Dispatch #7: Bitcoin Smashes Through to New 2020 High

In this patch of your weekly Dispatch:

• Bitcoin conquers new 2020 high
• The Bahamas launch the first full CBDC
• Kik agrees to settle with the SEC for $5M

The Big Idea

A New 2020 High for BTC

For weeks, we’ve been discussing the strength of BTC fundamentals (hash rate ATHs anyone?) in the context of sideways prices. It seems, however, that the last few days have finally seen a major move.

It started on Monday/Tuesday, as Bitcoin crept towards and finally punched over $12,000 but really accelerated on Wednesday as it leaped up all the way over $13,000, blasting past the previous August high of ~$12,400.

So, what’s going on?

First, the ‘Blue Wave’ narrative of a Democrat sweep in US elections has many of us thinking that a lot more fiscal stimulus and money printing are coming, boding well for currency hedges.

Second, a week doesn’t go by without a new company moving cash reserves into Bitcoin. This week it was Mode - publicly listed in the UK - announcing they would put up to 10% of its cash into BTC.

Third, PayPal confirmed earlier rumors when it announced new support for buying and selling cryptocurrencies, representing a massive new prospective user base.

Put it all together and you have the recipe for a serious break out moment for Bitcoin and crypto as a whole.

The Latest In…

Altcoins

Some serious funding news for protocols this week. Mina Protocol (formerly Coda) developer (0)1 Labs raised a fresh $10.9M to build out a developer community in Asia of their size-constrained blockchain. Smart contract platform CasperLabs also added $14M to their war chest via a private token sale.

The Latest In…

Regulation

After much back and forth, it appears that the saga of Kik vs. the SEC is finally drawing to a close. The parties have agreed to a $5M settlement that will end the fight around Kik’s $100m ICO. Ultimately, this isn’t a particularly good outcome for anyone except the lawyers in the middle.

The Latest In…

Central Bank Digital Currencies

In what’s being called a first of its kind, the Central Bank of Bahamas is launching a true central bank digital currency, affectionately dubbed the “Sand Dollar.” The bank has said the goal of the initiative is to reach underserved communities in the Caribbean, so while the bank might be comparatively small, this should be an important initiative to watch. In the US, Fed Chair Powell said that it was more important for the US central bank to be right than to be first when it came to digital currencies.

The Latest In…

Stablecoins

As we’ve written before, stablecoins have been one of the breakout crypto use cases of 2020. Part of that is the utility in DeFi protocols, but another part has to do with individuals and enterprises using non-sovereign payment rails in the face of a financial crisis. The total supply of stablecoins has surpassed $20B after starting the year at just under $5B. A four-fold increase in 10 months ain’t nothing to sneeze at.

The Week’s Most Interesting Data Story

Total Transaction Fees Deep

Over the last few months, we’ve seen a meaningful dip in total transaction fees on Bitcoin and an accompanying decrease in daily transaction volume. Among other things, the percentage of miner revenue from fees was also down, hitting a three-month low of 3.49% over the weekend. However, even as this was being observed, the question remains: was this just a consolidation period poised to break out to new highs? The answer after midweek’s price action is an unequivocal "yes."

Hot Topics

What the Community Is Discussing

Some trends are big, blaring, and obvious but what are the more surreptitious trends that could shape this space for years to come?

MicroStrategy’s Michael Saylor continues to evangelize, bringing with him a crisp and clear articulation of how many Bitcoiners see the economy differently.

The Bitcoin bounce is exciting, but how much is it at the expense of every other asset in the crypto markets?

Our Take

@AntoniNexo This Week

• Having seen rising interest in tokenized gold, Nexo expanded its gold offering and now offers up to 5% interest on PAX Gold via the Earn on Crypto & Fiat suite. Read more about this development on Nexo’s blog. Looking for a deeper dive on gold? Head to this article by Nexo’s editorial team which revisits gold’s utility and evaluates the asset’s evolution towards tokenized gold.
• Pointing out how groundbreaking the recently published Travel Rule Solution is for the crypto space, Nexo’s Co-founder and Managing Partner Antoni Trenchev commented: “The recent FinCEN Files illustrated quite graphically just how inefficient regulators can be when dealing with mainstream banking, which they’ve handled for decades, so how can we expect them to regulate a space they are not yet familiar with? I support the USTRWG’s approach fully — if regulators are to understand and effectively regulate digital finance, there must be dialogue. It makes me proud to be on the side of the fence starting this conversation. If anything, it says a lot about how mature and professionalized our industry is becoming.”

What to Watch for Next Week:

• Can Bitcoin sustain its new highs?
• Will altcoins grow with BTC or at the expense of it?
• Which public company will be next to announce a Bitcoin treasury?