2022W10 - WTF happened in Bitcoin this week?
Bitcoin has your back.
TLDR: Inflation running hot, US executive order, Lightning development & more.
Hey there niblings, it’s uncle Bam again, with a summary of the most insightful events in the Bitcoin space. Back at it again digesting all the important news for you.
Inflation keeps ramping up. The headlines from The Guardian says it all:
Essentially, it means that if you didn’t have a wage increase of at least 7.9%, then you are able to afford less goods compared to a year ago. The scarier thing is that naturally this measure is calculated by a combination of different products that seems to be the most used by the society, but the reality is that it could depend from household to household.
The bitcoin community has been warning against money printing, as a main cause of monetary debasement or devaluation (or as they prefer to call it, inflation), for the last couple of years. Many like to dismiss the monetary properties of bitcoin without giving it further research as it is easier to ignore something one doesn’t understand than admitting the existing current monetary system is corrupt and broken, and that there is a possibility that our elected officials and unelected ones (I’m looking at you Central Banks) do not have our best interest in mind.
If we can learn something in monetary history, is that empires fall, and all fiat currencies eventually perish from reckless abuse of the money printer. This week we see bitcoin reaching a new all time high in Russia. And you can possibly say: “But Uncle Bam, it is different because Russia is attacking Ukraine”.
Sure, current geopolitical political situation is not ideal, but we have seen this happening also for other currencies such as the ones from Turkey and Argentina, in the last couple of months, even though the price in US dollars was not at its current peak.
The only thing I could say time and time again, is that bitcoin is an insurance you want to have before times turn bad, not when it is already too late.
And this is how the week started.
1. Stripe launched business infrastructure to support cryptocurrencies allowing businesses to transact and scale with Bitcoin.
2. Shake Shack is introducing a limited-time trial of 15% bitcoin cashback rewards for customers using Cash App’s Cash Card.
3. Visions, $5 Billion New York credit union, launches new service for buying and selling Bitcoin.
4. Bain Capital, $105 Billion venture arm said they are strong believers in the long term future of bitcoin.
5. Zoltan Pozar, global head of short-term interest rate strategy, published a report for Credit Suisse explaining his view of the current geopolitical situation and how it is likely to cause a paradigm shift, a Bretton Woods III kind of scenario.
“… and Bitcoin (if it still exists then) will probably benefit from all this.” - Zoltan Pozar
6. Yoon Suk-yeol won the closest South Korean election in history with promises to deregulate bitcoin and crypto while easing tax burdens.
7. Thailand's cabinet approved tax relief for bitcoin and cryptocurrency investors giving a value-added-tax and loss-harvesting tools to offset taxes.
8. Spain's largest bank, Santander, to offer loans backed by crypto assets in Argentina.
9. The Virginia Senate passed a bill allowing state banks to offer bitcoin & crypto custody services
10. U.S President Joe Biden signed an executive order on Wednesday that actively calls for policy on Bitcoin and other cryptocurrencies and "urgent" action towards developing a Central Bank Digital Currency (CBDC).
11. BTC Inc., is donating 100 tickets to the Bitcoin 2022 conference – worth $100,000 in total – to the "Black Bitcoin Billionaire" group, an organisation committed to empowering people of color to build generational wealth by earning, holding and using Bitcoin.
12. Steve Wozniak discussed the mathematical purity of Bitcoin as “pure-gold” mathematics, separating it from other cryptocurrencies.
13. Shark Tank’s Kevin Oleary, says that he now has 20% of his portfolio in bitcoin and cryptocurrencies.
FUNDAMENTALS
The distribution of bitcoin’s realized price (the price at the last moment each bitcoin was moved on the blockchain), seems to show a strong consolidation on the upper $30,000s. This could make the case for big accumulation having happened on both strong corrections the asset has experienced in the summer of 2021, and right now. Although this does not mean the price is bottoming, or about to make a big move, it provides a picture of how bitcoins are successfully changing hands in a decentralize manner, peer-to-peer, which validates the adoption up to some extent.
If combined with the knowledge of the availability of bitcoin in exchanges, in this case Coinbase, where on March 10th, 30,000 bitcoin were just taken off of the exchange, drying out the supply, one could suggest the consolidation could likely break up to the upside, as the bitcoin willing to be traded seems to be decreasing.
As a summary note..
Bitcoin is much more than a store of value, and many people forget how the Lightning Network is currently solving scalability and has been developing at an incredible fast pace in the last year.
El Salvador making bitcoin legal tender, has definitely had an impact on the acceleration of the people joining forces into making the Lightning Network a more robust environment. As Lukas mentions in his tweet, it used to be that payments were not finding routes to their destinations, leading to payment failures, but now it seems that the capacity of the network has improved.
Even exchanges, such as Bitfinex, have reported a massive surge in usage in just a year. From February 2021, having processed 30 bitcoin per month in lightning transaction volume, to 100 bitcoin per month in February of 2022.
Have a great weekend niblings.
Stay humble & stack sats.
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