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As most people who own bitcoin know, price drawdowns that are greater than 50% have been a regular occurrence after each all-time high. What we also know is that bitcoin price has proven to significantly recover from every major drawdown, which has made it the best performing asset over the last decade.

Currently were rebounding from a 56% price drawdown post a 228% recovery. Historically what comes next is yet another massive recovery. This double top pattern playing out is eerily similar to 2013 where price went on to explode over 10 times in just 52 days, starting in early October. As we hover around $66,000, a six-figure bitcoin price is only a 51% price move away. This is a more conserative percentage move during a bitcoin bull cycle recovery based on previous cycles.

History may not repeat itself exactly but all of the on-chain metrics, recent price action and expectations of new entrant demand, during the most bullish holder behavior in bitcoins history, have signaled a major price recovery underway.

At its core, bitcoin price is a function of new demand, through increased adoption, relative to the amount of limited supply available on the market. And right now, theres just not that much supply on the market until the current holders of bitcoin find a new, higher price worth selling at. This is the free market, volatile nature of bitcoin that so many criticize playing out. Except this time the volatility is price exploding to the upside just like it has in every previous cycle.

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The Bitcoin Price Could Be Headed Toward Six Figures - Bitcoin Magazine

Whether or not youd believe inflation could reach World War II levels, its clear that the global economy post-COVID-19 looks uncertain. A chasm is growing between the developed and developing markets fueled by uneven vaccination rates and Gross Domestic Product growth. Central Bank Digital Currencies (CBDCs) are set to be a key factor thatll accelerate the world economy fit for the digital age, ushering in a digitally-connected economy unlike anything weve seen before.

Despite inflation being slowly on the rise, depressed economies like the U.S. are accelerating in their adoption of new economic policies like Modern Monetary Theory (MMT), which in a nutshell enables governments to print money at will. Basically, wealthier governments arent required to be reliant on taxes or borrowing when it comes to spending as theyre able to print money on demand. The stellar rise of MMT, particularly advocated by an economy with as much impact as the U.S., sends ripple effects that not only affect the U.S. but other economies as well. In Asia, governments particularly in mid- and small-sized economies are waking up to the potential power and influence that CBDCs have thanks to their latest understanding of MMT.

CBDCs draw influence from bitcoin, and bitcoin itself has transformed the public's perception about money and alternative asset investments. In fact, many today consider it a hedge for inflation. Recently, crypto companies are increasingly coming under scrutiny with government action ramping up as the publics interest in crypto has made way for governments that are beginning to recognize the plurality of bitcoins co-existence with fiat currency.

In fact, COVID-19 has accelerated an urgency to strike a balance on how this coexistence might look. Governments are looking for ways to employ an effective monetary policy that gives them more rights, with less reliance on the dollar for trade. As CBDCs hold a 1:1 value to fiat currency, they not only hold the benefits of faster, but also more secure transactions thanks to the use of blockchain technology. And for the public, its the ideal vehicle to boost consumption, and combat money laundering, while enabling a more effective tax collection policy. China is leading this development with its digital renminbi (DCEP) and it aims to improve financial inclusion and risk control.

In Southeast Asia, were also witnessing the emergence of a similar train of thought among governments. Cambodias Bakong, a blockchain payment system, is being devised as its own CBDC with the goal of helping central bankers to lower the cost of international remittances. And this distributed technology ledger system is a model that even the chief fintech officer at the Monetary Authority of Singapore (MAS), Sopnendu Mohanty, believes will benefit international payment schemes as well.

Lets put it this way: Most wealthy nations monetary policy has remained accommodative with quantitative easing continuing in the backdrop. And statistics have shown that the U.S. Federal Reserve printed $2.3 trillion in 2020 to combat COVID-19. Admittedly, the stimulus was for a noble cause; it would keep families and communities afloat.

However, how we define the success of this program isnt black and white with unintended effects. According to a survey by Pew Research Center, About one in five (21%) say they will save a majority of the money, and 14% say they will use it to pay off debt. The remaining 10% say theyll use it for something else. Flush with cash, stimulus money was hitting Wall Street close to home with the hyper enthusiasm of buying stocks like GameStop and altcoins like Dogecoin. This exposed the already fragile financial system and raised valid questions about the efficacy of government aid programs, along with its impact on MMT in the long run.

Not to mention, the U.S.s policy has triggered an unintended ripple effect that has had drastic consequences for emerging Asian markets - particularly in Southeast Asia. With the stimulus fueling a strengthening influence of the dollar, emerging markets risk weakened currencies against the greenback and falling deeper into debt.

Its situations like these where a CBDC can come into the picture. In the case of helping those in need with precision, CBDC-based stimulus can ensure that the spending of the stimulus money is aligned with its original purpose, which means families and communities have access to basic necessities. And the progress of these programs can be measured in real time. In short, CBDC can become a viable option for the government to subsidize an industry or community with higher precision, transparency, and effectiveness.

With increasing scrutiny from the world, the perception that the U.S. is losing its fiscal responsibility is growing according to the Council on Foreign Relations. The Council argues that investors could lose confidence in Washingtons ability to right its fiscal ship and become unwilling to finance U.S. borrowing without much higher interest rates. This perception endangers the dollars global acceptance and of course, means self-reliance, especially in the developing world, is more important than ever.

So how does bitcoin come to play a role in all of this? On a more extreme, yet seemingly realistic alternate reality, considering the disastrous outcomes like what weve seen in Venezuela when its economy experienced hyperinflation in May 2019, bitcoin tends to become the de facto tool to counter sovereign credit risk. And governments themselves recognize this. The El Salvadoran government in 2021 recognized bitcoin as its legal tender. Other countries of course have taken a more centralized strategy by deploying their own CBDC. But regardless of the currency used, the motives are one and the same. Whether its bitcoin or a government-backed digital currency, both offer tremendous value (albeit in different ways) to the digital economy, with more ways yet to be discovered.

As signs of an economic recovery make way for inflation, were sitting closer and closer to the edge and could tip over into a global financial crisis. And Im not the only one concerned. Satyajit Das from MarketWatch poignantly draws the conclusion that where supply constraints are reached, excessive deficit-financed spending would result in inflation, higher rates, and a currency correction. So, all it takes is for the Federal Reserve to increase the interest rate. By then, the dominoes in Asia - not just in the U.S. or the West - inevitably will topple.

So, theres no surprise that those developing countries have the best position to lead the charge toward a new digital currency and offset the risk. Whether the solution is a national CBDC or the adoption of cryptocurrencies like bitcoin may be up to a regional decision, but what Im certain about is that the digital economy is inevitable. Its just a matter of when.

This is a guest post by Flex Yang. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

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COVID-19 Is Accelerating Asias Digital Future Of CBDCs And Bitcoin - Bitcoin Magazine

The long-awaited day finally came on Oct. 19 as the first Bitcoin (BTC) exchange-traded fund (ETF) went live on the New York Stock Exchange, thrusting the crypto asset into the limelight across mainstream news outlets and alternative media alike.

Despite the fact that the ETF in question will hold no actual Bitcoin and is instead a futures-based instrument, investors and pundits across the ecosystem have largely hailed its launch as proof that Bitcoin has hit the big leagues and will soon surpass the coveted $100,000 price target.

Many investors either dont have access or will choose not to interact with the newly launched EFT, but holders can still use a variety of strategies to earn a yield on their BTC holdings.

Heres a look at some strategies BTC holders can use to earn a yield.

BadgerDAO is an open-source protocol built on the Ethereum network that has the specific goal of building products and the required infrastructure needed to simplify the integration of Bitcoin into decentralized finance (DeFi).

Currently, BadgerDAO has the most extensive list of BTC paired pools where investors can provide liquidity.

As seen in the image above from the BadgerDAO dashboard, there are different offerings from the simple staking of Wrapped BTC (wBTC), which can earn a yield ranging from 1.22% to 27.98% depending on the terms of the lockup, to the staking in more complex liquidity provider (LP) strategies like the renBTC/wBTC/sBTC pool, which offers a yield ranging from 7.07% to 45.37%.

It is important to note that there are risks involved with wrapping BTC and RenVM because a user must relinquish control of the original BTC in order to obtain either wBTC or renBTC, violating the crypto code of not your keys, not your crypto.

For LP tokens that pair BTC with other cryptocurrencies such as Ether (ETH), BADGER or stablecoins like Tether (USDT) and USD Coin (USDC), holders must also consider the possibility of suffering an impermanent loss if the price of Bitcoin increases by a significant amount compared to the other token it is paired with.

Trader Joe is the largest decentralized trading platform by total value locked (TVL) on the Avalanche network, according to data from Defi Llama, with $2.18 billion worth of assets currently on the protocol.

Using wBTC on the Avalanche Network requires another layer of wrapping that produces wBTC.e, which can then be traded on the network or used to provide liquidity.

At the time of writing, Trader Joe is offering a yield on three LP tokens, including a return of 26.223% for the wBTC.e/AVAX pair, 16% for the wBTC.e/USDC.e pair, and 11.9% for the wBTC.e/USDT.e pair. All rewards are paid out in the protocols native JOE token.

Raydium is the top-ranked DeFi protocol on the Solana network, according to data from Defi Llama, and currently boasts a TVL of $1.77 billion.

Users who wish to use their BTC on Solana have the option of pairing it with USDC, USDT, Serum (SRM) and a wrapped form of Solana known as mSOL.

The yields offered range from 5.16% to a high of 14.27%, with all rewards paid out in the platforms native RAY token.

PancakeSwap is the No. 1 ranked protocol by TVL on the Binance Smart Chain (BSC) with data from Defi Llama showing that $5.39 billion worth of tokens is currently locked on the protocol.

In order to utilize Bitcoin on the BSC, it must first be wrapped to become BTCB, which can then transact on the network.

At present, PancakeSwap is offering a 5.44% return for the BTCB/ETH pair, a 15.82% return for the BTCB/BUSD pair (Binances stablecoin, Binance USD) and 20.79% for the BTCB/BNB pair. All rewards are paid out in the protocols native CAKE token.

Related: Valkyrie Bitcoin futures-linked ETF launches on Nasdaq, with share prices dropping 3% in first hour

DYdX is a decentralized perpetual futures trading platform that made waves back in September when it airdropped thousands of dollars worth of its native DYDX governance token to early adopters of the platform.

Similar to the ProShares Bitcoin Strategy ETF, trades made on the dYdX protocol do not settle in actual Bitcoin but instead in a USD stablecoin, so BTC stakers may not be too interested in the protocol if directly increasing Bitcoin holdings is the only goal.

However, as opposed to trading a government-regulated futures product that is only available when the traditional markets are open, dYdX offers the decentralized, 24/7 trading environment that the crypto faithful have grown to love.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Altcoin Roundup: Holding Bitcoin? Heres how to put it to work in DeFi - Cointelegraph

The worlds second most valuable cryptocurrency, ether, has been touching all-time highs in price ahead of a major upgrade of its underlying platform, ethereum. Ether is currently worth in aggregate just shy of US$500 billion (363 billion). Thats still slightly less than half that of the biggest cryptocurrency, bitcoin.

But could this upgrade, a vital step towards a much greener and faster version of the current system, put ethereum on the path to becoming the dominant platform on the internet and make ether number one?

First of all, its important to understand the difference between bitcoin and ethereum. Bitcoin is a system for allowing people to send value between one another without the need for banks. It is built on a technology known as blockchains, which are online ledgers whose transactions are checked and recorded by a decentralised network of computers known as validators.

These validators are incentivised for their work by receiving newly minted bitcoin as rewards, in what is known as mining. To make this more attractive, bitcoin is relatively scarce: only around 18 million coins are in existence and the protocol is such that there can never be more than 21 million.

Ether vs bitcoin by total value (market cap)

Ether works in a similar way to bitcoin, but ethereum is different. It is a worldwide software platform with no host, on which developers are building thousands of blockchain-based applications.

This means these applications can all run without being controlled by a company. Examples include cryptocurrency exchanges, insurance systems, and new kinds of gaming.

At the heart of the platform is the idea of smart contracts, which are automated agreements that ensure that money and assets change hands when certain conditions have been fulfilled. All transactions on the platform ultimately use ether, and the success of the platform is why ether has been the second-largest cryptocurrency after bitcoin for the past few years. The fact that ether fuels the platform even being referred to as gas fees gives it a utility and an intrinsic value that bitcoin does not have.

Ethereum has several major problems, however. The first is that gas fees have become very expensive in the last couple of years because the network has become so popular and is therefore very congested.

Validators prioritise users who are willing to pay the highest fees for their transactions. For example, the average transaction at the time of writing on crypto exchange Uniswap costs around US$44 in gas fees.

Bitcoin has comparable issues with congestion, which its developers are trying to solve by building applications like Lightning on top which boast faster transaction speeds.

The second problem for ethereum is that, as it has become more popular, the amount of computational power used by validators has rocketed. Its the same problem that has brought a lot of negative publicity to bitcoin, because it uses a lot of electricity.

Bitcoin is currently using as much power as the whole of the Philippines, although its supporters argue that much of this is power that would otherwise be wasted for example, oil rigs burning off natural gas because its not profitable to sell it. Proponents also point out that the network is shifting towards using much more renewable power over time.

At any rate, the eventual creation of an ethereum 2.0 will solve these problems by moving the platforms system of validation from proof of work to proof of stake. Without getting into too many details, proof of work is a protocol in which validators all attempt to solve complex equations to prove that each proposed transaction is valid. With proof of stake, theres no need for all validators to do this power-hungry work, because the system chooses one at random to confirm each transaction.

Many in the bitcoin community are against proof of stake because it gives the most power to the biggest validators, potentially allowing them to corrupt the system of validation if they can get control of more than half of the network. Ethereum supporters counter that proof of stake has checks and balances built in that would prevent this from happening.

Either way, ethereum 2.0 promises to reduce the platforms power consumption by 99.9%, making it far more sustainable. It should also solve the problem with gas fees by raising the platforms processing ability from 30 transactions a second to potentially 100,000, as well as making possible more sophisticated smart contracts than before.

The transition to ethereum 2.0 has been a slow one, riddled with technical issues that have dragged on for over two years. For the past few months, the new proof-of-stake blockchain has been running in a test format in parallel with the existing system, allowing the developers to prepare it for a merger in 2022.

The forthcoming upgrade is essentially a warm up for this merger. Known as Altair, it introduces numerous technical changes that are designed to keep validators honest and make the system more decentralised. Assuming this goes ahead as planned, all eyes will be on the merger, and then later another change known as sharding which will greatly increase the systems processing capability.

Certainly the price of ether has been strong ahead of the Altair upgrade. The recent surge in bitcoin to all-time highs has been helping to lift the entire crypto market. But some of the price movement in ether probably reflects people betting that the upgrade will succeed, while the rest is from speculators switching from bitcoin, and new money moving into the space.

Ether vs the eth killers by total value

In the run-up to the merger of ethereums two blockchains, it will be interesting to see how all this affects ethers price in relation to the so-called eth killers. These are rival platforms like cardano and solana that have been very popular in recent months partly due to ethereums problems with fees.

But ultimately the question is what it will mean for bitcoin. Bitcoiners will continue to argue that their protocol is more decentralised than proof of stake, and they have the advantage of being the crypto brand that investors are most comfortable risking their money with.

The question is whether these advantages are outweighed by ethereum 2.0s greener credentials and the fact that it can handle more transactions. Bitcoin is currently worth about double ether, but talk comes and goes about a flippening where ether overtakes it. Could it happen in 2022? With bitcoins hegemony at stake, it will be fascinating to find out.

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Ethereum: the transformation that could see it overtake bitcoin - The Conversation UK

Bitcoin (BTC) failed to beat its all-time highs on Oct. 20, but a separate record kept bulls confident of a breakout.

Data from Cointelegraph Markets Pro and TradingViewshowed BTC/USD reaching $64,490 on Bitstamp overnight.

While inches from matching Aprils peak, the action nonetheless sealed Bitcoins highest-ever daily close around $64,230.

In several currencies, including the Japanese yen, Australian dollar and euro, new all-time highs were already in on Wednesday.

For popular trader Crypto Ed, it was time to reevaluate likely short-term targets.

Summary: at 40k I mentioned 73k as first target but I think were going higher and keep extending those waves. I think we even have a good chance were not going sub 60k for a while, he tweeted.

A worst-case scenario could involve a brief spike downward to $58,000, but this would be followed by clear skies for the coming weeks/ months, he added.

The bullish tone across the board follows a successful day for the first Bitcoin exchange-traded fund (ETF) in the United States, with $1 billion in volume and $550 million in assets under management after just a single trading session.

Correspondingly, Bitcoin futures open interest hit fresh all-time highs of $817.6 million, data from on-chain analytics firm Glassnode confirms.

The atmosphere makes the comparative lack of mainstream interest in Bitcoin all the more unusual.

Related:Bitcoin RSI strength suggests BTC price is still far from its cycle top

Beyond institutional excitement, data shows that hardly anyone is following or checking on Bitcoin relative to earlier this year.

As Cointelegraph reported, this has been the case for some time, but even a trip to the threshold of all-time highs has failed to upend the trend.

A normalized score from Google Trends put Bitcoin interest at 36 this week, relative to 100 in mid-May.

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Bitcoin sees its highest ever daily close as BTC/Euro pair hits all-time highs - Cointelegraph

Introduction

The widespread adoption of bitcoin is a topic that has raised immense expectations for change to monetary systems, governments, and society in general. Over the years, bitcoiners have fiercely defended their belief that bitcoin represents a superior form of money and expressed a large number of hypotheses about possible pathways to the broader adoption of bitcoin. Over the years, Bitcoiners have fiercely defended their belief that bitcoin represents a superior form of money and expressed a large number of hypotheses about possible pathways to the broader adoption of bitcoin. In this article, we investigate the concept of hyperbitcoinization which represents one of the most promising potential developments of our time. By hyperbitcoinization, we mean the process of rapid and irreversible adoption of bitcoin as the primary global monetary reserve.

This article is part of a longer series wherein we outline the views and predictions made by the bitcoin community concerning the prospect of hyperbitcoinization. In our analysis we highlight "transition agents," i.e., main players, groups of players, or institutions that could accelerate the transition to a bitcoin world. For each topic, we base our arguments on the references collected, and if possible, present data that aims to verify the probability of this outcome. This first article describes top-down scenarios initiated by institutional agents or governments whose influence is expected to trickle down to a wider audience, while a second article will provide an understanding of bottom-up types of initiatives.

The views presented in this article are intended to capture the pulse of the Bitcoin community and remain hypothetical. This is an initial foray into analyzing hypothesized hyperbitcoinization scenarios; we expect that this area will require on-going investigation.

The informational resources that most accurately reflect the extent of bitcoin adoption are often private and/or anonymous, but a significant part of the sentiment is publicly available. The methodology employed in this study can be broken down into four steps: collection, content analysis, validation/extrapolation, and convergence.

Step 1: Collection

With the aim of identifying agents of transition that may initiate a hyperbitcoinization scenario, we conducted online research of articles, blog posts, podcasts, videos, data sets, tweet samples and research papers from July 2013 to July 2021 that either contained the term hyperbitcoinization or referenced the rapid adoption of bitcoin:

Figure 1. Frequency of hyperbitcoinization in online materials.

Step 2: Analysis

Through analysis of the articles and transcripts of the videos/podcasts we identified recurring themes highlighting the current social, political, and monetary contexts, the agents or events engendering the transition to the bitcoin world, and only a few projections about the prospect of a hyperbitcoinized world.

Step 3: Validation/Extrapolation

Qualitative data collected in step 1 most often came in the form of predictions discussed within the bitcoin community that have yet to be subjected to critical examination by the wider financial and economic communities. In the following section we present a quantitative analysis that critically examines these hypothesized causal pathways by using micro and macroeconomic data from government, institutional, and public databases to extrapolate the feasibility of such scenarios.

Step 4: Convergence

In the last step, we coded each reference to hyperbitcoinization according to a descriptive theme so that we might present a coherent overview of the current discussion within the Bitcoin community. Despite the great diversity of authors, the analysis that follows shows that hyperbitcoinization predictions converge on a limited number of cases where the transition is triggered by four main groups of actors. These four groups who may influence hyperbitcoinization include central banks, governments, the private sphere, and the Bitcoin community.

The financial and economic worlds, crystallized in the fiat system for the last several decades, are unable to perceive credible alternatives to their current reality. According to current economic and financial elites, a different monetary system based on the gold standard or the bitcoin standard would give rise to an anarchic and violent society wherein all concepts of law, economics, or civilization would disappear. Bitcoiners, on the other hand, offer a more optimistic narrative (Keiser and Seiche 2021). Inspired by libertarian thought, they see the government as a superfluous or useless element of society whose interventionism in the monetary field prevents the proper functioning of the market. In this view, the advent of bitcoin would restore monetary stability based on the fixed and transparent production of money.

Figure 2. Hyperbitcoinization scenarios driven by central banks.

Central Banks

Inflation of Money Supply

Out of all the hypotheses made by Bitcoin community members, the most frequent reason cited as a possible trigger for hyperbitcoinization centers on money manipulation by central banks. At several points in history, monetary inflation set off a vicious cycle of decreased purchasing power that culminated in a complete loss of faith in the currency under inflationary pressure. In figure 3, we rank countries based on an annualized increase in broad money between the years 20152020.

Figure 3. Annualized monetary inflation (CAGR period 20152020). The World Bank. 2021. Broad Money (Current LCU). Washington, D.C.: The World Bank. https://data.worldbank.org/indicator/FM.LBL.BMNY.CN.

Unsurprisingly, figure 3 shows that a large number of countries from this sample suffer from aggressive interventionism with yearly increases of monetary supply higher than 10%. For instance, a 10% annual increase of the money supply implies a decrease in purchasing power of 40% after only five years. The stability and predictability of bitcoin supply has the potential to disrupt the vicious cycle of manipulated monies leading to the loss of faith in the manipulated currency, and elicit the interest of the general population in the hardest form of money ever invented.

Central Bank Digital Currencies

The imminent launch of CBDCs (Central Bank Digital Currencies) by several countries will undoubtedly impact the cryptocurrency industry, but it is not completely clear how this intervention will unravel. Initially we can expect central governments to nudge their populations toward CBDCs through large-scale educational campaigns that will likely have a collateral effect on bitcoin adoption. However, as the limits of centrally-governed monies emerge, we can predict this will push new users into Bitcoins arms for at least four of the following reasons:

Government

One of the most common hyperbitcoinization hypotheses is the adoption of bitcoin initiated by governments. Figure 4 describes several prospective scenarios hypothesized by the Bitcoin community that have yet to occur.

Figure 4. Hyperbitcoinization scenarios driven by governments.

State Hoarding Of Bitcoin Scenario

In this scenario, the transition toward a bitcoin standard unfolds in distinct ways whether we look at it from the angle of individuals or governments. In Layered Money, Nik Bhatia (2021) predicts that governments will progressively build a healthier monetary system on top of the hardest money ever created: bitcoin.

Figure 5. Nik Bhatia. 2021. Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies. Nikhil Bhatia.

Several countries have reported possession of bitcoin after seizing it from criminal activities, but no country has announced a specific strategy for hoarding digital assets as a reserve currency. In this context, El Salvador is an outlier in adopting bitcoin. The acceptance of bitcoin as a legal tender in El Salvador could be interpreted as an isolated political decision, but the successive announcements by the government to first implement a national mining policy with the BigBlock Datacenter and subsequently to hoard BTC, confirm the execution of a broader bitcoin strategy in the country.

Sputnik Trade Scenario

For decades, the dollar's status as a global reserve currency has given the U.S. the privilege to impose sanctions on a global scale (figure 6).

Figure 6. Map of countries sanctioned by U.S. Wikimedia.org, JojotoRudess, CC BY-SA 4.0 , via Wikimedia Commons.

Predictions about the demise of the hegemonic dollar are not new, but recently new narratives have appeared speculating on how the adoption of bitcoin could contribute to the decline of the U.S. dollar (Clemente 2021). If two countries suffering under U.S. sanctions start using bitcoin as a settlement layer to circumvent these sanctions, doing so may provide the same kind of rude awakening for world governments as Sputnik had for U.S. space policy in the 1960s. From that point, it could set an alternative path for other countries to replicate. Iran, whose economy has been under embargo since 1979, sits on a large reserve of fossil fuel energy that could either be exported against a payment in bitcoin or by selling hashrate. The Iranian currency could become one of the most sought after global currencies and reposition the country on the pedestal of sound money (Keiser and Seiche 2021).

El Salvador Case

The announcement made by the president of El Salvador to accept Bitcoin as legal tender was greeted as a consecration by the Bitcoin community in the word. El Salvador, whose economy has been hit hard by the Covid-19 pandemic, has long dealt with high crime rates linked to drug trafficking. The countrys dependence on the U.S. is high both in terms of exports and expatriate remittances (figure 7).

Figure 7. Total cost of transaction for remittance of $200 based on World Bank data. World Bank, Remittance Prices Worldwide, available at remittanceprices.worldbank.org,

The bill proposed by President Nayib Bukele to the legislative assembly aims to position the country on the rails of prosperity by creating job opportunities, driving more inclusion, and boosting the economy. Even if this bill created a lot of excitement among Bitcoiners, forced money law in this case bitcoin as a legal tender diverges from the Bitcoin communitys central values of freedom, voluntarism, and free competition (Koning 2021).

This initiative provoked mixed reactions from global financial institutions. As expected, the International Monetary Fund expressed serious concern about the adoption of bitcoin as legal tender by the Central American country and pronounced that the bill presented a number of macroeconomic, financial, and legal risks. The Central American Bank for Economic Integration (CABEI), whose mission is to promote the economic integration and social development of the Central American region, took a more constructive and pragmatic approach. They offered technical assistance to the country to help with the implementation of the new system.

Since the announcement of the bill, officials from Paraguay, Panama, and Mexico have expressed their intentions to present crypto-related bills in the coming months to duplicate the process initiated by President Bukele.

If the experience in El Salvador, whose dependence on remittances is estimated at 24% of Gross Domestic Product, translates into an improvement in economic conditions, many countries beyond Central America could be incentivized to follow the same path as shown on the following map:

Figure 8. World Bank staff estimates of personal remittance received (% GDP) for Africa & Asia based on IMF balance of payments data, and World Bank and OECD GDP estimates.

On an exploratory basis, we estimated the impact on countries GDP if current remittance solutions are replaced by Lightning Network (LN) payments. As part of this estimate, we assumed a zero cost LN transaction and remittance cost equivalent to the average observed for transactions of $200 in each country. Figure 9 shows that the economic impact would be particularly beneficial for countries whose dependence on foreign capital inflows is greater than 20%.

Figure 9. World Bank staff estimates of the impact of zero-cost transactions on country GDP (%) based on IMF balance of payments data, and World Bank and OECD GDP estimates.

This study synthesized hyperbitcoinization scenarios and identified key agents that may initiate this transition. We categorized these scenarios into two groups: (1) top-down initiatives stemming from institutional actors such as central banks and governments, and (2) bottom-up initiatives emerging from the private sphere and Bitcoin communities. This first article presented an exhaustive analysis of the top-down scenarios, however the current state of adoption of Bitcoin technology does not permit drawing definitive conclusions about the influence of a particular agent. Rather this article serves as a foundational framework to continue our analysis of these prospective scenarios over time. The decentralized nature of Bitcoin is often in tension with the priorities of governments and financial organizations which are centralized, but this study shows how these institutions may play a major role intentionally or unintentionally in a mass adoption of bitcoin.

In a second article, we will present bottom-up scenarios driven by private and individual actors as a comparison to the top-down pathways.

This is a guest post by Alexandre Bussutil. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Bibliography

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Clemente III, W. (Jan 24, 2021). Hyperbitcoinization. The Path To Becoming The Worlds Dominant Form Of Money https://www.bitrawr.com/hyperbitcoinization

Fan, Y. (April 1, 2020). Some Thoughts On CBDC Operations In China https://www.centralbanking.com/fintech/cbdc/7511376/some-thoughts-on-cbdc-operations-in-china

Keiser, M., & Seiche, L. (Jan 8, 2021). ES MCCVR 2020: Max Keiser & Lina Seiche - Hyperbitcoinization: Maximalist Utopia or Inevitable Endgame? https://www.youtube.com/watch?v=kese9tMFgvc

Koning, J. (June 16, 2021). Hyperbitcoinization: By Choice or by Force? American Research for Economic Research. https://www.aier.org/article/hyperbitcoinization-by-choice-or-by-force/

Minting Coins. (Sept 9, 2017) #88 Hyperbitcoinization + SEC Meeting, Overstock, Google, & Byzantium Metropolis youtube.com. https://www.youtube.com/watch?v=PgjmSGjjRvo

Redman, J. (April 6, 2020). Hyperbitcoinization: Visions of Bitcoin Fueling the Post Covid-19 Shadow Economy https://news.bitcoin.com/hyperbitcoinization-post-covid-19-shadow-economy/

Suberg, W., & Draper, T. (March 3, 2021). Netflix 'Might' Be Next Fortune 100 Firm To Buy Bitcoin Tim Draperhttps://cointelegraph.com/news/netflix-might-be-next-fortune-100-firm-to-buy-bitcoin-tim-draper

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The Roads To Hyperbitcoinization - Bitcoin Magazine

The crypto economy has come awfully close to nearing the $3 trillion handle as far as the value of all 10,000+ crypto assets is concerned. Today, crypto market aggregation sites show the entire crypto-economy at $2.756 trillion is worth more than the value of Apples market cap at $2.467. Furthermore, the top ten crypto-asset exchanges, in terms of cryptocurrencies held in reserves, hold more than $200 billion or 7.47% of the entire crypto economy.

Digital currencies are far more valuable today than they were a month ago and the crypto economy is coming close to topping $3 trillion in value. The whole crypto-economy surpassed Apples overall worth this past week as bitcoin (BTC) became the sixth-most valuable asset on earth and ethereum (ETH) is now the 15th-largest global asset. While BTC has a $1.2 trillion market cap, ETH commands a market valuation of over $500 billion.

Meanwhile, the top ten crypto asset trading platforms, in terms of cryptocurrencies held in reserves, hold 7.47% of the entire crypto-economy under custody. The top ten crypto asset exchanges that hold the most value in crypto assets in custody are Coinbase, Binance, Huobi Global, Kraken, Okex, Gemini, Bitfinex, Bittrex, Bitmex, and Bitflyer respectively. All ten of these exchanges on Thursday, October 21, 2021, hold approximately $206.263 billion using todays exchange rates.

The Exchange Transparent Balance Rank data on Thursday is provided by Bituniverse with help from Peckshield, Etherscan, and Chain.info. Out of the whopping $206 billion held on centralized exchanges, Coinbase holds 35.84% with $73.84 billion held in reserves. Binance holds 14.78% of the $206 billion with $30.46 billion. Both Bitmex and Bitflyer hold the least amount of crypto reserves in the top ten positions, with Bitmex holding $7.27 billion and Bitflyer holding $4.89 billion in crypto reserves.

All ten of these exchanges combined hold more value than the overall market capitalization of Fortune 500 companies like Comcast, Pfizer, Cisco, Coca-Cola, and Intel. Its safe to say that the top ten crypto exchanges in terms of crypto reserves held in custody are becoming heavyweight behemoths in the world of finance, thanks to the growing value of the crypto economy.

What do you think about the top ten crypto exchanges holding $206 billion in cryptocurrencies? Let us know what you think about this subject in the comments section below.

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As the Crypto Economy Nears $3 Trillion, Top 10 Crypto Exchanges Hold Over $206B, More Than 7% Economics Bitcoin News - Bitcoin News

CNBC.com's Pippa Stevens brings you the day's top business news headlines. On today's show, CNBC.com's Tanaya Macheel reports on the first U.S. bitcoin ETF, which popped on its first day of trading. Plus, Netflix posts better-than-expected subscriber growth in the third quarter.

Shares of the first U.S. bitcoin-linked exchange-traded fund rose in their trading debut Tuesday.

TheProShares Bitcoin Strategy ETF, ticker "BITO," jumped 4.8% to close at $41.94. The fund tracks CME bitcoin futures, or contracts speculating on the future price of bitcoin, rather than the crypto itself.

That means investors in the ETF should expect the price and performance of the shares to differ somewhat from the price of bitcoin itself. This isn't ideal for existing investors; many of them take a long view on cryptocurrencies and had hoped for an ETF that would track physical bitcoin that investors could buy and hold.

The price ofbitcoinjumped more than 4% Tuesday to $64,206.51, according to Coin Metrics, about 1% from its all-time high from April 14 of $64,899. Bitcoin futures gained about 4% as well.

The launch highlights the remarkable growth of the ETF industry, Will Hershey, CEO of Roundhill Investments, told CNBC.

Netflixshares were up slightly after-the-bell Tuesday after the company postedthird quarter results, showing investors the streamer can continue to attract new subscribers.

The quarter's subscriber growth of 4.4 million was a solid beat over the expected 3.84 million. Analysts had expected users to flock to the streamer as it began to roll out a slew of content that was delayed to the back half of the year due to the pandemic.

The company said it expects to add 8.5 million subscribers in the fourth quarter. Netflix added it plans to have a more normal release schedule over the course of 2022, barring any Covid-related delays.

Securities and Exchange Commission ChairmanGary Genslersaid Tuesday that Wall Street's top regulator is working to determine if payment for order flow needs to be reformed or barred to ensure a competitive marketplace for buying and selling trading volume.

Gensler acknowledge that modern agreements between brokers and market makers have made trading far cheaper and efficient than in prior decades, but noted that some troubling conflicts of interest remain.

"Our markets have moved to zero commission, but it doesn't mean it's free. There's still payment underneath these applications. And it doesn't mean it's always best execution," the SEC chief said on CNBC's "Squawk on the Street."

Online brokerages that tout "free" or zero-commission trading typically make money by selling their customers' orders to high-frequency market makers who execute the buying and selling. That process is controversial and known on Wall Street as payment for order flow.

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Much-anticipated bitcoin futures ETF makes its debut on the NYSE: CNBC After Hours - CNBC

A closely followed strategist is eyeing price charts from the 2017 Bitcoin (BTC) bull run to see where the worlds leading crypto is heading next.

Justin Bennett tells his 82,800 Twitter followers that comparing BTCs previous peaks and valleys is like having a cheat code. He foresees a new all-time high of $80,000 just around the corner, followed by a leap past $100,000.

The 2017 fractal accounts for this weeks pullback.

Each move this cycle has been a little less aggressive than in 2017.

It was a 13% pullback then. Probably an 8-10% pullback now, or $60k BTC.

Then $80k+ in early November, $65k retest in mid-November, and $100k+ in December.

The trader uses some video game jargon in a follow-up tweet.

This is like having a cheat code

As long as it doesnt deviate.

Bennett next zooms in on the BTC candles chart as he highlights a pullback that mirrors a 2017 price drop.

Heres that slight BTC pullback I was referring to yesterday.

Next area of support is $58,000 $60,000.

Bitcoin needs to reclaim the $64,000 area to become constructive again.

Finally, the analyst plots out a price road map where Bitcoin surges well past $100,000 into the $200,000+ range by early January of next year.

I think something like this is much more likely.

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This Bitcoin Chart Is Like a Cheat Code for Calling Top Cryptocurrencys Trajectory, Says C... - The Daily Hodl