Prices have gotten quiet, but newly created metrics point towards a substantial correction in Bitcoin. Meanwhile, the fight for Bitcoin as legal tender may be getting a new champion. A social media giant is incorporating NFTs. And with rising costs around the globe, guess who got a raise?
All that, and more:
Bitcoin LTH Deflation Ratio
Market update (The calm before the storm)
News Watch: BTC Champion, NFTs on a social platform, petrodollar worries
The big stories
According to David Puell of Ark Invest, Bitcoin price proportional to long-term-holder (LTH) supply sits at its most deflationary point in history. In simple terms, more Bitcoins are being taken out of circulation than miners are releasing, at a rate of 7.4x daily issuance, to be exact. A long-term holder constitutes an entity that holds longer than 155 days.
Looking at the chart below, when the markets become extremely deflationary in this sense, there tends to be a significant correction. This has been the pattern since 2018.
Source: David Puell
You couldn't make this stuff up. The need for financial change is advertised everywhere you look. Congress just gave their staffers a 21% pay raise to accommodate for inflation they are partially responsible for unleashing.
Market Update
Bitcoin (BTC) activity has dwindled in anticipation of tomorrow's Fed Fund Meeting result. Bitcoin closed the US trading session down - 0.99% to 39.2k. Don't expect much action in Bitcoin until the release of the rate hike and following the announcement tomorrow.
A few altcoins experienced gains last night, notably Fantom (FTM), The Graph (GRT), and Elrond (EGLD). Fantom spokesman Harry Yeh joined the show yesterday to clear the air on the project's future after Andre Cronje's departure.
News Watch
Cryptocurrency has entered the bloodstream of politics in recent months. The newest US Senatorial candidate, Bryan Solstin, has stated his focus will be to make Bitcoin legal tender in the United States if elected.
The software company behind Metamask, ConsenSys has raised $450M at a valuation of $7b, doubling its value since November 2021. According to documentation, the firm will convert the funds to Ethereum. SoftBank and Microsoft are among new investors. Also noted on the announcement, Metamask has 30 million monthly users. Source: ConsenSys
Meta CEO Mark Zuckerburg announced that the firm is working on bringing NFTs to Instagram "in the near term" during a panel at Austin's South by Southwest Festival yesterday.
The petrodollar could be in danger as Saudi Arabia is in supposed talks with China to price some of its oil sales to the country in yuan. According to ZeroHedge, Saudi Arabian officials are not pleased with the lack of support in the Yemen civil war from the US and the Biden administration's attempts to strike a nuclear deal with Iran. The possibly move away from the petrodollar could pose significant threats to the Dollar as the world reserve currency and adversely affect markets.
This is after Jerome Powell stated there could be more than one reserve world currency in a senate hearing last week.
Kazakhstan has begun to crack down on illegal Bitcoin farms initially banned in late January. According to officials, the farms were operating illegally and creating a strain on the power grids. The country is working on creating a regulatory framework for mining endeavors.
Notable Events
Bored Ape Yacht Club team Yuga Labs plans to sell virtual lands and drop a $Ape token.
Meme of the day
Not too far off the truth. lol.
Writer’s Take
The economic climate is bad, inflation is on a 40 year high and to rub it in our face, US government staffers got a 21% raise. A financial overhaul will be a hot topic in future elections and candidates will be riding on the coattails of crypto-assets. The Dollar losing its world reserve currency title could be the final catalyst for revision. Minor warning signs are popping up, and It won't happen overnight, but the faults of the current financial systems are becoming more apparent every day. When things fall apart, a better system will be there to pick up the pieces. Until then, hodl on my friends.
O, and don't forget to keep an eye on the rate hike tomorrow; we might just be in the calm before the storm.
Thanks for reading!