Monat: März 2023

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Over two-thirds of the Bitcoin supply has not moved in a year


Key Takeaways

  • Long-term holders continue to sit on their Bitcoin stashes
  • Two-thirds of the supply has not changed hands in the last year, despite rampant volatility and a collapse of the Bitcoin price
  • Over half the supply has not moved in 2 years or longer

“Supply squeeze” is a seductive phrase thrown around among Bitcoin enthusiasts. 

It refers to the predicted propelling upwards of the Bitcoin supply as a result of the supply cap – there will only ever be 21 million bitcoins – and a constant increase in demand. 

Whether this comes to fruition remains to be seen. But there does appear to be a growing cohort of Bitcoin investors who are holding. In fact, over two-thirds of the entire supply has not moved in over a year, an all-time high. 

To be precise, 67.9% of the Bitcoin supply has not moved in over a year. That is extremely high, especially when considering the last year have brought its fair share of scandals, including the respective crashes triggered by LUNA, Celsius and FTX. 

Combining these scandals with the most rapid monetary tightening in the wider economy, which have seen interest rates rise from near-zero to close to 5%, and the crypto market has been pillaged. 

Looking at the price action over the last 12 months, Bitcoin has fallen from $41,000 to $15,000 and is now trading at $28,000, with more than its fair share of ups and downs in between. And yet, two-thirds of the supply has been stagnant. 

Branching further out, over half the supply has now not moved in two years, close to 40% hasn’t moved in three years, while 28% has been stationary for 5 years. 

Of course, lost coins will be included in all these statistics. Bitcoin has been around since 2009, and that means people have died, and with them access to their coins has vanished. 

There are also simple cases of lost keys, people still roaming the Earth but with no access to their wallets. Let us not forget that Bitcoin was just a niche Internet plaything not so long ago, trading for less than $1 per coin. 

Not to mention, Satoshi Nakamoto’s mammoth stash of an estimated 1 million coins, or over 5% of the entire supply, remains untouched and included in the above stats. 

So make of it what you will, but Bitcoin still remains quite an illiquid market and with a dwindling supply, it is easy to see the narrative pushed by enthusiasts that if demand continues to rise, the price will only go upward. 

Of course, whether that demand will indeed continue to rise is another question entirely, and a much harder one to answer. 

The post Over two-thirds of the Bitcoin supply has not moved in a year appeared first on CoinJournal.

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Florida Governor Ron DeSantis seeks to ban CBDCs

Key takeaways

  • Florida’s governor has proposed a legislature that would prohibit the use of CBDCs.

  • The governor claims that the use of CBDCs would stifle innovations in Florida. 

  • President Biden’s administration is currently studying the advantages and risks of using CBDCs. 

Ron DeSantis wants to ban the use of CBDCs

Florida Governor and possible Republican U.S. presidential candidate Ron DeSantis has submitted a new legislative proposal in his state that would prohibit the use of a national central bank digital currency (CBDC) as money within the state. 

In a press release submitted on Monday, DeSantis claims that the use of CBDC in the state would stifle innovation as the Biden administration is seeking to weaponise the national digital currency. 

The governor wrote;

“Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle innovation and promote government-sanctioned surveillance.”

The State Chief Financial Officer, Jimmy Patronis, added that;

“Governor DeSantis is ahead of the curve when it comes to protecting individual rights. A Central Bank Digital Currency is the cornerstone of a federal government that could track each and every transaction that happens in the world. There would be no privacy, and if there is no privacy, there are no rights. In the same way, Florida is fighting back against the IRS, we need to fight back against this program. It’s how we protect freedom, liberty, and prosperity.”

The US government is studying the risks and uses of CBDC

The proposed law seeks to prohibit the use of a CBDC issued by any central bank in other parts of the world. DeSantis’s statement calls on other states to also adopt similar legislation.

This latest cryptocurrency news comes after President Joe Biden issued an executive order for the federal government to study the possible uses and risks of a CBDC in 2022. 

There are privacy concerns regarding the use of CBDCs. DeSantis also added that the CBDC would diminish the role of community banks and credit unions. 

The United States is not the only state that is currently studying the use and risks of CBDCs. Several countries around the world, including Nigeria, China, The Bahamas, and Sweden, have launched their CBDCs. 

The post Florida Governor Ron DeSantis seeks to ban CBDCs appeared first on CoinJournal.

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Coinbase CTO bets Bitcoin to $1M in 90 days, but I’m not sure even he believes it


Key Takeaways

  • Former Coinbase CTO Balaji Srinivasan bet an anonymous Twitter account $1 million that Bitcoin would trade at $1 million or greater in 90 days
  • Srinivasan is predicting imminent hyperinflation and a collapse of the US dollar
  • Bet is on wildly unfavourable terms, with the other side of the bet, James Medlock, able to lock in massive profit risk-free by simply buying a call option with a $1 million strike for insurance 
  • Bet comes nearly a year to the day after Do Kwon’s infamous bet with another anonymous Twitter account over LUNA price

I’m no chemist, but one of the most potent mixtures known to humankind has to be that of ego and money. 

In what may go down in the annals of Internet history, former Coinbase chief technology officer and prominent angel investor Balaji Srinivasan bet $1 million that the price of Bitcoin would be $1 million or greater in 90 days’ time. 

The bet was confirmed over Twitter, with the other side taken by anonymous meme enthusiast James Medlock. “(My wife) is the only person who knows I am James Medlock”, he posted in another tweet. “And I immediately told her about the bet”. 

What is the bet?

The bet started when Medlock posted the below tweet, an innocuous tweet outlining his belief that the US would not experience hyperinflation, apparently in response to some crypto enthusiasts declaring that it was inevitable. 

It should have ended there. But in came Srinivasan declaring he “will take that bet”. Not only that, but on wildly unfavourable terms. The setup is this: Medlock sends 1 BTC and Srinivasan sends $1 million to escrow today, with the latter denominated in the stablecoin USDC. 

The logic is that, were hyperinflation to occur and the US dollar to collapse, Bitcoin would reap the gains and explode upwards. Hence, the bet turned from hyperinflation into the Bitcoin price. 

If Bitcoin trades at $1 million or greater on June 17th, the kitty is Medlock’s. If it doesn’t Srinivasan takes the bounty.

The bet makes no sense

Obviously, this bet makes no sense for a variety of reasons. Firstly, the original tweet was a joke, as $1 million in the event of hyperinflation would become worthless. 

But the crux of it is the terms. Looking at market odds, this is a longshot of almost impossible odds. So much so, in fact, that a massive chunk of the bet could be guaranteed to Medlock in a risk-free manner in about 30 seconds, should he so please. 

All he would have to do is go to the market and buy a call option on Bitcoin with a strike price of $1 million dollars on the same expiry date of the bet (June 17th). This would cost pennies in comparison, and a massive chunk of the $1 million could be pocketed. 

Of course, everybody knows this, and the bet is nothing more than a grab at publicity or some sort of self-marketing stunt by Srinivasan. He reportedly already holds a massive stash of Bitcoin in any case, with the bet not being overly material to him. Call me a cynic, but there is also the fact that Srinivasan launched a podcast a month ago. 

The funny part is that Medlock didn’t have 1 BTC, worth $26,000 at the time, to hand. Poker player Isaac Haxton stepped in to cover the 1 BTC (without taking any upside). Medlock has also said he will donate a total of 70% of the winnings after taxes to charity – yet he will still pocket a cool $300,000 from a tweet which was a literal joke. 

What would have to happen for the bet to win?

Were this bet to win, it is hard to imagine what the world would look like. A 3600% increase to $1 million per Bitcoin in 90 days would place the market cap of Bitcoin at close to $20 trillion. That is a mind-boggling number – for one thing, it is more than all mortgage debt in the US. 

For this to happen in 90 days would likely mean a total collapse of the economy and society as we know it. The banking sector evaporating into thin air and the US dollar collapsing would throw the world into chaos, with an almost unimaginable level of crime, unrest and anarchy. 

People would lose their life savings and society would collapse near-instantly. And yet, there are Bitcoiners cheering on Srinivasan in this bet. Go figure. 

In an amusing twist of fate, the bet comes nearly a year to the day that LUNA founder Do Kwon bet with another anonymous Twitter account that LUNA would be a lower price in one year than it was then. This week marked the one-year point, and I think any cryptocurrency investor knows what has happened to LUNA. 

Some people have too much money and just don’t know what to do with it, I suppose. 

The post Coinbase CTO bets Bitcoin to $1M in 90 days, but I’m not sure even he believes it appeared first on CoinJournal.