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Token Diamond Market Explodes Amid Crypto Banking Crisis As Investors Seek Sustainable Assets – Here’s What You Need To Know


Token Diamond Market Explodes Amid Crypto Banking Crisis As Investors Seek Sustainable Assets – Here’s What You Need To Know

Source: Adobe Stock / LIGHTFIELD STUDIOS

Amid the chaos of last weekend’s banking meltdowns and a major stablecoin de-peg, investors have found solace in a surprising asset class: token diamonds.

As market volatility peaked, reports from CoinDesk show sales of digitized diamonds soared 300%, with the Diamond Standard market leading the charge.

Founder and CEO Cormac Kinney confirms that the increase in trading volume has been so significant that the Standard Diamond Spot Market stayed open all the time.

Notably, according to the CEO, most of those who bought these diamonds wanted to get out of stablecoins. He was quoted as saying that,

“[Sales] diamond coins and other products have risen sharply since Friday following the shutdown of Silicon Valley Bank and Signature Bank by regulators, with the USDC breaking its [dollar] peg and amid fears of contagion to other banks and digital assets.”

The popular stablecoin USDC has returned to its fixed price of $1 after regulators in the United States assured that depositors in Bank of Silicon Valley (SVB) could access their money.

USDC is the fifth-largest coin and the second-largest stablecoin by market capitalization at $37 billion, while Tether (USDT) ranks third among all cryptos and first among stablecoins at $76 billion. dollars in market capitalization.

Diamond Standard, based in New York, is a blockchain company that describes itself as a technology developer, diamond market maker, and “producer of the world’s first diamonds.”

The company symbolized the diamond market, making it easy for investors to invest in the ore.

“Our goal is to unlock the potential of natural diamonds as sustainable assets for investors, like gold, silver and platinum,” the company said, adding that it was working with regulators, auditors and the financial sponsors to do so.

And having these investment options is especially relevant in times of market volatility and uncertainty, when investors tend to focus on durable assets for protection.

Additionally, the CEO said that most clients working with the company aim to hold the asset for the long term, seeing it as an opportunity for portfolio diversification and hedging.

The firm’s clients include individuals, family offices and smaller hedge funds, and many of them have gold in their portfolios, seeing “diamonds as something that is uncorrelated to diamonds.” other assets”.

Also, there is arguably room for the price of diamonds to rise and investors to make money.

Interestingly, Diamond Standard is still primarily banking with Signature Bank, while having affairs with a few others, the report notes. Kinney argued that Signature is currently “the safest bank in the world”, given that the newly created interim entity will, for some time, be run by the Federal Deposit Insurance Corporation (FDIC).

As a reminder, the turbulence in the banking sector has so far led to three major bank failures in the United States: silver gateSVB and Signature Bank.

The FDIC took control of Signature two days after regulators shut down SVB last weekend in a massive meltdown affecting billions in deposits.

Signature had $110.36 billion in assets and $88.59 in deposits at the end of 2022, according to New York State. Financial Services Department.

The Signature collapse was the third biggest failure in American banking history, the Silicon Valley Bank shutdown was the second, and the first was Washington Mutualwhich collapsed during the 2008 financial crisis.

With the struggling Silvergate, Signature Bank was known as one of the largest crypto-friendly banks in the United States.


Learn more:

– Crypto firms shift funds to asset managers including Fidelity amid banking turmoil
– Coinbase Confirms $240M Corporate Cash Balance With Signature Bank As Lender Shuts Down

– Crypto Bank Silvergate Forced to Return $9.85M Deposit to BlockFi in Ongoing Bankruptcy Litigation
— Lawmakers demand answers from Fed and FDIC on Silicon Valley bank meltdown

– Diamond Standard wants to launch a coin in 2022
– Now that Bitcoin “is digital gold”, what crypto is for payments?

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.