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Is The Bitcoin Hashrate Recovering From Kazakhstan’s Crisis? Fear Abides

As the government of Kazakhstan claims the country’s power services are stabilizing, thus the Bitcoin hashrate could be on its way to recovery. However, is the situation stable enough for Bitcoin mining yet? Will it ever be?

A Recap

Just a few days after the Bitcoin hashrate reached an All-Time High, thus recovering from the China ban on crypto mining, another authoritarian crisis hit the bitcoin mining industry in Kazakhstan, taking the hash to drop 15% in 10 days.

The country has been the second-largest bitcoin mining spot (after the U.S.) with 18% of the global BTC hashrate ever since China’s miners were forced to find new locations with cheap energy costs.

Parallel to the crypto market down movement, on Friday 7th the price of BTC dropped to $41,000 while the coin’s mining in Kazakhstan went dark as the government forced a power and internet shutdown to gain control over raising protests, which had turned violent.

The protestors were reportedly voicing their anger toward new high fuel costs.

The news has been reported everywhere without complete certainty of what’s happening. Borders, the internet, and other means of communication were blocked, so the information doesn’t reach the world so easily.

The latest reports had shown that the uprising has been tamed as Russia’s President Putin stood proudly as the military ally who sent paratroopers last week. A demonstration of power through force.

President Kassym-Jomart Tokayev called it “an attempted coup d’etat”, Reuters reported. He alleged that “It became clear that the main goal was to undermine the constitutional order and to seize power.”

Both countries had referred to the uprising as a foreign-backed insurrection, failing to blame someone –or somewhere– in specific.

“Old man out!” was the protestors’ favorite chant referring to the former Nazarbayev who still holds power.

“We are ordinary people. We are not terrorists!!” read a banner from 40 activists.

Related Reading | Could Kazakhstan Turmoil Cause Another Bitcoin Hash Crash?

Is The Crisis Over?

The government gave “shoot to kill” orders.

In short: no, the real crisis cannot be over. The violence, however, might have stopped.

Reportedly, 164 people (3 children) have been killed, over 2,000 injured, 7,939 were detained.

“The violence has been by far the worst seen in the country since independence from the Soviet Union in 1991.” The Telegraph reported

“One man who had ventured out to find food was shot dead, according to credible reports, and a Kazakh media group said that one of its drivers had been killed.”

It wasn’t simply an internet shutdown: they was no way to buy food, banks were closed in central Almaty, going out was too dangerous, even ambulances were too afraid to work past the 7 pm curfew.

It also wasn’t simply about a rise in fuel prices, as the UK-based newspaper reported, the citizen’s despair also comes from “frustration at economic stagnation, revulsion at elite corruption and anger at the dilapidated state of social services and healthcare despite Kazakhstan’s oil and mineral wealth”.

The National Security Committee of Kazakhstan claimed that the situation has “stabilized and is under control” and declared the date as a day of mourning.

However, others report that the protests enter week 2.

Bitcoin Mining In Kazakhstan

On the miners’ end, the government intends to tighten rules and introduce extra taxes starting this year.

Currently, reports are showing mixed signals about the impact of these events on the industry.

An analysis by CoinDesk using data from mining pool BTC.com alleged that the lost Bitcoin hashrate of top mining pools had been nearly recovered, narrowing the loss to 2.2%.

Data from BTC.com shared by CoinDesk

The portal reported Alan Dordzhiev, head of the Kazakh National Association of Blockchain and Data Center Industry, had told them that the situation had been “almost resolved” and despite the blackouts, crypto mining regions were “totally fine”.

However, internet watchdog NetBlocks reported that a new blackout happened:

 

And NetBlocks’ director of research of internet monitor Isik Mater told Forkast that restorations made in the country “are limited, unpredictable and don’t satisfy the requirement for a stable connectivity needed for cryptocurrency mining or blockchain applications,”

The current hashrate measured by Blockchain.com reads 176 EH/s, still away from the 208 million EH/s ATH on January 1st –but not endangering.

Kazakhstan miners had been facing power restrictions. They might have already started to set their sight overseas, and beyond the service’s stability, the ongoing situation is unlikely to make them feel safe and welcomed.

Related Reading | Bitcoin Hashrate Approaches New ATH, What Does It Mean For The Price?

Bitcoin has shed over 19% in value in the past two weeks, the current price is at $41613 in the daily chart | Source: BTCUSD on TradingView

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The SEC Files A Strike Against Ripple’s Defense. Could It Drown XRP?

The U.S. Securities and Exchange Commission (SEC) made a surprise attack on the Ripple case by filing a letter of supplemental authority to strike Ripple’s “fair notice” defense. Simultaneously, the token XRP is down 2.33% in the last 24 hours to $0.7 following the market’s downtrend.

The SEC’s Surprise Move

As the popular SEC vs. Ripple case is expected to be resolved around April this year, the SEC has made a new move that left many wondering if previous expectations could change.

The American regulator is using a winning move from another case to strike at Ripple’s key arguments.

The SEC had taken John M Fife and five entities controlled by him to court in September 2020 for selling $21 billion of penny stocks and gaining a profit of $61 billion without registering as security dealers.

FIFE’s defense adopted an argument similar to Ripple’s, alleging the SEC hadn’t given them a fair warning and the term “dealer” can be widely interpreted. Last month, the court denied this argument.

What Does It Mean For The Ripple Case?

Naturally, the regulator now aimed to use this denial to strike at Ripple’s “fair notice” key defense.

Similarly, Ripple’s “fair notice” defense alleges the regulator failed to notify them about a possible violation of federal securities laws and claimed the term “investment contract” is being misused by the SEC, adding that “The SEC’s theory, that XRP is an investment contract, is wrong on the facts, the law and the equities.”

No foreign regulator has determined that XRP is a security. In fact just the opposite is true. The U.S. would be the unfortunate outlier.

The SEC is using the FIFE case latest outcome to insist that the term “investment contract” is bound by legal parameters since 1946:

In Ripple’s case, binding authority construing the term “investment contract” has existed since 1946. W.J. Howey Co., 328 U.S. at 298–99. Thus, Fife provides additional authority for striking Ripple’s fourth affirmative defense.

However, the cases have distinct terms. The attorney Jeremy Hogan explained via Twitter that the FIFE case outcome “marginally helps the SEC’s position in its Motion to Strike Ripple’s Fair Notice Defense so the SEC filed it with the court.”

Although the SEC is trying to make a move out of the similarities from both cases, Hogan claims that FIFE’s “was in a very different stage of litigation and the standard is completely different than the SEC v. Ripple case.

In the “Fife” case, the Defendant tried to argue “Fair Notice” in order to dismiss the lawsuit entirely (and failed) because the burden is very high on a party moving to strike a pleading. In the Ripple case, it’s the SEC that is trying to strike the affirmative defense of Fair Notice and it has the high burden to meet.

 

Ripple CEO Brad Garlighouse had remained hopeful at the end of 2021 as he expressed to CNBC:

Clearly we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.

Related Reading | XRP Builds Momentum With 7% Increase As Ripple Launches New ODL Partnership

The Impact On XRP

Related Reading | Ripple Had Its Strongest Year Ever Despite The Sec’s “Attack On Crypto”

The next hearing will be a key day for the outcome of the Ripple case, thus XRP’s price.

The timing is rather complicated for XRP. Its downtrend seems to follow the general crypto market movement. XRP is down 2.33% in the last 24 hours to $0,7634 as it shows in the next chart:

XRP trading down to $0,7634 in the daily chart | XRPUSD on TradingView.com

 

 

After the SEC filed the lawsuit against Ripple in December 2002, the XRP price plunged dramatically from $0.60 to $0.1748. It continued to drop and lose ground but remains inside the top 10 crypto Ranking.

Then, XRP recovered throughout 2021 and reached highs of $1.34 on November 10, 2021, although it didn’t manage to close the year above $1.01.

The XRP enthusiasts’ expectations are for Ripple to win the case and XRP to enter a massive rally, surging to its all-time high of $3.4 or even double numbers. However, the previous projections hadn’t taken into account the current crypto market downtrend.

And if the Ripple case were to have a surprisingly negative resolution, XRP might see an outcome just as sad.

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How Crypto Empowered Porn Creators In 2021: Less Cant More Freedom

The crypto industry saw the opportunity of a lifetime this year when OnlyFans, a platform known mostly for its adult content, announced it would ban sexually explicit content. The crypto and porn industry together represents a very profitable merge that has just started to happen.

The world of payment methods has a history of hypocrisy, control, and morals, and it tends to not support anything related to sex work.

Reportedly, earlier in the year OnlyFans had decided to shut down all sexually explicit content because of pressure from banks and payment processors. There was a huge backlash and the ban stopped days after its announcement, alleging that the platform had “secured assurances necessary” from the banks.

The platform’s founder and chief executive told Time that banks were refusing to process adult content-related payments.

“OnlyFans stands for inclusion”, they said, but they had been trying to distance themselves from the porn industry, interested in launching a streaming service –which doesn’t allow adult content.

Payment methods have been a burden for porn creators worldwide for years. Their gains are often subject to frozen funds, huge losses, and since there’s not much protection and support offered for sex workers, they need to be extra careful to not become subject to scams and other dangers.

So anonymity and safe digital wallets go really well with this industry. Naturally, many creators and producers have started to see an answer in crypto.

Crypto’s Not The Only One With A Bad Reputation

Cristobal Medoza producer and co-creator of a top Argentinian porn channel called ‘My Bad Reputation’ was one of many to adopt crypto in order to find financial stability and more opportunities. He gave us inside comments on his personal experience, allowing us to take a peek at the industry people love to consume from but try not to support.

New platforms are surging that connect the porn and crypto industry. A great niche for all parties if successful –it needs to be simple, safe, and well-executed–.

It’s a demystification that goes both ways: the amount of porn consumers is very high. If adult content platforms are related to crypto, this might become a blasting cap of mainstream adoption.

Medonza explained that the major porn platforms have already adopted crypto (paying in Bitcoin and USDT), which contrasts with other payment services offered that are very restrictive and using them comes with too many complications and downsides.

However, many smaller adult content platforms don’t use crypto yet, and that becomes a major problem that comes with huge fees to convert the creators’ money to digital assets.

Mendoza added that porn creators are often affected by the banks, which he claims have closed the accounts of many and frozen their funds when finding out their income is related to adult content.

He commented on the OnlyFans sketchy days of adult content baning, alleging that a large of new pornography platforms started to appear, trying to take that big chunk of a very profitable market.

There’s always going to be someone that will take a stake at that market because it generates huge gains. At the end, OnlyFans took a step back because they knew they would loose too much money and others would quickly fill into their role.

Mendoza stated that his adult content channel takes its payments through Binance, and it has become a great option since “it doesn’t question where the incomes come from, there are no types or morality issues with how we make the money,” plus they can easily exchange it.

Further than using crypto as a better payment method, it has also allowed him and his co-creator to make a few investments through trading and hodling.

There’s many people from the industry that still don’t know how to use crypto as a tool for payments and administration.

I think [they] would greatly benefit from crypto … comissions are low, there’s full control over one’s own income.

He mentioned there are many new projects that claim to link the adult content industry with crypto but some are scams, and creators need to be wary and start to educate themselves about cyber security.

Crypto total market cap at $2,1 trillion in the daily chart | Source: TradingView.com

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What DAOs Can Do: Exciting Or Worrying? Rethinking 2021 – Pt. 2

DAOs are believed to be the most efficient and important coordination tool for businesses and other organizations nowadays. In the first part of this article, we talked about the many benefits we saw during 2021, but like in any innovation, there are worries about what it might all mean in the future.

Related Reading | What DAOs Can Do: Social Movement Or Playground? Rethinking 2021 – Pt. I

Worries Of The Year

One of the worries that popped out in 2021 was taxes: are DAOs being responsible enough to educate their members on the taxes they will likely be subject of? If not, 2022 might bring very unpleasant surprises to them.

The taxation of DAOs in the U.S. is an unclear landscape at the moment, and that can turn into dangerous scenarios for small investors.

There are big concerns about thousands of dollars accumulated in tax liabilities, plus a dangerous grey area on legality. Reportedly, many users didn’t know their tokens were taxable when they got them from DAOs during 2021.

What happens if the token’s price plunges dramatically? Members could still have to pay taxes based on the fair market value at the time they received it.

Another 2021 main worry was the question of whether executing decisions via code is truly a good idea for the future of work and complex decisions.

Some have pictured scenarios in which smart contracts fully replace the decisions that used to be handled by managers. This could eliminate part of the human error of decision-making and turn the process into a more democratic way to coordinate within a business, but to many people, predetermined inputs also sound dangerous and dystopic.

Can smart contracts do more harm than good for workers? Or can they create a more balanced workspace and take more humane considerations into account? It’s a challenge the DAO technology will likely face.

Related Reading | It’s Not You, It’s Crypto: Execs Leave Silicon Valley To Join Crypto Startups

What DAOs Ignore

Yet, one of the most interesting approaches on what the tech of DAOs is still missing was made by Grace (Rebecca) Rachmany this year and published on CoinDesk.

The founder of DAO Leadership noted that not all the decision-making in DAOs is as democratic as it sounds since there are organizations –not centered in investments– where “those affected by a decision” are not “those who make the decision”.

Some believe that the cost of tokens is a great feature of DAOs because it can show stakers care about the project. However, what if the project is no longer centered on investments but finding better ways to achieve helpful and successful decisions to create an impact on large communities and endure times of crisis?

DAOs represent a promise to defy previous organization models, this means they can also have a higher impact on society: can the DAO tech achieve what the United Nations cannot? Rachmany suggests the techs should be seeing the bigger picture.

“DAO technology has provided little more than voting and funds allocation mechanisms,” she writes, and adds that the “DAO technology should be applied to areas we haven’t solved yet, areas where everyone’s interest is at stake and therefore everyone should have a say.”

Rachmany notes that “DAOs offer the potential to organize collective intelligence to address complex questions and manage shared resources.” However, “Because of their myopic focus on “on-chain” governance of blockchains, the DAO technologists have failed to create compelling technology for the problems that society is facing.”

Rachmany sees failure in centering this potential in small circles, an ironic reality as the fuel of these movements is “the sense that almost all of the democratic processes are broken in today’s society”.

She thinks it’s time for well-designed systems that can “cause better sense-making” and sees gaps in the decision-making processes of DAOs so far, the organizations’ accountability, lack of solutions for the inclusion of minorities with “less (or no) capital to invest “, and so on.

Will new technologies fail society or can they meet with complex global challenges?

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What DAOs Can Do: Social Movement Or Playground? Rethinking 2021 – Pt. I

Will 2022 be the year of DAOs? 2021 was certainly a blazing start.

The blockchain-related explosive and disruptive innovations seem to come from a shared ontological hunger: that deeper side of the human being that urges us to fill in the void that makes us so different from other animals species.

Spoiler alert: the void cannot be filled.

But trying –creating, innovating, going against the system, etc– to make something with it is what keeps us moving, conscious, and alive. The opposite is to become purposeless zombies that do exactly everything they’re told to do.

What You Should Know About DAOs

So, Daos. Smart contracts, decentralization, collectively finding an alternative to the traditional structures: 3 big guys on top and thousands of workers who cannot be part of major decisions inside the environment they dedicate their lives to. Basically most corporations.

2021 was a blooming year for Web3, DeFi, the metaverse, NFTs, and DAOs. It has all started to go mainstream. It’s getting big, it’s everywhere. But there’s so much happening so soon that the bigger picture of these innovations doesn’t have a defined shape yet.

Nevertheless, it’s important to approach the urge that lays behind everything that’s exploding around us, because it’s likely about to become part of everyone’s life.

So what are DAOs? Decentralized Autonomous Organizations, right, but that didn’t tell you much.

“They represent a fundamental shift in the ways humans coordinate”, explained Spencer Graham, project lead of DaoHaus. He suspects many future companies and organizations will be organized as DAOs.

He also noted that “decentralized” is probably the most important word in there. Nowadays most of these groups focus on distributing an organization’s power amongst the members of a group in order to make decisions and changes: no guy on top.

They introduce the possibility to achieve collective goals without needing to trust everyone on the team –because they simply cannot corrupt the process, and trust relies on the algorithm as the only intermediary– or an external legal framework to keep things on track.

The governance of DAOs works to take every vote into account. Nothing will get executed if there’s not enough quorum. You don’t need to be wary of people cheating in the ballots. Imagine presidential elections being that clear.

2021 In Review

Heads up: I’m not about to list trendy blockchain organizations. Let’s talk about what’s happening.

DAOs are getting harder to define. Firstly, they are a tool for coordination. But if we get into the details, there are so many types of DAOs.

Variations depend mostly on the goals: what are they using the organization for?

DAOs could replace big entities and give the small guys a chance to compete against venture capitalism. They could also be an investment club, people pooling money because they have the same financial goal.

Primarily, in crypto, I think most people are either trying to make money, create something of value, or both. All options are respectable.

The people inside a DAO probably couldn’t achieve their goals individually. So people need people.

Really, People need people.

At this point, we’ve all become a little bit too cynical to believe it, but it’s true.

When you truly observe how the most important sides of crypto move –the ones that can directly have an effect on society–, it becomes an unavoidable reality that we need each other to achieve the greater goals.

In 2021 we had a DAO who tried –and almost achieved– to buy one of the rarest copies of the constitution. Their effort became so valuable and popular that other DAOs were born to buy things like a Jodorowsky’s Dune Manuscript, and even try to purchase an NBA team.

It might sound geeky, but it’s also touching how people are finding ways to access things they could never dream of before –and stick it to the establishment.

It’s also important to note that 2021 was also full of despair. People are tired of oppressive and toxic workspaces.

Related Reading | DAO To Make Jodorowsky’s Dune Manuscript Public: Member Won $3M Bid

The Problem?

The passion that these organizations have, hoping to fix big systemic, institutional issues, sounds great and encouraging, but passion always has a dangerous side. There are worries about smart contracts and DAOs: could they be a scam? Can the reliance on smart contracts become problematic for companies’ decision-making?

In some cases, information has been withheld from the community and public, which beats the purpose of decentralization and puts some organizations in question. In 2021, we also saw that some DAOs can be wolves in sheep’s clothes. Why? We’ll dig into that in the second part of this article.

Related Reading | Largest DeFi Hack Yet? BadgerDAO Hack Results In Loss Of $120M+

 

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Metaverse Tank Tops: How The Fashion Industry Wants To Yield Over 75%

Metaverse: a digital universe. Infinite possibilities for its users, and for a brand’s revenue too. 2021 has set solid grounds for NFTs, GameFi and the metaverse to bloom into money trees. Many people still ask “What’s the point?” with every blockchain-related launch from major brands.

The gaming industry takes the spotlight as Gucci, Dolce & Gabbana, Ralph Lauren, Balenciaga, Adidas, and many other famous fashion brands and designers are racing to launch their own digital clothing on different platforms.

It might sound silly, but if look at what people were already paying thousands of dollars for mostly to brag about it, it’s not such a strange concept for the same thing to happen in the digital world. And socially, it might come with a redefinition of identity and reality.

If you could be anybody and anything, what would you look like? This is the kind of curiosity that the metaverse explodes, and the luxury industry is ready to market this avenue.

Related Reading | Metaverse Race Continues: Chinese Internet Giant Baidu Registers Trademark

Into The Metaverse Profit

The metaverse is only starting to take form and we cannot fully know what it will look like, but the concept of “avatars” is already getting big. Nowadays, there are virtual couture houses where users can buy or design garments for their digital persona.

These avatars are the digital version of their users; they can do everything humans do daily and more. A big difference is that when you sell something to a digital self, you won’t need to take into account the many costs and issues from the physical world –like shipping, fabric, damaged items, etc.

The new generations like Gen Z are native to the internet, TV, and video games. They were raised while looking at screens. These were babies surrounded by iPads, tables, and other items distant from the stereos and first iPods older generations grew up with.

This means that Gen Z’s relationship with digital reality is different, and they require a marketing strategy adapted to their interests. Virtual items have been the perfect gateway.

Ever since Morgan Stanley investment bank strategists said on a note that the metaverse could mean over $50 billion in revenue for the luxury industry over the next decade, brands have started to race even more vigorously than before.

The total market of luxury brands could expand by more than 10% in approximately eight years. Reportedly, one in five gamers from the Roblox platforms update their avatars every day. Add up the next generations to join, which will likely be even more adapted to digital reality. Understandably, the modern fashion industry is enamored by how much revenue it’s about to see.

Is It A Cute Fit Or Is It Just From The Metaverse

The items that can change the appearance of an avatar are called ‘skins’, and this is what brands like Balenciaga –who partnered with Fortnite– are currently focusing on as a marketing strategy.

The designer Charli Cohen, who partnered with the department store Selfridges and the company RYOT Lab to design a virtual Pokémon-related collaboration, talked to Euronews about her personal views and projection for the metaverse fashion:

Identity has evolved – there is no longer a line between the physical and digital ‘us’. The streets have moved into games and social media – and accurately taking your visual identity into these spaces matters as much as it does IRL. 

She further stated that “Interoperability is going to be a major focus for digital fashion in 2022 – the ability to take your digital wardrobe across multiple games and social spaces.”

Bloomberg reported that, amongst the brands that joined in during 2021, the Gucci garden Roblox pop-up sold one of its digital bags for $4,000. Burberry designed playable NFT characters called Shaky B for Mythical Games and the collection sold for around $400,000.

And the cherry on top of the metaverse-involved luxury industry, Dolce & Gabbana sold an NFT collection of nine pieces for around $5.7 million. And this is barely getting started.

Related Reading | Only In Crypto: A Croissant Explains Web3 And NFTs To Elon Musk

Crypto total market cap at $2,4 trillion in the daily chart | Source: TradingView.com

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Ripple Had Its Strongest Year Ever Despite The Sec’s “Attack On Crypto”

Ripple Labs managed to stay strong in 2021 despite the Securities and Exchange Commission (SEC)’s “attack on crypto”, AKA the lawsuit against Ripple and its executives. Now the payments solutions company celebrates its “strongest year ever”. Ripple CEO Brad Garlinghouse announced the achievements and had some comments to share about the SEC’s case.

Ripple’s first On-Demand Liquidity (ODL) was launched earlier this year during 2021’s Q3. It is a payments solution that “allows customers to instantly move money around the world at any time”. This service first appeared as a corridor between Japan and the Philippines that leveraged the token XRP. They have recently announced Ripple’s first ODL deployment in the Middle East as well.

Related Reading | Ripple Announces New Payment Corridor in Japan As XRP Rallies 23.5%, More Profits Ahead?

Now, a Ripple report shows that the XRP-based On-Demand Liquidity payments accounted for 25% of the total dollar volume across RippleNet. Garlinghouse celebrated the results and added that the ODL tokens are up 25x from Q3 2020, and 130% quarter over quarter.

“All of this growth came from outside the US for (sigh) obvious reasons” tweeted Garlinghouse.

Related Reading | Ripple Partners With Republic Of Palau To Develop National Digital Currency

The report notes that Ripple’s ODL users have access to over 20 countries “for their payment needs”, and transactions over the Ripple network have more than doubled since Q3 2020.

Ripple made sure to mention the effects of regulatory uncertainty, noting that their U.S. ODL flows were “essentially halted”. However, “international ODL volume has continued to surge”.

ODL is thriving in regulatory jurisdictions that embrace innovation and understand that crypto is critical to creating a more inclusive, equitable and efficient global financial system.

XRP trades at 0,9 USDT in the daily chart | Source: XRPUSDT on TradingView.com
CEO Brad Garlinghouse Slams At The SEC

SEC Chairman Gary Gensler is famous in the crypto world, but not for good reasons. Since filing the case against Ripple and its two executives a year ago, many have feared the possibility of falling subject to enforcement actions.

Gesler has repeatedly called crypto the “Wild West of our financial system,” and Brad Garlinghouse doesn’t agree –nor does the community.

 

The Ripple CEO stated that “Calling crypto the “Wild West” is a farce” noting that Gary Gensler “has taken an aggressively anti-crypto approach”, which he claims is making companies move outside the U.S. He pointed out that “Web2 was built with many American companies” and suggested that Web3 might not be given the same fair chance.

Garlinghouse claims that most crypto-related companies “are complying with financial regulators globally” and added that “This industry shouldn’t be punished for asking for regulatory clarity & regulation that is consistently applied with a level playing field.”

Garlinghouse referred to the SEC’s lack of clarity refusing to answer questions about the legal status of Ethereum and questioned: “Is the agency actually living up to its mission of protecting investors w/ regulation by enforcement & what Hester Peirce calls “strategic ambiguity”?”

2021 has been a watershed year for crypto. Acceptance and awareness of the opportunity to bring billions of people into the global financial community has never been so clear. It’s been incredible to see a lot less ‘maximalism’, and many more builders joining the industry.

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It’s Not You, It’s Crypto: Execs Leave Silicon Valley To Join Crypto Startups

A few years ago it was an executives’ dream to work at Google, Amazon, Apple, and the other Big Tech firms of Silicon Valley, but now that dream has evolved into crypto startups. Whether it is to join a blockchain-related company or start a new one, high-paying executives and engineers are leaving the valley of big salaries and CEOs at an accelerating rate.

The New York Times reported the exodus of Big Tech executives and the boom of crypto products like NFTs is seen as a possible reason for it. But if the fantasy of Silicon Valley talent used to be that cushy position involving good money, what do crypto firms represent to them now? Could it still be just about money?

Big companies like Google are getting worried about keeping the talent in. Allegedly, they have started to offer additional stock grants for the employees who are likely to choose a crypto startup over them, although the company refused to comment for the paper.

Evan Cheng, co-founder and chief executive of a blockchain-related startup called Mysten Labs, commented about the change of hearts: “Back in 2017 or so, people were mostly in it for the investment opportunity,” and added that “Now it’s people actually wanting to build stuff.”

Execs Are Silicon Valley’s Exes

Here are some of the executives that have broken the Big Tech guys frozen hearts:

  • Sandy Carter used to be Amazons’ vice president, now she’s Senior Vice President and Channel Chief of Unstoppable Domains, a company that uses blockchain domains to connect Web2 to Web3.
  • Former chief financial officer of Lyft, Brian Roberts, left the company to join the popular OpenSea
  • Jack Dorsey, of course, left his position as Twitter’s chief executive to dedicate himself to Square, now renamed Block because of the blockchain.
  • David Marcus, the head of cryptocurrency efforts at Meta, is leaving the company and reportedly joining a cryptocurrency project of his own.
  • Surojit Chatterjee, Google’s former vice president, is now Coinbase’s chief product officer.

Related Reading | Deloitte Survey Shows 76% Of Finance Execs Think Physical Money Is Nearing Its End

Will The Exodus Continue?

Absolutely yes, said Sandy Carter, the former Amazon vice president. She thinks that “It’s the perfect storm,” and added that “The time is just perfect to jump in on it.”

Meanwhile, Brian Roberts told The New York Times in an email: “I’ve seen enough cycles and paradigm shifts to be cognizant when something this big is just emerging, … We are Day 1 in terms of NFTs and their impact.”

Back to the question of why exactly is the talent leaving Silicon Valley, a part of the decision might be related to the salaries, but another side of it is ideological and enthusiastic: engineers are tired of dealing with bureaucracy, many feel the desire to build something, plus the ethics and moral aspects of Big Tech firms don’t help either.

Ms. Carter noted that some of this talent is being lured by the empowerment of decentralization against the dominance of large companies. It is appealing to not be part of the ones controlling personal data to generate a large income.

“Software engineering culture has always leaned toward anti-authoritarianism” explained Dan McCarthy from the firm Paradigm. He, who spent seven years recruiting talent for Google, paints the scenario of working for a FAANG company (Facebook, Amazon, Apple, Netflix, and Google):

your impact on the product you’re building may be negligible, nothing you’ll work on is truly yours, … That’s setting aside all of the ethical quandaries related to privacy, security, and ownership that are inherent to those companies and grating to anyone who self-identifies as anti-authoritarian on any level.

He further explains the attractiveness of crypto startups token-based vesting model, where “employees accrue an ownership stake in the company over time just like stock options”, but including the benefits of “no exercise cost”, tokens being “governed by a transparent, immutable smart contract”, plus they retain “liquidity continuously over time”, and other positive aspects.

He notes several other luring points, like the openness of DAOs in comparison to the lack of transparency and invasive behavior of big tech, and the possibility of causing “real-world impact”, which he defines as “the ability of one person to influence the direction of a project or technology.”

Related Reading | Cardano Founder Spills The Beans on “Fakeness” of Silicon Valley

Crypto total market cap at $2,3 trillion in the daily chart | Source: TradingView.com

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Russians Have Invested $67 Billion In Crypto As The CBR Flirts With A Ban

According to a recent report by a Russian lawmaker, the country’s citizens have invested over 5 trillion rubles ($67.5 billion) in the crypto market, but the regulatory terrain remains hostile and unclear with the governor of the Central Bank of Russia increasingly hinting at a highly regulated environment

Cryptocurrencies have had legal status in Russia since 2020, although it is forbidden to use them as means of payment in the country. Authorities, however, have expressed opposing views stating that they could be a tool of money laundering and possibly used finance terrorism. The law “On Digital Financial Assets” entered into effect this year and regulated a few activities.

Despite recent warnings on a possible ban, the Russian crypto market has seen remarkable growth. The head of the Financial Market Committee Anatoly Aksakov stated during hearings at the lower house of the Russian parliament that residents have invested over $67.5 billion in crypto, although he didn’t specify a timeframe, the state-owned agency Tass reported.

According to some reports, 5 trillion rubles have already been invested by Russians in cryptocurrency

Crypto total market cap at $2,2 trillion in the daily chart | Source: TradingView.com

This crypto Russian boom might see big obstacles in the near future.

Aksakov empathized several kinds of investors, including the common Russian, are now interested in the crypto market. He stated:  “It is necessary to determine how we treat this phenomenon and, accordingly, prescribe liabilities in the law, should we prohibit or restrict something.”

Authorities have warned and taken a few measures against what they see as high-risk investments for residents with low financial literacy attracted to the crypto market.

However, there is not enough regulatory clarity for Russian crypto investors at the moment and authorities have sent mixed signals about future legal actions.

The deputy chairman of the Central Bank of Russia (CBR) Vladimir Chistyukhin announced recently that they are preparing an advisory report in which the regulators will start to provide more clarity by explaining the bank’s stance on how cryptocurrencies shall play a role in Russia’s financial market.

I think that we will soon publish a report on cryptocurrencies. This report will contain our approaches related to what place we see for cryptocurrency in the Russian financial market. I give a hint – we do not see a place for cryptocurrency in the Russian financial market.

Related Reading | Bitcoin Overtakes Russian Ruble, Inches Closer To Top Ten Global Currencies

Russian Authorities On Top Of Crypto

Elvira Nabiullina, the governor of the Central Bank of Russia (CBR), shows a conservative and skeptical view when facing the rise of cryptocurrencies. She has hinted at a ban and recently noted that the CBR is capable of implementing restrictions. The local news portal finmarket.ru quoted:

Cryptocurrencies carry great risks for retail investors due to high volatility and use in illegal activities, so we cannot welcome investments in such assets.

Related Reading | To Ban Or Not To Ban? Russia Concerned About Growing Crypto Transanctions

The head of the bank has stated that the regulator doesn’t see the possibility of legalizing cryptocurrencies on the country’s exchanges, but they are studying its other uses.

Earlier, Russia’s Economic Development Minister Maxim Oreshkin had compared bitcoin investments with gambling and warned that cryptocurrencies imply many risks for its investors.

As for bitcoin: if you look at how the value of this asset fluctuates, it’s dozens of percent points up, dozens down. A normal asset that can bring money to eligible investors should not have such characteristics, since it’s worse than a casino,

On Russia’s Finance Ministry views, the country should only allow “eligible investors” to do bitcoin transactions on exchanges.

The Deputy Chairman of the Central Bank Vladimir Chistyukhin has expressed that a solution to their fears would be to prohibit transferring funds from bank accounts to crypto-exchanges:

I think that we will resolve the issue through amending the legislation. There will be a more precise definition of how cryptocurrencies can circulate,

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BlockFi Co-Founder Sees Huge Growth And FOMO For Crypto In 2022

Co-founder of BlockFi and senior vice president of operations, Flori Marquez, shared the company’s insight on collected customers’ data and shed some light on the crypto industry’s growth as they have seen “huge moves” of Americans interested in it, suggesting a burgeoning adoption.

During an interview with Yahoo Finance, Flori Marquez shared some interesting numbers. In the year over year Bitcoin returned 112%, and compared to gold and S&P respectively, she said, “that’s a negative 4% and 24%.”

So, year over year, it has been volatile in the last 30 days. But it’s still a great investment for people who were participating a year ago.

Marquez claims this year was big for crypto in terms of mainstream consumer demand, which took BlockFi to research amongst customers’ data to try understand their sentiment on Bitcoin at the moment.

we’ve seen that 1 in 10 people plan to gift crypto this year. And also, about 2/3 of Americans prefer to talk about crypto versus if you think about five years ago, only 1% of people had ever traded crypto, and 50% of Americans had never heard of crypto five years ago.

BlockFi has around 75,000 clients using their Visa Signature Credit Card which offers rewards in Bitcoin, “And that’s absolutely huge because most fintech companies look to see about 10,000 credit cards in their first year” Marquez added and further suggested that Americans are highly interested in earning “different types of awards”, but not necessarily looking forward to earn cash back.

BlockFi’s co-founder claims that 2/3 of their clients “actually spend less with cash back” since starting to use their Bitcoin-rewards cards because they are “more into crypto”. Their clients nowadays show a long-term ‘hodlers’ way of thinking, and see BTC as an asset that could generate them an important yearly return that cash cannot offer.

when they receive a Bitcoin reward, they’re not selling that for cash. So the upside isn’t necessarily the $140 that you’re receiving in Bitcoin today. The upside is what could that Bitcoin be worth a year from now.

A Chainalysis research shows that, by October 2021, the goblal crypto adoption had grown over 2300% since Q3 2019 and over 881% in the last year as many countries face devaluations and citizens all over the world want to protect their savings, and there is also a large boost coming from institutional investment. The total market cap of crypto reached $3 trillion in 2021 and is currently at $2,2 trillion.

Crypto total market cap at $2,2 trillion in the daily chart | Source: TradingView.com

 

Related Reading | Has The NFT Bubble Popped? Prices Down 65% While Ecologists Sharpen Knives

BlockFi Sees The Growth Of Crypto Driven By FOMO

During 2022, Marquez expects to see more first timers American customers enter the crypto space as she thinks that “a huge driver is going to be FOMO”, meaning that the industry is getting so popular –and cash is looking less useful– that people do not want to miss out on the possible returns.

Reading | FOMO Beware: Spot Bitcoin Buying Volume Remains Low, Despite New ATH

For Marquez, this Holiday season could incentivize the FOMO as many are talking about their 2021 investments and how they worked out. “I do think that crypto has become a bit more digestible for the average consumer than it was five years ago”, she claims.

Furthermore, Marquez thinks that crypto will keep seeing new talent come in, people who have changed paths trying to find a “right fit” for the long-term during the pandemic. She claimed there will be more “shifting from other more traditional industries into crypto and the fintech sector”, and thinks that’s a new opportunity to bring in historically excluded demographics.

As many others do, Marquez hopes to see some regulatory clarity for crypto next year, and commented that “BlockFi is a huge believer in partnership with regulators” to achieve building a bridge that connects traditional finance with crypto. She suggested clarity would boost the mainstream adoption because users will think the space is safer if regulators are in it.

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Solana Trades Up 15.7%, But Network Issues Raise Concerns

Solana (SOL) traded 15.7% up and lead gains earlier as the crypto market started to see the green zone, recovering from the total cap value dropping to $2,1 trillion, now at $2,2 trillion, a 5% increase in 24 hours.

As several altcoins from the top 100 savor the upswing, it’s a polarized day for Solana’s popularity as the network saw major congestion issues that might put down price expectations for 2022.

A few days ago SOL saw a two-month low of around $150, but losses are in reverse in the past 24 hours. The digital coin went up as much as $188, a 15.7% daily growth. Solana’s market cap value grew from  $51.17 billion to $56.76 billion during the period (adding $5.59 billion).

Solana is trading up at $182 in the daily chart | Source: SOLUSD on TradingView.com

In terms of competition for the top 5 cryptocurrencies by market cap, Solana took the win while Ethereum surged around 4%. Cardano climbed 3% and Avalanche, on the other hand, is also seeing growth surging 15% in 24 hours after announcing native support for USD Coin (USDC), swinging up above the $100 mark.

Related Reading | Solana Could Become The Next Bitcoin, According To FTX’s Sam Bankman-Fried

 

Solana, The Cool Kid On The Block?
Taken from Twitter

As Solana grows in popularity surrounded by mainstream projects, crypto users at CoinMarketCap shared positive estimates of the median price for the end of the year: 20,490 people think SOL will be closing the year trading around $185. However, the community is predicting a downside starting 2022 to $171, then lower to $168 by the end of February. What are they seeing?

The cool kid from the block is having trouble at home and the followers are concerned. The network experienced more technical troubles with a large amount of failing transactions: over 2000 per second, more than 60% of the total volume, some have speculated.

Several investors and developers have expressed skepticism and frustration on social media. Some see the glitchy scenario as a sign to step back as it does not provide trust and also fails to meet with the blockchain’s promise of high efficiency.

Related Reading | How Solana Was Brought Down By This dApp Launch

Solana has more troubled moments to mention. The first one was back in September with a 17-hour network outage. Then, during this month alone, on December 9th the network reportedly suffered a distributed denial-of-service (DDoS) attack which also resulted in delayed transactions.

Clarity wasn’t the top priority at the time. The first tweet to mention the DDoS attack was deleted, then the infrastructure firm GenesysGo reported the issue but claimed it was due to “growing pains”. And on December 13th, a Solana-based NFT debut (SolChicks) announced that “CHICKS HAVE TAKEN DOWN SOLANA.”:

We apologize for the inconvenience of this delay but tens of thousands of people are trying to buy $CHICKS and the Raydium server has crashed. It appears SolScan is also not loading our contract address right now either.

However, Solana’s price has not seen investors fear since the last failure of transactions happened –at least not beyond the low prediction from the CoinMarketCap community. Is the hype stronger than the issues?

The rise of Solana has seen big investors as backers (like Sam Bankman-Fried, Andreessen Horowitz, and Polychain) and a large number of projects with big names, especially in the gaming and NFT sectors. If the blockchain’s transactions are not fast enough sometimes, their marketing is.

For example, basketball giant Michael Jordan just announced a platform for athletes called HEIR, which is based on Solana. This mainstream event was believed to carry SOL’s price up. Will popularity be enough for the future of the blockchain?

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FED’s Powell Doesn’t Think Crypto Risks Financial Stability

The crypto market cap has moved up to $2,2 trillion after the Fed announced they would double the tapering of bond purchase and interest rates will stay the same for now. Fed’s chairman Jerome Powell held a news conference after the decision was taken where he approached several issues on the United States economy and current concerns for its financial stability.

Crypto total market cap at $2,2 trillion in the daily chart | Source: TradingView.com

Related Reading | Bitcoin, Ether Spike After Fed Announce No Change To Interest Rates

When asked about the concerning risks and systemic issues that could affect the U.S. financial stability nowadays, Powell broke it down to four essential “pieces” that the Feds “hold” themselves to. In his words, that’s separated in the following keys:

  1. Asset valuations: “are somewhat elevated”, Powell says.
  2. Debt owed by businesses and households: “households are in very strong financial shape”, and “businesses actually have a lot of debt, but their default rates are very very low.”
  3. Funding risk: The fed sees “market funds as a vulnerability and would applaud the SEC’s action this week”, claims Powell.
  4. Leverage among financial institutions: “is low in the sense that capital is high.”

Followingly, Powell named scenarios that they are looking at as possible risks, which start at the “emergence of a new [Covid] variant” and the concerning possibility –with no basis– that it could be resistant to vaccines. Similarly, they fear “a successful cyber attack” that could take down a major financial institution. The chairman says this is the one scenario they would not know how to deal with.

Even though the reporter’s question had clearly meant to assess risks from the crypto industry, Powell did not even get close to mentioning it within his “list of horrible”, and when asked again to clarify if it is a concern to him, Powell responded: “I think the concerns there are not so much current financial stability concerns.”

However, the chairman does see cryptocurrencies as “speculative assets” that are “risky” and “not backed by anything”, and he sees consumers issues for those who “may not understand what they’re getting”.

Powell also thinks that certain events in the crypto market, like the kind of leverage built-in, should be followed, but that is not within the Feds jurisdiction, he reminded.

Stablecoins Could Scale, Powell Thinks

As Powell is currently not in favor of a crackdown on crypto similar to China’s to happen in the U.S., he does have considerations regarding other possible risks and agrees there should be certain regulations. He now expressed support to Biden’s working group report on stablecoins.

Although, that report disappointed many as it failed to provide regulatory clarity and called for a new bill to “limit stablecoin issuance, and related activities of redemption and maintenance of reserve assets, to entities that are insured depository institutions.”

The report puts all the weight on Congress and does see stablecoins as a possible systemic risk and wants to stop them from having “an excessive concentration of economic power”, a statement in which people saw the huge irony of the government not wanting such a strong competitor for the banking industry.

In Powell’s views, “Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated,” and as there are no regulations at the moment he thinks “They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.”

You could have a payment network that was immediately systemically important that didn’t have appropriate regulation and protections. The public relies on the government and the Fed in particular to make sure that the payment system is safe and reliable.

As many can agree on the fact that certain regulations are needed to provide clarity, the report in question doesn’t paint the best picture. Powell’s statement, however, could be met halfways.

Related Reading | CBDCs to coexist with cash payments, according to FED Chairman Powell

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Next Bitcoin ‘Buy The News’ Event Upcoming?

“Taper” and “volatility” seem to be the words of the month as Bitcoin gets further away from its $69,000 November all-time high. Along with the short-term bearish sentiment in the crypto market, BTC had a pullback on December 13th dripping below $48,000. Some people see more downsides and others rather bid for BTCUSD gains.

Bitcoin trading at $48,270 in the daily chart | Source: BTCUSD on TradingView.com

Investors have derisked as all eyes are on and the current Federal Open Market Committee (FOMC) meeting and the U.S. Federal Reserve tapering of asset purchases, fearing Chairman Jerome Powell will be –too– hawkish. There are many speculations running around and some experts have suggested this Wednesday could turn into a “buy the rumors, sell the news” event, thus Bitcoin could see more losses.

As NewsBTC has reported before, the central bank is expected to start reducing its net asset purchase month by month by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities.

The scenario could get uglier for the traditional and crypto markets if the Fed decides on a faster taper, doubling the pace to $30 billion a month, raising interest rates earlier, meaning higher volatility.

Related Reading | Surprise Bitcoin Selloff Causes Extreme Greed To Taper

What Traders Are Saying About Bitcoin

Analyst William Clemente claimed on Twitter that as the FOMC is “a known event”, then “anyone who is bearish BTC or wanted to risk-off lead up to FOMC has been and will have already done so by then.” Clemente wonders “how many sellers will be left + how much capital is on the sidelines.”

In a “sell the news” you have the opposite effect. The event is front ran by insiders first and then works its way to the bottom of the informational totem poll. By the time the event occurs, no one is there to buy, and everyone who bought in anticipation of that is offside.

For this reason, the analyst thinks that FOMC has a good chance to become a “sell the rumor, buy the news” event tomorrow.

Pair that with illiquid supply back at yearly highs and some large Bitfinex bids coming in. Just waiting for $53K to start bidding. Happy to miss some of the move and essentially pay for confirmation.

Basically, Clemente is saying there is so much uncertainty around the taper that once investors get a glimpse at what it will actually look like, they might start buying again. This, of course, does depend on how hard the tapering will be on the markets: the bull could resume if expected amounts are met, but huge dumps could come otherwise if the Fed tightens beyond those expectations.

Another Twitter user breaks it down: “It’s suggesting the market is overpricing in fear and selling off as a result. When the FOMC meeting occurs and uncertainty is removed, the market may react favorably even if at a headline it’s ‘bad’”.

But amongst traders, several opposite views are found on Bitcoin’s near-future. Michaël van de Poppe, on the other hand, commented that the market is dropping down, and “we’re looking for a bullish divergence to be created beneath the $46.5K area in order to have a reversal possible.”

A market report by the expert Ben Lilly read interesting warning signs and concluded:

It is clear next year will be tough sledding. Part of that is because the response by the Fed will require tools that have never been used before. It is a tough task to tone down inflation after unprecedented new money supply being added… All while not creating a massive deleveraging effect in the debt markets that could result in a recession.

Furthermore, Kaiko, digital assets data provider, analyzed the price movements as Bitcoin allegedly leans towards a higher correlation with traditional stocks than it does with gold:

Overall, Bitcoin’s correlation with traditional equities has been on the rise while its correlation with gold has been mostly negative. … Risk-off sentiment seems to be driving similar investor responses for equities and crypto, disrupting Bitcoin’s narrative as a safe haven and inflation hedge.

Related Reading | Crypto Market “Extreme Fear” Metric Reaches Multi Month Low

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This Crypto Collaboration Aided Health Staff Beaten By Venezuelan Regime

As Venezuelans have struggled to survive the pandemic during times of dictatorship, the crypto company Circle collaborated last year with the countries’ opposition to financially aid healthcare workers who were abandoned to a broken-down system with almost no proper medical equipment and a discouraging $15 a month salary.

Today $1 equals 45,000,000,000,000,000 bolivars –although it has been devalued to look like 4,5 VES–, a cipher too large to comprehend, much like the general panorama. The basic food basket is calculated over $300 a month, but the minimum wage is roughly $7, and last year many doctors were making as much a $15 a month.

Financial Times published a report where they describe the methods used by the interim president to bypass the Maduro regime’s tight grip that would not allow citizens to receive any type of external aid.

As Gideon Long’s report remembers, the U.S. sanctions on Venezuela had made the situation worse for its citizens with the state funds frozen in U.S bank accounts, but the politicians who oppose the government –with Guaidó recognized by Washington as Venezuela’s legitimate president– found leverage in that by managing to access the accounts after convincing the US Treasury of doing so.

But how would they get the money to the health carers’ hands if the government was extremely against it? Legitimized or not, Venezuela is still under Maduro’s control, so the banks were not a possibility, but stablecoins were. During the bumpy road, the crypto era opened a pathway that wouldn’t have been there a decade ago.

Circle, U.S.–based fintech innovator Airtm and Juan Guaido’s team collaborated in what they claim to be the first “use of stablecoins for foreign aid“, the “only viable option available”.

Circle says on its website: “we were able to put in place an aid disbursement pipeline that leveraged the power of USDC — dollar-backed, open, internet-based digital currency payments — to bypass the controls imposed by Maduro over the domestic financial system and put millions of dollars of funds into the hands of people fighting for the health and safety of the people of Venezuela.”

Maduro’s regime did its best to block the Airtm platform, where healthcare workers would receive the aid, but Guaidó’s team published a guide on how to use the Canadian company TunnelBear’s VPN, which provided free services for a while.

Many countrymen have said that not much changed for Venezuelans either way but at the same, the landmark that collaborations like this ones create show the possibilities that the crypto era we are entering can offer in situations of despair. It’s not all about the market, it’s also about freedom.

Related Reading | Venezuelan Airport To Accept Payment In Bitcoin

Inside The Effects Of Crypto

As the countrymen were already in a heartbreaking situation, the times of Covid came around and Venezuela entered deeper despair. Numbers on deaths cannot be officially traced because the regime covers them up to make itself look better, and all we are left is with the abandoned voices of its victims.

A New York Times report on childbirth in Venezuela amidst a shattered system.

Guillermo Herrera Gallo, a Venezuelan doctor that currently works for the Red Cross in the country, was one of the health workers to receive the bonus. He made comments to newsBTC about his personal experience regarding the financial aid through the decay of Venezuela’s health system.

Herrera said that the aid didn’t make much of a difference for the lives of doctors, but he did see relief in the eyes of nurses who could finally afford a better meal and supplies for their children. He thinks that the method and platform used were strongly beneficial when facing a national currency devaluation that has become useless and was pleased with how secure using AirTM feels like.

Circle adds that this event remarks “the freedom of people to transact, even in the face of brutal dictatorships. It also marks a historic moment where in order to execute on foreign aid objectives, economic and political leaders have turned to stablecoins. ”

Related Reading | How Bitcoin is The Answer To Venezuela’s Stuck-At-Sea Oil Supply

Crypto total market cap down to $2,2 trillion in the daily chart | Source: TradingView

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More Downside For Bitcoin? CPI New Numbers Could Call For Early Taper

The stock markets and Bitcoin’s price performance might be hitting a bumpier road after the next Consumer Price Index release. During the year the Fed has been clear about an upcoming tapering, and now that new –and higher– CPI metrics are expected, the taper is likely to fasten its pace and the markets to suffer.

The central bank is expected to start reducing its net asset purchase month by month by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities. This has raised fear over the traditional and crypto markets as prices are expected to be affected by a reduction in the global market’s liquidity. Previous tapering scenarios have seen yields fall and government bond prices rise.

Costumers who have experienced the rise in prices this year have low expectations for the Consumer Price Index’s results to come. The red signals send a reminder of Jerome Powell’s previous words: “we are prepared to adjust the pace of purchases if warranted by changes in the economic outlook,”

Similarly, James Bullard, President of Federal Reserve Bank of St. Louis, had said in an interview with Bloomberg that they could “move faster” and speed of the taper “if it is appropriate”.

I think it behooves the committee to go in a more hawkish direction in the next couple of meetings so that we are managing the risk of inflation appropriately,

Bullard’s comments followed the U.S. Labor Department October’s report of a 6.2% yearly rise in the consumer price index, a 31-year high. This “further aggravated the market’s concerns about inflation, voices for accelerating Taper has become increasingly loud” said Huobi Research.

It is not the first policy retreat for the Fed, but it is seen as the most dramatic one, as it is a turnaround from unmatched support to financial markets. The general question now is whether it will look “appropriate” after the CPI report. If so, the markets are looking red to the experts.

Related Reading | Why Closing Out The Year Below $50,000 Could Be Bad For Bitcoin

What Happened To The Bitcoin $100k Dream?

At the beginning of November, Bitcoin dipped –falling almost by $2000– as the Federal Reserve announced it would gradually reduce the bond purchase. Powell had accepted that U.S. inflation numbers are not “transitory”, thus suggesting accelerating the taper as he saw a stronger economy and hot inflation.

Bitcoin trading at $47,534 in the daily chart | BTCUSD on TradingView.com

There are current considerations of wrapping things up a few months earlier than initially planned. The future two-day meeting on December 14-15 will tell if the Fed will double its taper pace to $30 billion a month. A faster taper could be used to fight the surging inflation by raising interest rates earlier, but this could bring times of high volatility for the markets.

Louis Navellier, one of Wall Street’s famous growth investors, had commented:

The Fed is tapering, and this should create a correction in risk assets, of which bitcoin is a part. The more the Fed tapers, the more volatility we should see in both stocks and bonds — and yes, bitcoin, too.

Huobi Research explained that the projection behind the previous expectation for Bitcoin’s price to flirt with $100k by the end of this year “ignored the impact of external macro changes on the market.”

The Huobi report claims “the extremely loose monetary policies” –the central bank’s release of liquidity– during times of Covid was also carrying Bitcoin’s price uphill –as well as other risky assets– to the remarkable surge we saw this year. That also means the taper is “the turning point of global liquidity growth”.

As we observed during March last year, due to the shortage of market liquidity, Bitcoin price dropped by nearly 50% in one day…

The concerns about inflation have turned into a difficult landscape the future prices for various high-risk assets. However, this wouldn’t be Bitcoin’s first low, and we have seen it bounce back before.

Related Reading | Despite Red Bitcoin, On-Chain Signals Flip Green

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Eastern Caribbean CBDC Rolls Out to Two More Nations

The Eastern Caribbean Central Bank (ECCB) expanded its CBDC (DCash) to two more nations of the commonwealth: Dominica and Montserrat. Now, the digital version of the EC dollar has been rolled out in seven out of all eight-member from ECCU countries.

The Eastern Caribbean dollar (EC$) is the currency used by the members of the Organisation of Eastern Caribbean States (OECS), and a central bank’s pilot project rolled out the DCash as a digital version of the currency that can be sent and received through a free app for users based in any eastern Caribbean country that has launched the CBDC. During the pilot period, the transactions are processed with no transfer fees.

The ECCB Governor Timothy N.J. Antoine expressed that “the payment system should work for all, except for illicit actors,” and DCash “must work for small states and small businesses”. Antoine justified the existence of an Eastern Caribbean CBDC as an advance in the digitalization of the economy while noting that the current payment methods are “too slow and too expensive”.

Users do not need a bank account to access or use the digital currency as the bank claims its top goals are “payments system efficiency, financial inclusion of the unbanked and underbanked populations, and increased resilience and competitiveness in the ECCU.”

All of these goals are aimed at boosting economic growth, but ultimately at propelling our agenda of socioeconomic transformation for the shared prosperity of the people of our Currency Union.  … we believe that to do that, we have to transform the region, and DCash is an important instrument in what is really the bigger conversation about the buildout of a digital economy for our Currency Union,

Related Reading | The People’s Bank Of China’s Report On Blockchain Tech And Their Upcoming CBDC

How The Caribbean Can Benefit From CBDCs

Besides the geographical issues on cross-border payments that Eastern Caribbean islands have faced for years, LatAm and the Caribbean are the world’s second region most prone to natural disasters, a study shows. In some cases, the damage has reached a 90% equivalent of a few countries’ PIB.

Hurricanes and floods can rule over almost half of the Caribbean’s year and most of these nations have a limited capability of dealing with the situation. The times of COVID and climate change have made them even more vulnerable.

There are many economic and social implications that follow these events and one of them is that, amidst a natural disaster, there is an important part of the population that cannot reach banks to access money, which leads to even more vulnerabilities.

Enthusiasts have claimed that CBDCs like The Bahama’s sand dollar and the ECCB’s Dcash could offer a viable solution by making money more accessible as soon as users can enter the platforms during periods of crisis, thus delivering financial help packages faster.

Several small countries have found themselves in a bigger need to move towards digitalization. The DCash project became the first currency union to use a CBDC and aims to reduce 50% of the use of physical cash by 2025. The ongoing twelve-month pilot started in March of 2021 and is expected to “assess the feasibility of a full commercial launch to all eight of their member countries”.

Related Reading | Central Bank of France Tests Blockchain-Backed CBDC Targeting Debt Market

Crypto total market cap at $2.3 trillion in the daily chart | Source: TradingView.com

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Ethereum Strength Sends Bitcoin Ratio To 2018 Highs

As Bitcoin (BTC) is coming out of a harsh weekend with a 5% drop and a huge sellout, ether (ETH) still maintains its strength in comparison, which has been happening since October. Arcane Research’s weekly update shows that the ETHBTC pair reached its highest level since May 2018 reaching 0.085 BTC, seeing possible signals of maturity and an upcoming alt-season.

Source: Arcane Research weekly update

In 2021, ETH has shown greater strength than bitcoin. The cryptocurrency could be signaling its maturity as it sees higher lows –compared to BTC– than it did in 2017 and 2018.

However, Arcane Research noted that back in 2021 and 2018 the strength of ETH and altcoins’ performances in periods when BTC saw lows also signaled lower prices to come, so a similar scenario could happen during 2021’s fourth quarter.

The current ETHBTC pair peak is similar to the one seen in May, which was followed by May 19th’s crash during massive liquidations and new buyers panic –which some users called the second worse day ever for Ethereum, although similar phenomenons had happened in earlier years–. Then, the ETHBTC pair saw another spike at the beginning of September as Bitcoin saw lows on the 7th.

Furthermore, we could be facing froth in the market as altcoin’s strength has signaled before.

Ether was also down on Saturday but surged to the mentioned 0.086 Bitcoin high during Sunday. The price dropped 5.5% on Monday to $3,965, and overall, it traded down by 0.51% in the past week compared to BTC’s 10.06% decline.

Today, the Ethereum price is up again around $4,352.74, up 2.93% in the day-to-day, surging more than 24% from the low. Even though it’s 9% away from its all-time high, it is also 496% up in comparison to 2021’s early days. ETH also shows a 24-hour trading volume of $23,566,690,676 and a market cap of $512,648,545,331.

Ethereum trading at $4,352 in the daily chart | Source: ETHUSD on TradingView.com

Related Reading | Ethereum “Accumulation” Nears Liftoff Phase: What This Could Mean For Bitcoin

Bitcoin Dominance Sees New Lows

Today, Bitcoin’s dominance is 40.65%, seeing no increase over the day. It had fallen towards 40% on December 5th as it saw its newest bloodshed. BTC also saw its dominance drop in September and May, but it has not seen other lows alike since May 2018.

As the crypto market started to fall on Friday –with 372,000 liquidated crypto accounts by Monday totaling $2.3 billion-, Saturday’s early morning saw bitcoin drop $10,000 in price, going from around $57,000 to $47,000.

Over the weekend, the drop reached a $14,000 loss and experts saw no clear reason for it, but since then traders have suggested a connection with the fear around the Omicron variant plus market moves exaggerated by lower trading liquidity.

Compared to its November all-time-high, BTC is down by $21,000, but also up over 75% in all 2021. The price has climbed back up to over $50,000, more than 4% higher, and the total crypto market cap surged 5% to $2.5 trillion.

Bitcoin trading at $51,258 in the daily chart | Source: BTCUSD on TradingView

Some expect a hard end of the year for Bitcoin as it has not shown its regular strength, but at the same CNBC quoted Will Clemente, insights analyst at Blockware Solutions, who thinks these dynamics are “healthy and show supply continues to move to long term investors” and BTC could actually see a new bull run at the start of next year:

There’s a reasonable case that we could see the opposite effect heading into Q1, as funds are willing to take on more risk for the new year with fresh profit and loss, … This effect assisted in bitcoin’s massive move in January 2021.

Related Reading | Ethereum Lacks Momentum Above $4,200, But Dips Likely To Be Limited

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IOTA to Release Smart Contract Network ‘Assembly’ And Distribute ASMB Token

The ledger IOTA aims to become “a fully decentralized, feeless multi-asset ledger” by launching Assembly in 2022, a governance layer one for permissionless smart contracts, along with the native token ASMB that will open the doors for the network’s main stakeholders, who would be democratizing Assembly.

IOTA’s founders say the ledger is a “public permission-less backbone for the Internet of Things that enables interoperability between multiple devices.” It aims to provide decentralized transactions accessible for everyone, without the need for miners or blocks, offering solutions for the cost fees, increasing scalability, and staying secure by using the Tangle network.

As the Shimmer network was released only two weeks ago along with its own token -with real monetary value, most likely to be traded on crypto exchanges- to stake, some skeptical users questioned the actual need for Assembly, but enthusiasts have compared to a scalable Ethereum without imposed fees.

Smart contracts will be allowed to run for free, but there is an option to put a price when high computing power is needed, in which cases supply and demand will determine prices.

Smart contract chains can be fully run from Assembly’s own network, which is the reason for all activities to be anchored to the IOTA Tangle to provide trust by “making them fully immutable and secure”.

Related Reading | IOTA Smart Contracts Enter Beta Phase To Circumvent Network Flaws

The Staking Of Assembly (ASMB) Token

Proof of Stake also works to provide trust. As a decentralized network, of course, Assembly has no central system to reach if a user requires assistance, so staking comes to play as a wide community is meant to be built through the ASMB token, with members who care about the safety and maintenance of the network: validators.

If validators do not play the role of making sure the rules are followed, they get penalized. Just as well, playing by the rules generates revenue for validators in form of more tokens. All that is required to deploy smart contract chains or become a validator is to run a node or own “a small amount” of the ASMB token “to stake as a security deposit”.

The ASMB token will have “70% going to the community”. In the beginning, tokens will be created during a 90-day period when users will be able to “stake IOTA tokens in order to earn ASMB tokens.” -by locking IOTA on the Firefly wallet-, then tokens will be able to get claimed for free, and there will be a period 2 years for users to get their staking rewards.

20% of the initial token supply will go to IOTA holders. Afterward, there will be more staking periods for the ASMB token distribution. Assemble was further described by Dominik Schiener, IOTA’s co-founder, as:

A fully decentralized, permissionless network. It’s an extension of the Smart Contracts framework (live in Beta), and adds a validator pool, the ASMB token, staking and slashing. Anyone can deploy fully sharded smart contract networks on Assembly, while benefitting from the shared security, trustless interoperability, and feeless transactions.

No more bridges, relays or M-of-N multisigs. We’re here to connect smart contracts. … What makes Assembly so unique is that you can customize fees and incentives.

He also stated the Assembly’s journey is only starting and they will be sharing more details on the Builders Program and the support that teams building on Assembly and IOTA will receive. “Hint: It involves a lot of financial support”, he said.

Related Reading | How IOTA Could Reach $1B In Tokens Locked Before Chrysalis 2.0

IOTA trading at $1.3910 in the daily chart | Source: IOTAUSD on TradingView.com

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What Ethereum 2.0 Looks Like As Vitalik Buterin Celebrates Its Birthday

The Ethereum 2.0 upgrades of the consensus layer built by multiple teams in the ecosystem promise to bring a “more scalabe, more secure, and more sustainable Ethereum”, and now Vitalik Buterin celebrates 1 year since the proof-of-stake Beacon Chain went live. Eth2 or Serenity aims to “support 1000s of transactions per second” so the high gas fees problem can be solved.

The Beacon Chain, one of  Ethereum 2.0’s distinct sections, has allowed users to be Eth2 validators by staking Ethereum, reportedly earning up to 10% annually, diminishing miners for transaction validation, and adding new blocks.

Ben Edgington, the lead product owner of the Teku Eth 2.0 client, had explained that “Slashing penalties were reduced at the start of the Beacon Chain to increase stakers’ confidence. Now that we are all much more comfortable with staking, penalties are gradually being increased towards their ‘crypto-economically correct’ values.”

The August update in the London hard fork proceeded to implement EIP-1559, changing the transaction fee system. Like so, the ETH burning started, which now sees a total of 353,615.10 ETH burnt during the past 30 days with a burn rate of 8.19 ETH/min. The general expectation is that if ETH supply gets limited, its price will likely increase.

Related Reading | Over 1 Milllion ETH Has Been Burned Since Ethereum EIP-1559

Eth 2.0 Roadmap At The Beacon Chain’s Birthday

The next stage, The Merge, is possible to happen around May or June next year if the code is completed by February. This will ‘merge’ the Beacon Chain into the mainnet. As it has been explained, it is meant to finalize the transition to PoS, “Ethereum’s history on the PoW network will be preserved as the PoS consensus layer is merged in as a replacement for PoW.”

Buterin Vitalik publishes an updated roadmap diagram of Ethereum protocol development’s current state

Tim Beiko stated that “the Arrow Glacier upgrade is scheduled for block 13,773,000, which is expected on December 8, 2021”, and called for users to upgrade their nodes. He expects the Kintsugi devnet to go live early this month, this is intended to “implement a release candidate design for The Merge”, which would be followed by “testing, risk management, and governance”.

Both Beiko and Edgington have said that Ethereum devs are mainly focused on the Eth2 final steps.

The move to proof-of-stake will not immediately provide any significant extra throughput to the Ethereum chain, so I don’t expect it to have a measurable effect on gas prices. The scalability strategy in Ethereum now revolves around layer-two solutions like the various roll-ups that are currently being deployed. Once The Merge is done, we will focus on providing data shards within the Ethereum protocol that will allow roll-ups to scale massively.

Obol Labs image tweeted by Collin Myers

Project lead of Obol Labs, Collin Myers, was glad to see Distributed Validator Technology (DVT) “on the top” of Vitalik’s Eth2 roadmap, and explained it as a new infrastructure that enables “Active-Active redundancy across Eth2 infrastructure deployments”, and suggested “a world where validator key theft becomes nearly impossible due to applied cryptography”.

We believe a more resilient Ethereum can be realized through a collaborative infrastructure protocol that protects against the disappearance of a few network operators. DVT can an enable this by allowing a group of network operators to act as one single validator together – something we like to call a multi-operator validator.

Related Reading | Ethereum Rallies 5%, Why ETH Could Surge To New ATH Above $5K

 

Ethereum price at $4,536 in the daily chart | Source: ETHUSD on TradingView.com

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How Thai Crypto Unicorn Bitkub Plans to Become the Coinbase of Asia

Thailand startup Bitkub Capital Group Holdings, founded in 2018, hit unicorn status last month notching up a valuation of over $1 billion. Now the crypto exchange intends to expand over Malaysia, the Philippines, and Laos, aiming to become “the Coinbase of Southeast Asia”, said the chief executive officer Jirayut Srupsrisopa.

The Bangkok-based crypto exchange is aiming for huge growth during 2022 as it looks for the possibilities for partnership in Southeast Asia and setting up its own units, Bloomberg reported. Part of the strategy focuses on monopolizing in countries that lack bigger players, which opens the doors to dominate the field.

Our strategy is to expand in countries that have no clear winners yet and are under-banked, with high social media usage and the potential to use cryptocurrency for remittances, … The expansion will be achieved either through new ventures or acquisitions. The goal is to become the Coinbase of Southeast Asia.

The American company Coinbase Global Inc. is a crypto assets marketplace, and its technology provides a way to build crypto-based applications, among other services. It says on the Coinbase website that they roughly have “73 million verified users, 10,000 institutions, and 185,000 ecosystem partners in over 100 countries trust Coinbase to easily and securely invest, spend, save, earn, and use crypto.”

Related Reading | Coinbase Will Invest 10% Of Its Profits In Crypto Going Forward

The Crypto Unicorn Climbs Up

Last month, Bitkub saw a 24-hour turnover after Siam Commercial Bank Plc bought a 51% stake of the startup for 17.85 billion baht (over $528,8 million), which valued Thailand’s largest crypto exchange at 35 billion baht ($1 billion).

This set Bitkub at the 79th spot within 300 international exchanges worldwide ranked by CoinMarketCap. Its native digital coin almost tripled in value following the purchase announcement.

Jirayut Srupsrisopa claimed back then that “Bitkub is no longer just a startup and is now becoming a necessary part of the infrastructure critical for Thailand’s financial industry.” Now, he plans to climb on top of that thought.

Related Reading | Bitcoin Payments Card Are Coming To Asia Pacific, Courtesy Of Mastercard

Although Southeast Asia’s unamicable policies on crypto-assets might represent an obstacle for crypto startups to reach such ambitious goals, Jirayut expects a brighter future in which policymakers and regulators recognize the general embracing of crypto and finally back them, “they can’t avoid it forever” he said.

We have kept on going despite calls from the anti-money laundering agency and the central bank, … Regulations have always followed innovation. The majority of people would have given up because of these regulations. We’re crazy enough to keep going.

Earlier, Bitkub also became one of three Asian platforms to partner with Mastercard to offer crypto credit, debit, and prepaid cards for users and businesses based in the Asia Pacific. This partnership allows users to convert Bitcoin and other cryptocurrencies into fiat money to make purchases, giving them the “choice and flexibility in how they pay”, said Mastercard’s executive vice president Rama Sridhar.

Jirayut also shared Bitkub’s expectation for a 1,350% growth in revenue in 2021, reaching around 5 billion baht ($148 million).

Crypto total market cap at $2,5 trillion in the daily chart | Source: TradingView.com