The Daily: Huobi Unveils HUSD, New Cryptocurrency Loans Launch

The Daily: Huobi Unveils HUSD, New Cryptocurrency Loans Launch

The Daily

It’s been a week for stablecoin stories in the crypto sphere, and while we’d like to have started the weekend on a different tack, Huobi’s effort was too intriguing not to share. We’ll also detail the latest cryptocurrency lending options in Saturday’s edition of The Daily and consider a topical Halloween costume for bitcoiners.

Also read: Bitcoin Cash Merchant Directory Marco Coino Surpasses 500 Listings

Stablecoins Get Meta With HUSD

Stablecoin mania is spreading, and now it’s starting to get meta. Huobi, the world’s second-largest exchange by trading volume, has announced the launch of HUSD. This isn’t technically a stablecoin though: it’s an integrated solution that contains multiple stablecoins. The aim is to save traders from having to choose between multiple pegged coins. Many exchanges, Huobi included, now list numerous stablecoins which are often paired against one another.

The Daily: Huobi Introduces HUSD, New Cryptocurrency Loans Launch

Huobi explained: “When you deposit any kind of stablecoins, they will be shown as HUSD in your account. You may withdraw any kind of stablecoin … For example, when you deposit 1 PAX, it will show as 1 HUSD in your account, and you can withdraw 1 TUSD.” Given that stablecoins can generally be relied on to adhere to the U.S. dollar, the solution ought to save hassle for Huobi and its customers alike. Initially, PAX, TUSD, USDC, and GUSD will be incorporated under the HUSD umbrella. The Singapore-based exchange finished:

We look forward to more stablecoins being involved in the HUSD system. Concurrently, we will evaluate the existing stablecoins in the HUSD system on a real time basis, if the stablecoin doesn’t meet the corresponding risk control standard, we will remove it.

Salt Expands Cryptocurrency Loans

The number of cryptocurrencies that can be used as collateral is growing. “Very Lending, Much Liquidity,” read the email Salt used to introduce its latest altcoin lending option. Cryptocurrency users can now deploy DOGE as collateral, along with BTC, ETH and LTC, and obtain a loan starting from $5,000. Crypto-fiat loans can be obtained for between one and 36 months, with an APR that starts at around six percent.

The Daily: Huobi Introduces HUSD, New Cryptocurrency Loans Launch

Crypto Twitter Goes NPC

The non-player character (NPC) meme has been inescapable this week, and it only seems fitting to sign off with crypto Twitter’s take. Cryptocurrency factions never need much prompting to dehumanize and goad one another, and it was inevitable that the NPC meme, which depicts opponents as programmatic non-entities, would catch on. One Twitter user has proposed a bitcoin-themed Halloween costume, accompanied by the sort of stock insult that an NPC might utter:

The Daily: Huobi Introduces HUSD, New Cryptocurrency Loans Launch

Meanwhile, a visitor to Ripple’s headquarters joked that some NPC programming may have been taking place:

What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.

Images courtesy of Shutterstock, Huobi, Salt, and Twitter.

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Major Online Rental Platform Allows Users to be Paid in Ripple

Omni, the online item rental and storage management startup, is now allowing its users to get paid in Ripple, capitalizing off of the cryptocurrency boom. The addition of the XRP payment method comes after the startup raised $25 million in XRP this past January.The company will be paying users out of their own stash of XRP, which is worth significantly less than it was in January, but users will still have the option to cash out in USD if they aren’t interested in the volatility of cryptocurrency.Omni’s founder and CEO, Tom McLeod, spoke to TechCrunch about the company’s latest move, confidently expressing that all companies should have a crypto strategy in order to prepare for the future.“I think any company scaling today has to have a crypto strategy. This is the start of ours,” he said.Omni originally began as an item storage solution that is significantly more efficient and cost effective than traditional storage methods, like renting a storage unit. When a user has an item that they need stored, Omni sends a representative to pick up, photograph, and transport the item to a large storage facility, which proves to be significantly cheaper than renting an entire storage unit for one item.Once a user needs the item (or items) back, they can request to have them delivered to their residence within a few hours of sending the request, 24/7. The service has since added another, more profitable, feature, called Marketplace, that allows users to rent out their unused items while generating side income.Omni is now requiring users to itemize the unused items that they are looking to rent, rather than grouping them in one container for Omni to take. User’s looking to offload and rent out items grouped in a suitcase or a large container now must pay double the storage fee, while collecting the same rental profits from the items in the container.“Marketplace is driving Omni growth, and has always been the core of the long-term vision. Closed containers don’t grow the business, but move almost as much. We’re basically the same price as competitors now for them. It also makes it potentially more likely that small items will be itemized. We’re going to launch kits/playlists that will allow for grouping in the coming months,” McLeod explained.Omni’s services are currently available in San Francisco and Portland, but will likely expand to other major cities in the coming months.Ripple Could Benefit Both Omni and UsersIn addition to offloading their bag of XRP, both users and Omni can benefit by collecting profits in cryptocurrency. Users can unlock liquidity in their items while growing their investment portfolio, while Omni can lower their transaction fees that they are forced to pay when users cash out and transfer USD.McLeod explained the double-sided benefits of using XRP, saying:“In every other crypto investment scenario, you have to risk your cash — this way you can put items you already own to work for you and have them earn XRP while you relax. With this integration, you can basically double dip on ownership-as-investment by both unlocking liquidity early and investing some or all of the proceeds back into the crypto markets.”Featured image from Shutterstock

Expect More Crypto Hedge Funds To Close in 2018… But Not For Why You Think.

In a recent tweet thread, Anthony “Pomp” Pompliano, co-founder of Multicoin Capital, outlines why many of crypto hedge funds might be closing their doors in 2018.

Most people would expect that the bear market and the prices would be the number one reason why most hedge funds are closing up shop.

While this is certainly a factor, Pomp believes that it has to do more with the fee structures that the funds set-up in 2017. In 2017, 198 hedge funds launched and in 2018, it’s projected that 220 hedge funds will open.

2017 was a great year to start a crypto hedge fund, especially the earlier part as the returns were massive and investors made great returns.

2018, on the other hand, has seen a significant downturn in many of the cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin and Stellar, Zcash and DASH. Many of these coins make up a strong percentage of most of the crypto hedge funds out there.

While price has a significant reason for the closing of these hedge funds, it’s actually due to the fee structures many of these funds set-up in 2017, which will actually cause the closings of these funds.

Most hedge funds have a fee on what is known as Assets Under Management or AUM.

A 2% management fee is pretty standard across all industries for hedge funds. The real money for owners of funds is what is known as a “performance” fee or an “incentive” fee which can be as high as 20% of profits. These bonus fees are calculated at the end of the year. In 2017, the numbers indicated stellar returns.

As an example, if a fund had $10 million assets under management and grew it to $20 million, they would take 20% of the $10 million in profits and pocket a $2 million incentive fee.

According to Pompliano, most hedge funds have a high water mark clause in their contracts that basically states, “The performance bonus is only good if the fund breaks the previous yearly high.’

This means that for the same fund that doubled in value of 2017 at $20 million, would need to be above $20 million by the end of December for 2018.

Due to the 70-90% corrections from all-time highs in 2017, a majority of crypto funds will most likely not make any performance fee this year.

This means they have three options for the rest of the 2018 fiscal year.

They can:

  1. Raise New Capital
  2. Ride the market out and hope 2018 is better.
  3. Close the fund

Raising new capital is a hope for many funds, as the new money won’t be ear marked with the ‘highwater’ clause. In fact, we are seeing a lot of funds trying to raise more money for the 2018 year to get in on the bear market prices.

Kyle Semani of Multicoin Capital has stated, “New capital has slowed, even for a higher-profile fund like ours.” This means that most of these smaller, lower profile funds are feeling the weight of this bear market as capital is drying up for the crypto markets.

As for riding out the market, I’m guessing that, like many of our readers, they are hoping for a strong 4th quarter so that they can reach the benchmark set in 2017. Based on conservative figures, most funds need to 4X from their current positions to get back to their high water marks.

We’ve seen this in other industries. If we don’t get the strong fourth quarter, then we may see hedge funds start to close their doors to start new ones, join other firms, or just retire from their 2017 profits. George Saber from Coin Observatory, a crypto hedge fund advisory company, had the following to say:

We have hedge funds from around the world that use our Market Intelligence Interface to keep their investors money safe. You have to adapt your strategy to the market that you’re in. 2017 was a buy and hold bull market. 2018 has been a choppy bear market. We recommend our clients use complex hedging strategies rather than just hodling and praying. It’s all about exposure and risk management.

A few lessons to take away: the best hedge funds of 2018 were most likely shorting the markets all year or at least hedging their positions by shorting the futures market.

What are your thoughts on the current state of crypto hedge funds?

Images courtesy of, Shutterstock.