Global Tech - Afrikan Heroes

Musk, Others Urge Pause on AI Development

March 30, 2023

Elon Musk and a group of artificial intelligence experts are calling for a six-month pause in training systems more powerful than OpenAI’s GPT-4.

Elon Musk and a group of artificial intelligence experts and industry executives are calling for a six-month pause in training systems more powerful than OpenAI’s newly launched model GPT-4, they said in an open letter, citing potential risks to society and humanity.

The letter, issued by the non-profit Future of Life Institute and signed by more than a thousand people including Musk, Stability AI CEO Emad Mostaque, researchers at Alphabet-owned DeepMind, as well as AI heavyweights Yoshua Bengio and Stuart Russell, called for a pause on advanced AI development until shared safety protocols for such designs were developed, implemented and audited by independent experts.

“Powerful AI systems should be developed only once we are confident that their effects will be positive and their risks will be manageable,” the letter said.

Powerful AI systems should be developed only once we are confident that their effects will be positive

The letter also detailed potential risks to society and civilisation by human-competitive AI systems in the form of economic and political disruptions, and called on developers to work with policymakers on governance and regulatory authorities.

The letter comes as European Union police force Europol on Monday joined a chorus of ethical and legal concerns over advanced AI like ChatGPT, warning about the potential misuse of the system in phishing attempts, disinformation and cybercrime. Musk, whose car maker Tesla is using AI for an autopilot system, has been vocal about his concerns about AI.

Since its release last year, Microsoft-backed OpenAI’s ChatGPT has prompted rivals to accelerate developing similar large language models, and companies to integrate generative AI models into their products.

Sam Altman, chief executive at OpenAI, hasn’t signed the letter, a spokesman at Future of Life said. OpenAI didn’t immediately respond to requests for comment.

“The letter isn’t perfect, but the spirit is right: we need to slow down until we better understand the ramifications,” said Gary Marcus, a professor at New York University who signed the letter. “They can cause serious harm… The big players are becoming increasingly secretive about what they are doing, which makes it hard for society to defend against whatever harms may materialise.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Samsung Galaxy S23 vs S22: Real-World 5G Speeds Compared

Samsung Electronics recently launched its flagship Galaxy S23, S23+ and S23 Ultra smartphones, claiming to offer improved 5G performance compared to their predecessors.

However, a recent analysis by Ookla using Speedtest Intelligence suggests that the new models only outperformed the corresponding S22 models in Germany and two out of three models in the US for 5G download speed.

In South Africa, for instance, the median 5G download speeds for the S22 models ranged from 172.1Mbit/s to 206Mbit/s, while the S23 models ranged from 187.6Mbit/s to 202.1Mbit/s. This suggests that South African Galaxy S22 users may not need to upgrade their phones to the S23 models if they are primarily looking for faster 5G speeds.

The analysis looked at data from the first month after the launch of the Samsung Galaxy S23 models

The analysis looked at data from the first month after the launch of the Samsung Galaxy S23 models in 12 of the largest mobile markets with established 5G networks and the highest number of connected mobile devices during the fourth quarter of 2022, according to industry body the GSMA. It found that while the S23 models showed promise for faster 5G speeds, they did not yet outperform their S22 counterparts in all markets.

It’s worth noting that device data differs across markets due to various factors, including 5G investments by governments and mobile operators, different 5G spectrum allocations by operators, 5G availability, and the number and different kinds of 5G deployments, as well as other differences, including mobile 5G plans.

Despite the parity in speeds between the S23 and S22 models in some markets, there were still some positive takeaways from the analysis. For instance, the median 5G upload speed for the S23 Ultra was faster than the S22 Ultra, suggesting that the S23 models may still offer some advantages over their predecessors.

Furthermore, the analysis found that the S23 models looked poised to be faster in the future as further 5G adoption and build-out continues and more spectrum is allocated for 5G across the C-band and millimetre-wave frequency bands.

While the new Samsung Galaxy S23 models offer some promise for faster 5G speeds, users should carefully consider whether upgrading from an S22 model makes sense. South African Galaxy S22 users, in particular, may want to wait for further developments in 5G technology before deciding to upgrade, while users in other markets should weigh the potential advantages of the S23 models against their specific 5G needs and usage patterns.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Why Bitcoin is Losing its Liquidity

March 28, 2023

Bullish bitcoin has been a surprise winner of the banking blowout. Yet investors aiming to amp up their bets face an ominous obstacle: a lack of liquidity that could trigger wild price swings. The price of the top cryptocurrency has jumped 40% to around US$27 700 since 10 March, when the failure of Silicon Valley Bank (SVB) careered into mainstream markets.

On the flip side, though, its liquidity is drying up.

Bitcoin’s market depth indicates the asset is at its lowest level of liquidity in 10 months, even lower than in the aftermath of the FTX collapse in November, according to data provider Kaiko. The market depth for the two leading trading pairs — bitcoin-dollar and bitcoin-tether — stands at 5 600 bitcoin, the equivalent of about $155-million, Kaiko said.

As a market maker, we try to provide liquidity where we can, but we’re facing a difficult situation

“As a market maker, we try to provide liquidity where we can, but we’re facing a difficult situation,” said Kevin de Patoul, CEO of Keyrock. “There is a big network effect here. In the short term at least, liquidity will remain a challenge.”

Slippage, a liquidity measure describing how much prices change between the placement and execution of a trade, has also increased. Slippage for buying bitcoin with US dollars on the Coinbase exchange is 2.5 times higher than it was at the start of March, said Conor Ryder, research analyst at Kaiko.

The slippage for a simulated $100 000 sell order has doubled in the past month, meaning the average price you get for each bitcoin is worse than a month ago, Kaiko said.

The network effect De Patoul referred to was the collapses of Silvergate Capital and Signature Bank, whose networks had long been used by market makers — which expand liquidity by rapidly buying and selling tokens — to transact with exchanges.

Greater volatility

Lower liquidity typically translates to more volatile markets, especially in crypto. Kaiko’s Ryder said this was possibly one factor behind bitcoin’s leap this month.

CryptoCompare’s Bitcoin Volatility Index spiked to 96 last week, way higher than the range of 52 to 65 it saw last month as the cryptocurrency held its footing despite broader market turmoil. The index is currently hovering around 68.

Further crimping liquidity, Binance — the world’s most liquid crypto exchange — ended zero-fee trading for nearly all its bitcoin trading pairs last week, hitting market makers’ ability to charge higher fees for executing trades on the platform.

Liquidity for the bitcoin-tether pair on Binance has dropped 70% since the announcement, while trading volumes have fallen 90%, according to Kaiko data.

The vanishing liquidity can be traced back to the collapse of Sam Bankman-Fried’s FTX exchange and hedge fund Alameda Research. Alameda was one of the biggest liquidity providers in the crypto industry, and its bankruptcy left a void that has been exacerbated by the banking sector turmoil of 2023.

While most market participants expect new contenders to gradually emerge to perform the network functions of Silvergate and Signature, they say complete replacements are unlikely to pop up overnight.

Until then, “liquidity is probably going to get worse and worse”, said Joseph Edwards, investment adviser at Enigma Securities.

Furthermore, it’s not just market-maker trouble that’s crunching crypto liquidity. Despite bitcoin’s recent rally following a lengthy downturn, many investors are still trading cautiously in the wake of the banking crises and rising interest rates, some specialists say.

“Even if some players haven’t left the place, they are on the sidelines right now because of what’s happening with banking turmoil,” Edwards said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Fast Congo DRC Fiber Highway Goes Live

March 26, 2023

Fast Congo – a subsidiary of GBS & the Paratus Group – announces massive fiber capacity is now activated in DRC.

The Paratus Group subsidiary in the Democratic Republic of Congo (DRC), Fast Congo, announces that its 620-kilometer fiber optic network link between Muanda on the West Coast and the capital, Kinshasa, is now active. The fiber link will deliver high speed connectivity to the region through the Paratus Group’s pan-African network.

The fiber highway was originally installed and funded by the World Bank following which, last year, the DRC government entity, Société Congolaise de Fibre Optique (SOCOF ) announced that Fast Congo had won the tender to deploy, operate and maintain the fiber link in an exclusive 15-year license contract. Over the last few months, Fast Congo has been installing the necessary infrastructure to connect the network, which is now live and fully operational.

By adding DRC to its network, Paratus group now boasts a unique and contiguous footprint in Africa, which includes: offices in seven SADC countries; five Data Centers (including the Google Equiano Cable landing station in Namibia); 6,000 VSAT terminals; an extended network through satellite connectivity-focused service in more than 37 African countries; and international points of presence (PoPs) in the UK, Europe and the USA.

The inauguration event for the new DRC fiber route took place today, on March 16th, in Kinshasa. It was attended by several delegates from the DRC government along with executives from Global Broadband Solutions (GBS) and Paratus Group.

Speaking at the event, Paratus Group CEO, Mr Schalk Erasmus said: “This is a major milestone in delivering high quality and high-capacity network services in the DRC. We are uniquely placed to connect the country to Angola and Zambia and beyond through our network in southern Africa.”

GBS Inc. CEO, Mr Hassan Yahfoufi adds: “The new network will unlock huge economic potential in the region. For the moment, we’re only offering wholesale connectivity solutions and this will enable other operators to offer high-speed fiber connectivity to businesses and consumers in the Democratic Republic of Congo, providing them with limitless opportunities to connect with anyone across the continent and globally.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

ChatGPT & Generative AI in Enterprise Environments

By Phil Lewis

Generative AI describes a new class of foundational models for Natural Language Processing (NLP), which includes OpenAI’s ChatGPT and DALL-E, Google’s BARD chatbot, Baidu’s ERNIE Artificial Intelligence (AI) model, and others. These models enable users to tap into a variety of data sources, including the Internet, to generate text and code, formulate predictions and summaries, perform translations, analyse images and more.

Infor is cautiously optimistic about the potential for OpenAI’s ChatGPT and other Generative AI models to automate business processes and improve productivity in enterprise environments.

Infor envisions that ChatGPT and other Generative AI models could be used for a variety of enterprise use cases such as – but not limited to – writing e-mails, reports, product documentation and web content, creating job descriptions and requisitions, performing product and vendor comparisons, and assembling photos, music tracks and videos for marketing campaigns, for example.

At the same time, there are a number of challenges to be addressed before ChatGPT and other Generative AI models can gain widespread adoption in enterprise environments. For example, human control and moderation will be required for some time to boost the accuracy and consistency of the generated content, help reduce socio-political biases, and ensure that a company’s competitive edge is not compromised.

Further, the generation and exchange of business-specific content must adhere to strict legal and data privacy requirements – for example, when companies perform a Data Protection Impact Assessment (DPIA) to ensure compliance with the General Data Protection Regulation (GDPR).

Open AI models also are exposed as APIs, which customers can consume using their own credentials. The openness of Infor’s technology platform, Infor OS, enables customers to register these APIs in Infor’s API gateway and build custom extensions on top of them from Infor cloud. For example, you can easily build a custom skill to chat with Open AI from Infor’s own chatbot. Or you can look up publicly available information on products and vendors from an in-context widget in our Infor portal.

We strongly advise that any such interactions be subjected to moderation filters provided by Open AI. It also is important to note that, at this moment, the knowledge of this model is based on data up to 2021.

There is no doubt that this is an inflection point in AI and computing. While we expect our customers to adopt this powerful technology rapidly, we also hope they are aware of the potential risks, inaccuracy and privacy concerns behind consuming this powerful technology. Naturally, it’s only a matter of time before the Generative AI space matures and addresses such concerns.

Infor is also investigating ways in which ChatGPT and other Generative AI models can complement our current NLP solutions and AI ensemble – delivered in conjunction with Amazon Web Services (AWS), our preferred infrastructure partner. These solutions include voice chat capabilities with our Infor Coleman digital assistant, machine learning (ML) models through our Coleman AI platform, and enterprise search and image recognition capabilities via AWS.

ChatGPT and other Generative AI models represent disruptive solutions that already are helping consumers refine the search process, automate the creation of content, and boost individual productivity.

With human control and moderation, these models also have the potential to transform enterprise environments – simplifying code and content generation, automating end-to-end business processes, and boosting employee productivity and satisfaction.

By Phil Lewis, Senior Vice President of Solution Consulting, International, Infor

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Bybit Goes Live With ARB Token and a $400K Prize Pool

March 24, 2023

Bybit, the world’s third most visited crypto exchange, is proud to list the Arbitrum (ARB) token — along with a massive prize pool of $400K to celebrate. Today, users will be able to deposit ARB and trade newly created ARB spot pairs, perpetual contracts, and trading bot pairs.

Arbitrum is the biggest player in Ethereum’s layer 2 scaling landscape, designed to boost Ethereum’s speed and scalability while adding additional privacy features. The release of ARB (which includes “airdropping” 12.75% of the entire supply to the chain’s early users) is one of the most highly-anticipated events in the cryptocurrency industry this year.

To celebrate this occasion, Bybit has launched a series of campaigns that offers ARB traders a chance to win part of its massive $400K prize pool.

Firstly, all users who deposit 250 ARB will receive a gift of 25 USDT, and new users who have used the Arbitrum-native trading platform GMX, can claim a further 0.5 GMX with a deposit of 500 ARB. Also, Bybit’s official Twitter account will be giving away GMX and USDT in a lucky draw to 400 users who like or retweet its tweets, or follow the official Twitter account.

Bybit offers a range of trading bots, which allow users to automate strategies, backtest them, and trade the markets 24/7. Their bots are easy to configure, so even beginners can benefit from automated trading.

As part of the ARB celebration, users who trade ARB via Bybit’s spot grid bots will share in a $20K prize pool. Another launchpool campaign for ARB subscribers will unlock a total of $150K in rewards. Finally, a high APY ARB fixed-term product is available via Bybit Earn, allowing traders to earn even more rewards from their investments.

“At Bybit, we recognize our responsibility to provide forward-thinking opportunities for our users and lead the way in supporting the proliferation of cryptocurrency and blockchain technology,” said Ben Zhou co-founder and CEO of Bybit. “I am delighted to see that we are offering an ARB token listing, which promises unique rewards for those who make use of it. We are eager to see how our users leverage this powerful new asset and await their feedback with enthusiasm.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Digital Industries (Pty) Ltd Signs an AVEVA Select Partnership Agreement For East and West Africa regions

March 23, 2023

Dion Govender, CEO of Digital Industries and Managing Director of IS

Digital Industries (DI) (www.DigitalIndustries.co.za) through its business unit Industry Software Solutions and Support (IS³), announced that it has become an AVEVA Select (https://apo-opa.info/40uonZj) partner for the East and West Africa regions. AVEVA Select partnership allows Digital Industries to deliver AVEVA’s full portfolio of leading-edge industrial software solutions to customers that will help them become more sustainable and profitable.

The AVEVA Select agreement has set specific strategic intent to support customers’ requirements for improving operational efficiency, driving better returns and increasing the sustainability of their businesses. A people-based ecosystem driving digital transformation is the key enabler to achieving these strategic objectives on the African continent. DI will expand its ecosystem of customers and partners who want to adopt technologies to enable their digital transformation. Leveraging existing indigenous knowledge and skills and creating new skills pools is the key differentiator.

In East Africa, the regional footprint will be led by Kenyan operations AVEVA Select East Africa and the Nigerian representative offices AVEVA Select West Africa will take on a similar role in West Africa. Both these operations are also investing heavily in establishing training and demonstration centres to build these skill pools and to equip system integrators, partner companies and end-users with skills to enable them to maximize the use of the technology and to customize the service offerings available.

The coveted ‘AVEVA Select Partner’ designation allows distributors to enable customers to simplify design, optimize production, and maximize performance. By leveraging the breadth of the AVEVA software portfolio, AVEVA Select partners can take advantage of programs designed to suit every product and solution specialization in the engineering and industrial segments. The AVEVA Select Program offers an effective way for partners to penetrate new markets and build upon existing solutions and local relationships.

The AVEVA Select partnership has accelerated the value that DI can provide, empowering their customers and partners to optimize engineering, operations, and asset performance. A common digital thread across all enterprise pillars is enabling a new level of Performance Intelligence using bedrock technologies from Artificial Intelligence (AI), Industrial Internet of Things (IIoT), big data to the cloud and hybrid solutions.

With AVEVA’s engineering (https://apo-opa.info/3Kb0SPT) solutions, they can assist customers in efficiently delivering capital projects on time and within budget. The AVEVA Operations (https://apo-opa.info/3K0eWLH) suite eliminates supply chain value leaks while improving operational efficiency and enhancing collaboration. DI can also empower customers and partners to balance operating expenses and risk to optimize performance with AVEVA Asset Performance Management.

“Digital Industries’ customers and partners will continue to get the same dedicated local support, now with the added value of wider access to AVEVA’s complete portfolio of solutions, which enables a new level of Performance Intelligence using technologies such as AI, IIoT, big data and cloud. The AVEVA Select program helps our distributors to deliver even more value and support their customers digital transformation initiatives,” said Kerry Grimes, AVEVAs Global Head of Partners. “We are pleased to extend Digital Industries coverage as an AVEVA Select partner and look forward to developing and capitalizing on mutually beneficial growth strategies.”

“The Industrial sector in Africa is the final frontier for at scale digital transformation. Leaders in industry are adopting strategies for digital transformation across the continent. The market for industrial software and services is increasing exponentially and growth will be driven by customer value creation. As an AVEVA Select partner, we are on a journey to create sustainable digital champions. We look forward to industrial organizations joining us,” concluded Dion Govender, CEO of Digital Industries and Managing Director of IS³.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

TikTok is at ‘Pivotal Moment’ Says CEO

Chinese-owned short video app TikTok faces a “pivotal moment” as a growing number of US lawmakers seek to ban the popular app over national security concerns, CEO Shou Zi Chew said.

Chew said in a video posted on TikTok early on Tuesday that the app now has more than 150 million active monthly US users, representing almost half of the country’s population and up from the 100 million US users it had in 2020.

Chew, who will testify on Thursday before the US house energy and commerce committee, noted that some politicians were talking about banning TikTok.

Banning TikTok would be another message to younger voters that we don’t care about what you think

“This comes at a pivotal moment for us,” he said on the video that featured the US Capitol in the background and received more than 3.8 million views since it was posted earlier in the day. “Some politicians have started talking about banning TiktTok. Now this could take TikTok away from all 150 million of you.”

Chew asked TikTok users to leave comments about what they wanted US lawmakers to know about “what you love about TikTok”, and thousands responded in support.

TikTok’s critics fear that its US user data could be passed on to China’s government by the app, which is owned by the Chinese tech company ByteDance. TikTok rejects the spying allegations.

Last week, TikTok said the Joe Biden administration demanded that its Chinese owners divest their stake in the app or it could face a US ban.

‘Unacceptable’

On Wednesday, TikTok creators and New York representative Jamaal Bowman, a Democrat, will hold a press conference outside the US Capitol to oppose a TikTok ban.

Bowman described the push to ban TikTok as “fear mongering” in an interview. He said the US needed comprehensive “Big Tech regulation” that addressed Facebook, YouTube, Twitter and others, but singling out TikTok was “unacceptable”.

Banning TikTok “would be another message to younger voters that we don’t care about what you think,” Bowman said.

Chew said five million US businesses also used TikTok to reach customers.

TikTok also said Tuesday it had updated its community use guidelines and offered more details of its plans to secure the data of US users.

The company said it had started to delete this month US user protected data in data centres in Virginia and Singapore after it started routing new US data to the Oracle Cloud last year.

TikTok, which has said it has spent more than US$1.5-billion on rigorous data security efforts, said “if protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access”.

A growing number of US lawmakers support a ban on TikTok, including house energy and commerce committee chair Cathy McMorris Rodgers, congressional aides told reporters on a call Monday.

On Friday, six more US senators backed bipartisan legislation to give Biden new powers to ban TikTok. On 1 March, the US house foreign affairs committee voted along party lines to give President Joe Biden new powers to ban TikTok.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How Bitcoin Surge is Defying Macro Peril

Even though macro events suggest bitcoin and other tokens should be beating a hasty retreat. Instead, they’re extending their 2023 rebound.

Concerns about further interest rate hikes, a fizzling US stock rally and a US crypto crackdown all suggest bitcoin and other tokens should be beating a hasty retreat. Instead, they’re extending their 2023 rebound.

Bitcoin’s year-to-date gain has now reached 50% after a further jump in February, contrasting with a retreat in global equities this month courtesy of a macroeconomic environment replete with growth and inflation concerns.

This divergence has dented a positive correlation between shares and crypto that sprouted in the pandemic. A 40-day correlation between bitcoin and the S&P 500 has slid below 0.3 to the lowest since 2021 from a May record above 0.8. A reading of 1 implies assets are fluctuating in lockstep and minus 1 signifies the opposite.

This divergence has dented a positive correlation between shares and crypto that sprouted in the pandemic

Other relationships have shifted, too: a once deeply negative 40-day correlation between bitcoin and a dollar gauge is rapidly disappearing, while January’s tight tie between treasuries and the largest digital asset has dissipated.

“Crypto has been decoupling from traditional assets in 2023” and “crypto-specific events increasingly drive the market”, digital-asset Research Company Kaiko wrote in a note.

An array of assets including digital tokens surged in January, but the risk rally outside of crypto snapped this month as data including strong US jobs figures dashed hopes for an imminent peak in borrowing costs.

Crypto is outpacing traditional assets as a result. The S&P 500 has returned a smidgen over 6% this year, the Nasdaq 100 almost 13% and gold about 1%. The MVIS CryptoCompare Digital Assets 100 Index of leading tokens is up 40%.

Endogenous drivers

Some commentators contend that endogenous drivers in the digital-asset industry are influencing speculative bets on tokens. Hong Kong, for instance, stirred optimism by pivoting in October to a pro-crypto stance and on Monday outlined a plan to allow retail investors to trade larger coins.

Adam Farthing, an analyst at crypto market maker B2C2, said 59% of flows from the Asia-Pacific region were buyers, compared to 55% in Europe and the Middle East, and slight selling pressure from the US where regulators have turned up the heat on the sector in the wake the collapse of the FTX exchange.

Another crypto theme is the next upgrade of the ethereum blockchain — the biggest commercial highway in the virtual-asset industry. The so-called Shanghai upgrade will allow investors to withdraw ether coins they had locked up to help operate the network in return for rewards, a process called staking.

Smaller tokens from applications that try to make it easier to harness staking rewards have surged. Examples include Lido DAO and Rocket Pool’s RPL, which are up 200% and 150% respectively in 2023, according to data from CoinGecko.

Innovation “will allow crypto to decouple from traditional markets,” said David Moreno Darocas, research lead at market intelligence firm CryptoCompare.

So-called halving events — set intervals where the rewards paid out to crypto miners are slashed by 50%, reducing the new supply of tokens — are also rippling through digital-asset markets. The litecoin token’s halving is due in coming months and it has gained about 35% this year. Bitcoin’s halving is expected in 2024.

“Unless there is a material escalation in macro instability, we expect crypto to revert to be driven by sector-specific factors,” said Richard Galvin, co-founder of fund manager Digital Asset Capital Management.

Crypto correlations can turn on a dime and some argue bitcoin has surfed a short squeeze and is vulnerable to rising rates. Higher borrowing costs and a series of blowups lopped $1.5-trillion off the market value of digital tokens last year.

Many investors remain wary, but those who are interested are coming off the sidelines and appear to be “buying for price appreciation and diversification”, said Alkesh Shah, head of crypto research at Bank of America.

Retail-investor demand is helping, added JPMorgan Chase & Co strategist Nikolaos Panigirtzoglou. “This positive retail impulse year-to-date is naturally more dominant in crypto given the absence of institutional investors at the moment” post-FTX, he said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Bitcoin Passes The Bank Stress Test

March 22, 2023

As crisis stalks the traditional world of stocks and bonds, bitcoin is suddenly looking like a safe haven. The infamously volatile cryptocurrency seems positively hale and hearty, just as a banking meltdown drives markets into the arms of a recession. Bitcoin has risen 21% this month, while a choppy S&P 500 has lost 1.4% and gold has gained 8%. This is pretty close to as spot-on a thesis for owning bitcoin as you’ve ever heard

“If you were going to describe an environment where there were successive bank runs because central banks are trying to fight inflation with fast rate increases, that is pretty close to as spot-on a thesis for owning bitcoin as you’ve ever heard,” said Stéphane Ouellette, CEO at digital asset investment platform FRNT Financial.

The cryptocurrency has, for now, severed its ties with stocks and bonds and tagged on to a rally in gold, fulfilling at least one part of creator Satoshi Nakamoto’s dream — that bitcoin can serve as a refuge for suffering investors.

Bitcoin’s 30-day correlation with the S&P 500 has slid to negative 0.12 over the past week, where a measure of 1 indicates the two assets are moving in lock step.

Selloff

A selloff in banks has wiped out hundreds of billions of dollars in market value and forced US regulators to launch emergency measures. The past couple of weeks has seen Silicon Valley Bank and crypto lender Silvergate go under, while Credit Suisse has teetered on the brink. Let’s not carried away, though. This is bitcoin.

“The bearish argument would be that these dynamics are temporary, and ultimately this rally is not going to sustain,” said Ouellette.

It remains to be seen if bitcoin’s bullishness will endure as attention shifts to the Federal Reserve’s policy meeting this week where the US central bank must walk a fine line as it fights inflation and bank stresses.

Furthermore, the cryptocurrency’s allure hasn’t all been about safety.

The rapid price rise has forced some short-sellers to cut their bets and buy coin back. Data from Coinglass shows traders liquidated $300-million worth of crypto positions on Monday, with most of those total — $178.5-million— short positions.

Nonetheless, bitcoin is resurgent.

It now commands nearly 43% of the total crypto market, its highest share since last June, according to CoinMarketCap data, while the total cryptocurrency market’s capitalisation has jumped 23% to $1.1-billion since 10 March.

“We’re seeing a return to bitcoin’s core ethos, that of a financial asset independent from the opacity and meddling of the centralised financial system,” said Henry Elder, head of decentralised finance (DeFi) at digital asset investment manager Wave Digital Assets.

The mainstream bank crisis has also fuelled some interest in DeFi, with the total value of tokens linked to such platforms rising to $49-billion from $43-billion over the past week, according to DappRadar.

Depegged

Not all areas of the digital world have been immune to the banking fallout, though. The second largest stablecoin, Circle USD (or USDC), lost its 1:1 peg to the dollar after disclosing its reserves were parked at the now-closed Silicon Valley Bank.

As worries spread over USDC’s ability to maintain its peg, its market cap slid to $36.8-billion last Friday from $43.8-billion a week earlier, even as leading stablecoin tether gained around $4 b-llion.

Market participants said some USDC withdrawals were likely reinvested in bitcoin as well, helping fuel the rally.

“It’s too soon to say that bitcoin has proven the narrative that it’s an alternative in a banking crisis,” cautioned Ed Hindi, chief investment officer at Tyr Capital in Geneva.

But he added: “The rally we are currently witnessing in bitcoin will be looked back at as the point in time where its main property as a decentralised non-sovereign asset was stress-tested.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry