Dispatch #24: FedWire Went Down. Bitcoin Just Kept Working.
Feb 26, 2021•4 min read
In this patch of your weekly Dispatch:
- The Fed’s settlement system goes offline, unlike Bitcoin
- Are you selling your BTC to Microstrategy & Square?
- Beeple artwork sells for $6.6M before first-ever Christie’s NFT auction
- Antoni just moved up in Dispatch 😊
The Big Idea
Ah, the Irony.
Bitcoin finally had a comedown after an absolute march straight up from $30,000 to nearly $60,000. Throughout the week, we saw a major sell-off, with prices getting all the way down below $45,000 on some exchanges.
While most professionals attributed the particular violence of the move at least in part to over-leveraged traders, another popular narrative explanation was that the market was reacting to more negative comments from Treasury Secretary Janet Yellen who called Bitcoin “inefficient” in Monday remarks.
How deliciously ironic then when on Wednesday the Fed’s real-time settlement system FedWire went offline for a number of hours. Many companies (including crypto exchanges) were stopped in their tracks as the system went down – an outage the likes of which Bitcoin hasn’t experienced in the last 2,907 days.
Adding to the irony is the fact that the outage came just one day after Federal Reserve Board Chairman Jerome Powell announced that 2021 was the year the Fed started focusing on a digital dollar with diligence.
May want to hire a few more engineers before that journey starts?
Our Take
@AntoniNexo This Week
We’re moving our Antoni section up in this patch because it’s been a big week for him and he damn well deserves it.
- First, a special report from Nexo HQ: Antoni’s first child was born on Sunday night. We have no idea how he’s managed business as usual, chatting away to the media, and doing an AMA this week, but wow and congrats, Antoni!
- Business as usual, but rather epic: in an existential conversation about Bitcoin, Bloomberg Best pitted Antoni against economist Nouriel Roubini, aka Dr Doom, and, boy, was it intense. If what Roubini says is true – that cryptocurrencies are not assets because they don’t give you income – what should we call the 8% interest you earn on BTC with Nexo, if it were not income? Don’t dividend-paying tokens generate income, professor? You should, of course, listen and draw your own conclusions, but we think we’re right…
- Talking to Bloomberg again, Antoni reiterated just how positive the outcome of Tether’s settlement is, commenting: “On the grand scale of things, it’s less than a speeding ticket. I’m just excited that they will be revealing more numbers so that we can accurately assess and hopefully that will create some comfort for the market participants.”
- And because this week wasn’t quite action-packed enough for Antoni and Nexo, he wrapped it up with the first edition of our monthly Ask-Antoni-Anythings. We’re still hyped from the energy and great questions that came our way – thank you for that! For those of you who missed the live stream – we’ve got you covered.
The Latest In…
Bitcoin
We mentioned above that Bitcoin had a major dump, but back in the bullish column were announcements from Square and MicroStrategy that they had both added to their BTC treasury reserves. Square bought $170M in Q4 while MicroStrategy announced a new purchase of more than $1B. Seriously, if you sell your Bitcoin because you get nervous, you’re selling it directly to Jack Dorsey and Michael Saylor.
The Latest In…
Stablecoins
In another bit of HUGE news this week, the New York Attorney General settled its suit against Tether. The settlement involved Tether paying $18.5M in fines, agreeing to not do business with anyone in New York, admitting no wrongdoing, and providing quarterly attestations of reserve backing USDT for the next two years. In all honesty, it’s hard not to see it as a big win for the industry. It ends the worst FUD that somehow USDT was being printed to manipulate the price of BTC and clears the way for more cautious organizations to start investing.
The Latest In…
NFTs
Thursday was big for NFTs. Hours after chatting about crypto art with Binance CEO CZ on Clubhouse, digital artist Beeple made NFT history with his work titled Crossroads selling for $6.6M – more than 100 times its original price. The same day marked the kick-off of the first-ever auction of a purely digital artwork by iconic auction house Christie’s. The latest bid of this 14-day online event – with Beeple as protagonist again – stands at $2.4M.
The Week’s Most Interesting Data Story
Do You Even HODL Bro? - Results
Our readers are our mirror image and the results of last week’s Dispatch survey prove it. In the previous couple of issues we asked you two questions that inevitably cross the minds of everyone who has anything to do with crypto. First, why do you HODL crypto and, second, how long is your HODL-ing horizon? We were thrilled to find out that nearly 50% of respondents seem to be investors focused on the long term rather than quick gains. This proves that our business is attracting like-minded individuals. What really made our jaws drop, however, was the fact that 72.1% of you plan to keep your crypto for at least three years and nearly 20% claimed you were never selling. If these results are not bullish, we don’t know what is. Expect news from us on this front.
Hot Topics
What the Community Is Discussing
Talk about Diamond Hands! This HODLer just moved 100 BTC that hadn’t moved since 2010. Wild.
Speaking of Bitcoin’s early days – is this Satoshi’s anonymous Twitter account?
North America’s first Bitcoin ETF is absolutely crushing, even with the volatility this week.
What to Watch for Next Week:
- Will Bitcoin reclaim its $1T market cap?
- Will NFTs go even more mainstream?
- Will there be any Bitcoin left for the rest of us when Saylor is done?