CoinLoan Weekly: Risk-off sentiment, Goldman Sachs’ BTC-backed loan, real estate sold for crypto
From a peak of $40,606.77 on Tuesday, April 26, BTC collapsed to nearly $38,000. The ensuing upturn did not offset the loss. The coin continued falling over the weekend and reached its lowest point on Sunday, May 1 ($37,777.45).
The Fear & Greed Index continued to see-saw between fear and extreme fear (20-28) as BTC echoed the risk-off sentiment in stocks. Tuesday’s fall has been attributed to the suspension of Russia’s gas supplies to Poland, along with central bank tightening and issues with El Salvador’s use of BTC as legal tender.
As of now, BTC is trading at $38,592.11, with a 24-hour rise of +2.1% and a 7-day loss of -2.2%
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ETH moved up and down in unison with BTC. After crashing from $3,016.42 on Tuesday, April 26, it made a feeble attempt at recovery and headed downhill. Sunday, May 1, brought the lowest low for the week — $2,738.17.
Like BTC, ETH is returning to the price observed on Monday, April 25. Its latest jump has virtually eliminated the lost value.
As of this writing, ETH is trading at $2,842.16, with a 24-hour jump of +2.6% and a 7-day loss of -2.7%.
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XRP had a damaging week. Like BTC and ETH, it peaked out on Tuesday, April 26 ($0.701083) and bottomed out on Sunday, May 1 ($0.587149). However, it lost nearly five times more value.
April brought XRP’s worst monthly performance since June 2021. The SEC vs. Ripple case is affecting buying sentiment, so holders should monitor the news closely.
As of now, XRP is trading at $0.607557, with a 24-hour change of +1.3% and a 7-day fall of -13.1%.
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Goldman Sachs issues first crypto-backed loan
Goldman Sachs has become the first Wall Street bank to issue a loan collateralized by crypto. This BTC-backed lending facility proves that financial giants have a growing interest in digital assets. According to Bloomberg, the bank’s foray into this domain “accelerates Wall Street’s embrace of cryptocurrencies.”
Goldman Sachs, which has a digital assets team, lent cash to a Bitcoin holder for the first time in its history. This scheme includes 24/7 risk management. If BTC loses too much value, the borrower may be obliged to add collateral to prevent liquidation.
This is the latest milestone in Goldman Sachs’ history of crypto-related projects. In March 2022, it gave clients exposure to Ether through Galaxy Digital’s ETH fund. A few weeks later, Galaxy Digital facilitated the first OTC crypto transaction as Goldman Sachs traded a Bitcoin non-deliverable option (NDO).
In 2021, this partnership allowed the bank to launch its Bitcoin futures trading. According to Galaxy Digital co-president Damien Vanderwilt, the growing crypto adoption in banking may ultimately soothe Bitcoin’s volatility.
Wall Street already offers a range of crypto-related services: investment banking, trading, and wealth management. Lending is the next logical step. In the future, governments and institutions could use over-collateralized loans to access additional capital.
Property developer in Dubai accepts Bitcoin and Ethereum
DAMAC Properties, a major luxury real estate developer in the Middle East, has announced plans to accept payments in BTC and ETH. According to the company, it intends to revolutionize the future of the real estate. It also aims to enhance convenience and optionality for investors worldwide.
According to Ali Sajwani, DAMAC’s General Manager of Operations and head of its digital transformation initiatives, the move will help DAMAC “accelerate the new economy for newer generations, and for the future of our industry.” However, it is not a pioneer — Latin America’s Proptech La Haus made a similar announcement in late 2021.
The UAE’s focus on innovation attracts leading crypto and blockchain companies. In March 2022, Binance received a license from Dubai’s regulator. Bybit and Crypto.com have set up a regional base in Dubai, while Kraken is licensed to operate in Abu Dhabi’s free trade zone.
Meanwhile, crypto holders in the US can use their digital assets as collateral for home loans. On April 28th, 2022, blockchain real estate platform Propy announced it had joined forces with Abra Borrow, a crypto lending service. USDC.homes has launched uncollateralized mortgages tied to credit scores — an Austin resident has recently bought a condo using a $500,000 loan issued in USDC via Polygon.