[Comparative to Zaobao] Crypto market sentiment is high, and Bitcoin has broken a record high; US St. Louis Federal Reserve Report: 4 Major Opportunities and 6 Risks of DeFi; Wall Street Journal: Usage Costs, Price Fluctuations, and Tax Policies Make Bitcoin Payments Impractical

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[Crypto market sentiment is high, and Bitcoin has broken a new record high]

Over the past 24 hours, the popularity of the crypto market has not abated. Bitcoin has reached a record high of $47,000 and is trying to rise to $50,000. Among the top ten cryptocurrencies by market capitalization, the platform currency, BNB, increased the most, reaching nearly 40%. The current total market capitalization of the cryptocurrency market is $1,413,828,262,260, and the 24-hour trading volume is $335,664,604,794. Bitcoin accounts for 61.95% of the market. In the past 24 hours, 16 of the top 20 cryptocurrencies by market capitalization have risen, and 82 of the top 100 cryptocurrencies by market capitalization have risen. The overall cryptocurrency market is trending upward. The top 3 gainers were Filecoin (56.63%), Matic Network (45.85%), and PancakeSwap (42.80%). The top 3 declines were Dogecoin (-8.81%), Alpha Finance Lab (-6.34%), and Ampleforth (-5.28%).

[St. Louis Federal Reserve Report: DeFi's 4 Major Opportunities and 6 Risks]

The official website of the Federal Reserve Bank of St. Louis of the United States recently published a report entitled “Decentralized Finance: Financial Markets Based on Blockchain and Smart Contracts”. The report provides a detailed analysis of the main application scenarios of DeFi as well as future opportunities and risks. The author of the report, Fabian Schär, professor of distributed ledger technology and fintech at the University of Basel, proposed a five-layer conceptual framework, including settlement layer, asset layer, protocol layer, application layer, and aggregation layer, and used this to introduce some of the main DeFi application scenarios, such as asset tokenization, decentralized transaction agreements, decentralized lending platforms, decentralized derivatives, and on-chain asset management. He believes that the current DeFi ecosystem has 4 major opportunities and 6 major risks. In terms of opportunities, the report says DeFi can improve the efficiency, transparency, and accessibility of financial infrastructure. Furthermore, the composability of DeFi systems allows anyone to combine multiple applications and protocols to create new, exciting services.

[Wall Street Journal: Usage Costs, Price Fluctuations, and Tax Policies Make Bitcoin Payments Impractical]

As Elon Musk's Tesla announced the purchase of $1.5 billion in Bitcoin, the price of the largest cryptocurrency by market capitalization continued to rise, which also attracted mainstream media attention. The Wall Street Journal said in an article on Tuesday that although Bitcoin has attracted public attention, it is impractical as an everyday payment method due to usage costs, price volatility, and tax restrictions, and this will not change as Tesla buys Bitcoin. Bitcoin is an unattractive payment option for users who might want to buy a $4 cup of coffee at Starbucks, for example because of the associated fees. According to data from the website BitInfoCharts, the median transaction fee is currently around $5.4, but the average fee is over $11, and the fee varies greatly depending on network traffic. The average daily cost for the past three months was between $2.18 and $17.20.

[Musk embraces Bitcoin, some applaud and welcome, others disdain]

The biggest news in the crypto sector this week was Elon Musk's Tesla disclosure that it has purchased $1.5 billion in Bitcoin and may support Bitcoin payments. Although this has pushed the price of Bitcoin to a record high, he also heard two very different voices. Crypto proponent Senator Cynthia Lummis invited Musk on Twitter to consider moving to Wyoming because the state “is the most business-friendly state in the nation and has the best digital asset laws in the US.” However, there are also some corporate finance experts who are not convinced by Tesla's move. Critics believe this may put shareholders at risk due to the volatility of Bitcoin's price, and they specifically point out that Bitcoin experienced a long bear market in 2018 and “Black Thursday” in March 2020. Former British MP Nick Boles said that central banks should ban Bitcoin because it consumes too much energy. He wants every Bitcoin holder to be able to exchange their bitcoins for non-PoW cryptocurrencies that won't have this “disruptive impact.”

MicroStrategy CEO Launches Free Bitcoin Course for Individuals

MicroStrategy CEO Michael Saylor announced on Twitter the official launch of a free Bitcoin course for individuals: Bitcoin for Everybody. The course is designed to introduce everyone to Bitcoin, and includes topics such as Bitcoin economics, Bitcoin investments, the history and philosophical philosophy of Bitcoin, etc. Saylor said the course will help anyone seeking to use the Bitcoin network to promote economic empowerment.

[Crypto trading service provider Apifiny plans to go public before the end of the year]

Cryptocurrency trading service Apifiny announced on Tuesday that it plans to go public before the end of 2021. The company said it plans to raise capital through the listing to continue active expansion in the crypto trading space. Haohan Xu, CEO of Apifiny, said, “We think there are more ways to improve our products, such as better algorithms, faster connections, more powerful servers, and faster transaction processing.” The company has two main product lines, including Apifiny Connect, which enables institutional traders to quickly access global crypto exchanges, and ExOne Plus, a market-making platform for smaller exchanges that require liquidity. Apifiny said it uses connections to exchanges around the world to achieve better price discovery and use this to hedge traders' positions.

[ECB Executive: The digital euro will not disrupt the financial system and banking stability]

ECB executive board member Fabio Panetta said the planned digital euro would not disrupt the financial system and banking stability. He was interviewed by “Der Spiegel Weekly” this week. In the interview, he answered a series of questions raised by reporters about the ECB's plan to launch a digital euro. According to a previous report in “Comparative”, ECB President Lagarde said that the digital euro will be launched within five years. Panetta said that people are using less and less cash to pay, and there are more digital payments, and the COVID-19 pandemic has accelerated this trend. As a complement to cash, people need an efficient means of digital payment to protect data and be accepted across the Eurozone.

Author Amy Liu

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