amounts of people from being on the road for this long, so the sell-off was expected. Like everything else, once we start to see normalcy in our lives, so to will we see it on the balance sheets and trading dashboards.

Want us to cover a specific market or digital asset? Reach out to us here.