Dispatch #173: The Power of Bitcoin (Hype)

In this patch of your weekly Dispatch:

• Vitalik takes out the map 🛣️
• Three crypto heavy-hitters 🎯
• A Puma in the Web3 jungle 🐈‍⬛

The Big Idea

Happy New Year, Dispatch Readers!

2024 has come with so much momentum from 2023, that the New Year’s Eve fireworks show has seemingly been extended to the cryptoworld in this first week. The weight that the investing world puts on the possibility of the approval of multiple spot Bitcoin ETFs was once again highlighted as Bitcoin crossed $45,000 for the first time in almost 2 years on January 1.

But that hype came at a cost – piling long leveraged futures positions resulted in the Chicago Mercantile Exchange (CME) Bitcoin futures unexpectedly surging to $47,040, i.e. $1,600 above spot markets. In other words, it got expensive to stay in the markets and wait out the approval from the SEC. And it took one mid-week, left-field report for Bitcoin to return most of its 2024 gains. Mind you, similarly, it has mostly (re-?) regained those to finish the business week just below $44,000. Again – on the back of some ETF enthusiasm.This general optimism about Bitcoin is energizing, even if it borders with mania at times. Which is why we need to level ourselves with the cold hard facts on how this may unfold:

• 15 spot Bitcoin ETF applications await approval from the SEC, with January 10 a deadline for ARK Invest and 21Shares’ applications.
• Bitcoin’s premium, known as contango, suggests a bullish outlook as the market anticipates BTC price appreciation – a “buy-the-rumour, buy-the-news” outlook in essence.
• Analytics company K33 Research serves the opposing perspective – the ETFs’ approval may become a sell-the-news event as “aggressive leverage from longs may set up the market for long squeezes following the ETF verdict.”

So in essence bright brains in expensive suits are trying to advance Bitcoin into its next adoption phase – we are just not there yet. In this position, legendary investing TV programme host Jim Cramer possibly put it best, and this time, he appears to nail it – Bitcoin is indeed a technological marvel. But we shouldn’t always react to its glistening.

The Latest In…

Vitalik Goes Full Speed Ahead

Ethereum co-founder Vitalik Buterin has released the network’s 2024 roadmap, outlining top priorities for the blockchain. Key focuses include:

• achieving 100,000 transactions per second (Surge),
• addressing risks like MEV and liquid pooling (Scourge), and
• simplifying the protocol (Purge)

Vitalik endorses single-slot finality to improve Proof-of-Stake and highlights the battle against economic centralization. The roadmap maintains last year's priorities with no set timeline, but we are expecting the world's second-most valuable network to continue building.

The Latest In…

Ehtereum’s Offsprings Shine

In the midst of growing anticipation for a spot Bitcoin ETF, Ethereum's Layer-2 networks are making headlines with a remarkable Total Value Locked (TVL) reaching over $21B.

Key Highlights:

• Optimism's Token (OP) achieves a record-high price of $4.10, sustaining around the peak before retreating towards $3.50.
• Arbitrum's Token (ARB) soared 13% in a day to reach a record high of $1.83, representing a 60% surge over the past month.
• The ENS token jumped 85% to $15, its highest value in eight months, after Vitalik deemed it “super important.”

The Latest In…

Web3: A Habitat for Puma

Puma, the global sportswear giant, has boldly committed to Web3 technologies. Head of Emerging Technology, Ivan Dashkov, underscored Puma's proactive stance in navigating the evolving digital landscape. Having secured the Ethereum Name Service (ENS) domain "Puma.eth" in 2022, the company established a presence within the Ethereum blockchain community. Venturing into the metaverse with Black Station and Black Station 2 last year, Puma pioneered innovative spaces for digital consumer engagement. Now that’s a company sticking to the Web3 innovations, as TechCrunch reports.

The Week’s Most Interesting Data Story

Quantifying Anticipation

Bitcoin futures markets have commanded traders’ attention with a remarkable $840M surge in open interest within 24 hours, representing the total outstanding Bitcoin futures contracts. Some of the volume is on Nexo, you know.

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What to Watch for Next Week:

• Spot Bitcoin ETF – Yay or Nay?
• Stablecoins in 2024 – What’s ahead?
• Crypto in Asia – Is adoption still strong?