State of Bitcoin: Bitcoin First
Week ending: 2022-02-04; Block Height at time of writing: 721747
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In our Friday articles, we take a deep dive into the current state of Bitcoin. We previously published a series debunking the FUD surrounding Bitcoin - you can find those links at the bottom of this article. Every Friday we will continue to publish brief State of the Coin newsletters to keep subscribers up to date on BTC with both on-chain analytics and off-chain news from the Bitcoin industry. For full disclosure, Brandon and Daniel are strong believers in Bitcoin and both have allocated portions of their portfolios to BTC (HODL baby).
Video Version!
A look off chain:
Fidelity Digital Assets says Bitcoin First: Fidelity Digital Assets - a fund manager of Fidelity Investments (over $4T in AUM) focused specifically on blockchain technologies - recently released a paper titled Bitcoin First: Why investors need to consider bitcoin separately from other digital assets. In the paper, they argue that “Bitcoin is best understood as a monetary good” and that “no other digital asset is likely to improve upon bitcoin as a monetary good because bitcoin is the most (relative to other digital assets) secure, decentralized, sound digital money.” The paper is a phenomenal crash course on Bitcoin and its validity as a sound monetary network - I highly recommend reading the entire report.
ARK Invest calls Bitcoin a monetary revolution: Bitcoin was included in ARK’s recently released Big Ideas 2022 report. ARK analyst Yassine Elmandjra described Bitcoin as a “Monetary Revolution” and said “Bitcoin’s market capitalization could scale more than 25-fold in the next decade, with each [bitcoin] exceeding $1 million in value.” The report pointed to 2021 as a year of important technological breakthroughs and increased institutional adoption, citing the successful roll out of Taproot, increased usage of the Lightning Network, a number of new publicly traded ETFs for both BTC and BTC miners, and El Salvador’s adoption of BTC as legal tender. Regarding the common ESG FUD used against BTC, ARK concluded that “concerns about Bitcoin’s lack of sustainability seem ill-informed.”
Bill proposed to eliminate cap gains on small BTC transactions: On Thursday a bipartisan bill was introduced proposing to exempt bitcoin transactions of under $200 from capital gains taxes. Currently, all gains obtained from the sale of cryptocurrencies must be reported as taxable income. If passed, the bill may help incentivize the digital currency’s usage as a medium of exchange.
DeFi keeps getting REKT: Wormhole, a popular cross-blockchain bridge, confirmed on Wednesday that they were hacked for approximately $320 million worth of ETH. The hackers were able to mint their own “wrapped” ETH (wETH) on the Solana blockchain prior to swapping it for ETH, disrupting the bridge’s 1:1 wETH to ETH ratio and causing the platform to temporarily go offline. This hack is the second largest in DeFi’s short history, behind only the $600 million Poly Network attack that occurred last August (those funds were eventually returned, however). The Wormhole exploit comes less than a week after DeFi protocol Qubit was exploited to the tune of nearly $80 million.
Quick word about stacking tax-advantaged sats!
Do you want to HODL BTC in a tax-advantaged retirement account? Check out the Choice app! Click this LINK to find out more!
Guest writer: Enlil.btc (@EnliltheMiner)
"Ghostfruit (@io_ghostfruit) is coming to the scene as a Bitcoin hosting company currently based in Upstate New York. We offer fully immersed units, under monitor 24/7 via Braiins - and soon to be providing a digital twin system for customers to have access to the most in-depth and up-to-date details about not only their machines, but facility conditions as well. Partnering with an artist based in Denver, CO allowed Ghostfruit the realization of an unparalleled NFT-based rewards program, using the on-chain data (secured by the Bitcoin blockchain) of each NFT as proof of membership in the aforementioned rewards program. We plan to incorporate other benefits into the NFTs in the future (looking into a TCG currently), but their real value to our members comes from access to the rewards program.
Looking forward, Ghostfruit aims for growth into many more areas of the Bitcoin space such as education and promotion of the network (I'm personally taking half my salary through bitwage). In furthering those goals, we've already begun speaking with charity leaders and local legislature about how we can work together so the machines we operate can provide the maximum benefit to our community. I mostly manage the maintenance and oversight of our machines, but if you have any questions or require more information I'd refer you to our CEO, @PhilMcKnight1"
We’re always looking for guest writers! If you or someone you know would like to be featured on State of the Coin as a contributor, let us know! You can email us at greencandleit@gmail.com or DM us on Twitter (@Greencandleit)!
A look on chain:
This week we’re going light on on-chain data…look, Fidelity just told investors to look at Bitcoin first and multiple states in the U.S. are now arguing for its use as legal tender…in our opinion, the off-chain momentum is likely more important than the on-chain data. We may be wrong, but c'est la vie.
Price update: As of this writing, the current price of BTC is $37,600; in the last week, BTC’s USD price is up 0.24%; in the last month, it is down 19.6%; in the last year, BTC price is up 0.9%.
SOPR: The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) by the value at creation (USD) of a spent output. Or more simply: price sold / price paid. Values greater than 1 indicate that coins are being sold for profit (typically bullish) and values less than 1 indicate coins are being sold at a loss (typically bearish). We saw a slight upward spike this week, but generally speaking SOPR continues to hover close to 1. The positive spike in SOPR may indicate that market participants are cashing out at a profit as we jump even slightly higher than the sideways trend we’ve been on for the last few weeks. In my opinion, these upward spikes at such low prices are bearish. However I continue to DCA,
Meme of the Week
What would the BTC community do without memes? Every week on State of the Coin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)! This week, we’re featuring a meme we came across from Swan Bitcoin (@SwanBitcoin):
New to Bitcoin and looking to learn more?
Check out our introductory series, where we walk through common misconceptions about the world’s leading cryptocurrency!
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Happy Friday everyone - get after it this weekend!
Dan and Brandon
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Daniel Kuhman, Brandon Keys, and occasionally a guest writer; it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. None of the authors of this article are financial advisors. We encourage all readers to do further research and do your own due diligence before making any investments.