CZ’s Two Cents on BTC Dip, India’s Crypto Awakening, Digital USD Plot Twist, New Bitcoin-Ethereum Bridge
In this edition:
- CZ: ‘’BTC Dip Did Not Happen Due to the Coronavirus’’
- Crypto Investors Rush to India
- Digital USD – A Game-Changer or a Fairytale?
- Vitalik Buterin Proposes a Bitcoin-Ethereum Bridge
How’s your mental health, fellow Anchorians? Luckily, I’m fine since my lamp makes hilarious jokes. A lot of countries around the globe are in full lockdown now and people struggle with boredom, fear, and lack of social interaction. However, it’s vital to #StayHome because this way you protect yourself, as well as other people. We send love and support to each and every one of you!
Everything is quiet now, haven’t you noticed? When people stop, it seems like the world stops, too. It’s great for nature, sure, but at the moment we only have one subject of discussion, the coronavirus. Still, we have some important news to share with you, as you saw in the first paragraph and we will dive into them shortly. I would also like to encourage you to think about the future and be sustainable, in a calm way. No excessive buying or hoarding – just be reasonable. While we wait for the world to start spinning again, let’s stay well-informed. The 33rd edition of Weekly Crypto Roundup is ready for you!
Oh and one last thing, feel free to share with us how you are coping with this whole corona-situation in our Telegram Community >>
CZ: ‘’BTC Dip Did Not Happen Due to the Coronavirus’’
It’s not difficult to mistake a consequence for a cause. Binance’s CEO Changpeng Zhao shared his opinion on the recent BTC price crash. According to him, the coronavirus was ‘just a trigger, not a root cause’ for the entire economic meltdown, including cryptocurrencies.
In an interview for a Binance blog post called ‘’Is Bitcoin a Safe Haven? A Note from CZ’’, he reflected on previous events in the history of the global economy, such as the 2008 financial crisis, and explained that even without a pandemic at the time, everything went south shortly. He also said that, in his opinion, there is no need to worry about bitcoin – the currency still remains ‘different to fiat’ due to its limited supply. Crypto can’t magically save the day but it offers people another path, a solution for them to choose, making them less dependable on official bodies.
So, according to him, it’s not about COVID-19 but the fear that triggers certain behavior in people: ‘’When people fear the doomsday of empty shelves in stores and a shortage of food, people will want to hoard cash. So there’s increased demand or pressure of people wanting to sell their investments (stocks or crypto) into cash, again in the short term…People hoarding cash will eventually find out they no longer need to hoard it and will put it back on investment… Our economy should be stronger, at least strong enough to survive some shocks.’’
The events following the coronavirus pandemic have shown that the economy is basically a house of cards, waiting for a gust of wind to tear it all down. If something is simply not strong enough and inclined to fall, it will fall nonetheless, with a pandemic or without it. Keep that in mind when the recession comes! In 2008 people didn’t have a hedging mechanism such as cryptocurrencies to preserve the value of their assets but now they do. It’s not a magic wand, clearly, but it’s you who makes the choice.
Crypto Investors Rush to India
If you read our Crypto Roundups on a regular basis, then you must know that we talked about India’s crypto renaissance in the 31st edition. We also mentioned VC Tim Draper and his optimism when it comes to cryptocurrencies in the previous edition of our Roundup. Guess what? Now we talk again about India and Tim Draper! When we promise to follow up on something, we deliver.
Anyhow, now that the ban has been overturned by the Supreme Court, many investors choose India as their next investment destination and billionaire venture capitalist Tim Draper is one of them. In a recent interview, Draper admitted he met several bitcoin and crypto startups during his recent trip to India. Wanting to be among the leaders of this ‘crypto renaissance’ is only natural and now is the right time to do it.
Additionally, the biggest crypto exchange in India, CoinDCX, recently shared that they achieved 10x growth in volume only in the first week after the ban’s annulment. They managed to collect $3.000.000 in the first round of funding, as stated ‘led by Polychain Capital, Bain Capital Ventures and HDR Group, operator of BitMEX with participation from other VCs’. Good time to be a crypto-related business in India, huh? Look how the tables have turned.
Even though there is a potential threat coming from a put-on-pause bill concerning the complete ban of cryptocurrencies, it seems as if the Indian government changed the rhetorics and approach when it comes to crypto.
Digital USD – A Game-Changer or a Fairytale?
Digital USD as a stimulus due to the current state of affairs? Well, we almost had it. The US Congress discussed massive stimulus measures as a response to the coronavirus pandemic vast influence on the American economy.
The stimulus package included the creation of a ‘digital dollar’ as a legitimate currency, along with the ‘digital USD wallets’ for citizens of the United States of America. Okay, what does it mean exactly? Firstly, it’s important to state this is not supposed to be a cryptocurrency, just a digital version of a national fiat currency.
The bill defined the digital dollar as ‘a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal Reserve Bank or … an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).’ Meaning – very, very centralized.
In addition, a digital wallet was identified as ‘a digital wallet or account, maintained by a Federal reserve bank on behalf of any person, that represents holdings in an electronic device or service that is used to store digital dollars that may be tied to a digital or physical identity.’ Quite a mouthful, but not that difficult to comprehend – you don’t roll it, you click on it.
CBDC (central bank-issued digital currency) is not something new, yet it’s still trending. If you want to know more about the concept and which countries were/are trying to implement it, read this article.
Since it’s still somewhat controversial, this narrative created turbulence and since additional turbulence isn’t good for already turbulent times, the final version of Nancy Pelosi’s stimulus bill now no longer includes the concept of a digital dollar. The idea, however, remains in the ether and it’s not completely abandoned yet. Is this going to be back on the table? We’ll sure let you know!
Vitalik Buterin Proposes a Bitcoin-Ethereum Bridge
Okay, let’s focus on blockchain now. On March 24th our favorite Ethereum guru Vitalik Buterin tweeted:
We should put resources toward a proper (trustless, serverless, maximally Uniswap-like UX) ETH <-> BTC decentralized exchange. It's embarrassing that we still can't easily move between the two largest crypto ecosystems trustlessly.— vitalik.eth (@VitalikButerin) March 24, 2020
Vitalik reflected on one of the major issues concerning these two networks. He also proposed a solution – a decentralized exchange (DEX) that will serve as a trustless bridge between Bitcoin and Ethereum networks.
Logically, Buterin is not the only person aware of the problem and many people commented on his tweet saying that Nash exchange is already planning to do this. However, the concept is actually very similar to Uniswap, a decentralized automated liquidity protocol.
Do you know what could also help with this issue? Bifrost. Well, not the one from the Nordic mythology (though I like Thor, too). Bifrost is Stellar’s application that creates respective bridges between Stellar and Bitcoin network and Stellar and Ethereum. Not the same, but worth mentioning.
A lot of the crypto enthusiasts will still choose a centralized exchange over DEX, primarily due to the liquidity options. Nevertheless, there is still room for potential collaboration and connection of the ecosystems, as Vitalik himself later added. Let’s see how it unfolds!
Congrats! You’ve come to the end of another Weekly Crypto Roundup. Your thirst for knowledge is impressive. Yes, the coronavirus is still primarily making the headlines, even in the world of crypto but it doesn’t mean there are no other news-worthy occurrences.
BTC, CBDC, blockchain… What was your favorite part of this 33rd edition? Stay home, stay safe. I wish you fair winds and following seas, fellow Anchorians! Until next week!
Disclaimer: The information provided in this post is not legal, accounting, or financial advice. I am not a lawyer, accountant, or financial advisor. I am not registered as an investment adviser with any federal or state regulatory agency. The Information should not be construed as investment or trading advice and is not meant to be a solicitation or recommendation to buy, sell, or hold any cryptocurrencies.