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The Canadian Mint and Goldmoney, a blockchain-based gold payments and savings platform operating in Canada and the UK, announced a collaboration that will give Goldmoney users access to the Mint's gold bullion vault, in addition to vaults from other participating institutions. 

Bullion is the most common form in which precious metals are traded, i.e. in bars or ingots. 

The two parties will also collaborate on campaigns to improve public awareness of and access to gold. Any user with internet access can use Goldmoney to buy, sell, and transfer allocated gold bullion via blockchain, and the service is available both for individuals and for businesses. Goldmoney has 13.4 million global users and $1.7 billion worth of AUM. 

Goldmoney users will be able to instantly buy any amount of Mint bullion using the platform's permissioned blockchain. Fees of 0.5% will apply for purchases, but bullion storage is free for up to 1,000 grams for Goldmoney users. Users will also be able to send gold title to anyone free of charge via text or email, redeem their gold balance to a prepaid Goldmoney Mastercard or bank account in fiat currency, or make vault-to-vault transfers between the Canadian Mint and seven other vaults worldwide using Goldmoney's platform or mobile app, available both for iOS and Android. 

Gold trading seems to be an area ripe for real-world blockchain use cases. This week, Euroclear and Paxos successfully tested a clearing and settlement platform for unallocated gold bullion. And although most focus has been on blockchain implementation within the banking sector, it is possible that the first successful industry-wide blockchain network might take root in the gold-trading industry.

Blockchain has the potential to make the gold-trading process, prone to high costs and human error, more cost-efficient and secure through automation and an ability to better keep track of bullion as it changes hands. In addition, alternative assets, including precious metals like gold, have been in high demand recently due to political uncertainty in the US and Europe. Together, these factors could mean high demand for blockchain solutions in the sector.

Blockchain technology, which is best known for powering Bitcoin and other cryptocurrencies, is gaining steam among finance firms because of its potential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander.

That's because blockchain, which operates as a distributed ledger, has the ability to allow multiple parties to transfer and store sensitive information in a space that’s secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, governments and the music industry are investigating the technology’s potential to simplify record-keeping.

As a result, venture capital firms and financial institutions alike are pouring investment into finding, developing, and testing blockchain use cases. Over 50 major financial institutions are involved with collaborative blockchain startups, have begun researching the technology in-house, or have helped fund startups with products rooted in blockchain. 

Jaime Toplin, research associate for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain technology that explains how blockchain works, why it has the potential to provide a watershed moment for the financial industry, and the different ways it could be put into practice in the coming years.

Here are some key takeaways from the report:

• Spending on capital markets applications of blockchain is expected to grow at a 52% compound annual growth rate (CAGR) through 2019, according to Aite Group, to reach $400 million that year.
• Banks and major financial institutions are working both collaboratively and independently to develop blockchain tech. Over 50 major financial institutions are involved with collaborative blockchain startups, like R3 CEV or Chain. And many are investing in the technology on their own as well.
• Putting blockchain to use for real-world transactions is likely not that far off. If working groups' tests are successful, firms could be using it to transact real value as early as the end of this year and we could see widespread industry application within the next few years. 

In full, the report:

• Examines the funding increases that are pouring into blockchain
• Assesses why blockchain is becoming so popular and what factors are driving up increased research and development
• Explains in full how blockchain technology work and what assets make it valuable and vulnerable
• Identifies pain points in the financial industry and profiles how various firms are using blockchain to solve them
• Demonstrates the challenges to mainstream adoption and their potential solutions

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of blockchain technology.

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Bitcoin prices have shot past $900, the latest move in a week of dramatic market increases.

Source

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The post Bitcoin Keeps Soaring, Breaks Beyond $900 appeared first on CryptoCoinsNews.

The value of the Bitcoin virtual currency has hit a three-year high with each one now worth about $900 (£730).

A 27-year-old has raised $10 million for an unusual hedge fund – with support of venture capitalists like Andreessen Horowitz and Union Square Ventures.

The 27-year-old in question is Olaf Carlson-Wee, and he's launching a strategy that invests in cryptocurrencies. 

To be clear, the $10 million managed by Carlson-Wee's Polychain Capital is peanuts in the hedge fund world. But Polychain's strategy is rare, with few other funds trading in cryptocurrencies. Most hedge funds trade stocks, bonds, and currencies, with variations of different strategies.

So what is a cryptocurrency?

A cryptocurrency is basically a digital, encrypted currency that is decentralized, so no one single power oversees its value. Bitcoin is the most famous of cryptocurrencies – nobody knows who created it – and it's divorced from any government. It's considered a secure, private currency, drawing the attention of antigovernment and privacy-minded folks. But it's not the only one – several other cryptocurrencies exist and are being developed.

Transactions for these currencies are recorded in blockchain, a private (encrypted) ledger. 

Carlson-Wee is betting that he can choose the cryptocurrencies that will go up in value – and he expects hundreds of them to enter the market.

"The challenge for someone running a hedge fund is how to build a portfolio across that spectrum of risk and how to choose which of the new issues are going to become important, and which are not," said Brad Burnham, partner at Union Square Ventures, which is investing in the fund.

Polychain, based in San Francisco, will be small, hiring only a handful of people – and Carlson-Wee is not looking for traditional Wall Street types.

"An amateur trader in the cryptocurrency market may have a more relevant background than someone who has had a traditional background on Wall Street," Carlson-Wee said.

Carlson-Wee, a Vassar College grad, wrote his undergrad thesis on bitcoin."I was immediately enamored and sort of obsessed," he said. "I thought the prospect of [bitcoin] had massive implications."

He then went to Coinbase, a digital asset exchange, and headed risk, overseeing things like fraud prevention and account security, he said.

Not only is his background unusual for hedge funds – so is his strategy. For instance, the normal research avenues for common hedge fund trades are unavailable, though there are some parallels.

Qualitative research

Instead of talking with sell-side researchers or looking at credit agencies (there are none), Carlson-Wee spends his time reading through the white papers that describe the protocols, interviewing the lead developers, and looking at a protocol's machinations in the GitHub repository.

"This qualitative research is supplemented by market data such as price and trading volume as well as network data such as transactions per day, dollar value transacted per day, and the estimated cost of a network-scale attack," he said.

He also embeds himself within the groups that are using the protocols to get a sense of how they are interacting with them, he said. 

That model is similar to other funds that have launched in the space. MetaStable, another small San Francisco-based hedge fund, launched in 2014 with a handful of employees. The firm manages a few million, said Lucas Ryan, one of MetaStable's staffers.

Its investors tend to be those that are already sold on blockchain, but "aren't necessary sold that bitcoin has solved all the problems," so they are seeking to invest in other cryptocurrencies, Ryan said.

Ryan, who has a programming background, says his job is to evaluate the protocols that people are developing and the problems they are trying to solve.

"The market is so immature, and requires a high degree of technical understanding to wade through the stuff that isn't bulls***," Ryan said. "A lot of stuff I couldn't do if I wasn't a programmer with a cryptography background. There’s not like a ratings agency for any of these [currencies]."

Still, like with Polychain's strategy, there are parallels. Ryan meets with protocol developers and tries to get a sense of how serious they are, and whether their source coding is legit.

To be sure, this world of funds is very young. Until recently, Ryan was working on the fund part-time, he said.

And it's unlikely for these kinds of funds to grow large. Bitcoin, the most popular coin, has about a $13.7 billion market cap.

"Bitcoin is like 80% of the total market of coins," Ryan said. "It would give someone pause to start a $50 million fund."

BI EXPLAINS: What is a hedge fund?

SEE ALSO: $3.5 TRILLION FUND MANAGER: 'Wall Street hasn't been taking its fair share'

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Italy has reached a deal to save its banks. The Italian government has agreed to a 20 billion-euro ($20.9 billion) fund to aid its struggling banking system, Reuters reports. Monte Paschi, the world's oldest bank, requested a bailout just moments after a deal was completed.

Bitcoin is zooming higher. The cryptocurrency is up 5.1%, or $44, to $905.50, bringing its year-t0-date gain to 117%. Bitcoin trades at its best level in three years.

"Fallen angel" debt had its best year since 2003. Bonds issued by companies that were unexpectedly downgraded by credit rating agencies have generated a 37% total return in 2016, more than double the total return for the broader high yield market, according to Goldman Sachs.

Putin says the Russian economy is on the mend. Speaking at an annual year-end news conference, Russian President Vladimir Putin said the economy is slowly healing as the capital flight fades and wages pick up, Reuters, reports.

Deutsche Bank and Credit Suisse have reached settlements with the US. The two banks have agreed to settlements related to mortgage-backed securities totaling more than $12 billion, Reuters says.

The US is suing Barclays over mortgage-backed securities. The Department of Justice is suing the bank and two former executives, saying more than half of the $31 billion worth of packaged mortgage loans defaulted during the financial crisis, a person familiar with the matter told Reuters.

Twitter has had a rough week. The stock has tumbled 12% over the past week after a slew of top executive departures.

Stock markets around the world are lower. China's Shanghai Composite (-0.9%) trailed in Asia and Spain's IBEX (-0.4%) lags in Europe. The S&P 500 is set to open up 0.2% near 2,262.

US economic data flows. New home sales and University of Michigan consumer confidence will be released at 10 a.m. ET and the Baker Hughes rig count will cross the wires at 1 p.m. ET. The US 10-year yield is down 1 basis point at 2.54%.

US markets are closed on Monday. US stock markets are open a full day on Friday, but the US Treasury market will see an early 2 p.m. ET close.

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Here is what you need to know.

Italy has reached a deal to save its banks. The Italian government has agreed to a 20 billion-euro ($20.9 billion) fund to aid its struggling banking system, Reuters reports. Monte Paschi, the world's oldest bank, requested a bailout just moments after a deal was completed.

Bitcoin is zooming higher. The cryptocurrency is up 5.1%, or $44, to $905.50, bringing its year-t0-date gain to 117%. Bitcoin trades at its best level in three years.

"Fallen angel" debt had its best year since 2003.Bonds issued by companies that were unexpectedly downgraded by credit rating agencies have generated a 37% total return in 2016, more than double the total return for the broader high yield market, according to Goldman Sachs.

Putin says the Russian economy is on the mend. Speaking at an annual year-end news conference, Russian President Vladimir Putin said the economy is slowly healing as the capital flight fades and wages pick up, Reuters, reports.

Deutsche Bank and Credit Suisse have reached settlements with the US. The two banks have agreed to settlements totaling more than $12 billion related to mortgage-backed securities during the financial crisis, Reuters says.

The US is suing Barclays over mortgage-backed securities. The Department of Justice is suing the bank and two former executives, saying more than half of the $31 billion worth of packaged mortgage loans defaulted during the financial crisis, a person familiar with the matter told Reuters.

Twitter has had a rough week.The stock has tumbled 12% over the past week after a slew of top executive departures.

Stock markets around the world are lower. China's Shanghai Composite (-0.9%) trailed in Asia and Spain's IBEX (-0.4%) lags in Europe. The S&P 500 is set to open up 0.2% near 2,262.

US economic data flows. New home sales and University of Michigan consumer confidence will be released at 10 a.m. ET and the Baker Hughes rig count will cross the wires at 1 p.m. ET. The US 10-year yield is down 1 basis point at 2.54%.

US markets are closed on Monday. US stock markets are open a full day on Friday, but the US Treasury market will see an early 2 p.m. ET close.

Join the conversation about this story »

Bitcoin's rally continues on Friday, with the digital currency breaking through the $900 per coin mark.

Bitcoin is up over 5% against the dollar at just after 8.00 a.m. GMT (3.00 a.m. ET) in London to reach $913.13. It follows similarly strong gains on Wednesday and Thursday.

Friday marks a fresh 2016 high for bitcoin against the dollar and the first time the cryptocurrency has been above $900 this year.

Here is how bitcoin looks against the dollar over the last three months — note the sharp uptick at the end:It is unclear what's driving bitcoin's recent rally.

Bitcoin has behaved like a risk asset this year, spiking around the Brexit referendum in June and Trump's election in November. However, there has been no news trigger over the last few days to drive a fresh spike and other safe-haven risk assets, such as gold, aren't rising in-line.

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