Representative illustration of the week:
Weekly Headline News
1. First Mover: Crypto Gawks at GameStop, Sees Shades of Self
2. Dogecoin Becomes Most Mentioned Crypto on Twitter Ever as Price Soars
3. First Mover: Risks Nobody’s Ever Seen, From the Fed to Tether (and GameStop)
4. What I Think of Bitcoin
5. Rothschild Investment Adds to Grayscale Bitcoin Holdings
6. Miami Uploads Bitcoin White Paper to Municipal Website
7. Japan to Have Blockchain-Based Stock Exchange in 2022
8. We Have Entered the Age of Anonymous Crypto
● Digital-market traders found amusement in the GameStop saga. They also saw an opportunity for self-reflection. For cryptocurrency traders and analysts, one of the things that’s so surreal about the GameStop saga is that it all seems so familiar.
● In search of takeaways, First Mover reached out to the financial historian Niall Ferguson, former Morgan Stanley-banker-turned-crypto-banker Caitlin Long, Themys.io CEO Jonathan Mohan and Quantum Economics founder Mati Greenspan. Here’s what they said:
1. The GameStop coterie isn’t the only crowd taking on big finance.
2. Percentage moves, in the hundreds, are something to expect, even accept.
3. Bookkeeping-by-blockchain might be more efficient than Wall Street’s ledger systems.
4. Many new investors appear to be in it not just for the money, but for the fun, the entertainment, the joke, the thrill.
● Tweet volume for the shiba inu-themed cryptocurrency surpassed previous records for bitcoin, according to TheTIE. Twitter mentions of the dogecoin cryptocurrency rocketed to record levels after prices hit all-time highs Thursday.
● The shiba inu-themed coin has been experiencing a flurry of trading activity, possibly due to attention from members of Reddit trading groups like WallStreetBets and SatoshiStreetBets.
● Risks surrounding tether have been known for years, but they’re commanding fresh attention as the amount outstanding swells to $25B.
● Cryptocurrency traders and analysts planned to keep an eye on an expected Federal Reserve announcement Wednesday at 2 p.m. ET in Washington (19:00 UTC), detailing the U.S. central bank’s latest monetary policy plans as the coronavirus continues to ravage the economy. “Bitcoin seems poised to consolidate a little more, but if the Fed is not dovish enough and the dollar rebounds, the $30,000 level could easily break,” said Edward Moya, the senior market analyst in New York for the London-based foreign-exchange brokerage Oanda.
● With most central banks around the world acting to depreciate their currencies at a time when bond yields are already converging to zero, it’s reasonable to look for alternative storeholds of wealth. Bitcoin, by far the leader among cryptocurrencies, has gotten the lion’s share of attention here as it has skyrocketed in value — appreciating nearly 200% just since October to more than $40,000 per bitcoin before settling at current prices around $30,000. Bitcoin offers some attractive attributes, such as limited supply and global exchangeability, and is evolving quickly. Bitcoin’s dramatic rally is reigniting discussion around its viability as a storehold of wealth.
● Similar to gold, Bitcoin has limited usage as a medium for directly exchanging goods and services. Also like gold, however, Bitcoin offers stable and limited issuance that cannot be devalued by central bank printing. Bitcoin has a hard-coded total supply of 21 million bitcoins, with an issuance rate that automatically halves every few years. It is this feature of Bitcoin that has mainly driven the “digital gold” narrative.
● Bitcoin may look especially attractive to some investors now for the same reasons that gold has been supported in the last few years. Neither gold nor Bitcoin pays a yield on an outright basis, but this matters little when yields on other assets have collapsed.
● Bitcoin is globally accessible and easily portable-useful attributes for a storehold of wealth. Compared to some other traditional storeholds of wealth such as gold, art, and real estate, Bitcoin is much more easily exchangeable, especially for individual holders. Indeed, given its digital nature, Bitcoin might be the most portable storehold of wealth, much more so than physical cash.
● Bitcoin institutional acceptance is slowed by volatility, regulatory uncertainty, and still-immature infrastructure. If a fundamental purpose of a storehold of wealth is to preserve or increase one’s purchasing power over time, we think Bitcoin feels more like an option — it remains a highly volatile and speculative asset.
● In a best-case scenario, a maturation of crypto regulation that provides assurances around Bitcoin and greater means to access the asset (such as a Bitcoin ETF) could encourage large institutions to increase their exposure.
● Chicago-based Rothschild Investment Corporation recently increased its position in Grayscale Bitcoin Trust to 30,454 shares, a 24% increase from October.
● The institutional investment manager of $1.4 billion disclosed Monday its shares in the trust were worth $975,000 at the end of 2020.
● The city of Miami on Wednesday uploaded a copy of the Bitcoin white paper to its municipal website, joining a growing chorus of governments and companies now hosting bitcoin’s original blueprint.
● Mayor Francis Suarez emphasized his commitment to “turn Miami into a hub for crypto innovation” in his tweet announcing the upload. He’s been pumping the U.S. city’s potential as a landing ground for California tech expats for weeks on social media. Miami is the “first municipal government to host Satoshi’s white paper,” Suarez asserted.
● SBI and SMFG are expected to launch the platform in Osaka to compete against the Tokyo Stock Exchange (TSE), according to a Nikkei report Thursday.
● SBI Holdings has reportedly partnered with Sumitomo Mitsui Financial Group (SMFG) to launch a digital stock exchange slated for spring 2022. The exchange is expected to be Japan’s first such stock exchange, allowing investors to trade digital securities using blockchain technology.
● Spurred by an information crisis and compounding global unrest, privacy has entered public consciousness. Privacy has always been a core value of the crypto-anarchist philosophy. In the past 10 years, fully anonymous cryptocurrency has emerged as a Holy Grail of blockchain research.
● It’s not just traditional cryptocurrencies that are undergoing a renaissance. Privacy apps are proliferating on decentralized finance (DeFi) while private smart contract platforms like Secret Network and Aleo are enabling general-purpose, programmable privacy.
● Perhaps in anticipation of regulatory crackdowns, Bitcoiners are adopting increasingly militant rhetoric. Armed with advanced technology and an ideology capable of carrying its followers to the barricades, the developer of privacy-focused Bitcoin wallet Wasabi, Max Hillebrand, wondered: “Can the state withstand a full-blown Bitcoin offensive?”