Who will be Top Dog in Digital Currencies?

Digital currencies have been popping up like daisies over the last several years and there doesn’t seem to be an end to it. Some might say that it would be more accurate to compare them to weeds and that an awful lot of them need to be removed from the cryptocurrency environment.

It is certainly true that there are questions marks over the long-term survival of a significant number of them. Brad Garlinghouse, the Ripple CEO, thinks that around 99% of digital assets will “got to zero”. And there are many others who agree with him, even if they don’t put a precise figure on it.

Now the survival of what I might call the ‘smaller’ coins is even more in question, because central banks are moving into the digital asset arena with their own digital currency, and this will put a lot of pressure on all but the strongest cryptocurrencies.

Mati Greenspan, senior analyst at eToro remarked to Charles Bovaird at Forbes: “At the moment the three biggest currencies in the world are racing to make their fiat digital.” In this race, China is winning, because the European Central Bank and the Federal Reserve haven’t put in the effort to keep up. Then we add something like Libra into the mix and for a time it looked like Facebook’s digital coinage had the potential to threaten every other cryptocurrency,. Now, that project looks less certain to be such a major threat.

So what is the likely outcome? Some market observers believe that whatever happens, there won’t be a winner-take-all scenario. Jacob Eliosoff, a cryptocurrency fund manager thinks there will be around 100 widely used cryptocurrencies that will survive. Marouane Garcon, managing director of Amulet said, “There won’t be a single currency because of too many political differences in the world, but just like fiat currencies some will be stronger in value than others.”

Furthermore, bitcoin, which is currently the leading digital currency, may not be the ultimate winner, but it is likely to be in the winning group. Jake Yocom-Piatt from Decred had this to say: “Instead of a large amount of capital and attention spread across many currencies, we will increasingly see that same capital and attention spread across a smaller number of SOVs, leading to a corresponding increase in their value.”

Who do you think will win the race to be Top Dog in this race? The central bank coins, stablecoins like Libra, or bitcoin and its peers?

NYSE head backs digital currency survival

Good news for cryptocurrency supporters from the New York Stock Exchange (NYSE) chairman, Jeffrey Sprecher. This week he expressed his optimism about the survival of digital currencies as an asset class, according to one business news outlet.

Sprecher, who also happens to be CEO of Intercontinental Exchange (ICE) was speaking at the Consensus Invest conference. He told the audience about how he reacts to press headlines like “Will digital assets survive?” and said that his unequivocal answer is yes. However,, when it comes to price he suggested that the NYSE was “agnostic” about that, meaning that it has no bias about what might happen as regards that.

Coincidentally, and rather tellingly, Sprecher was joined on stage at the conference by his wife, Kelly Loeffler, who happens to be the CEO of Bakkt, a cryptocurrency platform. Bakkt also happens to be owned by ICE and will launch next year.

Loeffler talked about what Bakkt will be offering, including the Bitcoin futures contract, saying, ““the Bakkt futures contract will help Bitcoin traders establish a trusted price. Bitcoin now trades at different prices on different exchanges, many of which are unregulated.”

Indeed, the NYSE and its parent company have been quite proactive in the digital currency sphere, which is encouraging for others involved in it. ICE has already partnered with Blockstream, a blockchain tech company to provide the big Wall Street investors, including hedge funds, with what it calls “disciplined” BTC pricing. To do this, it said it would pull data from 15 major exchanges.

A few months after this, ICE then said it would offer traders contracts that would result in customers owning Bitcoin. At the time it said, “ICE has had conversations with other financial institutions about setting up a new operation through which banks can buy a contract, known as a swap, that will end with the customer owning Bitcoin the next day — with the backing and security of the exchange.”

And at the same time as this Sprecher has made a supportive statement on cryptocurrency, it has been announced that an Association for Digital Asset Management (ADAM) has been created to produce a “code of conduct” for the digital currency sector. Among ADAM’s founding members are the former NYSE CEO, Duncan Niederauer, Galaxy Digital, a crypto merchant bank, BTIG, a global financial services firm, fintech firm Paxos and GSR, a crypto liquidity solutions provider.

Even if the markets are struggling to find their level, it seems apparent that slowly but surely the financial world is coming around to the idea that cryptocurrencies are here to stay.