Podcast Summary
Significant crypto developments this week: Bitcoin hits new all-time high, Bitcoin ETF debuts, PoolTogether introduces v4, DraftKings joins Polygon, Wu Tang album accessible via DAO
This past week saw numerous significant developments in the crypto space. Bitcoin reached new all-time highs, surpassing its previous record of $63,500, with the Bitcoin ETF making its debut. PoolTogether, a popular DeFi project, introduced its v4, offering a no-loss lottery experience and whale-proof prizes. Additionally, DraftKings, a $40 billion public company, joined Polygon. The crypto market has been eagerly anticipating these events, and their occurrence has led to a surge in excitement and investment. The week was also marked by the Wu Tang album becoming accessible to the public through a DAO. These developments underscore the growing momentum and innovation in the crypto world.
Bitcoin and Ethereum surpassing traditional currencies and financial institutions: Bitcoin is now the 13th largest world currency, surpassing the Swiss franc. Ethereum's market cap exceeds JPMorgan, making it larger than all global banks. Ethereum's price increased by 14.5%, while Bitcoin saw an 11% increase. Ethereum's growing recognition as a reserve asset, EIP 1559, and upcoming merge are bullish factors.
Both Bitcoin and Ethereum are making significant strides in the world of global finance. Bitcoin has recently surpassed the Swiss franc to become the 13th largest world currency by market cap, with a total value greater than all outstanding Swiss francs. Ethereum, on the other hand, has surpassed the market cap of JPMorgan and is now larger than all global banks. Ethereum's price had a particularly good week, with a 14.5% increase, while Bitcoin saw an 11% increase. The dynamics between Bitcoin and Ethereum are interesting, with Ethereum putting up a fight against Bitcoin in the Bitcoin to ETH ratio. The speaker is increasingly bullish on Ethereum, feeling that it's only a matter of time before it exceeds Bitcoin's market cap due to its growing recognition as a reserve asset, the implementation of EIP 1559, and the upcoming merge. However, it's important to note that the recently approved Bitcoin futures ETF may not have the same impact on Bitcoin's spot market as a spot-based ETF would.
Bitcoin ETF Approval: Institutional Adoption and Future Price Appreciation: The recent Bitcoin ETF approval signals institutional adoption, potentially leading to increased price movements. Ethereum's merge and DeFi's growth are also contributing to market strength, with DeFi's total value locked at an all-time high of $100 billion.
The recent approval of a Bitcoin ETF in the US is just the beginning of potential price appreciation for Bitcoin. Institutional adoption of Bitcoin through the ETF is expected to increase in the future, leading to more significant price movements. However, the impact on Bitcoin's price may not be immediate, as some institutions have yet to move their funds into the ETF. The discussion also touched upon the potential impact of Ethereum's merge and the ongoing growth of DeFi, which is outpacing older projects and protocols. The total value locked in DeFi has reached an all-time high of $100 billion, and while some DeFi 2.0 tokens are making a run, the blue chip DeFi tokens have remained relatively flat. The ETH/DPI ratio is currently at 0.084, leading to a revised bottom call for ETH from $0.13 to $0.013. Overall, the market is showing strength, particularly for Ethereum, and the bull run shows no signs of stopping.
Ethereum's Growing Value and Adoption: Ethereum's value has appreciated significantly, transaction fees are mostly being burned, DeFi total locked value is at an all-time high, bullish sentiment continues, and Ethereum's role as a key player is becoming evident in the $3 trillion crypto market.
Ethereum (ETH) is gaining significant value and adoption in the crypto market, with its role as a denominator for investments and its sustainable economics. The value of ETH has appreciated significantly in the past month, with new all-time highs in Bitcoin, DeFi, and the Ethereum Bed Index. Ethereum's transaction fees, now worth over $1 billion per month, are mostly being burned through Ethereum Improvement Proposal (EIP) 1559, benefiting ETH holders. With the growing adoption of Ethereum and its layer 2 solutions like Arbitrum and Optimism, the total locked value in DeFi is also at an all-time high. The bullish sentiment towards Ethereum continues to grow, and it's expected to reach a $100 billion total locked value in the near future. The total value of all crypto is now almost $3 trillion, and Ethereum's earnings and development make a strong case for its value. Other assets and projects like Polygon are also making significant progress, with Polygon reaching 100 million unique active addresses. Overall, the crypto market is experiencing significant growth, and Ethereum's role as a key player is becoming increasingly evident.
DeFi Market's Growth and Innovation: Polygon relieves Ethereum traffic, Matcha offers free gas fees, Alchemix offers self-paying loans, Future Swap aims for 10x liquidity, and ENS simplifies decentralized website access, all driving DeFi market growth.
The DeFi (Decentralized Finance) space is experiencing significant growth and innovation, as evidenced by the success of projects like Polygon and the launch of new applications like Future Swap and Alchemix. Polygon, in particular, is gaining attention for its ability to relieve traffic from the main Ethereum chain. Elon Musk, the meme lord and tech entrepreneur, even jumped on the bandwagon with a meme depicting a couple watching the price of Bitcoin and Ether soar. The meme underscores the current obsession with cryptocurrencies and the DeFi market. Another exciting development is Matcha, a DEX (Decentralized Exchange) aggregator, which offers free gas fees for trades exceeding $5,000 and provides the best possible price and liquidity across various chains. Alchemix, on the other hand, is a new DeFi app that offers self-paying loans, allowing users to spend and save at the same time, with no risk of liquidation. Future Swap, a perpetuals protocol, recently went live on the mainnet and aims to offer 10 times more liquid markets and 30 times more capital efficiency. The protocol is fully composable and supports exotic assets like NFTs. ENS (Ethereum Name Service) is also improving, making it easier to access decentralized websites by using doteth domain names in web browsers. These developments and more are contributing to the all-time highs in the DeFi market, demonstrating the immense potential and growth in this space.
New opportunities in crypto: DAOs and investments: Wyoming allows DAO registration, bridging the gap between decentralized entities and traditional businesses, and investments are flowing into various areas of crypto, including protocols, DeFi, NFTs, and mining, with innovative projects like Obel and Polynomial pushing the boundaries of decentralization and aggregation.
The crypto space is continuously evolving and expanding, reaching new milestones and areas, such as decentralized autonomous organizations (DAOs) and cross-chain technologies. The Wyoming state website now allows for DAO registration, bridging the gap between decentralized entities and traditional businesses, potentially leading to federal recognition. Additionally, investments are pouring into various areas of the crypto ecosystem, including protocols, decentralized finance (DeFi), new funds, NFTs, and mining. Innovative projects like Obel and Polynomial are making strides in decentralization and aggregation, respectively, contributing to the growth and maturity of the space.
Crypto Industry's Growth and Investment: Element Finance leads DeFi with fixed-rate loans, Bitwise's Polygon fund offers institutional exposure, large funds raise for crypto investments, FTX and Candy Digital secure substantial investments, crypto sector attracts massive attention and investment
The crypto industry is seeing significant growth and investment, with various players making strides in areas like decentralized finance (DeFi), governance models, and non-fungible tokens (NFTs). Element Finance is pioneering fixed-rate loans in DeFi, while Bitwise's Polygon fund offers institutional investors exposure to the MATIC ecosystem. Funds like Variant, Galaxy Digital Interactive, and 16z are raising large amounts to invest in the crypto space. Companies like FTX and Candy Digital are also securing substantial investments, with FTX reaching a $25 billion valuation. The crypto sector is attracting massive attention and investment, with many established players and newcomers vying for a piece of the action.
NFT Industry's Growth and Mainstream Adoption: The NFT industry is experiencing explosive growth, with the Proshares Bitcoin Strategy ETF's approval marking a significant mainstream development. Job opportunities are increasing, making it an exciting time for those interested in crypto careers.
The NFT industry is experiencing explosive growth, with new companies and raises happening across various subcategories, some of which are even going mainstream. For instance, the Proshares Bitcoin Strategy ETF, which is based on Bitcoin futures, has finally been approved after 8 long years. However, it's important to note that this is a futures-based ETF, meaning it tracks the price of the next coming Bitcoin futures contracts, rather than the spot price. While this is a significant development, it's just the beginning as the crypto market continues to evolve and mature. Another key takeaway is the increasing number of job opportunities in the crypto space, with various companies and organizations actively hiring for various roles. So, if you're interested in exploring a career in crypto, now might be the perfect time. Overall, the crypto and NFT markets are witnessing unprecedented growth, and it's essential to stay informed and adapt to the changing landscape.
Bitcoin Futures ETF: Hidden Costs and Disadvantages: Buying a Bitcoin Futures ETF involves complex structures, potential fees, and losses, and may not directly translate to Bitcoin demand. Consider buying Bitcoin directly or waiting for a spot Bitcoin ETF.
Investing in a Bitcoin Futures ETF, such as the recently approved ProShares Bitcoin Strategy ETF, comes with hidden costs and potential disadvantages compared to buying Bitcoin directly on a spot market. The ETF's structure, which involves rolling into the next futures month and dealing with price discrepancies called contango, can lead to fees and losses for investors. Moreover, the ETF's demand may not translate directly to Bitcoin demand, and intermediaries and scalpers may benefit from the roundabout nature of the ETF. While the approval of a Bitcoin Futures ETF is a step in the right direction for Bitcoin adoption, investors should be aware of the potential risks and consider the advantages of buying Bitcoin directly on a spot market or waiting for a spot Bitcoin ETF. The SEC's approval of the ETF came with a warning to carefully weigh the potential risks and benefits, but it would be beneficial for the SEC to acknowledge and address the hidden costs and complexities of this type of structure.
Regulatory Familiarity and Strategic Partnerships Shape the Future of Crypto Finance and Digital Collectibles: Regulatory approval is crucial for crypto projects, with established institutions having an advantage due to regulators' familiarity. Strategic partnerships and user-friendly experiences also play significant roles in shaping the future of crypto finance and digital collectibles.
Regulators are more likely to approve ETF proposals from established institutions due to their familiarity and regulatory experience with these organizations. Grayscale's push to convert its GBTC fund into a Bitcoin ETF is a strategic move to leverage their existing assets and influence in the industry. The approval of the VanEck ETF, which aligns with the interests of incumbent institutions, further emphasizes this trend. Meanwhile, the Coinbase NFT platform's announcement showcases a more decentralized and open approach, allowing users to mint and sell NFTs across various chains and wallet solutions. The partnership with the NBA marks a significant milestone in mainstreaming NFTs, providing an easy entry point for users who may not be familiar with the crypto ecosystem. These developments highlight the complex dynamics between regulation, innovation, and market demand in the crypto space. Regulators' decisions can significantly impact the growth and direction of various crypto projects, making it crucial for companies to navigate these regulations effectively. In summary, the approval of the VanEck Bitcoin ETF and the Coinbase NFT platform's announcement underscore the importance of regulatory familiarity, strategic partnerships, and user-friendly experiences in the crypto industry. These trends are shaping the future of crypto finance and digital collectibles, making it an exciting time for investors and enthusiasts alike.
DAO buys Wu Tang album from infamous hedge fund manager: Decentralized organizations like PleaserDAO can bring people together and share valuable cultural assets, contrasting the exclusivity and destruction attitude of traditional entities.
The story of PleaserDAO buying the one-of-a-kind Wu Tang album from the infamous hedge fund manager Martin Shkreli is a perfect representation of the positive shift in perception towards crypto and decentralized organizations. This juxtaposition of a DAO of "homies" purchasing a rare cultural artifact from a scumbag hedge fund manager is exactly the kind of positive PR that crypto needs. The Wu Tang album, now owned by PleaserDAO, was originally famously auctioned off for $2,000,000 as a middle finger to the music industry middlemen before the advent of blockchain and crypto. Shkreli, who is currently in jail for securities fraud, had previously bought the album and notoriously refused to let anyone else listen to it. PleaserDAO, however, plans to make the album more accessible to the public through listening parties, gallery exhibitions, or even allowing fans to own a piece of it. This contrasts the hedge fund manager's attitude of destruction and exclusivity, showcasing the potential of decentralized organizations to bring people together and share valuable cultural assets.
Polygon-DraftKings Partnership and Facebook's Stablecoin on Ethereum: Major companies like DraftKings integrate with blockchain networks like Polygon, deploying IP and resources, while Ethereum's neutrality attracts Facebook's stablecoin deployment.
The crypto space continues to see significant partnerships and integrations between major companies and blockchain networks. One such example is the strategic partnership between Polygon and DraftKings, a $40 billion publicly traded sports betting company. DraftKings is not only deploying some of its IP and licensing on Polygon but also becoming a validator on the network. This alignment of incentives is a smart move as it pairs significant capital and resources with the Polygon network. Additionally, Facebook's recent deployment of a stablecoin on Ethereum serves as a reminder of Ethereum's credible neutrality and the difficulty of building out similar infrastructure from scratch. These developments underscore the growing importance of blockchain technology and its potential to disrupt various industries.
Facebook's past actions raise concerns for crypto community: Facebook's history of questionable business practices and opposition from regulators pose challenges for their entry into the crypto space, undermining trust and the decentralized nature of digital currencies
While Facebook may have technical talent, their ethos and past actions raise concerns for the global community. Instances like extorting game developers and rug pulls have damaged their reputation, making it difficult for them to be trusted in the creation of a decentralized digital currency. Regulators, such as Elizabeth Warren, have already expressed opposition to Facebook's entry into the crypto space. The crypto community believes that crypto could be the solution to the issues with big tech and centralized platforms, but Facebook seems determined to maintain control. A notable example is the refusal of a CryptoPunk owner, Richard, to sell his punk for the record-breaking bid of $10,000,000, emphasizing the emotional connection and personal value placed on the digital asset.
Crypto and NFTs: Regulation and Evolution: David missed an opportunity to increase the value of his $10M CryptoPunk sale using reverse psychology. Valve banned NFTs, while Epic welcomed them. China and the US have opposing views on crypto. Ross Ulbricht uses NFTs for charity from prison.
The world of cryptocurrency and NFTs continues to evolve with significant events and decisions shaping the landscape. For instance, David sold a CryptoPunk JPEG for $10,000,000 but later regretted not using reverse psychology to increase its value. Meanwhile, Valve Entertainment, a major gaming platform, banned NFTs and crypto games, while their competitor, Epic, welcomed them. This game theory of regulation unfolds at the nation-state level, with China and the US having opposing views on crypto. Ross Ulbricht, a notorious figure from the Silk Road marketplace, is now using NFTs to raise funds for charities from his jail cell. The ongoing developments highlight the importance of understanding the dynamics of this rapidly changing industry.
Politicians and Media Embrace Crypto: Politicians and media are increasingly adopting crypto, driven by its incentive mechanism and influence on mainstream society
The intersection of politics and crypto is becoming more significant, as evidenced by politicians like Andrew Yang embracing crypto and creating NFTs. This trend is expected to continue, with media publications like The Economist also jumping on the bandwagon by auctioning off NFTs of their magazine covers. Crypto's incentive mechanism, which rewards learning, advocacy, and coverage, is driving this adoption and spreading crypto's influence further into mainstream society. It's a self-replicating and energy-producing "life form" that is propagating itself through the meme layer of humanity. Jack Dorsey, the CEO of Square, is another notable figure who has caught the crypto bug, specifically for Bitcoin. Square is even considering building a Bitcoin mining system, further demonstrating the growing influence of crypto in the traditional world.
Crypto Community Debates Focus on Bitcoin vs DeFi and Ethereum's Proof-of-Stake: Some in crypto community believe Square is missing out on DeFi and Ethereum opportunities, while Coinbase proposes a digital asset policy for regulation under a new framework
There's a growing sentiment in the crypto community that some companies, like Square, are focusing too much on Bitcoin and missing out on the broader opportunities presented by decentralized finance (DeFi) and Ethereum's proof-of-stake model. The discussion also touched on the potential rebranding of Facebook, which some suggest could be related to their metaverse ambitions. Coinbase, on the other hand, has proposed a digital asset policy that suggests regulating digital assets under a new framework and designating a single regulatory body for digital asset markets. The conversation also hinted at an ongoing regulatory battle between regulators and centralized crypto lending companies.
New York's careless redactions reveal regulatory actions against crypto companies: Regulatory actions against crypto companies continue, highlighting the need for careful document handling and clearer regulations for the industry.
Regulatory actions against specific crypto companies in New York, such as Celsius and Nexo, have been revealed through carelessly redacted documents. This incident underscores the importance of paying close attention to document names and calendar sharing. The regulatory landscape for crypto is evolving, with some countries like Australia showing promising signs of clearer regulations and more welcoming attitudes towards the industry. The crypto industry is asking for regulatory clarity and friendly legislation, as opposed to shutting down centralized intermediaries. A recent development in New York serves as a reminder of the ongoing tensions between regulators and the crypto sector. Additionally, the placement of a large ape statue in front of the NYSE, along with bananas being thrown, is a symbolic representation of the ongoing battle between traditional finance and crypto.
The merging of society, crypto, and finance: Institutions expand involvement, political appeal rises, and scalability solutions improve, symbolizing the blurring lines between traditional finance and crypto
The intersection of art, culture, and finance continues to blur as we enter a new era. The shooting of Harambe and the subsequent internet reaction, culminating in a statue of the gorilla being placed in front of the stock market, symbolizes the merging of society and crypto into the financial world. Institutions, such as banks and the CBOE, are expanding their involvement in crypto through acquisitions and proposals. Even traditional financial figures, like the CEO of BlackRock, are acknowledging the opportunities in digital currency, despite their criticisms. Uniswap's hiring of a former Obama spokesperson and Axie's rise to a top 500 website in the US further illustrate the increasing political and mainstream appeal of decentralized finance. Arbitrum, an Ethereum scaling solution, is making transactions on Ethereum cheaper and faster, making it an attractive option for developers and users alike. These developments demonstrate the evolving relationship between traditional finance and the crypto world, and the continued growth and integration of decentralized finance.
Exploring the Ledger Ecosystem and the Future of Crypto Transactions: The Ledger ecosystem offers a one-stop solution for crypto users, allowing them to buy, stake, swap, display NFTs, and connect to various DeFi apps. The future of business transactions might shift from B2B to DAO-to-DAO, and the crypto market's total addressable value could surpass government spending.
The crypto world is evolving at a rapid pace, and tools like Arbitrum, Ledger hardware wallets, and Ledger Live app are making it easier for users to access DeFi and NFT experiences. The Ledger ecosystem goes beyond just a secure hardware wallet, allowing users to buy crypto, stake assets, swap on DEXs, display NFTs, and connect to various DeFi apps all in one place. NFTs are being compared to the early cave paintings of the metaverse, and while they may evolve, platforms like Coinbase are helping to onboard the mainstream audience. However, it's important to remember that social media and web 2.0 platforms are essentially our landlords, and we don't truly own the content we create. The future of business transactions might shift from B2B to DAO-to-DAO, creating a more interconnected and aligned ecosystem. Lastly, David Greider raises an intriguing question: what if the total addressable market for crypto isn't just compared to digital gold or the internet sector, but to government spending? The crypto world is expanding its reach and could potentially consume all financial assets that exist.
The potential market size for crypto extends beyond Earth: Ethereum seen as a settlement layer for the multiverse, potential to tokenize and trade celestial bodies, success relies on altruistic people and effective regulation, example: Wu Tang NFT and DAO sharing cultural artifacts
The potential market size for crypto is vast and limitless, extending beyond Earth to the solar system, galaxy, and even the multiverse. Ethereum, in particular, is seen as a settlement layer for the multiverse, with the potential to tokenize and trade the value of anything, including celestial bodies. However, the success of this industry relies heavily on the people involved, who must be altruistic and focused on doing good for the world, rather than becoming toxic or parasitic. The regulatory landscape also needs to be streamlined and effective to protect investors. A memorable example of this potential is the Wu Tang album NFT and the DAO's mission to share cultural artifacts with the world. The success of crypto depends on the collective effort to create a positive and inclusive culture.
The positive culture of Ethereum and crypto: Ethereum's transparency and collaborative nature fosters a positive society, alleviating concerns of regulatory interference and promoting beneficial practices.
The transparency and collaborative nature of blockchain technology, specifically Ethereum, incentivizes a positive and honorable society. The culture surrounding Ethereum encourages checking and accountability, creating a social system that guides individuals towards collaborative and beneficial practices. Additionally, the substance and progress of the 2021 bull run have alleviated concerns regarding regulatory interference and nation-state control. Overall, the long-term potential of crypto is seen as inevitable, with the ability to adapt and overcome any obstacles that may arise. The meme of the week further emphasizes the jovial and innovative spirit of the crypto community, poking fun at NFTs and the tax optimizer mentality.
Avoiding Extremes in Tax Planning: Find a trusted advisor to help navigate tax complexities and balance tax planning with other financial priorities.
While it's important to consider taxes in your financial decisions, over-emphasizing them to the point of neglecting other opportunities can be detrimental. The speaker acknowledges his own tendency to focus too much on tax optimization and warns against becoming overly fixated on taxes, to the point of disregarding other aspects of financial planning. He also advises against the opposite extreme of ignoring taxes entirely. Instead, the speaker suggests finding a trusted financial advisor or accountant to help navigate the complexities of tax law and ensure that all necessary taxes are paid while maximizing opportunities for growth. This approach allows individuals to focus on their investments and business ventures without undue concern for taxes, while still ensuring compliance with the law. The speaker emphasizes that this discussion is not tax or financial advice, but rather a reflection on the importance of striking a balance between tax planning and other financial priorities.
