Traders have begun unwrapping tokenized bitcoins. The U.S. Treasury Department will keep a vigilant eye on digital innovations. And trading volumes on OKEx have plummeted.Â
Forced burn
Ripple Chief Technology Officer David Schwartz tweeted the community could force the burning of billions of the protocolâs XRP native tokens held in escrow to prevent the drop in price that would likely occur should those billions in frozen tokens ever flood the market. On Dec. 2 a Twitter user asked the CTO, âIf Nodes, validators and the community at large got together and we agree that itâs better for the community to burn the 50 billion XRP Ripple has in escrows, would that be possible?â Responding to the tweet, David Schwartz implied that majority rule would win in such a decision.
Innovation or risk?
The U.S. Department of the Treasury wants state and federal regulators to keep a vigilant watch on digital asset innovation, which could upset the balance of the current financial system. According to a report released on Thursday by the Financial Stability Oversight Council, digital assets are a âparticularly good exampleâ of both benefits and potential risks associated with innovation. The report highlighted the ambitions by nations around the world in their experiments with central bank digital currencies (CBDC) as a way to âenhance the global standing of their own currencies and enable faster payments.âÂ
Unwrapped wBCT
Wrapped bitcoin, the bitcoin-backed token on Ethereum now worth over $2 billion, has seen an increase in burns (or âunwrappingsâ) by some of its largest users as the Ethereum-based decentralized finance sector continues to cool. BitGo clients including Three Arrows Capital and Alameda Research are exchanging an increasing amount of their tokenized bitcoins minted earlier this year for real bitcoins as the bullish cryptocurrency market continues to center on bitcoin and Ethereumâs decentralized finance takes a back seat for now. In the months following DeFiâs red-hot summer when bitcoins were wrapped faster than they were mined, the sector has cooled significantly.
Not OK
A sharp drop in OKExâs trading volume and stablecoin reserves â tether in particular â may reveal an ongoing exodus of its users after the popular crypto derivatives exchange unexpectedly halted all crypto withdrawal activities for about five weeks. Data from analytics service CryptoQuant shows the amount of tether held in OKEx wallets has dropped to 6.69 million from 275.0 million between Nov. 25 and Dec. 1, down 97.6% in less than a week. At the same time, total daily trading volume on OKEx has declined significantly during the same time period â down approximately 67.7% from Nov. 25, according to data compiled by CoinDesk. The volume of tether traded on OKEx plunged 70%.
Mirror, mirror
The creators of stablecoin platform Terra announced the launch of the Mirror Protocol Thursday, a way to mint crypto assets that mimic the value of shares in publicly traded companies like Apple or Tesla. The new protocol will also bring a new liquidity mining opportunity to Terraâs Tendermint-based blockchain. Known as mAssets, these tokens will track the price of U.S.-based equities in the real stock market, using an oracle system thatâs able to check prices every six minutes. âThe retail investor is at the center of this growing demand for U.S. equities and global equity derivatives. The stock market is no longer the exclusive purview of Wall Streetâs suits, whether in New York, London or Tokyo,â Arrington XRP argues in its report.
Price point!
I was reading that CNBC story on the Dutch family that bet it all on bitcoin. In 2017, a small business owner sold all his assets â company, house and accumulated detritus â and moved his family of five into a van. âWe stepped into bitcoin because we wanted to change our lives,â Didi Taihuttu told CNBC.Â
Thatâs wild! The media also quoted Taihuttuâs price prediction for a $200,000 bitcoin by 2022. Heâs a man that acts on instinct and knows things in his gut. Itâs seemingly worked out for him so far. CNBC went on to quote several price predictions from the respected and respectable folk in crypto. Â
Mike Novogratz, CEO of merchant bank Galaxy Digital, reportedly said bitcoin could reach $60,000 by next year. While a Citibank report geared for institutional clients made the case that one BTC could change hands for $318,000 by December 2021. Thatâs really wild!
Unquoted was Bloombergâs recent, and more modest, prediction that bitcoin could hit $50,000 sometime next year. Thatâs more than double the price of bitcoinâs all-time high! And infers a $1 trillion market cap!
A lot of good data gets thrown into price predictions. Thereâs technical analysis of candles and wedges, there are surveys of high-net individuals and comparisons to similar movements in both bitcoinâs historical charts as well as analogue assets. (Want to understand bitcoin today? Study gold in the 1970s!)
But I wouldnât put much store in them. This time three years ago, computer whiz and self-declared madman John McAfee had such strong convictions that bitcoin would hit $500,000 within three years (this year, incidentally) he would ingest his genitals.Â
After years of target prices that were well off their mark, itâs reasonable to suggest that most claims on bitcoinâs future price are more gut than calculus, more wager than assured. Sometimes it pays off. But understanding that one BTC is always one BTC, youâll never be wrong.
