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

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.

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

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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