BTC has a breakup

Good morning! Welcome to The Daily Moon. The Digital Rupee is finally here. RBI will begin trials on Tuesday. For starters, it will be tested in the wholesale market for bonds. Retail’s test-run will begin a month later, with select customers and stores.

The markets stayed cautious. Bitcoin hovered around $20,700 while Ethereum was at $1,620 levels. Nasdaq fell in early trade. Back home, Sensex and Nifty ended higher on positive global cues.

Bitcoin’s Shining On Its Own

Technology stocks were hit by a bad spell in the past week. The market expected Bitcoin to follow suit. But, that didn’t happen. Bitcoin rose 6.5% and surprised naysayers. Unlike stocks, there was no earnings “pressure” on the crypto.

Signs of uncoupling Bitcoin no longer moves in the shadows of Nasdaq. They are drifting apart. This means that BTC doesn’t move up if Meta, Alphabet, or Amazon does. Nor does BTC crash if these stocks do. It’s a sign that Bitcoin is valued as a standalone investment. There are two factors at play:

1. Quarterly woes: Companies face investor wrath every quarter when the earnings are poor. Lower revenues and high losses lead to price falls.

2. Inflation: Bitcoin is affected by inflation too. But it’s not as volatile as stocks which end up crashing ahead of every FOMC meeting.

There’s a view that Bitcoin’s become more stable because all its data is available live. Stocks, on the other hand, depend on company performance data released every quarter.

Will this last?So far, it has. Meta fell after a cash-burn on its metaverse project while Amazon slumped on lower-than-expected holiday season sales. Meanwhile, Bitcoin is headed towards $21,000.

Another interest rate hike is expected this week. What will be crucial is whether the US Fed indicates a pause in hikes ahead of the New Year. That’s another reason why the stock markets are on the edge. BTC will move undisturbed, at least for now.

LTC Heads To The Bulls

Ethereum’s loss is Litecoin’s gain. As miners were pushed out of Ethereum after its proof-of-stake switch, Litecoin got popular. Now it’s these miners that have led Litecoin to the bull market. It rose to $55 levels.

PoW WinsProof of Work (PoW) involves solving computational problems to add new blocks to a blockchain. This is measured as hashrate. Litecoin’s hashrate is 529.46 Terahashes per second. One Terahash is 1 trillion hashes per second, which means miners make ~529 trillion guesses to mine new LTC. Higher the hashrate, higher is the activity on the blockchain. Developers have also begun to build on the blockchain, another reason for LTC prices to move upwards. But, there’s not much buzz on social media yet.

Meanwhile…Ethereum’s staking yields have plateaued. Since more investors have staked their ETH under PoS, the yield or investment return dropped. This is because there are more people claiming the same returns. The staked Ether can’t be immediately withdrawn too.

Musk’s Foggy Blockchain Plans

No one really expected it to happen. But Elon Musk did really buy Twitter. And threw out a bunch of senior executives. That’s old news. What is truly unknown is how, and if, the richest man in the world will make good on his word to put Twitter on the blockchain.

What we knowMusk has said, publicly and in private texts, that blockchain and crypto payments were on his agenda if he buys Twitter. But there is also evidence that he said a blockchain Twitter wasn’t possible. Even so, integration of Dogecoin for Twitter payments has been moving DOGE for the past few weeks. So far, Musk seems to have given Twitter employees a deadline to begin charging users $20 for verification. Crazy, right?

What are the options?People have been saying they will leave Twitter because of Musk and what he plans to do with it. But there is possibly no major alternative social media platform which isn’t contemplating some kind of crypto or blockchain integration. Facebook (Meta), Discord (hosts DAOs), Mastodon (decentralised), and even the right wing social media app Parler (NFTs) all have a crypto connect.

All Roads Lead to Web3

The tech industry has little to cheer about. With a looming recession and rising inflation in the US, layoffs in the industry are rising. Data from layoffs.fyi suggests that 700+ startups have fired more than 95,000 employees. Where are they going? Web3. A simple search for Web3 on LinkedIn shows over 4,000 job postings in the US alone. Well-funded, forward-looking crypto companies are actively hiring, even though the larger industry continues to face a bear market.

Future ready or just risky?The opportunity is clearly seen as the future, but like everything new, there is some amount of scepticism. That aside, the thing with Web3 is, it is a difficult skill to acquire, even for developers who may have been doing excellent work with Web2 technologies. Besides, there are other issues that are surfacing, including a lack of diversity.

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Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.