Changpeng Zhao, the CEO of the cryptocurrency exchange Binance, deviated from the larger cryptocurrency community and welcomed the large institutions curating their own digital assets. In a recent tweet, CZ stated that JPM Coin and the Facebook coin will further the adoption drive for the collective industry.
Prior to his affirmation, the Binance CEO did admit that his opinion on such a contentious matter would be “unpopular”. According to him, banks and tech-giants like JP Morgan and Facebook can do as they wish as long as their intentions are not harmful. He also added that any form of cryptocurrency adoption would be beneficial for the larger community.
His tweet stated:
“Unpopular opinion: JPM/FB coins.
In a decentralized world, anyone can do as they please (within limits, so long as they don’t hurt others). The more people adopt
#crypto, the better.
How well will they do? Well, let’s wait and see.”
CZ’s tweet was in reply to an article that spoke about JPM Coin’s introduction as an achievement of marketing or engineering. JP Morgan’s stablecoin was created specifically to be an internal payments tool, allowing easy cross-border transactions and administrative transfers. However, the CEO of the bank, Jamie Dimon, known for his anti-Bitcoin stance, also stated that JPM Coin could be used in external retail payments.
Facebook has also been working on a digital coin primarily meant to be positioned on their messaging application WhatsApp. The Facebook coin would exist on a computer network, decentralized from the company, and can be sent via their messaging application between users instantly.
Other messaging giants that are also mulling a native digital coin are Telegram, Signal, Japan’s Line and South Korea’s Kako, along with China’s WeChat which already boasts a popular internal payment solution.
Despite the backing of a crypto heavyweight like Zhao, the overarching community is not a fan of the JPM Coin or the Facebook coin. In the recently held Hybrid Summit, Charles Hoskinson, the co-founder of Ethereum and creator of Cardano [ADA] called JPM Coin an “abomination of a concept”.
Hoskinson stated the JPM Coin was an example of the dying embers of an industry which is desperately trying to prove its relevance in a changing technological and financial world.
Brad Garlinghouse, the CEO of Ripple, stated that the JPM Coin “misses the point”, and added that a cryptocurrency backed by fiat was a “liability”. Garlinghouse also documented his criticism against cryptocurrencies launched by banks in a 2016 article titled “The Case Against BankCoin”.
CZ replied to nay-sayers questioning his opinion by stating:
“Don’t buy them if you don’t like them. No one is forcing you to.”
Some cryptocurrency proponents did align their views to that of Zhao’s, adding that if notable companies like JP Morgan, Facebook and Telegram were looking to mimic the cryptocurrency industry, they must be doing something right.
Justin Sun, the CEO of the Tron Foundation, replied to CZ’s tweet, stating:
“Totally agree. The more, the better.”
Renko, a crypto enthusiast and Twitter user, laughed off the proposition:
“JPM coin??? You do realize they just want to keep in control?
Matt44, another Twitter user, commented:
“I believe its a part of this evolution. Same like history with fiat. Crypto must evolve to the point where people will understand and rather to use only the decentralized ones.”
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Fall in Bitcoin’s market dominance may be correlated to the fortunes of the altcoin market
The trends set by virtual assets have always highlighted the cryptocurrency market’s inherent volatility and spontaneity. Prices lack symmetry and rarely exhibit consistent growth as different factors come into play to dictate an asset’s valuation.
At press time, the world’s largest crypto, Bitcoin, had stormed past the $11,000 mark and was consolidating to push for a surge over $12,000. The rest of the altcoin market however, apart from one or two minor hikes here and there, has been relatively quiet after collectively surging in the early part of the year.
At the beginning of 2019, a significant number of crypto-assets performed significantly well in a group, wherein most assets demonstrated a prominent hike in their values with little to minor price corrections.
A majority of tokens doubled their valuation until Bitcoin breached the $6,600 resistance. Subsequently, altcoins failed to keep pace as Bitcoin continued to test more resistance limits in the market.
At present time, Bitcoin enjoyed an unprecedented 62 percent dominance in the cryptocurrency market. As its dominance primes itself to climb over the 63 percent mark, many in the community speculate this could be red flags for the altcoin market.
Major cryptocurrency enthusiasts and analysts have stated that altcoins could significantly capitulate if it so happens. However, past events offer a sliver of hope for the altcoin market.
According to CoinMarketCap, the altcoin market has been significantly affected whenever BTC’s dominance has fallen. During the bull run of 2017, Bitcoin enjoyed a dominance of 65 percent and the global market cap hit a value of $402 billion. However, in January 2018, when BTC dominance plummeted, the global market cap peaked at around $710 billion. The dominance was down by half, whereas the global market cap had almost doubled.
A major reason for the same was money funneling into other altcoins after witnessing a shift in momentum from Bitcoin to the rest of the crypto-market. The present market situation may take a similar path once BTC’s dominance falls, opening the door for other virtual assets to take advantage of the scenario.
However, the present rise of BTC is backed by much more certainty than the bull run of 2017. Hence, a repeat of the January 2018 period may be unlikely, and will happen if and only the market sentiment shifts gears drastically towards altcoins.
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