On Oct. 1, the cryptocurrency market experienced a 9.5% pump that drove Bitcoin (BTC) and Ether (ETH) to their highest levels in 12 days. A variety of reasons have been attributed to the price move, including the U.S. consumer price index, exchanges’ diminishing supply, and a “cup and handle” bullish continuation chart formation.
Traders are not likely to find an explanation for the sudden move, apart from investors regaining confidence after the Sept. 19 drop was attributed to contagion fears from China-based property developer Evergrande.
The Ethereum network has been facing some criticism due to the $20 or higher transaction costs caused by the nonfungible token (NFT) sales and decentralized finance (DeFi) activity. Cross-chain bridges connecting Ethereum to proof-of-stake (PoS) networks have been partially solving this issue, and Friday’s Umbrella network oracle service launch shows just how fast interoperability is advancing.
It is also worth noting that China’s announced even stricter rules last week had a positive impact on the volumes seen at Decentralized exchanges (DEX). Centralized crypto exchanges, including Huobi and Binance, announced service suspension for Chinese residents, and a significant outflow of coins followed this. At the same time, this increased movement on Uniswap and the decentralized derivatives exchange dYdX.
Even with all this volatility, there are still reasons for investors’ year-end bullishness on Ether. At the same time, the limitations imposed by Ethereum layer-1 scaling also caused some of its competitors to present significant gains over the past couple of months.
ETH price vs. AVAX, SOL, ATOM. Source: TradingView
Notice how Ether’s 58% positive performance in three months has been significantly below those emerging Proof-of-Stake (PoS) solutions offering smart contract capabilities and interoperability.
For bullish traders who think Ether price will break to the upside but are unwilling to face the liquidation risks imposed by futures contracts, the “long condor with call options” strategy might yield more optimal results.
Let’s take a closer look at the strategy.
Options are a safer bet for avoiding liquidations
Options markets provide more flexibility to develop custom strategies and there are two instruments available. The call option gives the buyer upside price protection, and the protective put option does the opposite. Traders can also sell the derivatives to create unlimited negative exposure, which is similar to a futures contract.
Ether options strategy returns. Source: Deribit Position Builder
This long condor strategy has been set for the Dec. 31 expiry and uses a slightly bullish range. The same basic structure can also be applied for other periods or price ranges, although the contract quantities might need some adjustment.
Ether was trading at $3,300 when the pricing took place, but a similar result can be achieved starting from any price level.
The first trade requires buying 0.50 contracts of the $3,200 call options to create positive exposure above this price level. Then, to limit gains above $3,840, the trader needs to sell 0.42 ETH call option contracts. To further limit gains above $5,000, another 0.70 call option contracts should be sold.
To complete the strategy, the trader needs upside protection above $5,500 by buying 0.64 call option contracts if Ether price skyrockets.
The 1.65 to 1 risk-reward ratio is moderately bullish
The strategy might sound complicated to execute, but the margin required is only 0.0314 ETH, which is also the max loss. The potential net profit happens if Ether trades between $3,420 (up 3.6%) and $5,390 (up 63.3%).
Traders should remember that it is also possible to close the position ahead of the Dec. 31 expiry if there’s enough liquidity. The max net gain occurs between $3,840 and $5,000 at 0.0513 ETH, which is 65% higher than the potential loss.
With over 90 days until the expiry date, this strategy gives the holder peace of mind because there is no liquidation risk like futures trading.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
According to a recent research, 38% of Spaniards between 25 and 40 years old plan to enter the cryptocurrency market in the coming months. Moreover, 21% of the participants have already invested in bitcoin or some altcoins.
Are Spaniards Flocking into Crypto?
The Spanish neobank Rebellion conducted a survey to determine whether young Spaniards were thinking of jumping on the cryptocurrency bandwagon in the near future. Per the results, more than one-third of the participants answered “yes.”
Investing in digital assets is the most contracted investment product among locals aged between 25 and 40 years old as around one-fifth admitted they have already allocated funds in them. Pension funds and deposits (19%) ranked second.
The survey also revealed the top reasons for youngsters to catch the crypto tide. 27% of the participants believe that this is a “good investment,” while 27% praised bitcoin and the altcoins as “the future of payments.” Still, knowledge on the matter needs improvement as 17% answered they know nothing about crypto.
Sergio Cerro – the CEO of Rebellion – opined that digital assets would be a significant “factor to take into account in the future.” He stressed that now is the time for companies like his to embrace the asset class:
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“The world of payments is experiencing a change and now is the time to decide if we want to participate in this change or not. It is a matter of time before large institutions and organizations begin to accept them as a form of payment.”
Blockchain Technology Invades Spain
Young Spaniards are not the only chunk of the local society to be supportive of the crypto industry. According to another report, 25% of Spanish companies have had exposure to blockchain technology at some point. While the active users stood at 11%, it still represents a significant growth compared to the 1% at the end of 2019.
Additionally, 46% of the large companies in Spain are in favor of incorporating distributed ledger technoly to increase their security in the future.
Jesús Rodríguez, CEO of the technology company REALSEC – pointed out that although the use of blockchain solutions has a growing acceptance in the Spanish industry, there is still a need to work on its efficiency:
“The new economy imposes adopting new business models based on digital innovation. In this context, in 2020, blockchain has begun to be perceived as an efficient technology that contributes to reducing costs and risks and as one of the main technological strategies that want to incorporate a large number of companies.”
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A new study from a digital asset analytics firm is revealing that institutional investors are moving away from Grayscale’s Bitcoin Trust (GBTC) in favor of another crypto asset trading product.
According to a CryptoCompare report, Grayscale’s Ethereum Trust (ETHE) witnessed more daily trading volumes in September than GBTC for the first time in history.
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“Grayscale’s Ethereum Trust (ETHE) was the most traded digital asset product in September – with average daily volumes increasing 29.0% to $250 million (42.4% market share) – dethroning Grayscale’s Bitcoin Trust (GBTC) for the first time ever.”
The study also highlights that the total assets under management (AUM) in Bitcoin-based products fell to new lows in September while Ethereum’s market share peaked as investors diversify their crypto portfolio.
“AUM in Bitcoin-based products fell 7.8% in September to $35.1 billion (67.9% of current total AUM – the lowest share this year since April at 78.3%). On the other hand, Ethereum-based products reached their highest market share of AUM at 25.9%, following a 3.0% decrease to $13.5 billion.
This movement suggests that investors are seeking alternatives to Bitcoin for cryptocurrency exposure.”
Although Grayscale’s Bitcoin-based products saw a decline in terms of AUM last month, CryptoCompare notes that average weekly net inflows turned positive last month after going through a three-month downtrend.
“Average weekly net inflows were positive in September as inflows averaged $72.8 million, breaking a three-month trend of outflows (-$59.9 million in June, -$12.1 million in July, and $0.6 million in August).”
You can download the full report here.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
The goal of this article is to unite and create a coherent argument around the basic microeconomic idea of price equals marginal cost (P=MC), of fiat money as a product, and how bitcoin relates to these two. I must warn all readers that this is just a frame of thought, or, as Steve Jobs would have put it “connecting the dots.” It is by no means a finished concept, and the community will have to help evolve and polish this idea, the same way I have taken this idea from others and, hopefully, improved upon it.
Before we get going, a little reassurance to all readers: don’t worry, high-level math is not necessary to understand the concepts described herein. I will also try my best in keeping things short and simple. Without further ado, I hope you enjoy my little exploration of microeconomics, the Federal Reserve, and Bbitcoin.
First things first, let’s start with microeconomics. And I can already hear you ask:
“What is this basic microeconomic concept you talk so much about, General Kenobi?”
I’m glad you asked. The concept I keep referring to is a fundamental microeconomic idea inside the general equilibrium (GE) theory. GE theory tends to be among the first things that any economics student learns about, and with it, the idea of perfect competition. Inside of the perfect competition model lies a simple equation with potentially great implications: P=MC. The gist of it is that in a perfectly competitive market, the price of the product will approach and eventually equal the marginal cost of the given product.
“But what is marginal cost?” I hear you say.
In economics, every time you see “marginal,” it is helpful to think “next unit”. Therefore, MC is the extra cost of generating/producing an extra unit. Under perfect competition, companies optimize profits by minimizing MC, and the market equilibrium is therefore found at the lowest MC, which for normal companies tends to be a number not equal to zero.
Therefore, the basic idea is that under a competitive market, companies will optimize for their MC, and the price of the given product will approach the MC. Thus, P=MC under a competitive market. And if you are wondering why, that is because companies will have an incentive to produce an extra unit if the MC is lower than that of the previous unit, because that represents “increasing returns to scale.” Bigger is better. But if the MC of producing an extra unit grows, it means you have entered the realm of “decreasing returns to scale,” and are starting to lose profit. Bigger is worse. This is under the assumption that companies are looking to maximize profits.
But enough of that; I said I would try and keep it short and simple. Let’s continue with fiat currency and why the U.S. dollar is a product.
First, a fun fact about our favorite fiat currency: the issuer of the U.S. dollar, the Federal Reserve is a private company, and it has shareholders. Yes, the Fed is a private entity, complete with shareholders. Can you guess who these shareholders are? Correct, the banks. Only banks can be shareholders of the various private companies that represent the Fed, and only banks can get the dividends generated by the Fed. So, if the Fed is a company, and it has shareholders, they get dividends. What do they sell? What is their product?
Well, they sell money. That is the product. Everyone wants it, and despite popular belief, there are copious amounts of it. But, despite being so ubiquitous, most people barely ever stop and think about it.
If you stop and think about money for just a minute, you will find that money is but a mere asset — the most liquid one for sure — but just another asset. And because this asset is offered by a private company, it is also a product. It’s the AirPods of the Fed. Money is cheap for the Fed to make, maintains very good margins, and is a super-seller.
Stick with me for another second, because now we see that fiat money is a product, but for us to merge P=MC and fiat as products, we must find out if the U.S. dollar operates in a competitive market. The thing is that the currency market isn’t a standard market whatsoever. It is not a normal market, like the one for potatoes or corn for instance, because of the inherent monopolistic properties of money. What I mean by that, is that consumers tend to choose the best form of money for themselves and drop any other form of money that isn’t the best money. Thus, it is a binary monopolistic market. You either have the best money or you don’t, and if you don’t, you drop other money to move to the best form of money available. Thus, the fiat currency market goes from one monopoly to the next one.
But when people hear “monopoly” they either think of fun tabletop games or of anticompetitive markets. The way I see it, the currency market is not only a monopolistic market, but also a competitive market. It is the most competitive market. Because if your country’s currency wins this binary currency battle, the prize is unending. You become the world reserve currency, and the world bows to you. In fact, this is such a competitive market that the U.S. dollar also goes by the term “petrodollar” and is protected by the mightiest (and most polluting) entity on the planet, the U.S. military.
Breathe, the hard part is over. We have seen that P=MC, and we have established money as a product, and this product as residing in the most competitive market in the world. Now, it’s time to roll! Let’s look at the MC of money. During the gold standard (the period of history when the world’s commerce used mostly gold-based currencies), the MC of money was the cost of acquiring gold. Alright, this means that under those monetary systems, money had a verifiable MC — the cost of mining one extra unit of gold. And the MC of fiat money? Well, the cost of creating any extra amount of this asset we call fiat is as good as zero. The MC of fiat money, especially that of U.S. dollars, is zero. The cost is NADA. It is nearly nothing at all, nothing whatsoever. A person presses a button, a few electrons move around, and new money is created.
This effectively means that the U.S. dollar approaches a price of zero. And it has been doing so for decades. One could also argue that under a gold-based system, the more the money resembled fiat across time, the closer it was getting to its demise. Historically, as empires were crumbling, the first thing they would do is to debase and inflate their currency, slowly turning it into fiat money as the MC of the currency/product reached zero. When the previous winner of the money market was weak enough, a rotation to stronger money would happen worldwide.
I could go on talking about incentives of the fiat system, inflation, debasement and what have you. But neither am I the expert you seek, nor have we spoken about bitcoin yet, so let’s see how bitcoin interacts with these ideas. Well, bitcoin is expensive to make, and every subsequent BTC made will cost more than the previous one. This basically means that while the MC of fiat is always at zero and the market just slowly approaches it, bitcoin’s MC keeps increasing to infinity, and the market knows it.
Bitcoin has a verifiable cost, is not a product of any company and is thus a finite and unalterable asset, and the incentives laid out in its protocol ensure that MC will never equal zero. Satoshi gave us a gift. We are all just discovering it now!
We have the high ground!
General Kenobi
P.S.: I know that this topic is much more complex and profound than this. I may have gotten some things wrong, I may even have oversimplified some concepts, but I believe that the mental framework it generates is truly powerful. Not one to live by, but one that may be interesting to keep around, to see how it does. I have left some of the discarded paragraphs down below in case anyone finds them interesting or gets any inspiration from them. Enjoy 🙂
This framework shows BTC approaching a U.S. dollar-denominated value of infinity, while the U.S. dollar approaches an abstract final price of zero. This is almost like physics models showing negative energy. The same way that negative energy in physics models is impossible and makes us think outside our box, this mental model showing a BTC price of infinity in U.S. dollar terms is the same type of impossible that should make us think outside the box. We’re all thinking of the same thing, of a world where only BTC exists. Because we now live in a world in which you don’t know if the person giving you cash worked for it, or just created it out of thin air, but this same reality has an alternative. You decide which money you use, and so does the rest of humanity.
Till now, the asset intermediating all transactions was a centrally-controlled corrupt currency of which we usually didn’t think much about. In a near future, that asset will be occupied by the best money, which we have all gradually discovered. An asset that no economic agent can create without incurring significant and verifiable costs.
This is a guest post by General Kenobi Nakamoto. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
Crypto exchange Coinbase says that bad actors have stolen crypto assets from at least 6,000 traders this year.
In a letter posted on the California Attorney General website, Coinbase says hackers took advantage of a flaw in the exchange’s SMS Account Recovery process to receive an SMS two-factor authentication token and gain access to the funds, which they then transferred to wallets unassociated with the exchange.
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The hackers had previously secured e-mail addresses, passwords, and phone numbers associated with the impacted accounts, according to Coinbase’s letter.
Coinbase claims no evidence has been found suggesting that personal information was taken from the exchange itself.
“While we are not able to determine conclusively how these third parties gained access to this information, this type of campaign typically involves phishing attacks or other social engineering techniques to trick a victim into unknowingly disclosing login credentials to a bad actor.”
The attacks reportedly happened between March and May 20th of 2021.
Coinbase says they have updated their SMS Account Recovery protocols “to prevent any further bypassing of that authentication process.” The exchange also says they plan to fully reimburse customers.
The company adds that they are conducting an internal investigation and are working with law enforcement to determine who was behind the attack.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Coming every Saturday,Hodler’s Digestwill help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
DOGE co-founder sets sights on Ethereum bridge and NFTs for mass adoption
Billy Markus, the co-founder of the beloved Dogecoin (DOGE), emphasized the importance of completing an Ethereum-to-Dogecoin bridge on Thursday, citing that the asset could be integrated for payments on Ethereum-based NFT marketplaces.
Markus stated that there is “high demand” to purchase NFTs within the crypto community and that enabling NFT purchases with DOGE “greatly increases its utility.”
The development of a Dogecoin–Ethereum bridge would mark a significant milestone for the meme coin, as it would enable users to send DOGE from the Dogecoin blockchain to the Ethereum blockchain, and utilize the asset in the DeFi and NFT sectors via ERC-20 DOGE token contracts.
JPMorgan CEO says Bitcoin price could rise 10x but still won’t buy it
Jamie Dimon, the CEO of JPMorgan Chase and staunch crypto critic, has slammed Bitcoin’s appeal despite admitting that its price could multiply by 10 within five years, presumably because he doesn’t like making good returns on his investments.
During an interview with The Times of India, the CEO was asked whether Bitcoin (BTC) or other crypto assets should be banned or regulated. Dimon answered by taking a swing at the hype surrounding the asset, stating:
“I don’t really care about Bitcoin. I think people waste too much time and breath on it. But it is going to be regulated. […] And that will constrain it to some extent. But whether it eliminates it, I have no idea and I don’t personally care. I am not a buyer of Bitcoin. […] That does not mean it can’t go 10 times in price in the next five years.”
Morgan Stanley doubles exposure to Bitcoin through Grayscale shares
Speaking of large investment banks, it was reported on Monday that Morgan Stanley has more than doubled its exposure to the Grayscale Bitcoin Trust (GBTC) since April.
According to a recent SEC filing, the Morgan Stanley Europe Opportunity Fund owned a total of 58,116 GBTC shares as of July 31. The holdings are worth around $1.96 million at the time of writing, representing an 18.3% decrease on the $2.4 million Morgan Stanley said it has splurged on GBTC.
Previous filings show that Morgan Stanley has increased its shares of GBTC by more than 105% since April, suggesting that market volatility over recent months affected its appetite for Bitcoin via Grayscale.
Visa working on blockchain interoperability hub for crypto payments
On Thursday, payments giant Visa announced an ambitious project that aims to be a “universal adapter” of blockchains that can connect multiple crypto assets, stablecoins and “spawn of satan” central bank digital currencies (CBDCs).
The project, dubbed the “Universal Payment Channel,” is hoping to serve as an interoperable blockchain hub that can connect to multiple blockchain networks and enable transfers of different crypto from various protocols and wallets.
“Imagine splitting the check with your friends, when everyone at the table is using a different type of money — some using a central bank digital currency […] like Sweden’s eKrona, and others preferring a private stablecoin like USDC,” Visa wrote, as it emphasized the benefits to users without revealing how centralized the hub may be.
White hat hacker paid DeFi’s largest reported bounty fee
Automated market maker protocol Belt Finance said it paid a white hat hacker the largest bounty in DeFi history. The Binance Smart Chain (BSC)-based protocol, which operates a yield optimization strategy, said that white hat programmer Alexander Schlindwein discovered the vulnerability in Belt Finance’s protocol this week and reported the news to the team.
Schlindwein, who appears to have no intent on swindling, was paid $1.05 million for his work, which consisted of $1 million from Immunefi and $50,000 from BSC’s Priority ONE program.
“I went through the list of bug bounties on Immunefi and picked Belt Finance as the next one to work on,” Schlindwein told Cointelegraph, adding:
“While I was studying their smart contracts, I noticed a potential bug in the internal bookkeeping, which keeps track of each user’s deposited funds. Playing the attack through with pen and paper gave me more confidence in the existence of the bug. I continued by producing a proper proof-of-concept (PoC) which undoubtedly confirmed its validity and economic damage.”
Winners and Losers
At the end of the week, Bitcoin is at$47,351, Ether at$3,226and XRP at$1.02. The total market cap is at$2.05 trillion,accordingto CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are dYdX(DYDX)at 86.90%, OMG Network(OMG)at 42.04% and Axie Infinity(AXS)at 39.19%.
The top three altcoin losers of the week are Celo(CELO)at -19.59%, Huobi Token(HT)at -13.58% and Avalanche(AVAX)at -8.27%.
For more info on crypto prices, make sure to readCointelegraph’s market analysis.
Most Memorable Quotations
“I don’t really care about Bitcoin. I think people waste too much time and breath on it. But it is going to be regulated. […] And that will constrain it to some extent. But whether it eliminates it, I have no idea and I don’t personally care. I am not a buyer of Bitcoin. […] That does not mean it can’t go 10 times in price in the next five years.”
Jamie Dimon, CEO of JPMorgan Chase
“The most difficult aspect of Bitcoin to grasp is that it’s completely unique — nothing like it has ever existed. There’s nothing for the media to compare it to, and they’re unable to fully understand the magnitude of the coming paradigm shift that Bitcoin will bring.”
Samson Mow, chief strategy officer of Blockstream
“There is no doubt that the crypto assets market is becoming more mainstream in the institutional and wealth management sectors.”
Henry Howell, head of business development for Nickel Digital Asset Management
“Millennial gamers hold 55% of all crypto assets, compared to just 5% of all millenials, showing that gamers are far more likely to hold crypto than the average person. Eighty percent of gamers who own crypto are also interested in using cryptocurrency to purchase games and in-game items.”
David Gan, founder of OP Crypto Capital Management Ltd.
“Not only is Saule Omarova, Biden’s pick to lead the OCC, a threat to our traditional economy, she also wants to regulate crypto into oblivion. Crypto faces future-defining government regulations. This nomination needs to be stopped.”
Ted Cruz, U.S. senator
“It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement.”
Elon Musk, CEO of Tesla
“Sooner or later, ETH will outpace Bitcoin and become the global standard.”
Sandeep Nailwal, co-founder of Polygon
Prediction of the Week
Former Bitcoin lead dev predicts demise of BTC network… with a major silver lining
Gavin Andresen, one of the earliest developers of the Bitcoin network, published a blog post recently about one of the potential outcomes for Bitcoin many years down the road. Andresen, however, included the caveat that the future he described is possible, yet unlikely.
Andresen’s forecast saw BTC in 2061 having a hefty price tag of $6 million per coin, complete with $7,500 transaction fees. Bitcoin’s price will not have risen to that valuation solely of its own accord, however, but largely as a result of inflation by a factor of six. He predicted that, by 2061, $6 million will have the purchasing power of $1 million at today’s dollar value. Large holders of BTC will run the coin’s blockchain by then, with most transactions taking place on other blockchains via wrapped versions of BTC.
Fast-forward another 39 years to 2100, and Bitcoin will see very little activity on its main blockchain since, by that time, the mining reward will have been cut in half so many times that mining and maintaining the network are not worth the effort. At that point, the whales ruling Bitcoin would halt the network, and BTC would then simply live on other blockchains in wrapped form.
FUD of the Week
Second-largest Ethereum mining pool to suspend all operations
Following the latest crackdown from the Chinese government, Ethereum mining pool Sparkpool suspended access to new users in China and abroad on Thursday.
According to an announcement on Monday, the measures are being put in place to ensure the safety of users’ assets in response to China banning crypto yet again. “Further details about the shutdown will be sent out through announcements, emails, and in-site messages,” Sparkpool said.
Launched in China in early 2018, Sparkpool emerged as one of the largest Ether mining pools in the world. As of Wednesday, Sparkpool’s mining power represented around 22% of Ethereum’s global hash rate. However, following the suspension, it now accounts for 0%. According to PoolWatch, Ethermine leads the mining pool pack, making an estimated 25% of Ethereum’s global hashrate.
Alibaba to ban crypto miner sales amid Chinese crackdown
Alibaba also faced some crypto mining-related issues this week amid the crackdown in China, announcing on Monday that its platform will prohibit sales of cryptocurrency miners and suspend categories for blockchain miners and accessories from its website on Oct. 8.
The company’s decision was tied to regulatory compliance issues with crypto. The e-commerce giant is also halting sales of crypto mining devices and imposing a ban on using its platforms to sell major cryptocurrencies, such as Bitcoin, Ether (ETH) and Litecoin (LTC).
Alibaba stated that any sellers who continue to list banned crypto-related products and services after Oct. 15 will face a range of penalties including blocking stores, and freezing and closing merchant accounts.
CFTC hits Kraken with $1.25M in fines over alleged illegal offering
The United States Commodity Futures Trading Commission (CFTC) announced Tuesday that it is ordering top crypto exchange Kraken to pay $1.25 million in civil penalties over allegations that the firm exchange is violating the Commodity Exchange Act.
The CFTC attests that Kraken has failed to register with the regulatory body as a futures commission merchant (FCM), and is therefore offering illegal margined retail commodity trading via crypto assets.
The CFTC said the action was a “part of broader effort to protect U.S. customers” and emphasized that exchanges that offer “margined, leveraged or financed digital asset trading” must register as an FCM or face the regulatory hammer.
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“They’re looking for these antiquities but keep hitting a wall because they’re so used to using OpenSea.”
Cool green mayor giving a grand in Bitcoin to each resident
“I never thought so many people would care about this tiny little town in Missouri.”
The dramatic short squeeze of the stock of video game retailer GameStop this January was the moment when r/WallStreetBets finally transformed from a humble Reddit forum into a financial force that can no longer be ignored. But lost among the memes, trading app drama and hand-wringing over the sanctity of the stock market was one surprising outcome: GameStop’s share price didn’t just rise — the company actually listened to its many new retail investors and aggressively ramped up its strategy to focus on e-commerce. Rather than just a one-off market glitch, the investments made by r/WallStreetBets users resulted in the real transformation of a company that many in Wall Street had been predicting the demise of.
Related:GameStop inadvertently paves the way for decentralized finance
You’d think Wall Street types and their fan club in Congress would be hailing this as a rare triumph of market evangelism. But the wrong people made money out of this event so, in their eyes, the GameStop episode was a dangerous fluke.
The stock market remains in the hands of self-dealing and corrupt institutions. But just because the traditional market is rigged with rules that shift with the elites’ moods doesn’t mean that everyday retail investors should cede all shareholder control and abandon trading equity entirely. Instead, a hybrid model incorporating cryptocurrency and bringing tokenized shares of companies onto a blockchain ledger for people to buy, sell and exchange, can help to build a better, more transparent stock market accessible to all.
Since I founded the r/WallStreetBets subreddit in 2012, the community has grown immensely and undergone a number of changes. Until recently, discussion of crypto tokens was considered off-limits among r/WallStreetBets users. But the popularity of innovative trading apps has helped to close the gap between stocks and digital assets. r/WallStreetBets’ latest initiative aims to create exchange-traded products, or ETPs, which function like traditional ETFs but instead allow community members to buy indexed shares of cryptocurrencies as well as shares of companies like Tesla or Facebook.
If, as expected in the future, more companies start tokenizing their shares on the blockchain, not only will they assist in creating a more democratic market, but they’ll benefit from a number of technological efficiencies and gain access to a powerful army of retail investors.
Related:Understanding the systemic shift from digitization to tokenization of financial services
Tokenization of financial services
As friendly as the market can be to large institutional players, old methods of raising capital still present a number of challenges and outdated protocols for most companies. The stock exchange’s strict rules help some more than others, as does the willingness of banks and financial institutions to issue credit and handle general difficulties for business owners convincing private investors to get involved. With tokenized shares on a blockchain, issuing equity comes with lower costs and greater flexibility in fundraising. This way, everyday investors have more of a voice, and the value of businesses is more closely aligned with market forces rather than an elite group of wealthy investors.
Rather than forcing people to guess what decisions are being made in smoky back rooms, tokenized shares traded on a blockchain move in plain sight, with greater transparency for both regulators and shareholders. Regulators have the ability to monitor capitalization tables and share activity instantly, as well as view corporate governance votes that are on-chain. Shareholders, whether studying algorithms or YOLOing stimulus dollars on meme stocks, are able to see any on-chain activity in regards to the sale of shares, as well as votes from other shareholders regarding corporate decisions. Such a system is much fairer than the current status quo for everyone involved.
Our outdated system restricts shares by jurisdiction, meaning a Portuguese citizen is shut out from investing in companies that may even operate within their own country. If you ask me, anyone who’s ever sold their Wii for 3 euros or 550 yen should have the right to throw money at GameStop. But a blockchain-based system makes tokenizing equity universal and accessible 24/7, 365 days per year. In addition to providing greater access, this shift eliminates after-hours and dark pool trading that allow institutional investors to trade without exposure and without publicly showing their intentions while searching for a buyer or seller. The r/WallStreetBets ETP initiative overcomes these built-in biases and eliminates the advantage that large institutions abuse to make secretive trades that drive inequality.
To borrow an online term, the TLDR (too long didn’t read) summary is that blockchain allows for the creation of community governance that is fundamentally incompatible with traditional finance. Democratic features like community polling empower each and every participant to shape how allocations and investment decisions are made, and the results are clear. Numerous academic studies have compared the financial market accuracy between professional individual traders and decisions made by collective intelligence, showing time and time again that even a group of outsiders can outperform top indices.
Related:Crypto social governance will lead to online freedom
To take a slang term from the r/WallStreetBets subreddit about the power of investing as a community, research supports that “apes together” indeed are strong, and somehow, as a collective, make better decisions than the pros. If Wall Street calls it market manipulation when a bunch of normal people band together to pursue their economic interests, maybe it’s time for a new market.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jaime Rogozinski is a founder of WallStreetBets, the internet movement that sparked the meme stock phenomenon that has challenged Wall Street. He has appeared in The Wall Street Journal, CNBC and a variety of other media outlets. Currently, he’s working with founding members of the WallStreetBets movement to create a decentralized autonomous organization in which tokenized shares and crypto assets can be accessed by everyone in the form of ETPs, which are like index funds but digitized, available to all and much, much harder to manipulate.
CoinShares’ chief strategy officer Meltem Demirors thinks that Bitcoin is ready to rise over the next few months as sidelined investor capital gets pushed into the crypto asset.
In a recent interview on CNBC Television, the digital asset management firm executive highlights thepotential catalysts that can push the value of Bitcoin to greater heights in the coming months.
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“Right now, we’re hearing rumblings around a potential Bitcoin ETF approval. That would be cash-settled, contract-based ETFs, but still, there’s a lot of ‘buy the rumor, sell the news behavior’ in crypto, that’s a big catalyst we’re looking at in Q4.
There’s also not a lot of open longs in the Bitcoin position anymore, so we’re seeing a lot more firms taking on more bullish long calls. In fact, there are a number of six-figure long-dated option calls that are seeing some action going into the end of Q4 and early Q1.”
She also mentions that the wide variety of platforms developed to buy Bitcoin will likely accelerate the asset’s growth heading toward the end of this year.
“And I think most importantly, honestly, is there’s a lot of cash sitting on the sidelines, and a lot of investors are now seriously contemplating an allocation to Bitcoin in their portfolios. There are now so many different avenues through which to do that, whether it’s through a publicly listed investment vehicle, or through assets themselves on platforms like Coinbase, or Robinhood, or Square. There [are] just an absolute plethora of options that are opening up the channel for retail and professional investors to get exposure to the asset class.”
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Bitcoin’s price closed in September at a lower level than it did in August. While that may sound like a negative occurrence for BTC bulls, the popular cryptocurrency analyst PlanB actually saw this happening months ago and predicted the exact closing price.
Furthermore, he provided even more favorable prices for the end of October, November, and December.
Bitcoin to Close Oct at Near ATH?
BTC went through a roller-coaster in the past few months after the peak, which it reached in mid-April of $65,000. The subsequent retracement, caused initially by Elon Musk and later by the latest Chinese ban on the crypto industry, drove the asset south hard. In the following months, bitcoin had lost more than 50% of its value and dumped below $30,000 on numerous occasions.
The latest such example came in late July when BTC went all the way down to $29,000. Since then, though, the tides have turned rather decisively.
PlanB, the popular crypto analyst behind the stock-to-flow model, saw these developments early on. Back in June, he posted a graph showing that his “worst-case scenario” for this year based on the price and on-chain metrics predicted this “weakness” in July.
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Later on, he envisioned that BTC’s price will end August at just over $47,000, which it actually did. The price line for September was slightly lower – at around $43,000, which also occurred.
Keeping in mind his accuracy, it’s worth pointing out that his October closing prediction is at $63,000. If bitcoin is to tap this level, the asset would be just shy of its all-time high record ($65,000). For November, he sees BTC at $98,000, while for December, the price tag would be $135,000.
To be clear: “worst case”/floor model is NOT, I repeat NOT based on stock to flow (S2F), it is based on price and on-chain data (like I wrote in the June 20 tweet below). So, great that Aug closed >47k and Sep is now around 43k, but it says NOTHING about S2F. S2F says ~100k now. https://t.co/tj6SSwSzKR
— PlanB (@100trillionUSD) September 28, 2021
Nothing to Do With S2F
PlanB is perhaps best known in the cryptocurrency community as the creator of the stock-to-flow model and its variations, which also see BTC going into a six-digit price territory by the end of this year.
However, the analyst made sure to distinguish the difference between the S2F prediction and his aforementioned worst-case scenario.
Nevertheless, PlanB updated that the closing price of $43,834 in September also works “like clockwork” for the stock-to-flow model.
#Bitcoin Sept closing price $43,834 .. like clockwork pic.twitter.com/nCZNaJJ2Fy
— PlanB (@100trillionUSD) October 1, 2021
Although BTC stands more than halfway away from the coveted $100,000 mark, the number of analysts and prominent names envisioning such an increase in the next few months continues to grow. The latest to come with such a number include the co-founder of Northstar and Badcharts, the CEO of Chainalysis, Adam Back, and Bloomberg’s Mike McGlone.
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Gary Vee’s NFT collection outsold Andy Warhol and Jackson Pollock.
The auction took place at Christie’s New York on October 1, 2021.
The doodle took Vaynerchuck just minutes to draw.
Gary Vaynerchuk sells scans of his doodles for up to a million dollars online. But yesterday, the workaholic investor, serial entrepreneur, and yard sale flipper proved that the paper drawings are still valuable in the digital age—he just sold five of them for $1.26 million, outselling Andy Warhol and Jackson Pollock at a Christie’s auction in New York.
The lot of five hand-drawn VeeFriends pictures sold for more than six figures each. Up for sale were the “ink on paper” versions of Empathetic Elephant, Gratitude Gorilla, “Diamond Hands” Hen, “You’re Gonna Die” Fly, and Tremendous Tiger. The Emphatic Elephant sold for the most: $412,500. The doodle took Vaynerchuck just minutes to draw.
The five doodles are part of a 286-strong collection of animals hand-drawn by Vaynerchuck himself. Vaynerchuck turned his doodles into a collection of 10,255 NFTs called VeeFriends. Each animal carries an epithet: noble camels, glowing glow worms, benevolent barn owls, and so on.
The VeeFriends website says that the animals “represent human traits that Gary most admires. He focused on traits that he believes will lead to happiness and success.” Aside from his entrepreneurship, Vaynerchuck is renowned for his motivational advice.
Someone’s accomplishments aren’t at the demise of another’s .. the world is abundant.. perspectives need a tweak on the culture of “or” and “versus” .. ❤️☀️
— Gary Vaynerchuk (@garyvee) October 1, 2021
The doodles may look infantile, but the floor price is 14.65 ETH, or about $50,100, and the most valuable VeeFriends NFT sold for almost $1.2 million on OpenSea. It depicts an “Alert Ape,” and looks exactly like it sounds.
Each NFT is accompanied by a 20-30 second video of Vaynerchuk thrashing out the doodle, and the NFTs doubles as a ticket to Vaynerchuck’s upcoming conferences for the next three years.
Wait to they find out it’s way bigger than the art 🖼 and collectibles 🧸 … the technology and behavior that nfts will create Ans what can and will be built is mind blowing
— Gary Vaynerchuk (@garyvee) October 1, 2021
On September 10, Vaynerchuck announced VeeCon 2022, the first of three planned annual events that will take place from May 19 through to May 22 in Minneapolis, Minnesota.
On Thursday, social media giant TikTok announced that it would release a collection of NFTs featuring Vaynerchuck on October 6. The collection, which will be hosted on Ethereum scaling solution Immutable X, and will also feature recording artist Lil Nas X, Grimes, and social media personality Bella Poarch.
