🚀 Bear Necessities
Fed Coin Fears, Soccer Non-Fungi-balls, and Teen Traders
May 21st, 2021 | Sign Up
Good Morning. Whether or not you think the bull market is still intact, the anti-crypto crowd is enjoying their victory lap after Wednesday’s crash, dubbed as Black Wednesday. Then again, Bitcoin has been declared dead over 400 times now.
⬆️ Bitcoin: $40,526 ( +10.46%)
⬆️ Ethereum: $2,768 ( +13.52%)
⬆️ Dogecoin: $0.3982 ( +20.57%)
⬆️ Aave: $467 ( +12.76%)
⬆️ SushiSwap: $15.12 ( +15.20%)
Prices as of 11 PM EST 5/20, data from FTX
Markets: Crypto and stocks made a small rally towards the end of the week, with the Nasdaq up 1.77% (that’s significant in stock land) and the total cryptocurrency market cap regaining 13.5% since Wednesday’s crash.
Covid: Europe has recorded a 60 percent drop in new coronavirus infections over the past month, while Argentina orders a nine-day lockdown as the South American country experiences another wave of cases.
World: Israeli Prime Minister Benjamin Netanyahu’s Security Cabinet voted Thursday in favor of halting their military activity in the Gaza Strip, and Palestinian group Hamas agreed to a "mutual and simultaneous" cease-fire. Palestinians celebrated in the streets as the decision came into effect today.
Supercycle or Bear Market?
Zhu Su, cryptocurrency thought leader and co-founder of Three Arrows Capital, gave the bulls some hope yesterday by tweeting that the supercycle was still intact:
∞ CO฿IE @CryptoCobainIt was only 2mo ago I tweeted "reduce your leverage" 40 times in a row, I'm not going to do it again because either you don't listen to me or the OI apes are not following me You're supposed to ride leverage hard early in a bull run, and reduce risk as the ruggability increases
Usually, the term supercycle refers to multiple decade-long bullish runs of commodities. Since this crypto bull-run has started, some people in the community have been applying the term to cryptocurrency markets, citing that mass mainstream and institutional adoption of crypto will spur a “super” cycle compared to the short-lived bull cycles of the past.
After the events of Black Wednesday where nearly $500 billion was wiped from the total cryptocurrency market cap, some investors say we have officially entered a crypto bear market, while others say that this correction is just a natural part of the supercycle.
Fed Coin Incoming?
Everyone is hopping onto the blockchain bandwagon, even the United States Government. In a move investors have long speculated about, the Federal Reserve announced that it plans to release a research paper this summer, exploring the potential of a central bank issued digital dollar, called a CBDC (Central Bank Digital Currency).
Head of the Federal Reserve, Jerome Powell, was careful not to reveal any details of the agency’s plans regarding the currency. Jerome did, however, say that The Fed has been “carefully monitoring and adapting” to innovations in the payments technology space. Speaking specifically of CBDCs he had this to say:
While various structures and technologies might be used, a CBDC could be designed for use by the general public
Make of that what you will.
Proponents of CBDCs argue that they’re a crucial step for the legitimacy of the crypto industry and can serve as a seamless bridge between traditional and decentralized finance. A take from iamDCinvestor on what a good CBDC implementation might look like:
Those against CBDCs believe that central banks issuing digital currencies will defeat the purpose of Satoshi’s original vision for cryptocurrency, allowing more opportunity for the government to surveil its citizens. This group does not want to bend the knee to the king of the old.
MLS Plays With Non-Fungible Soccer Balls
MLS is dropping four NFT artworks surrounding this weekend’s highly-anticipated matches between the Portland Timbers and LA Galaxy on Saturday, and the Seattle Sounders FC and Atlanta United on Sunday.
Street-artist muralists from Secret Walls will represent each city as they face off against each other with 60 minutes to create the one-of-a-kind artworks. The battle will be livestreamed starting at 3pm (PT) today, Friday 5/21, on NFT marketplace Bitski and the pieces will be available for auction for 48 hours immediately following the competition.
In a press release, MLS SVP of media Chris Schlosser said:
The special NFT art collection is the latest evolution of Major League Soccer's commitment to celebrating the creativity in our sport and the permission to connect soccer with progressive and exciting art experiences. The live art battle, plus the modern take on a matchup poster, helps create a cultural moment that celebrates our League, and the two great MLS matches this weekend
Additional NFT’s by the artists will be made available in a limited window during the MLS matchup as well.
Addressing the growing concern over the carbon impact of Proof of Work blockchain consensus technology, the league says a portion of the proceeds will be used to offset carbon emissions, working with carbon offset app Aerial.is to make the environmental impact of the entire process completely carbon neutral.
In the near future, the move to Proof of Stake on the upgraded Etherium 2.0 network is estimated to decrease energy usage by up to 99.95%, making carbon impact practically a non-issue.
Teenage Mutual-Fund Ninja Traders
This week Fidelity announced that they will be releasing the Fidelity Youth Account, an investing and savings account for 13 to 17 year-olds. The no-fee account will allow teenagers to buy and sell stocks, ETFs, and Fidelity mutual funds. Sound familiar?
Fidelity is taking the educational angle according to a statement by Jennifer Samalis, senior vice president of acquisition and loyalty at Fidelity Investments:
Our goal for the Fidelity Youth Account is to encourage young Americans to learn through action and foster meaningful family conversations around financial topics
Of course, Fidelity and other firms targeting young investors could actually be a negative thing. The rush of young investors has recently contributed to bubbles and the rise of assets based on memes and pump-and-dumps instead of fundamentals. Teens new to investing may become turned off if they see this as the norm and suffer losses from unwittingly entering into high-risk investments. A little education goes a long way.
Thankfully, the youth account does not allow for option or margin trading, phew.
With more and more young people being interested in investing than ever before, expect trading firms like Fidelity to race to capture this new generation of investors. What was that old saying about taking candy from a baby?
Small Bitez 📰
Ark Investments published a solar + battery + bitcoin mining model that provides energy to the grid while also mining Bitcoin
New Securities and Exchange Commission (SEC) Chairman Gary Gensler said that the agency "should be ready to bring cases involving issues such as crypto."
Cryptocurrency company BlockFi accidentally sent millions in bitcoin to their customers, threatening to sue if they didn’t give it back
An anonymous donor has given The University of Pennsylvania’s Wharton Business School a $5 million Bitcoin donation
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