In brief

6 REASONS IT'S BEEN A BAD YEAR FOR BITCOIN.
In today's @Markets newsletter, I wrote about all the ways that 2020 has undermined a bunch of popular Bitcoin narratives.
https://t.co/001CaQMvIB— Joe Weisenthal (@TheStalwart) June 15, 2020
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18.56%$0.424771
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1.12%$27.77
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0.02%Reading
Bitcoin failed to take advantage of the “perfect storm” created by the coronavirus crisis, falling short of becoming “digital gold,” according to Bloomberg on Monday.
When the coronavirus pandemic began to engulf the whole world, many experts, such as Galaxy Digital CEO Mike Novogratz, argued that “Bitcoin’s moment” could be just around the corner. For a start, the US Federal Reserve was printing billions of new US dollars and inflating its supply while the new supply of Bitcoin was instead being reduced during its halving. Bitcoin was presented as a hedge against economic uncertainty, a digital version of gold and the one thing to remain resilient in a world of chaos. But per Bloomberg, Bitcoin failed at exactly that.
6 REASONS IT'S BEEN A BAD YEAR FOR BITCOIN.
In today's @Markets newsletter, I wrote about all the ways that 2020 has undermined a bunch of popular Bitcoin narratives.
https://t.co/001CaQMvIB— Joe Weisenthal (@TheStalwart) June 15, 2020
“Despite the extraordinary market volatility, it hasn't surged to new heights. In fact, it continues to make a general trend of lower highs. This takes away the argument that an economic crisis creates a boom for Bitcoin,” Bloomberg editor Joe Weisenthal wrote, in a market briefing.
He pointed to the clear correlation between the price of Bitcoin and traditional markets in the last few months. On March 12, most markets around the world crashed amid the outbreak—and Bitcoin followed suit. The price of BTC dipped twice in two days, plunging from around $9,000 to as low as $4,100. Then, as the market recovered, so did Bitcoin.
“This undermines the argument that Bitcoin has good portfolio diversification properties,” he said.
One of the biggest arguments for Bitcoin is that it has a fixed inflation rate that decreases over time until it effectively goes to zero. It is often contrasted against fiat currencies, like the US dollar, which have high inflation rates—and in some cases, hyperinflation.
A symbolic moment of Bitcoin’s alternative (and fixed) monetary policy was its recent halving, when the new supply of Bitcoin was cut in half. This is a process that occurs every four years. But it failed to stimulate a price rally in the near term.
The Bitcoin halving, one of the most anticipated events in the crypto world, finally happened today at 19:23 UTC by AntPool. Miners who support the most valuable and revered blockchain network in the cryptocurrency ecosystem will now earn half as much as they used to, 6.25 BTC per block, just as Satoshi Nakamoto designed. Today’s milestone occurred when the 630,000th block was mined, triggering a 50% reduction in the reward miners receive. Miners will now receive only half as much Bitcoin per b...
“The Bitcoin halving (a slowing of new supply) which many Bitcoiners championed as a likely catalyst for a move higher came and went without much impact,” said Weisenthal.
“The Fed has engaged in extraordinary balance sheet expansion, and governments around the world are running major deficits, and it hasn't led to the kind of inflation or currency collapse that many Bitcoiners would have predicted. So that undermines some of the popular stories about what would catalyze a Bitcoin boom,” he added.
Worse, Bitcoin fever is moving back into traditional stocks. While the ICO boom was characterized by retail investors ploughing into speculative cryptocurrencies, it has largely died out (with the SEC cracking down heavily on ICOs). And now, modern apps like Robinhood are making it much easier for retail investors to get involved in stocks and shares much more easily.
“Young people are discovering the stock market via platforms like Robinhood. So to the degree that people were putting money into Bitcoin because they liked volatility and action, there's a new competitor on the block for those dollars,” he said.
Does that make stocks the new Bitcoin?
Publicly traded Brazilian fintech company Méliuz has dubbed itself the South American's first Bitcoin treasury company after spending over $28 million on the cryptocurrency. Méliuz, a Brazilian household name that offers customers cashback coupons and trades on the country's oldest stock exchange (B3: CASH3), first announced its plans to buy Bitcoin in March, sending its stock soaring. And on Friday, after announcing it had snapped up 274.52 BTC for $28.4 billion, at an average price of $101,7...
Ukraine may be planning a strategic state crypto reserve, according to reports by local media. If it follows through, it would potentially join nations like El Salvador, Bhutan, and the U.S.—who all already have reserves. Yaroslav Zhelezniak, the country’s first deputy chairman of its Committee on Finance, Tax and Customs Policy, told local crypto publication Incrypted that he plans to submit a new bill for approval “in the near future,” claiming the bill is in the finalization stage. Kirill Kho...
A growing number of companies are launching Solana tokens as a way to circumvent traditional fundraising methods. Tokens linked to these companies are hitting market capitalizations in the millions or even tens of millions—despite growing concern that many of their products are “vaporware.” “Internet capital markets is itself a powerful meme, and it’s among the most significant and OG meta-narratives and use cases for crypto,” Alon Cohen, co-founder of Pump.fun, told Decrypt. “In principle, it r...