● US Government Approves First Digital Bank
● UBS Predicts Silver and Platinum to Outperform Gold
● US Dollars Bounces from Near Yearly Lows
As always, thanks again for picking up today's edition of Overbit Weekly Round Up, where we try to survey and review some of the more important stories in financial markets over the past few weeks.
Our first significant headline of the day comes out of the United States, where federal officials have approved the first-ever 'digital bank'.
According to a report out of SeekingAlpha, the US Office of the Comptroller of the Currency (OCC), which is the regulatory body tasked with chartering and regulating banks throughout the United States, has 'conditionally approved' the Anchorage Digital Bank National Association for a national trust charter. This would make Anchorage the first-ever federally chartered bank for digital assets in the US.
Banking services have been a significant problem for cryptocurrency users for years. Fiat on-ramps have always been a problem, though that issue has been eased a bit by the adoption of stablecoins. The other major problem is the lack of options for cryptocurrency custodial services, something that cannot happen without the bank mentioned above charter.
As Anchorage puts it, "This is a major milestone, not only for us as an organization, but also for the crypto industry and the wider financial world." As we have said, the relationship between banks and cryptocurrencies will be a significant trend for 2021, and this recent news out of the US is a positive sign for that trend.
Moving out of the US regulatory affairs, we switch our focus to the commodities sector. According to UBS Group AG, a Swiss multinational investment bank and financial services company, silver and platinum are set for a roaring 2021.
Business Insider recently reported that UBS Global Wealth Management strategists said silver and platinum would be bolstered in 2021 by the economic recovery, which will cause a rise in industrial demand. UBS analysts reportedly believe these two tailwinds will bring silver and gold to outperform gold in 2021.
One part of their thesis rests on policymakers' idea focusing on renewable and alternative energy, noting that "more than 50% of silver used in industrial applications is linked to solar panels and electronics".
Going forward, UBS analysts seem to doubt gold will repeat its 2020 run in 2021. Business Insider reports that the firm sees XAU/USD finishing the year 2.5% below its current price at $1,800/oz. To contrast, UBS analysts view gold ending the year around $27/oz, and platinum trading around $1250/oz, both of which are more than 10% gains. Though it's incredibly early in the year, it seems the idea of an economic bounce back in 2021 that we've talked about is picking up some steam.
To close today's edition of Overbit.com's Weekly Round Up, we're going to look at the ongoing market settings for the US Dollar Index. The US Dollar has found support from hopes of sustained economic growth, as it appears that underlying inflation is mild even as the COVID-19 pandemic struck the labour market and the services sector, with factors having the dollar closing 0.344 per cent higher at 90.335 on the day.
Over the coming weeks it will be necessary to watch how the dollar impacts the other markets, and thank you again for joining us for another fantastic edition of Overbit.com's Weekly Round Up.