BITCOIN BOX SCORE
Market Capitalization: $841.1B
Hash Rate (90 days): 454.9 EH/s
Transactions (30 days): 15,804,204
Network Fees (day): 135 sat/vB
The Federal Reserve is poised to play Santa this year, hinting that rate cuts are ahead.
Projections point to 75 basis points in rate cuts in 2024, a substantial increase from the 25 basis points estimation from just three months ago.
This possible loosening of monetary policy has markets buzzing with optimism. The Dow Jones Industrial Average soared, surpassing 37,000 for the first time.
The markets may continue their euphoria in the short term, but the long-term implications loom large, especially the return of inflation. It is important to remember, as economist Peter St. Onge recently put it so well:
The Fed isn't an economic organization, it is a political organization. Given a choice between the American economy and Joe Biden's re-election, it's an easy choice.
Amidst this economic maneuvering, bitcoin's dollar exchange rate could continue to rise.
Yet, its real allure is more significant than a higher exchange rate with a fiat currency melting in value. Bitcoin is money that remains untainted by the political machinations of institutions like the Fed, presenting something unique in our ever-politicized economy.
With that, let's dive into the news.
Fed “Doomsday” book sees the light of day 📓
The Federal Reserve's internal "Doomsday Book," a guide for emergency actions during economic crises, has been revealed. Among other things, it shows that the New York Fed has a rather flexible interpretation of its authority. This disclosure could prompt legislative discussions to ensure the Fed operates within its intended constraints and balances its crisis response powers with legal boundaries.
Now we know what they really think.
The Doomsday Book provides this main insight: During times of crisis, the leaders of the Federal Reserve expect to operate without regard for the law and instead adopt an "anything goes" mentality.
If only there was an alternative money system that was transparent and based on broad consensus. 🤔
Elizabeth Warren on the warpath again 🐎
U.S. Senator Elizabeth Warren introduced a bill called the "Digital Asset Anti-Money Laundering Act," that targets the alleged use of digital currencies in illicit activities like money laundering and drug trafficking. The bill advocates for stricter regulation and reporting requirements. Backed by a coalition within the Banking Committee and various anti-crypto organizations, the bill is a direct attack on individuals and institutions that use cryptocurrencies in the United States.
This is about more than one bill.
Per Coin Center, the bill is "an opportunistic, unconstitutional assault on cryptocurrency self-custody, developers, and node operators." Thankfully, Elizabeth Warren is notorious for sponsoring bills that won't pass.
Regardless of its chances, all Americans should oppose the bill because it is a clear attempt to shift the Overton Window in favor of less financial privacy and more financial surveillance.
“Basel III Endgame requirements,” coming soon? 🏦
The Senate Banking Oversight Committee met with top U.S. bank CEOs about "Basel III endgame requirements" proposed by U.S. regulators. Such requirements would tighten capital restrictions on banks and require banks with $100 billion or more in assets to hold an additional $2 of capital for every $100 lent.
Artificially raising the cost of credit has... costs.
The proposed regulations would raise the cost of credit across mortgages, small business loans, and more. Costs would be disproportionally felt by small businesses and individuals as compared to corporations. This move would also risk exacerbating the "too big to fail" phenomenon, leading to increased taxpayer liability and systemic risk.
S&P Global releases stablecoin ratings 📈
S&P Global launched a stablecoin stability assessment. It rates eight stablecoins. None received top marks, and two received the lowest possible score. This assessment is the first of its kind for stablecoins by the renowned rating agency, which considers factors such as asset quality, governance, liquidity, and risk.
Stablecoins are here (for now).
As stablecoins increasingly take on the role in global finance traditionally held by eurodollars, expect more scrutiny from rating agencies and regulators.
BITCOIN ADOPTION CONTINUES
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is auditable.
In finance, transparency and accountability often seem like abstract ideals rather than attainable goals. Just consider the Federal Reserve, which has a secret “Doomsday Book” that was just revealed.
One way bitcoin sets itself apart from traditional money is with its transparency and ability to be audited. Bitcoin isn’t just more auditable, it’s perfectly auditable, and an audit can be done by anyone with a computer.
About every 10 minutes, the network produces a new block of transactions and adds it to the ever-growing chain, verifiable by anyone. Every historical bitcoin transaction can be verified, going all the way back to when bitcoin began.
This perfect transparency extends to the amount of bitcoin in circulation, too. Today, there are about 19,569,880.53 bitcoins in existence. Anyone can verify and monitor that number as it increases with each new block as it is mined.
The supply will continue to grow until it reaches the hard limit of about 21 million bitcoins. This stands in sharp contrast to dollars – nobody really knows how many dollars there are in circulation and estimates vary so widely that it’s anyone’s guess.
Moreover, every transaction itself is also viewable by anyone. (Sorry Senator Warren, but bitcoin is pretty much the worst money laundering tool imaginable.) Each transaction and wallet address are openly visible on the blockchain.
Bitcoin Dominance is the ratio of bitcoin’s market cap to the market caps of all cryptocurrencies. “In 2018, amongst the rising popularity of altcoins like ETH, XRP, SOL, ADA, and many others, bitcoin dominance fell as low as 37%. The following year, as altcoins crashed, BTC dominance rose all the way back to 71%.” - BitPay.
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.