The secret behind the Libra currency basket – blockchain weekly

Summary

Topic: Libra's currency basket is behind the compromise of economic, financial and political factors. The Libra real money basket that is currently revealed is basically in line with our predictions. The US dollar dominates Libra, with the euro, the yen and the British pound in the currency basket. The only thing that is more than expected is that the Singapore dollar is included in Libra's currency basket.

The inclusion of the Singapore dollar in Libra is in line with Libra's strategic goal. As a major power in the global economy, China's influence cannot be ignored by Libra. The positive correlation between the Singapore dollar and the renminbi is strong, and the Singapore dollar can be seen as the shadow of the renminbi. USD accounts for 50% of a basket of currencies anchored by Libra. In addition to the strength of the dollar itself, it may also be related to political considerations. Libra's currency basket has a Singapore dollar and no renminbi. Behind the 50% dollar, it is a product of economic, financial and political factors.

Quotes:

The BTC rebound was blocked, and the remaining main circulation certificates rebounded considerably. The total market value of digital certificates this week was 274.32 billion US dollars, up 3.9%; the average daily turnover was 57.42 billion US dollars, up 10.1%; the average daily turnover was 21.0%, up 1.6%. The current price of BTC is US$10,181, a decrease of 1.7%. The average daily turnover of BTC this week is US$15.3 billion, and the average daily turnover rate is 8.3%. The current price of ETH is 218.1 US dollars, an increase of 20.4%; the average daily trading volume of ETH this week is 8.4 billion US dollars, and the average daily turnover rate is 38.0%. This week, the exchange's BTC balance was 875,000, an increase of 0.51 million; the exchange's ETH balance was 9.39 million, an increase of 170,000. In the BICS secondary industry, the market value of payment and settlement has decreased, and the number of public service certificates has increased significantly.

Output and heat:

The difficulty and power of mining have increased significantly, and the attention of ETH has rebounded. The difficulty of mining this week is 11.89T, which is 0.932TT higher than last week. The average daily power is 91.70EH/s, up 2.77EH/s from last week. The difficulty of mining this week is 2425, which is 105 higher than last week. The average daily power is 190.0TH/S, which is 9.5TH/S higher than last week.

industry:

The application scope of the blockchain has gradually expanded and attracted widespread attention. The Canadian blockchain company will develop a blockchain solution for the oil and gas consortium; Venezuelan public housing will be delivered using petroleum coins; Bitwise reports to the SEC that the market is ready to launch the ETF; Turkey announced the national blockchain infrastructure plan.

Risk warning: regulatory policy risk, market trend risk

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1 Topic: The Libra currency basket is a product of compromises in economic, financial and political factors.

According to reports, in a letter replied to German legislator De Masi, Facebook announced the specific composition of the Libra currency basket, including 50% of the US dollar, 18% of the euro, 14% of the yen, 11% of the pound, and 7% of the Singapore dollar.

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1.1 The composition of the Libra currency basket is basically in line with our expectations.

Are we more "stable" in Libra with multiple currencies/assets mortgaged? Libra's operating mechanism conjecture predicts that Libra's currency basket consists of 47.68% for the US dollar, 35.00% for the euro, 11.02% for the yen, and 6.30% for the pound.

The Libra real money basket that is currently revealed is basically in line with our predictions. The US dollar dominates Libra, with the euro, the yen and the British pound in the currency basket. The only thing that is more than expected is that the Singapore dollar is included in Libra's currency basket.

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1.2 As the Singapore dollar of the shadow of the renminbi?

The inclusion of the Singapore dollar in Libra is in line with Libra's strategic goals, and the Singapore dollar can be seen as the shadow of the renminbi. The Singapore central bank is very open and inclusive of blockchain technology. In addition, China is Singapore's largest trading partner. The positive correlation between the Singapore dollar and the renminbi is strong. According to foreign media statistics, among the 12 currencies surveyed, the Singapore dollar and the renminbi are positive. The correlation is the strongest. Incorporating the Singapore dollar into the currency basket can be seen as indirectly incorporating the yuan into Libra's currency basket.

Libra's goal is to be a stable digital pass that combines the best currency features of stability, low inflation, global acceptance and interchangeability. According to the Libra white paper's description of its stability mechanism and reserve assets, Libra's structure of low-volatility asset collateral based on multiple currencies is very similar to the International Monetary Fund's (IMF) SDR, with certain "super-sovereign" currency attributes. .

According to the changes in the composition of the IMF's currency, the “super-sovereign” currency needs to have excellent international influence and high free use. In addition, excellent sovereign credit, moderate inflation rate and low volatility It is also an indispensable condition.

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In the previous report, Libra, which is collateralized by multiple currencies/assets, will be more "stable"? In the Libra Operational Mechanism Conjecture, we believe that with reference to the experience of selecting the monetary standard in the SDR basket, the high probability of the US dollar, the euro, the British pound and the Japanese yen will be first selected in the Libra currency basket. The sovereign countries selected for the currency must have a higher credit rating. Strong economic strength, the currency itself has market depth and extensive use.

Libra's indirect inclusion of the renminbi in the basket through the Singapore dollar is due to the lack of depth and liquidity of the renminbi in the international market. However, Libra wants to increase its appeal, and its currency basket, like SDR, reflects the importance of basket currency in the global trade and financial system.

As a big country with a global economy, China’s influence cannot be ignored by Libra.

1.3 Libra's currency basket is a product of compromises in economic, financial and political factors

We can accurately predict the composition of Libra's basket of currencies. It is not that we have a "crystal ball", but that we understand Libra's strategic goals, conditions and constraints. Libra's currency basket is a product of economic, financial and political factors.

At the Libra House of Representatives hearing on July 17, US time, Missouri Rep. Ann Wagner asked Facebook how to launch a global currency without damaging the dollar or undermining global economic stability. Libra project leader David Marcus replied that Libra's initial reserve is more than half of the US dollar, and the other half is a stable sovereign currency and low-risk assets, so it has less impact on the US dollar and says Libra will not be launched until all regulatory issues are resolved. .

USD accounts for 50% of a basket of currencies anchored by Libra. In addition to the strength of the dollar itself, it may also be related to political considerations. Facebook's Libra, although it is a private company's independent behavior, but with Facebook's volume, the US government department and the global market, it is hard to say that Libra is just an innovation of an Internet company. The United States is likely to lead innovation in the digital currency and payment sectors, gaining digital currency hegemony and establishing digital frontier barriers. Libra's currency basket has a Singapore dollar and no renminbi. Behind the 50% dollar, it is a product of economic, financial and political factors.

2 market: BTC rebound is blocked, and the remaining main circulation certificates rebounded

2.1 Overall market: The main circulation certificate rebounded greatly

The total market value of digital passes this week was $274.32 billion, an increase of about 3.9 percent from last week's increase of $5.9 billion. Continued the trend of the upswing last week.

The average daily trading volume of the digital pass market was US$57.42 billion, up 10.1% from the previous week, and the average daily turnover was 21.0%, up 1.6% from last week.

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The exchange's BTC balance this week was 875,500, an increase of 0.51 million from last week. The exchange's ETH balance was 9.39 million, an increase of 170,000 from last week. The exchange's BTC and ETH balances increased in different degrees, and the selling pressure on the market increased.

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The market value of USDT was $4.11 billion, an increase of $14.48 million from last week. At present, the enthusiasm for capital entry has dropped, and the USDT premium is relatively low with only a small premium.

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2.2 Core Pass: ETH leads the main circulation certificate

The current price of BTC is $10,181, with a weekly decline of 1.7% and a monthly increase of 0.4%. The average daily volume of BTC this week was $15.3 billion, with an average daily turnover of 8.3%. The BTC oscillated downward this week, and its performance was weaker than the main circulation certificate.

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The current price of ETH is 218.1 US dollars, with a weekly increase of 20.4% and a monthly increase of 16.7%. The average daily trading volume of ETH this week was 8.4 billion US dollars, and the average daily turnover rate was 38.0%. ETH led the main circulation certificate this week.

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EOS is currently trading at $4.01, up 7.7% for the week and 14.6% for the month. The average daily turnover of EOS this week was $2.1 billion, with a daily average turnover rate of 54.5%. EOS ushered in a larger gain this week.

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The current price of XRP is 0.29 US dollars, with a weekly increase of 15.2% and a monthly increase of 10.6%. The average daily turnover of XRP this week was 1.6 billion US dollars, and the average daily turnover rate was 12.8%.

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The monthly volatility of most major passes this week rose, BTC monthly volatility was 10.7%, down 3.1% from last week; ETH monthly volatility was 15.1%, unchanged from last week; EOS monthly volatility was 18.2%, compared with Weekly rose by 0.3%; XRP monthly volatility was 16.0%, up 5.0% from last week. This week, the market volatility of BTC has declined, ETH has not changed, and the volatility of other major circulation certificates has risen.

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2.3 BICS industry: the market value of payment settlement has decreased, and the number of public service certificates has increased significantly.

In the secondary industry of BICS (Blockchain Industry Classification Standard), the market value of the payment and settlement industry decreased from 76.0% to 73.7%. From the perspective of the change rate of market value, the market value of performance optimization industry has a higher growth rate, which is 30.0% higher than that of last week. The decline in the market value of physical assets is more obvious, down 19.0% from last week.

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The BICS secondary industry with more obvious increase in the number of passes this week is public services, health care and information technology, which increased by 14.3%, 12.5% ​​and 11.4% respectively compared with last week. BICS II has a significant decline in the number of passes this week. The industry is the pass-through asset management, communication services and operating platform, which are 7.7%, 5.6% and 5.5% lower than last week.

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2.4 Market View: The market is ready to move

This week, the BTC performance was weaker than the main circulation certificate. Some of the main circulation certificates began to rebound, and the main circulation certificates such as EOS, ETH and XRP ushered in a large rebound.

The market is just around the corner, and the big market is coming soon. This week, the performance of BTC was relatively weak, and some of the main forces shifted to other main circulation certificates. EOS, ETH, and XRP all ushered in a large rebound, breaking the turbulence of stalemate for many days.

3 Output and heat: mining difficulty and computing power increase significantly

The difficulty of mining and the computing power have increased significantly. The difficulty of mining this week is 11.89T, which is 0.932T higher than last week. The average daily power of this week is 91.70EH/s, up 2.77EH/s from last week. The difficulty of mining this week is 2425, which is 105 higher than last week. The average daily power is 190.0TH/S, which is 9.5TH/S higher than last week.

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This week, Google Trends's Bitcoin entry search heat was 9, which was the same as last week. The Ethereum entry search heat was 8, which was a bit higher than last week.

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4 Industry News: The application scope of blockchain is gradually expanding, causing widespread attention

4.1 Canadian blockchain company will develop blockchain solutions for the oil and gas consortium

According to BTCMANAGER, the Offshore Operators Council (OOC) Oil and Gas Blockchain Alliance, in partnership with Canada's GuildOne Blockchain, will develop a proof-of-concept blockchain solution for Alliance Expenditure Authorization (AFE) voting to reduce Trade friction and cost-effectiveness. It is reported that the OOC Oil and Gas Blockchain Alliance is the first industry blockchain consortium established by the seven major oil and gas companies in the United States. Its members include Chevron, ConocoPhillips, ExxonMobil. Equinor and Royal Dutch Shell.

4.2 Venezuelan public housing will be delivered in petroleum coins

According to The Daily Hodl on September 19th, Bitwise submitted a report to the US Securities and Exchange Commission saying that three key changes in the past two years "significantly improved" the bitcoin market, that is, the bitcoin spot market became efficient, bit Currency regulation has become fully important as an institutional, regulated futures market. According to the report, the United States has a sound foundation to establish a fully regulated bitcoin ETF.

4.3 Bitwise reports to the SEC that the market is ready to launch ETF

According to Argaam, on September 11, the Saudi Arabian Currency Authority (SAMA) Deputy Governor of Banking, Hisham Al Hogail, said that Saudi Arabia and the United Arab Emirates will complete the pilot of digital pass for cross-border banking transactions by the end of the year. The pilot work may focus on the technical aspects, while the legal and economic aspects will be reviewed at a later stage. In January 2019, SAMA and the UAE Central Bank jointly launched Aber, a digital certification program designed to facilitate cross-border settlement between the two countries.

4.4 Turkey announces national blockchain infrastructure plan

According to Cointelegraph on September 18th, the Ministry of Industry and Technology of Turkey announced the “National Blockchain Infrastructure” plan in the “2023 Strategy” to establish a nationwide blockchain infrastructure for use in public administration. Distributed ledger technology. The 2023 Strategy emphasizes that blockchain and DLT are the focus of national technology initiatives next year.