Etherbridge Updates. They’re Coming, They’re Coming.

Market Recap:

Overview of core fundamental data. Sources: Glassnodes and Coinmetrics

*for a description of each metric above click here.

“They're coming, they're coming!”

For many years now proponents of crypto have long awaited the entry of major institutions. Institutions have been hesitant in getting involved with bitcoin citing volatility concerns, misunderstood technology, and an unknown creator as reasons for sitting on the side-lines.

However, COVID-19 has greatly accelerated the need for businesses to investigate and attempt to understand bitcoin. Central banks around the world went on a stimulus spree in order to offset the hole created by worldwide lockdowns. According to the Bank of America, the pace at which this has occurred is equivalent to $1,4 billion every hour.

Society has learnt a valuable lesson from COVID-19 and lockdowns, we have realised our collective fragility sits in the hands of central planners.

“A bunch of paycheck to paycheck employees, working for paycheck to paycheck companies, governed by paycheck to paycheck governments.”- overheard in the Etherbridge office

This reality check has been felt by almost everyone. It has offered business leaders an opportunity to assess their assumptions, to ask why and how we got here. Additionally, due to dislocations like stock markets reaching new highs, while millions of people lost their jobs, has forced people to contemplate the role of central banks and monetary policy.

Source: Jack Ziegler (Image Altered)

Fortunately, whilst the traditional world has been putting out fires the digital economy has been building day in and day out. Like every market cycle, the seeds of the next bull market were planted in the bear market before it.

Since “the bubble burst” in December 2017 we have seen radical shifts in what is possible with bitcoin and cryptoassets. We now have established futures and options markets, easy onramps from fiat to crypto, lending and borrowing facilities outside of traditional players and well-respected names entering the space.

In the last bull run, there were no major investors like Paul Tudor Jones, there were no CEO’s like Micheal Saylor allocating the bulk of MicroStrategy’s balance sheet to bitcoin and there were no fully regulated US banks with a license to bank crypto like Kraken.

Bitcoin has firmly positioned itself into the macro conversation. Combined with a maturing market structure and new researched players in the game, conditions couldn't be more favourable for bitcoins next bull run.

Notable articles and news stories this week:

MicroStrategy allocates $425 million to bitcoin in an effort to protect capital

MicroStrategy is a US-based business intelligence and mobile software company with a market cap of around $1.5 billion. On August 11 they announced that they had converted $250 million worth of their cash holdings into bitcoin. They are the first listed US company to do so and this marked a big step forward for bitcoin affirming itself as a store of value. What gets even more exciting is that on Tuesday the 15th of September they announced that they had increased their bitcoin holdings by a further $175 million bringing their total holdings up to $425 million or 38 250 BTC. MicroStrategy has been followed by a Canadian company Snappa who also have started converting their cash holdings to bitcoin.

Listen to Michael Saylor’s rationale here.

Bitcoin adoption in Africa

According to an article published in Reuters, bitcoin is currently playing two significant roles in Africa. Firstly, it is functioning as the infrastructure required to facilitate seamless business and payments between people and across borders. Secondly, it is being used as a hedge against local currency weakness. We are already witnessing rapid adoption across Africa for these two reasons alone.

Bitcoin Exchange Kraken receives US banking charter

Kraken has become the first cryptoasset firm to be granted a US banking license. This is a significant development for bitcoin and other cryptoassets from a regulatory perspective. Banks and regulators in general have been very reluctant to grant licenses to cryptoasset firms in the past citing risk as their main concern. As regulators and government become more familiar and comfortable with these new technologies and the number of services available increase, we expect to see greater adoption by the everyday user.

Whilst we all have the option to look, to seek to understand, it’s often easier not to. Bitcoin, Ethereum and distributed ledger technology are complex systems that require significant due diligence. At Etherbridge we aim to lower the barriers of understanding this fast-growing digital economy.

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This is not financial advice. All opinions expressed here are our own. We encourage investors to do their own research before making any investments.



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