Last week we wrote about the environmental implications of bitcoin in our letter titled: The Truth About BTC. The feedback from the community was positive.
🌍 And so, today, we expand our horizons: bringing the social, economic and political impacts of bitcoin (and cryptocurrency) under investigation.
We’ll also be sharing the hottest crypto news and a very special podcast on the Ethereum Bull Case 🎧
Read, enjoy and share with your network. Let’s all build wealth together.
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🪂 5 Things You Need to Know
In a rush? Here’s 5 things we think all meditators should know about the crypto markets:
Buy The Dip And Run? Ammer and Raees Cajee (founders of Africrypt, the largest cryptocurrency exchange in South Africa) have vanished, along with billions of dollars worth of bitcoin! If it is unable to be recovered, it would be the biggest loss in a cryptocurrency scam to date.
Bring On the Crypto Funds. Andreessen Horowitz, a Silicon Valley venture capital firm founded by Marc Andreessen and Ben Horowitz, announced its new $2.2 billion cryptocurrency-focused fund last Thursday.
Wherefore Art Thou Binance. On Saturday we heard news from the UK FCA that Binance Markets Limited (the U.K. division of Binance) “is not permitted to undertake any regulated activity in the U.K.'' The headline came as a bearish delight but in actual fact Binance can still offer crypto trading through its website in the U.K. (as unregistered firms can still interact with consumers in the U.K.) Also, note the terminology, providing access to cryptocurrencies is not a regulated activity in the U.K. Providing derivatives on the other hand is regulated. The U.K and derivatives don’t have the fondest memories: think 2008 Financial Crisis and Credit Default Swaps.
Bitcoin… Bitcoin For All! El Salvador recently passed a law to make bitcoin legal tender (due to take effect on Sept. 7) and will also offer each adult citizen $30 worth of bitcoin for free. To receive the free bitcoin, they will need to sign up for the country’s sponsored crypto wallet app, Chivo.
Our Money’s On Dorsey. Jack Dorsey promoted an event called “The B Word” which will aim to encourage companies and institutional investors to adopt bitcoin. Due to take place on July 21. Elon Musk responded and seemingly agreed to chat with Dorsey about bitcoin at the event!
🌀Cryptocurrencies: The Good, The Better & The Great
1️⃣ Social Impact of Cryptocurrency
It’s not that we couldn't send and receive money all over the world before. We’ve all heard of Western Union and PayPal. It’s just that between their fees (transfer fees, conversion fees, other hidden fees) you are looking at generally over 10% of your entire transferred amount.
Enter Bitcoin. Exit the 10%. The receiver receives the full amount you send or transfer. No part gets deducted. And let’s not just consider business transactions, the same applies to charitable transactions! Trading platform FTX has received over $7 million from user donations. Cryptocurrency has given society ownership of their money. This control is liberating. Gone are the days of being bound by the permission of banks and authorities just to exercise control over your own money.
Let’s also talk about artists. Legendary artist Van Gogh lived most his life in poverty; with his work neglected and disregarded, he even succumbed to cutting off his own ear (which he went on to deliver to a lady named Rachel at a nearby brothel)! Artists fare a bit better these days but for their contribution to society, it does not seem they are compensated enough or fairly (compare their livelihoods to that of bankers). Developments in the NFT space have changed this. Digital tokens tied to assets can be bought, sold and traded, enabling artists to profit from their work more easily than ever. Nongunfible.com estimates over $300 million spent on CryptoPunks alone.
2️⃣ Political Impact of Cryptocurrency
Ever wondered why national governments are sceptical of Bitcoin? Well, it undermines their authority. In the past, national governments almost operated a monopoly to control finances, monetary policies, central banks and other pieces of financial legislation.
The decentralised nature of cryptocurrency threatens this sovereign authority of governments. Of course, it also makes it more difficult for the government to track transactions: as the sender and receiver are anonymous. As we explained in a recent article, funds can be tracked to an address, not a person. Governments are then left in a difficult position.
What are their options? To criminalise bitcoin will likely lead to increasing its popularity! The political impacts of cryptocurrency are profound. It is no wonder governments are adopting a regulation and moderation approach.
3️⃣ Economic Impact of Cryptocurrency
Meet inflation’s enemy. Unlike traditional currencies and investment opportunities, Bitcoin is not subject to the laws of inflation. In fact, China’s government banning Bitcoin a couple years ago was because of this reason. Chinese investors were creating asset reserves in Bitcoin (as they were inflation resistant) and this was not contributing to the growth of the economy.
Beyond inflation, Bitcoin and the crypto ecosystem has led to a massive surge in employment opportunities. The beauty of cryptocurrency is that it is not bound by CVs or extraordinarily expensive qualifications and degrees. Rather, anyone with motivation and a half-decent internet connection is able to make money or a career out of it. We share more details in our How To Land A Crypto Job guide.
We’ll end by paying tribute to blockchain technology. Several of the biggest private corporations have taken up Blockchain technology as a model of study. Blockchain technology is fast, safe and an efficient way of transacting. Watch this space, new use cases of blockchain are being identified each and every day.
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🏦 CBDC Competition
Singapore's central bank is offering a prize for 3 lucky winners who can provide innovative solutions for central bank digital currency (CBDC). But how much is that prize?
🏎 Formula 1 X Crypto.com
Earlier this morning, Formula 1 announced that they have partnered with Crypto.com, a platform through which more than 10 million users buy and sell 100+ cryptocurrencies, earn interest on their crypto assets, and spend and receive cash back with the Crypto.com card. Crypto.com will specifically be the 2021 inaugural global partner of the Sprint series, allowing it access at the track for every race for the rest of the season. 👉 You can use our link to download the Crypto.com app!
When asked about the reasoning for the partnership, Formula 1 stated “partnering with Formula 1 will ensure Crypto.com continue to grow their brand awareness on an international stage.” They also stated, “mirroring the fan-first approach F1 has adopted to engage with new audiences, Crypto.com aims to democratize the world of cryptocurrency for fans.” At the surface, this seems to be a very natural partnership with two companies that share similar values and goals.
Moreover, Crypto.com has pledged to become carbon negative within 18 months, setting an example of “clean crypto” for others, and aligning with Formula 1’s sustainability plans to be net zero carbon as a sport by 2030. All in all, news like this partnership is a victory not only for the parties involved but for the entire crypto community as the industry finds its way into the mainstream spotlight.
🎧 Ethereum’s Bull Case with David Hoffman
David is a founding father of Bankless newsletter and podcast, designed to help the community replace banking and navigate the Ethereum space.
At Market Meditations, we firmly believe that generational wealth should be accessible to everyone. To that end, we’re delighted to be partnered with Nexo: one of the most user-friendly crypto lending and earning platforms in the industry.
💎 You can use our link to start earning now.
To incentivise fintech companies The Monetary Authority of Singapore has announced a $37,000 prize for 3 lucky people if they are able to create innovative solutions for CBDC.
This includes retail solutions, payment systems and an aim to promote financial inclusion. In addition to the prize money 15 finalists will be provided with mentorship to rapidly improve the use of digital currencies worldwide.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.