Bitcoin Blows Past $22,000 | Coinbase Files IPO Docs

BITCOIN IS AT $22,000 AND COUNTING

On Tuesday at around 8:30 a.m. EST bitcoin climbed above $20,000 for the first time in history. It ultimately reached a new all-time high of $23,770 before settling above $22,000. As of this writing, bitcoin is up roughly 212% since the start of the year and nearly 500% from its 2020 low of less than $3,900 reached in March.

However, the most exciting part of this milestone is how sustainable the rally appears to be when compared to the boom and bust in 2017. While the prior run-up was driven by factors like strong retail interest and widespread media coverage, this latest charge has taken place amid growing fears of inflation as a result of broad stimulus measures and rising institutional adoption.

ET TU, ETHEREUM?

While bitcoin dominated headlines this week for obvious reasons, it is important to remember the tremendous year that the second-largest cryptocurrency by market capitalization had as well. Currently priced at $637, ether is up 400% for the year (double that of bitcoin), and just completed a major first step in an eventual upgrade that will make the decentralized universal computing platform far more scalable and efficient.

However, despite this progress and the continued growth of the decentralized finance (DeFi) industry, some technical indicators indicate that ether’s price could stagnate against bitcoin in the short term, as bitcoin is typically the gateway asset for first-time crypto buyers. That said, the demand for ether among whales could begin to accelerate rapidly when ether breaks out against bitcoin. It would make ether a favorable play for high-net-worth investors looking to grow their bitcoin-denominated portfolio.

COINBASE CASHING IN

As initially reported in July, we now have confirmation that Coinbase is preparing to go public. The firm has submitted a confidential S-1 filing with the SEC, which is the first step in becoming a public company in the U.S. In announcing the filing, the firm said, “Coinbase Global today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission. The Form S-1 is expected to become effective after the SEC completes its review process, subject to market and other conditions.”

Much remains unknown about the listing, such as whether or not the firm will issue new shares or go public via a direct listing. It is also unclear if the listing will incorporate blockchain in some manner. Regardless, a successful listing for Coinbase would be a watershed moment for the crypto industry.

READY, SET, CBDC

As we move into 2021, one big question that is being asked in crypto circles is the role stablecoins will play in the future. Stablecoins are digital assets that run on top of blockchains, just like bitcoin or ether, but rather than float freely are designed to mimic the price movements of an underlying asset such as the U.S. dollar. Their success this year as a market and asset class—now worth tens of billions of dollars—has in turn spurred the development and maturation of central bank digital currencies (CBDCs).

The Bahamas launched the first CBDC a few months ago, and there are expectations that China will shortly follow suit and become the first major economy to issue a sovereign digital asset. Dozens of countries around the world are in various stages of exploration or development, so it is fair to expect an explosion of CBDCs in the coming years. That said, the elephant in the room is what will happen with the Facebook-led Diem, formerly known as the Libra Association, which is rumored to be launching a dollar-pegged stablecoin next month.

ELSEWHERE

Messari values Coinbase at $28 billion following IPO filing [CoinTelegraph]

Self-Hosted Bitcoin Wallets Become Front Line in Fight Over Crypto Regulations [CoinDesk]

The bidding war for bitcoin mining hardware is heating up [The Block]


This is the last Crypto Confidential newsletter of 2020. Thanks for reading each week. We hope you have a wonderful and safe holiday season.

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