Potential of Bitcoin Tech

By Nathaniel Popper.

A well-known former JPMorgan Chase executive, Blythe Masters, has raised $52 million from several big banks for a start-up built on the technology underlying the Bitcoin virtual currency.

The start-up Digital Asset Holdings, based in New York, said on Thursday afternoon that it had raised the money from 13 financial institutions, including Ms. Masters’s former employer, JPMorgan, as well as Citi, BNP Paribas and Santander.

At the same time, the company also announced that it had signed a deal with Australia’s primary stock exchange, ASX, to provide technology that would speed up the settlement and transfer of money after stock trades. ASX Limited is also making a big investment in Digital Asset Holdings.

Digital Asset Holdings has based its technology on the blockchain concept that was introduced by the virtual currency Bitcoin. Visit cryptosoft software to learn how to use this virtual currency to your advntage. The blockchain is the database in which all transactions on the Bitcoin network are recorded. Unlike typical databases, the blockchain is maintained by users in a decentralized fashion. That has led many in the financial industry to hail it as a faster — and more reliable — alternative to existing transaction systems. For more information click this link here now.

Many financial institutions have been looking at ways to use a blockchain to modernize financial transactions by cutting out various middlemen from the markets. One of the Best Crypto Signals on Telegram is that the Nasdaq stock exchange has already integrated blockchain technology to improve stock trading.

Ms. Masters gave the technology a big boost when she announced her involvement with Digital Asset Holdings in early 2015. She left JPMorgan the previous year after a career during which she became one of the best-known figures in the financial industry.

Big questions remain, however, about how blockchain technology can be used in the real world, and so far talk of its potential has raced ahead of real-world uses.

In recent months, this disparity has caused some concern about the companies that are trying to raise money to build start-ups on the blockchain concept, including Digital Asset Holdings.

Potential investors said that it took Ms. Masters longer than expected to pull together her funders — and that some big-name banks ultimately declined to participate.

But Ms. Masters ended up raising more money than the $35 million that had been previously discussed. This round of fund-raising values Digital Asset Holdings at $100 million.

The Australian exchange company said that Digital Asset Holdings would help it develop new technology for the processes that take place after a stock is actually traded.

“Distributed Ledger Technology could provide a once-in-a-generation opportunity to reduce cost, time and complexity in the post-trade environment of Australia’s equity market,” the chief executive of ASX, Elmer Funke Kupper, said in a statement.

The other investors include CME Ventures, ABN AMRO, Santander’s innovation arm, Deutsche Börse Group, Accenture, Broadridge Financial Solutions, the Depository Trust and Clearing Corporation, and PNC Financial Services.

Source: NYTIMES

Understanding the Chinese Transition

John Mauldin looks at the latest happenings in the Chinese Economy and their significance.

China Beige Book’s fourth-quarter report revealed a rude interruption to the positive “stable deceleration” trend. Their observers in cities all over that vast country reported weakness in every sector of the economy. Capital expenditures dropped sharply; there were signs of price deflation and labor market weakness; and both manufacturing and service activity slowed markedly.

That last point deserves some comment. China experts everywhere tell us the country is transitioning from manufacturing for export to supplying consumer-driven services. So if both manufacturing and service activity are slowing, is that transition still happening?

The answer might be “yes” if manufacturing were decelerating faster than services. For this purpose, relative growth is what counts. Unfortunately, manufacturing is slowing while service activity is not picking up all the slack. That’s not the combination we want to see.

Something else China Beige Book noticed last quarter: both business and consumer loan volume did not grow in response to lower interest rates. That’s an important change, and probably not a good one. It means monetary stimulus from Beijing can’t save the day this time. Leland thinks fiscal stimulus isn’t likely to help, either. Like other governments and their central banks, China is running out of economic ammunition.

One quarter doesn’t constitute a trend. Possibly some transitory factors depressed the Chinese economy the last few months, and it will soon resume its “stable deceleration” course. It is hard to imagine what those factors might have been, though. The data is so uniformly negative that it sure looks like something big must have changed.

What does this economic weakness say for Chinese stocks? Probably nothing. It should be clear to all that the Chinese stock market is completely unrelated to the Chinese economy. They don’t move together, nor do they move opposite each other. They have no consistent connection at all – or at least not one we can use to invest confidently. I went to Macau when I was in Hong Kong a few weeks ago, just to observe the fabled fervor with which the Chinese gamble. The place did indeed have a different “feel” than Las Vegas does. I’m not the only one to think that the Chinese stock market is just an outpost of Macau, but one in which leverage and monetary stimulus can overload the system.

Let me say that there are real companies with real value in China. But the rules on the ground, not to mention the accounting, make it a particularly treacherous market to invest more than your own “gambling money.”

Source: Mauldin Economics