Weekly Crypto Roundup 6/12/21
Welcome to the Weekly Crypto Roundup, where we digest the most important news coming out of crypto for the week. This section of the newsletter will make it easier to decipher the facts from the noise, making you a more intelligent and informed investor!
Crypto moves extremely fast and having a clear idea of the market and trends could be the difference between success or failure, subscribe below so you don’t miss out:
The Market
Bitcoin is currently trading at $35,832, down 3% over a 7 day period. It has been trading within the $30,000 - $40,000 range since the crash in the middle of May. Ethereum is trading at $2,430, down 9.8% over a 7 day period. The general sentiment is bearish and short interest is currently at an all-time high. It’s rather difficult to come up with a prediction with a choppy market, below are the bullish and bearish catalysts:
Bullish
Short interest is at all-time highs, a move upwards can force these shorts to cover, thus moving price higher
The first country has adopted Bitcoin as legal tender, with other countries expressing interest
Michael Saylor confirmed that his company Microstrategy offered $500,000,000 in senior secure notes and will use that fiat to buy more Bitcoin
Bearish
Regulators are starting to attack crypto relentlessly
One of the main agendas of the G7 conference will be regarding digital currencies. I don’t see the heads of states for some of the most powerful countries on Earth being too thrilled about the threat that crypto can provide to them
General crypto metrics are down to fewer youtube views, Twitter engagement, and “social buzz” around crypto. The crash has shaken out a good amount of retail investors.
Bitcoin News
El Salvador Adopts Bitcoin As Legal Tender
The shot heard ‘round the world. President Nayib Bukele sent a prerecorded video to the 2021 Bitcoin Conference confirming that he will submit a bill to congress to make Bitcoin legal tender alongside the US Dollar in his country. Congress passed the historic bill while the president and his brother came onto Twitter Spaces to answer questions and mentioned that El Salvador will be mining Bitcoin using volcano energy.
This makes El Salvador the first country in the world to take this step. Afterwards, various politicians from Latin America to Tongo expressed interest in setting up Bitcoin friendly legislation in their own country. Slowly, then all at once.
Taproot Is Confirmed
Taproot has achieved a 90% consensus among miners, meaning that this will be one of the most significant updates to Bitcoin in recent times. This upgrade won’t come straight away, the soft fork is planned to activate in November.
Taproot will allow greater privacy in the Bitcoin network by not requiring certain information to be added to the blockchain. Since transactions require less information on-chain, fees will be reduced. Another highlight is the fact that since there is fewer data and Schnorr signatures will be enabled, more transactions will fit into a block and make the chain more efficient.
DeFi News
Arbitrum Launches
Arbitrum, an L2 optimistic rollup has officially launched. This rollup increases the speed and scalability of smart contracts with extra privacy features baked in as well. One of the main issues with DeFi on layer 1 Ethereum is high transaction costs and slow execution speeds. They enter a hotly contested L2 race for users with the Matic (Polygon) sidechain growing exponentially and the Optimism L2 set to launch in July after some delays.
CFTC Director Lashes Out
Dan Berkovitz, the director of the CFTC criticized DeFi and alluded that DeFi derivatives may be illegal during a keynote address at a financial conference. His logic is that since there are no intermediaries involved to “protect” investors, it must be illegal and a bad idea. Well Dan, no intermediaries are a feature of DeFi and makes it resilient and antifragile compared to TradFi. (For a refresher on TradFi vs DeFi and what antifragile means, I have a great article here)
He admitted that the extent of his research comes from one Google search “ What is DeFi"? We still have a looooong way to go with crypto education.
Andre Cronje, From Testing In Prod to Funding In Prod
Andre Cronje of Yearn.Finance alongside Standard Crypto invested $10,000,000 into the DeFi startup, Instadapp. Instadapp makes it easier to interact with DeFi protocols and provides a clean frontend to what could be considered complex smart contract transactions.
This is Instadapp’s second funding round, as they raised $2,400,000 from Pantera Capital, Coinbase Ventures, and others back in 2019.
Other News
American Politician Elizabeth Warren criticizes Bitcoin and claims that Bitcoin mining is unsustainable for the environment and calls for lawmakers to take the problem head-on. Two words, Volcano Mining.
Coinbase partners with 401(k) providers in order to allow people to have an allocation in crypto for their retirement plans. Participating employees can invest up to 5% of their portfolio into cryptocurrencies and is the first step to having crypto into widespread retirement accounts.
After threatening to ban Bitcoin for the millionth time, India is considering officially classifying crypto as an asset. This announcement comes right after El Salvador’s decision to adopt the digital currency.
That wraps up the news until next week!
Captain BTC
(This is for educational purposes and does not constitute financial advice)
The FTX exchange has one of the lowest fees for spot and derivatives trading up to 100x leverage. Register here!
If you enjoyed this analysis, please subscribe and share for more content!