Bitbuy Is Recognized On 2020 Startup List
Weekly Market Update
Analysis: Most major coins on Bitbuy are up on the 7-day period, with Bitcoin Cash leading the charge up over 16% in the past week. BTC dominance (Bitcoin as a percentage of total crypto market cap) currently sits at 58%.
Big Story Of The Week
Last Week Square’s Decision To Buy USD 50M Equivalent Of BTC For Treasury Drew Plenty Of Media Focus. They are the latest company to add Bitcoin to their corporate treasury. A running list is being compiled at BitcoinTreasuries.org
- In a post in the investor relations segment of their website, Square (NYSE: SQ) announced that they had purchased 4,709 BTC at an aggregate purchase price of USD 50M. The announcement was made in what the company refers to as a ‘Bitcoin Investment Whitepaper,’ which is essentially a 2-pager. Square bought the BTC over a 24-hour period with an OTC dealer which they have already integrated as a part of their CashApp. This is the latest foray in Square’s participation in crypto. Their CashApp BTC purchase and sale function has become the company’s primary revenue driver, and CEO Jack Dorsey has been a visible and vocal supporter of BTC and crypto in general for years. SQ shares rallied marginally on the announcement and did coincide with an uptick in the crypto market and BTC price.
Takeaway: The move for Square seems almost natural in the context of MicroStrategy’s (NYSE: MU) decision to make BTC their ‘primary treasury asset.’ Although Square is arguably the most committed publicly-traded company to BTC, that moniker may actually belong to MicroStrategy who invested nearly USD 500M into BTC, equivalent to just over 30% of their market cap. By comparison, Square’s purchase seems relatively conservative with a USD 50M investment less than 1% of the SQ market cap. The bullish readthrough on the story would be that it encourages other firms to make the same decision as SQ, however, this would be a highly speculative thesis. Ultimately, SQ’s commitment to crypto is an incremental positive for the space but last week’s announcement sees more akin to headline chasing than an identifiable shift in strategy.
Other Weekly Headlines
- Financial Ministers from the G7 will say they opposed the launch of Facebook’s Libra until it is properly regulated, according to a draft statement, writes Reuters. While payments innovation offers benefits, these services need to be regulated so that they do not undermine financial stability and other considerations, the statement says. The draft also acknowledges that a number of nations are exploring issuing digital currencies. The Financial Stability Board said yesterday that current regulations do not fully address stablecoins. – link – @Reuters
- Seven central banks, along with the Switzerland-based Bank for International Settlements, have issued a report studying the feasibility of central bank digital currencies. The report, which central banks from Canada, UK, Japan, EU, Sweden, Switzerland, and the US’ Federal Reserve contributed to, ‘outlines foundational principles and core features of a CBDC.’ – link – @
- A joint statement from the G7 nations has called on the implementation of the FATFS’ standards of ‘virtual assets’ in order to deter the growing threat of ransomware attacks. The statement specifically points to the application of the ‘travel rule,’ which foresees the exchange of client data along with transfers of crypto, similarly to the SWIFT system. Ransomware attacks have largely demanded BTC typically in exchange for seized data. – link – @G7Statement
- A startup building a platform for DeFi governance has raised USD 2.2M in a round led by Standard Crypto. Slow Ventures, CoinFund, Framework and others contributed. The platform is in beta mode and undergoing testing. – link – @TheBlock
- Ethereum Developer Danny Ryan has announced a bug bounty program focused on the transition to ETH 2.0. ETH 2.0’s bug-bounty program has been described as critical to the transition to proof-of-work by developers working on the network. – link – @DannyRyan
- The OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors, made public Monday, provides updates to progress made on crypto tax guidance. Te report says the ‘OECD is advancing its work to design a tax reporting framework that will ensure tax transparency with respect to crypto-assets.’ The OECD plans to present a new ‘tax reporting framework’ for crypto in 2021 to the G20. – link – @OECD
Disclaimer: The opinions and analysis expressed in this newsletter are those of the writer, and not of Bitbuy. Nothing in this note should be considered investment advice.