The Week in Review…
with Jason Deane
The big news this week is that the long-promised merge of Ethereum has finally happened, simultaneously drawing a collective sigh of relief from hordes of developers and bringing an end to the era of Twitter memes ridiculing Vitalik Buterin for the time it has taken to achieve.
I have to hand it to them; from a technical point of view this is, genuinely, quite the achievement and the fact that it was a total non-event is really the story. Ethereum simply moved to a proof-of-stake (POS) system from a proof-of-work (POW) system without incident. Bravo.
As usual, the coverage was very much focussed on the apparent energy savings as highlighted in this rather myopic piece from the BBC, but the story is actually far more nuanced than that.
Times have changed. The Merge was conceived several years ago when the taboo surrounding the power consumption of POW was gaining pace, but the validity of this argument is now in question. It is now entirely possible that the Bitcoin network will end up being carbon negative at some point in the not-too-distant future. Ethereum will now never have that opportunity and may ultimately find itself back on the wrong side of the environmental debate. Oh, the irony.
But POS also carries other inherent problems, not least the idea that the network is penalty based rather than reward based, has subjective rules, rewards the wealthiest users (just like our fiat system) and may actually encourage centralisation. There’s also the issue of triggering certain securities laws.
And has power consumption decreased? Well, not as much as you’d think. Equipment is already deployed, so miners simply switched to Ethereum Classic – another POW cryptocurrency born out of a contentious fork a few years ago, as can be seen from this chart.
Strategically speaking, I think this whole move is not a good one for Ethereum. It may be an unpopular view, but time will tell. So far the markets appear entirely indifferent on the subject.
Meanwhile, in Norway, “Dr” Craig Wright, continues his one-man campaign to become the most disliked person in cryptocurrency – if not the world – by insisting he really is Satoshi without actually providing any proof and then suing anyone who says he isn’t. By now, of course, that’s most of the community, so he’s always in court in one jurisdiction or another.
Currently he is in yet another defamation case against the ever-popular Hodlonaut which is being covered here. As usual, the “doctor” has already been caught in a number of lies, a couple of my favourites being this one and this one.
As amusing as it is, it’s a constant distraction to those who are building the next global monetary system and the damage Wright has done will take years to sort out especially when he makes these sorts of ridiculous claims. (Spoiler: No, Bitcoin cannot be seized, frozen or accessed under a court order).
Meanwhile inflation actually dropped this week in both the US and the UK to 8.3% and 9.9% respectively, sparking the usual rout in risk-on assets. As ever, as soon as this happens, someone gets in touch and asks if I still think Bitcoin is a good hedge against inflation. To be clear, there is simply no better hedge against monetary inflation.
Or were you thinking of price inflation? They’re not the same.
Have a great weekend and remember: #weareallhodlonaut
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Yesterday’s Crypto AM Daily in association with Luno
In the markets
The Bitcoin economy
*Definitions and insights can be found at https://bytetree.com/research
Total crypto market cap
The total capitalisation of the entire cryptocurrency market at time of writing is currently $957 billion.
What Bitcoin did yesterday
We closed yesterday, September 15 2022, at a price of $19,701.21. The daily high yesterday was $20,318.17 and the daily low was $19,636.73.
Bitcoin market capitalisation
Bitcoin’s market capitalisation at time of writing is $377.18 billion. To put it into context, the market cap of gold is $10.979 trillion and Tesla is $944.96 billion.
The total spot trading volume reported by all exchanges over the last 24 hours was
$31.009 billion. High volumes can indicate that a significant price movement has stronger support and is more likely to be sustained.
The price volatility of Bitcoin over the last 30 days is 50.99%.
Fear and Greed Index
Market sentiment today is 20, in Extreme Fear.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 40.88. Its lowest ever recorded dominance was 37.09 on January 1 2018.
Relative Strength Index (RSI)
The daily RSI is currently 45.45. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Convince your Nan: Soundbite of the day
“In a global bear market, there is no place to hide, but there is one place to stand. Bitcoin”
Executive chairman and a co-founder of MicroStrategy
What they said yesterday
So far, so good…
Decentralisation is key…
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Crypto AM: Editor’s picks
Three-in-four wealth managers are gearing up for more cryptocurrency exposure
Crypto.com granted FCA licence to operate in UK
Q&A with Duncan Coutts, Principal Technical Architect at IO Global
Jamie Bartlett – on the trail of the missing ‘Cryptoqueen’
MPs are falling silent over potential of cryptocurrency
Erica’s ‘Crypto Wars’ handed honours in Business Book Awards
‘Let people invest’: Matt Hancock makes case for liberal crypto rules
Explained: Why the Treasury is so sold on stablecoins
Fears crypto is used to avoid sanctions ‘misplaced,’ says Matt Hancock
The cryptocurrency fundraisers behind Ukraine’s military effort
Crypto crazy couple name baby after favourite digital asset
Crypto AM: Features
Crypto AM: Founders Series
Crypto AM: Industry Voices
Crypto AM: Contributors
Crypto AM: In Conversation with James Bowater
Crypto AM: Tomorrow’s Money with Gavin S Brown
Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
Crypto AM: Visions of the Future, Past & Present with Alex Lightman
Crypto AM: Tiptoe through the Crypto with Monty Munford
Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry
Crypto on the catwalk
Crypto AM: Events
For those of you who missed the Crypto AM DeFi & Digital Inclusion online summit 2021 – you can now watch the event in two parts via YouTube
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.
All information is correct as of 08:00 BST