It's been a rocky road for Bitcoin in 2022 so far, and we are keeping watch.
Welcome to The Daily Forkast January 11th 2022.
I'm Angie Lau, Editor-in-Chief of Forkast.News covering all things blockchain.
Well, Bitcoin briefly dipped below the US$40,000 mark for the first time since September, Monday
night Asia time, but it bounced back quickly.
Question is, can that recovery continue?
We're going to take a look at the road ahead and a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Well, let's kick off with some of the top stories coming out of Asia today.
First up, it is official, crypto mining is now on China's industry blacklist.
The country's National Development and Reform Commission has listed the industry in the
obsolete category in its guidance catalog for industrial structure adjustment.
Consider that code for politically and economically canceled by the Chinese government.
The catalog is used as a basis for guiding direction on domestic and foreign investment,
as well as for helping government agencies in formulating fiscal and import and export
policies.
Now, industries in the obsolete category, which it defines as technologies which are
backwards and do not have safe conditions for production or waste resources and pollute
the environment.
They're all prohibited from ongoing operations or seeking investments.
However, a deadline for operations to cease completely has not yet been announced.
Not yet, at least.
Meanwhile, a new NFT collection inspired by Taiwanese superstar singer and actor Jay Chou
has dethroned Board Ape Yacht Club from the number one position by trading volume on the
open sea marketplace.
Now the ten thousand PhantaBear series NFTs, co-created by Chow's hipster brand Fantasy,
priced at 0.026ETH or around US$1000 at the time, sold out within 40 minutes.
Now, in the past seven days, the collections trading volume has leapt almost 500% crossing
the 17,000 ETH, or US$53 million mark, outrunning both Board Ape Yacht Club and Doodles.
Now, Chou definitely wasn't kidding when he said he was all about being number one with
a little help from his stance.
You can find those stories and a whole lot more at Forkast.News.
Over in the markets, it's been a rough ride for Bitcoin so far this year.
However, after dipping below the US$40,000 mark overnight, it bounced back by Tuesday
morning Asia time trading at a little over US$42,000.
Forkast.News Lachlan Keller takes a look at the market action.
Bitcoin had been trading sideways after losing roughly 10% within 24 hours late last week
before this latest dip happened.
One expert told Forkast.News, there are multiple factors at play, with Bitcoin still being
seen as a hedge against inflation, alongside headwinds from the rejections of spot Bitcoin
ETFs.
But he also sees a lot of potential upside because of technological developments like
the Taproot upgrade, allowing Bitcoin to start campaigning in the DeFi space, meaning is
more than just digital gold.
"What I've seen in the early days of 2022 is just more positive signs about adoption.
You've got one of the biggest neo banks in Germany and adding crypto trading Square's
platform.
This convergence of fintech around crypto becoming mainstream.
More and more people will be will be seeing crypto, using crypto.
They might be using it without necessarily knowing they're using it.
It will be built into the platforms that they're using."
Miller says that while we may see more volatility ahead, US$40k is not a negative level for
a lot of investors who have been in the crypto space for some time, and he sees the trajectory
as going up into the right.
For Forkast.News.
I'm Lachlan Keller.
Well, crypto assets have had quite the volatile start to the new year.
Nevertheless, Bitcoin continues to reign supreme among digital currencies, with a market value
twice that of its nearest rival, Ethereum.
Question is, will DeFi allow the OG of crypto to consolidate that position further?
What we're going to ask David Lighton, co-founder of Lithium Finance, a platform that uses collective
intelligence to price the underpriced, and he is here to give us the DeFi download.
Good to see you again, David.
Good to see you, Angie.
Thanks so much for having me.
Well, David, there's a lot of bear sentiment out there, and Bitcoin has had its fair share
of skeptics, even as the bullish forecast for the currency, whether it's Goldman Sachs
or the El Salvadorian president, are talking of a move to six figures.
Do you see a network effect playing a part in that move?
First of all, I think Bitcoin will go to six digit levels in in 2022, maybe in 2023, based
on its strong track record of historical expert.
Essential growth, Dan Morehead at Pantera Capital has produced a really excellent piece
of research that shows bitcoin's log trend fitting exponential growth fairly tightly
since it was created.
So in principle, this ought to push the price above $100,000 sometime in 2022, or, like
I said, maybe in 2023 as to whether network effects play a part in that move.
Well.
Yes, network effects occur when the value of the platform increases with each additional
users.
So with regard to the store of value use case, that's true fundamentally because Bitcoin
has a fixed supply, right?
So with each additional buyer, the supply goes down.
But to the extent that these network effects increase the value of the other medium of
exchange and unit of account use cases on the Bitcoin blockchain.
This is also true, and I think we can look at interest in Bitcoin as to some extent crowding
out investment in gold, but also crowding in investment in the digital asset space,
more broadly, increasing liquidity and not just bitcoin, but all the other altcoins all
the way down the food chain.
Yeah.
Another interesting point from the Goldman Sachs report on Bitcoin was that the currency
could see an enhanced role as a store of value, taking away market share from gold over the
next few years.
But what do you think DeFi's role could be in this?
To the extent that Bitcoin enjoys an increased role as a store of value, there will be an
increased confidence in the DeFi sector overall because Bitcoin has historically been correlated
with the price of the alt-coins.
So to me, this is maybe the most interesting network effect.
A reinforcing loop as the demand for Bitcoin increases, the price of the alt-coins also
increases.
And as the liquidity in alt-coins increases, the builders in the DeFi ecosystem have more
liquidity to use to build their projects.
So the real network effect here is in the broader blockchain and digital assets ecosystem,
as the value of Bitcoin increases and Bitcoin takes away market share from gold, the market
power of DeFi increases, and it poses a greater threat to the marketplace for traditional
financial services, in my view.
So obviously we're seeing this play out on a small kind of infant scale at the moment,
but I see DeFi as roughly 10 years behind Bitcoin in going mainstream.
So ultimately, DeFi has at least as much to contribute to the world as as Bitcoin does
based on its capability to be the kind of ultimate example of fintech and innovation
in financial services by disrupting sort of traditional centralized players.
So we have to envision a world where bitcoin goes above 100,000 and a world where people
start to go to DeFi providers as their main sort of banking relationship.
Well,Bitcoin 13 years in, DeFi you could say it's still in the toddler phase, but there's
no doubt migration is happening right now and speeding up in 2022.
Thanks so much, David, for the DeFi download.
And that's The Daily Forkast from our vantage point right here in Asia.
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I'm Editor-in-Chief Angie Lau.
Until the next time.