January 2022
Happy New Year!
This month marks the first anniversary of the Crypto Investor Briefing newsletter. We express a sincere thank you to all the subscribers for your support! As one among many various crypto-related newsletters, our main focus is to provide readers with the most relevant, medium- to long-term view news bites that are more accessible. Our aim is to help our readers gain better insight into the crypto sector and make appropriate investment decisions without spamming their inboxes too often.
For short-term, technical, pricing-related news, our Crypto Market Outlook publication is suitable for traders. You may find this on the Tokenomy Blog.
Crypto will likely make further strides this year. We expect to see more adoptions in both the public and private sectors and clearer regulatory guidance from governments around the world. We will keep you informed continuously as the market makes more exciting developments in 2022.
Christian Hsieh
CEO, Tokenomy
Crypto growth snapshot in 2021: Bitcoin miners generated more than $15 billion in revenue in 2021, a 206% increase from 2020. Crypto companies raised over $25 billion in venture funding, a 719% increase year-over-year in total funding since 2020. Centralized crypto exchanges reported $14 trillion in trading volume in 2021, a 689% increase from 2020’s trading volume. Long-term Bitcoin holders (held over 155 days) increased their holdings by 16% over 2021. These holders own over 70% of the Bitcoin supply.
Myanmar’s National Unity Government (NUG), a shadow government run by the supporters of Aung San Suu Kyi, announced Tether’s USDT as an official currency for local use. In an official media post, the finance minister claimed that USDT would offer much-needed trade and transaction efficiency. The NUG is currently raising $1 billion in funds, and the adoption of the USDT comes as a measure against the current military regime. Cryptocurrency use was prohibited by the Myanmar Central Bank last May; the NUG’s adoption of the crypto stablecoin shows how these digital assets are not just reshaping financial markets but also serving as political tools.
90% of the total Bitcoin supply has now been mined, leaving only ~2.1 million Bitcoin unmined. Bitcoin block #714,032, which was mined at 23:26 UTC on December 13, 2021, rewarded its miner with 6.25 BTC as per the current issuance schedule.
Bitcoin mining has fully recovered from China’s mining ban. This was measured by looking at the hash rate, an industry term used to describe the computing power of all miners in the Bitcoin network. The Bitcoin hash rate reached a new all-time high in December 2021. The network has risen by over 114% in five months, fully recovering from the more than 50% drop after the Chinese crackdown.
Traditional financial services firms are considering crypto-backed loans for investors. Fidelity Digital Assets will allow its institutional customers to use Bitcoin as collateral for cash loans. Among a handful of tier-one U.S. banks, Goldman Sachs is figuring out how to use Bitcoin as collateral for cash loans to institutions. However, they will likely not touch physical Bitcoin, opting for synthetic crypto assets instead.
Fintech and digital payments giant Square Inc. has changed its name to Block in a move that reflects changes to its business. While not explicitly mentioned, the company is likely going to focus more closely on delivering Bitcoin and blockchain-based services. The announcement came after Jack Dorsey stepped down as the CEO of Twitter, showing that Block will likely be his highest priority.
Next-generation crypto payment adoption begins as WhatsApp launches a new pilot that lets a “limited number” of people in the US send and receive money from within a chat using cryptocurrency. The feature is powered by Novi, Meta’s digital wallet with payments made using Pax Dollars (USDP), a stablecoin pegged to the US dollar issued by Paxos.
Private equity giant KKR makes a move into crypto by leading an investment in Anchorage Digital, a federally-chartered crypto bank in the U.S. Anchorage has raised $350 million in a Series D funding round. This is KKR’s first direct equity investment in a crypto firm. Other investors include Goldman Sachs, BlackRock, PayPal Ventures, Andreessen Horowitz (a16z), Alameda Research, Apollo credit funds, GIC (Singaporean sovereign wealth fund), GoldenTree Asset Management, Wellington Management, and private equity firm Thoma Bravo.
A physical Bitcoin fund got approval in Singapore. Fintonia Group has launched two Bitcoin funds for professional investors. The Bitcoin Physical Fund purchases actual Bitcoin to provide investors with direct price exposure, and the Secured Yield Fund allows Bitcoin holders to obtain cash by putting their BTC as collateral.
Blockchain.com acquires Latin American crypto investment platform SeSocio. The deal marks the company’s largest acquisition to date and expands its ambitions in South America. SeSocio is reportedly one of the largest cryptocurrency businesses in Latin America that offers crypto savings and asset management services.
Crowdfunding pioneer Kickstarter will build a decentralized version of its platform on the Celo blockchain. The new platform will be controlled by a new, independent organization with a decentralized governance structure. While not quite a decentralized autonomous organization, this structure gives Kickstarter a way to ease into decentralization.
Gold performance in 2021 has demonstrated its worst year since 2015, shocking investors looking for a store of value.
- Over 1.6 billion people across 37 countries are suffering from double-digit inflation of their currency. At the minimum listed 10% inflation, their purchasing power will halve in just 8 years. Investors are looking for alternative stores of value that can catch up with the pace of inflation. Will Bitcoin be the answer? This research by Blockdata looks into the Bitcoin network and the possible scenarios that it could scale up to match the transaction volume of Visa or Mastercard.
- New research published in Nature reveals that top 10% of NFT traders perform 85% of all transactions. Though media reports consistently trumpet the sale of million dollar NFTs and record-breaking prices, the team found that $15 was the average sale price of 75 percent of NFTs, with only 1% of NFTs reaching prices higher than $1,500.
- Ethereum creator Vitalik Buterin outlined a “plausible roadmap” for the blockchain a year after the Ethereum 2.0 launch. Titled “Endgame,” Vitalik Buterin has put forward a hypothetical idea of a “big blockchain” that is trustless and censorship-resistant but indefinitely accompanies some of the common trade-offs such as scalability and centralization when it comes to block production.
- Special Reports: Messari’s 2022 Crypto Thesis Report is here, Bloomberg’s Crypto 2021 in Review is here, and Bitwise Asset Management’s DeFi Investor Primer can be found here.
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