The Weekly Wrap - SNB, Moonbeam, Hedge Funds, Inflation

Jan 14, 2022 - 5 min read

1. SNB project Helvetia trial concluded

The Facts:

  • The Swiss Nation Bank tested the integration of a wholesale CBDC settlement with commercial banks, monetary policy, and cross-border transactions.
  • The central bank announcement came on Thursday and mentioned the complexity of integrating such a CBDC in existing back-office systems and processes.
  • The next phase of Project Helvetia will see a joint experiment between the Bank of International Settlements, the SNB, SIX and five commercial banks.

Why it’s important:

  • The aim of the project is to be prepared for a future in which more financial assets are tokenized and financial infrastructures run on DLT.
2. Moonbeam launch on Polkadot

The Facts:

  • The project launched earlier this week, becoming the first fully functional parachain, after receiving over 35 million DOT through its crowd loan campaign last year.
  • Moonbeam is a fully Ethereum-compatible smart contract platform on Polkadot, meaning now that the GLMR tokens are transferable, users can connect Moonbeam to MetaMask to use them.

Why it’s important:

  • The first 30% GLMR tokens have been rewarded to participants.
  • In the following weeks a variety of deployments are expected, such as bridges, multisignature support, Chainlink oracles and more.

Even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance.

3. Crypto hedge funds outperform competitors in 2021

The Facts:

  • In 2021 we saw a big rally in stock with the S&P 500 returning 26.9%.
  • Reportedly, traditional hedge funds underperformed the index with a return of just over 10%, linked to underexposure of big tech performers that mainly drove the market.
  • According to data from Hedge Fund Research, crypto hedge funds returned, on average, 214% in 2021.

Why it’s important:

  • Outperforming the SPX is a feat never achieved by most fund managers.
  • The staggering performance of crypto hedge funds even topped BTC which returned 48.5%, but is still inferior to the roughly 400% returned by ETH.
  • 2022 might see more hedge funds making the move from traditional investments to crypto

Number of the Week

TSMC the world’s largest contract chip maker increased investment budget to boost production capacity. (via WSJ)

4. Inflation hits anticipated 7% mark

The Facts:

  • The Consumer Price Index which measures costs of different items, was at 7% in December 2021, meaning the pace of inflation growth over 12 months has been the highest in nearly 40 years.
  • Global supply chain disruptions are still causing shortages in goods, leading to a rise in price.
  • The Federal Reserve is now preparing to raise interest rates up to three times in 2022 to curb inflation.

Why it’s important:

  • Markets anticipated inflation to reach 7% in December, with stocks rising after the news and bond yields being mostly negative.
  • There’s a long way back to the Fed target rate of 2% but Jerome Powell signaled that the Fed will do whatever it takes to reach it.

In other news

  • North Korean hackers stole US 400m in 2021. (via cointelegraph)
  • Tether freezes USD 160m. (via cryptonews)
  • Group of US banks to offer Stablecoin. (Coindesk)

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