BITCOIN BOX SCORE
Exchange Rate $30,140
Market Capitalization $584.4B
Hash Rate (90 days) 355.9 EH/s
Transactions (30 days) 12,582,774
After months of doldrum, bitcoin and crypto seemed suddenly everywhere in the news again this week.
Even Fed Chair Jerome Powell contributed to the hype, stating that cryptocurrencies like bitcoin have "staying power."
Powell's statement and traditional finance's newfound appetite for bitcoin are curious. We've been stating that the Federal Reserve is in a tight spot for quite some time now. Powell knows that increasing interest rates is one way to combat rising inflation.
However, he also recognizes that doing so in a time of significant debt could trigger a series of financial crises, like the sharp fall in U.S. Treasury bonds we saw in 2020 or the bank failures this year.
Perhaps they've finally decided to give bitcoin the credence it deserves as incorruptible money whose adoption would not lead to senseless crises. Or not. Maybe they're just looking for a quick buck. Either way –you know the drill: stay humble and stack sats.
With that, let's dive into this week's news.
Traditional finance piles into bitcoin
Major financial institutions are increasingly entering the bitcoin and crypto ecosystem. BlackRock applied for a Bitcoin ETF, followed by similar moves from Invesco and WisdomTree. A new crypto exchange debuted, backed by Fidelity, Schwab, and Citadel Securities. Deutsche Bank is also seeking a digital asset license in Germany.
After years of dumping on bitcoin as a legitimate asset, traditional finance has pivoted significantly with these new offerings. Though many theories are floating regarding their intentions, it is safe to assume their reasoning is simple: they see a future in bitcoin and want to make money by "financializing" it via ETFs in classic Wall Street fashion.
Bitcoin dominance ratio breaks 50% 👀
Bitcoin's dominance, the measure of how much bitcoin makes up the total market capitalization of all cryptocurrencies, breached the 50% mark for the first time in two years.
It has surged more than 10% since this November, as other "alt-coin" projects have lagged due to inferior design, centralization, and mounting regulatory scrutiny within the United States.
Remember the "flippening?"
It has long been a narrative amongst alternative cryptocurrency promoters that the market cap of tokens like ETH would "flip" bitcoin, as "new tech" takes over the old. This year's events demonstrate the flaws in that narrative, as the investors flock to bitcoin and companies within the ecosystem continue to iterate in new and exciting ways.
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Recent bitcoin spot ETF applications signify that traditional financial players want in to the bitcoin ecosystem.
If these reach the market, some will claim a major win for bitcoin because traditional financial players, previously hesitant to enter the ecosystem, will onboard their clients by allocating part of their portfolios to bitcoin.
Banks and other traditional firms will also use these new vehicles to increase their exposure. Anticipating these positive developments, bitcoin's exchange rate is already rising.
Yet, for families and investors, a bitcoin ETF is not a substitute for holding bitcoin in self-custody.
Holding real bitcoin rather than a bitcoin-IOU is essential protection during elevated geopolitical and financial market risk periods.
Although custody is challenging, learning is better than simply giving up and channeling funds into an ETF that offers nothing more than price exposure.
Bitcoin securities products like ETFs don't allow typical retail holders to redeem the underlying asset. This restricts their ability to use bitcoin to exit a crisis with their wealth intact.
Given current geopolitical and market conditions, you cannot protect your wealth by simply allocating it into a security that tracks bitcoin’s price.
Unfortunately, we live in times where it behooves individuals to protect themselves from more than just the average financial crisis – and owning your bitcoin keys is the best way to do that.
Bitcoin is bitcoin. It is not a spot bitcoin ETF.
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Private keys are the fundamental means of exercising control and authority in the digital realm, bridging the gap between our physical existence and the digital world. They grant us the power to manage digital assets, including storage, transfer, and utilization, and the ability to decrypt secure information and validate digital identities.
That’s all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand what’s happening in the world of bitcoin. What did you think of today’s newsletter? Reply to this email and let us know what you’d like to see more of.
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