31st March 2023 - Real world adoption.

tl;dr

Real world adoption of cryptos into the TradFi world.

Market Snap

Market Wrap

All quiet but pay attention to the perpetual futures funding rate – it has the potential to propel us higher in a short time span.

Occasional Series – UK’s Net Zero ambitions

Reports suggest that “Car makers in the UK will be forced to ensure that 22 per cent of their UK sales next year are electric” (Daily Telegraph, 30th March 2023).

Ho hum.

Does this mean that every time a car maker sells 4 diesel or petrol cars, they have to stop selling any more until an electric one is ordered?

What happens if at the end of the year, car makers are failing to achieve this government mandated sales policy? Do they simply give away enough electric cars to meet this requirement during the Christmas period? Nice present to lucky recipients if so. But I must ask, given that situation, why would anyone ever pay for an electric car again?

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In entirely unrelated news, 60 oil tankers – which themselves are not exactly the most eco-friendly way of transporting energy – will have arrived in Europe this month. These tankers have provided the equivalent of 1.8 million barrels of oil per day, the highest since 2016.

How’s the EU’s Net Zero target going?

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In not entirely unrelated news, a succession of oil and gas firms (too long to list here) are withdrawing from the North Sea oil and gas fields because of the popular, but ultimately misguided, windfall taxes imposed by the Conservative government on oil and gas companies.

Instead, we will increase our imports of oil and gas from the other side of the planet in competition with every other country in Europe, causing greater ecological damage, making all our collective citizens poorer, strengthening despots and illiberal regimes around the world, whilst reducing the tax take to spend on the NHS.

I remain unconvinced that this is the outcome we would hope for.

Curious Cryptos’ Commentary – The Other CCC (Crypto Chitter Chatter)

Dr. Chloe’s brilliant other CCC - with whom I am still in legal dispute regarding the ownership of CCC as a trademark, though I do hope we settle matters without resorting to fisticuffs - has pointed me in the direction of the very latest technical analysis regarding XRP (Ripple):

What I find intriguing is the Twitter response:

Extraordinary.

The XRP haters are as blind as the XRP lovers.

Curious Cryptos’ Commentary – Real world adoption

Citigroup have issued a research report which makes for very cheering reading:

https://ir.citi.com/gps/MG9DEWhoYvQJVWLM9Kr3%2BZmqjoztKJcyNHr83F9Wug2pzAGHPQKfp23RAMrkNts%2FJitXoTNqufOvegUjjXh0IA%3D%3D

This report looks at the potential for tokenising investments for both institutional and retail clients:

“What DLT (distributed ledger technology) and tokenization offer is an entirely new tech stack that lets all stakeholders do all activities on the same shared infrastructure as one golden source of data — no more expensive reconciliation, settlement failures, waiting for the faxed documents or ‘originals to follow’ by post, or investment choices being restricted by operational difficulty in access.”

The report itself highlights “Four Key Takeaways”:

“Billions of Users … Gaming will lead the way in “making blockchain big” from a bottom-up perspective”.

“Trillions in value … we project tokenization to grow by a factor of over 80x in private markets and reach up to around $4 trillion in value by 2030. The significant benefits of tokenization, especially for private funds and securities, will likely drive demand-side uptake, leaving behind expensive reconciliations and settlement failures while embracing operational efficiencies, fractionalization, and accessibility to a wider range of market participants. Beyond private market tokenization, we expect $1 trillion of the repo, securities financing and collateral market could be tokenized by 2030.”

“Technology enablers … Decentralized Digital Identities … Zero-Knowledge Proofs … Oracles … Secure Bridges.”

“Legal Enablers … DLT brings unique benefits to the table compared to conventional web platforms”

I heartily recommend a good read of this report, to gain further understanding of where cryptos might take us in the next half-decade.