“NFTs could turn into a top 3 revenue source for the NBA over the next 10 years.” - Mark Cuban
Weekly Headline News
1. Institutions are driving cryptocurrency boom, says Goldman Sachs
2. Bitcoin tops $1 trillion in value again as the cryptocurrency’s price jumps
3. Cathie Wood sees bitcoin joining stocks and bonds as part of the classic balanced portfolio
4. JPMorgan Sends Its Private Clients a Primer on Crypto
5. How NFTs Became Art, and Everything Became an NFT
6. More Than 1/5th of Surveyed Goldman Sachs Clients Think Bitcoin Will Reach $100,000+ in 12 Months
7. Egyptians Are Buying Bitcoin Despite Prohibitive New Banking Laws
8. Want to be rich? Bitcoin’s limited supply cap means you only need 0.01 BTC
9. Software Firm Meitu Buys $22M of Ether, $17.9M Bitcoin for Its Treasury
10. Third Bitcoin ETF Expected to Launch in Canada This Week
11. Decentralized finance may be the future, but education is still lacking
12. DeFi will bring a new golden age for the film industry
● Huge demand from institutions for digital assets is the driving force behind recent surges in cryptocurrency prices, according to Goldman Sachs analysts. Matt McDermott, Goldman Sachs’ head of digital assets, explained the crypto landscape of 2021 was a very different place to that of 2017, largely because of private banking clients and institutional demand — a feature that was almost entirely absent until recently.
● “The team has fielded well over 300 conversations. And when I talk about the broad spectrum, I’m referring to hedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance, and pension funds.” Mr. McDermott also confirmed that much of the interest was purely around the world’s most dominant cryptocurrency — Bitcoin.
● Bitcoin’s value briefly surpassed $1 trillion on Tuesday as the price of the cryptocurrency jumped.
The digital coin’s price rose on Tuesday and its market capitalization went above $1 trillion in mid-morning trade Singapore time.
● It is only the second time that bitcoin’s value has surpassed $1 trillion after hitting that milestone for the first time on Feb. 19. Bitcoin’s market capitalization held above $1 trillion for a few days, before falling below that mark. The digital currency is up over 80% this year and 570% higher over the last 12 months.
● Ark Invest’s Cathie Wood spoke on CNBC’s “Closing Bell” Monday afternoon. She said she believes cryptocurrencies could stabilize and eventually behave like bonds. A 60–40 portfolio that’s split between stocks and bonds may look more like 60–20–20, Wood said. That is, 60% in equities, 20% in bonds and 20% in cryptocurrency.
● Though often called “digital gold,” bitcoin does not trade in tandem with precious metals and its high level of volatility is more reminiscent of assets that are thought of as higher risk. Wood said that, at the moment, bitcoin’s price was most correlated with real estate prices.
● The report, which was produced in February and obtained by CoinDesk on Friday, has been distributed to clients of JPMorgan Private Bank, which requires a minimum balance of $10 million to open an account.
● The move comes after CNBC reported in February that JPMorgan co-president Daniel Pinto claimed “demand isn’t there yet” from clients for crypto services, but it “will be there at some point.” The report plays down bitcoin’s common comparison to gold. Bitcoin has “diversifying” properties, but its “volatility characteristics and correlation profile refute the comparison to the traditional safe-haven asset,” the report states.
● Over $250 million of NFT volume was traded in 2020, according to a report from NonFungible, and that’s not counting the recent boom. Nor is it counting the $230 million for NBA Top Shot — digital “moments” (basically quick video highlights) that became so instantly popular, the developers were overwhelmed by a 200,000-person queue.
● NFTs can be art. NFTs can be music. NFTs can be collectibles, real estate, sports, fantasy football, gaming, internet ephemera and just about everything shy of thoughts. Want to buy an NFT of a LeBron dunk? One just sold for $208,000. Mark Cuban is all over it, and this is happening at lightning speed. Less than two months ago he told CoinDesk he was exploring NFTs (this was news at the time), and now, as he told USA Today, he thinks that NFTs “could turn into a top 3 revenue source for the NBA over the next 10 years.”
● A survey of pensions, sovereign wealth funds, hedge funds and more affirms growing institutional interest in crypto. Meanwhile, 54% of the respondents predict the price of the cryptocurrency will hover at $40,000-$100,000 in the same period.
● On this edition of The Breakdown’s weekly recap, NLW looks at:
1. Whether bitcoin is being caught up in the larger macro volatility
2. The latest NFT shenanigans including a burned IRL Banksy
3. The latest on institutional adoption including a positive survey from Goldman Sachs
● Public trading data shows volume on the platforms rose relatively steadily through 2020. On LocalBitcoins, new user registrations and trading volumes were up 100% between 2019 and 2020 in Egypt, according to the firm’s chief marketing officer, Jukka Blomberg.
● Both in terms of new Egyptian users and trading volumes, Blomberg said January 2021 was “the best month within the last three years.” The dramatic jumps in bitcoin transactions are all the more striking given the regulatory uncertainty on crypto use in Egypt. Crypto trading has been forbidden in the country under Islamic law since 2018. Although a religious decree is not legally binding, new amendments to Egypt’s banking laws in September 2020 prohibit the issuing, dealing or promoting of cryptocurrencies without an applicable license from the central bank of Egypt (ECB).
● “What we usually see across our platform is that in countries which are prone to inflation, there’s a direct correlation between inflation and an increased interest in cryptocurrencies,” CEX.IO’s Anissimov said. Those who truly believe cryptocurrency is the new frontier of financial systems will always find ways to get their hands on crypto.
● While purchasing 0.01 Bitcoin might cost only $500 today, current trends in global wealth distribution and the inevitable realization of Bitcoin’s limited supply could result in 0.01 BTC being worth $1 million in the future.
● As of March 1, Bitcoin’s total supply consists of 18.64 million BTC, leaving 2.37 million coins to be mined. In 10 years, the supply will reach 20.6 million, or 98% of the 21 million coins from the total supply. To conclude, buying 0.01 BTC today, roughly a $500 investment at current prices, can assure one a top 13% holder position. When comparing the relative wealth concentration of the fiat and Bitcoin markets, being among Bitcoin’s top 13% shares the same exclusivity as being a fiat millionaire.
● Hong Kong-listed Meitu Inc., which makes image and video processing software, said it has purchased $22 million in ETH and $17.9 million of BTC, making it the first time a firm has disclosed a major purchase of ETH for its treasury.
● The company said that while buying crypto helps diversify its holdings away from cash, “more importantly, the board considers this a demonstration to investors and stakeholders that the group has the vision and determination to embrace technological evolution, and hence preparing its foray into the blockchain industry.”
● According to an announcement from provider CI Global Asset Management, regulators have approved the final prospectus for the “CI Galaxy Bitcoin ETF.” The ETF is expected to begin trading on the Toronto Stock Exchange (TSX) on Tuesday, subject to approval from the bourse, under the ticker “BTCX.” BTCX will give investors exposure to bitcoin by investing directly in the cryptocurrency with holdings priced using the Bloomberg Galaxy Bitcoin Index.
● The listing, if approved, would make BTCX the third bitcoin ETF in North America. “I believe our ETF stands out based on its highly competitive price point and CI and Galaxy’s extensive capabilities and track record in managing alternative investments and digital assets,” said Kurt MacAlpine, CEO of CI Financial, the parent company of the CI Global Asset Management.
● Education and accessibility are crucial to make DeFi more accessible to the upcoming inflow of retail investors. Wading through the complex nature of DeFi requires clear and concise education. There is a rising need for educational platforms that address beginner levels of investing. Publications contributing educational content around DeFi noted significant growth throughout 2020 and early 2021. Educational initiatives have a goal to lower entry barriers to decentralized finance by educating people on cryptocurrency and the opportunities the broader industry provides.
● There is a lot more to DeFi than just owning Bitcoin, Ether or any other crypto assets. While that does grant one access to decentralized finance, the educational initiatives led by industry leaders will help explain how you can use these assets for more than speculative purposes. Through education, research and guidance, a new era of finance may just be around the corner.
● With an explosion of video streaming as a result of the COVID-19 pandemic and now around $40 billion locked into decentralized finance protocols, it’s time for decentralized finance and the film industry to meet. The chances of a film’s success are completely unknown until its release. DeFi and blockchain technology can address many of these problems by forming a new realm of decentralized film financing, or DeFiFi.
● Other use cases for DeFi and blockchain technology that would help to expand the entertainment ecosystem to further support creators and incorporate fan participation would be digital rights tracking and rewards for engagement. It’s about time users gain control over their own data, which has become equivalent to currency in the digital realm. In a DeFiFi ecosystem, users could be rewarded for contributing through curating content, promoting posts or performing other tasks essential to the upkeep of the decentralized network, such as running nodes, validating blocks of transactions or identifying bugs in the code.
● There are opportunities to be leveraged in bringing DeFi to film but also to fundraising, grant issuance, corporate treasuries and hedge fund governance. The possibilities are endless.