| Your Weekly Update On All Things Crypto |
|
| 50th Anniversary of the Nixon Announcement that Changed Everything |
Americans were first exposed to the highly controversial 'Nixon Shock' 50 years ago. It was in August of 1971 when the United States' 37th President halted gold redemption rights for the United States Dollar (USD), therefore breaking all ties fiat currency had with sound money (gold). That announcement changed the course of history and spawned a new era of uncontrolled fiat money production. Context 5 decades ago, the United States had a 5.8% inflation rate in addition to a 6.1% unemployment rate. As of last year, the unemployment rate had increased to 10.2%. Back then, Nixon engaged Federal Reserve Chairman Arthur Burns, John Connally (the Treasury Secretary at the time), and then Paul Volcker (the Nixon administration's Undersecretary for International Monetary Affairs) to address these issues. Volcker would also eventually go on to become Federal Chairman.
On August 13th, 1971, these officials got together with twelve other high-ranking Treasury and White House advisors to meet with then Nixon in secret at Camp David. There was much discussion over what the former leader of the American people should do, but in the end, Nixon opted to implement a few key changes on August 15th, relying mainly on the counsel of the self-assured Connally. These measures would then go on to impact the U.S economy to such a large extent that we are still feeling the effects of his decisions to this day. What Changes Did Nixon Implement? Nixon instructed Treasury Secretary Connally to prohibit, with limited exceptions, the dollar's convertibility into gold or any other reserve assets, closing the gold window and preventing foreign governments from exchanging dollars for gold. In order to combat inflation, Nixon signed Executive Order 11615 (in accordance with the Economic Stabilization Act of 1970), which imposed a 90-day freeze on salaries and prices. This was the very first time since World War II that the United States government imposed wage and price restrictions. Furthermore, an import tax of 10% was administered to guarantee that American products did not suffer as a result of the predicted volatility in currency rates.
Nixon remarked that rebuilding new prosperity is frequently linked to creating new employment and preventing inflation. As a result, he thought that the American dollar's role as a foundation of monetary stability across the world needed to be safeguarded and maintained in perpetuity.
To that purpose, he instructed Secretary Connally to temporarily suspend the dollar's convertibility into gold or other various reserve assets, apart from situations where the quantities and conditions were considered to be in the best interests of monetary stability and the United States itself. What Was The Driving Force Behind The Changes? Nixon abolished the gold standard because the United States could no longer conceal the huge military expenditures that were fuelling the Vietnam War. As part of the Bretton Woods agreement, the United States agreed to keep three-quarters of the world's gold reserves. Nixon's war spending was so huge in fact that other nations began to take note of the U.S printing massive sums of their national currency. What Were The Consequences? As the years went on, Nixon's words were often considered to have been hollow, as the monetary depreciation of the dollar began to accelerate after 1971, faster than at any given time in American history. He had inadvertently opened the floodgates to a realm of fiat that the world had never quite witnessed before. Nixon’s decisions also prompted the United States military-industrial complex as well as the unaudited Federal Reserve to develop exponentially after 1971.
The national debt has since risen to $28.6 trillion during the terms of Presidents Ronald Reagan, Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and now Joe Biden. Generations of American adolescents have never experienced what it is to live in a society without enormous government expenditure and never-ending wars. Moreover, since 1971, wages in the United States have stagnated like never before, and American citizens find themselves being increasingly unable to afford basic necessities as time passes.
Even now, the future looks bleak, as in 2021 the market and economy continue to be in bad shape, and traders are returning to gold and investing in cryptocurrency assets such as Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and numerous others. The fact that Dogecoin’s (DOGE) popularity had skyrocketed and the occurrence of the now infamous GameStop incident should speak volumes about how much of a disconnect has been made between the American youth and the U.S government, which makes sense as inflation continues to soar whereas countless adolescents are expected to work for unjustifiable pay. |
|
| BlackRock Makes A $383 Million Bet on Bitcoin Mining |
|
The world's largest asset manager joins the party and takes a large stake in two U.S.-based bitcoin miners. Last Week Blackrock, with $9 trillion in assets under management (AUM), revealed an SEC filing stating that they have invested $383,000,000 between two Bitcoin miners, Marathon Digital Holdings and Riot Blockchain. This move follows the trend of traditional financial institutions increasing their exposure to crypto through traditional equity investments. Blackrock's announcement regarding their move into crypto mining follows similar announcements from Fidelity Investments, and Vanguard Group, as this investment trend continues to gain momentum.
Blackrock has purchased 6.71% ($207M) of Marathon Digital Holdings, and 6.61% in Riot Blockchain ($176M). Though the stock prices of both companies have fluctuated with Bitcoin's rise and fall in price, Marathon's stock price has increased by +754%, Riot Blockchain by +848%, versus Bitcoin's +288% price increase over the same time period.
The lag between regulation and demand in the crypto sector has lead investors to take some interesting paths to get exposure to the crypto industry. While it is great to see some of the largest funds in the world taking steps to invest in Bitcoin, it is also great to see investments like these that help secure the Bitcoin blockchain as well.
|
|
| Coinbase to Buy $500M in Crypto on Balance Sheet |
|
Last Thursday, Coinbase Founder, Brian Armstrong announced on Twitter that the company had received board approval to purchase $500M worth of crypto on their balance sheet. Perhaps even more significantly, he announced that the company will be investing 10% of all profit going forward in crypto. Adding that he expects this percentage to keep growing over time as the cryptoeconomy matures.
The company plans to invest in “Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform,” becoming the first public company to do so, finance chief Alesia Haas said in a blog post.
The announcement emphasizes Coinbase’s commitment to making long-term investments in the crypto sector, stating: “Our investments will be continually deployed over a multi-year window using a dollar-cost averaging strategy. We are long-term investors and will only divest under select circumstances, such as an asset delisting from our platform.”
The news follows a Wall Street Journal report that said Coinbase has stockpiled $4 billion in cash to weather regulatory headwinds. Therefore the company still has plenty of cash on hand despite the transaction. |
|
| Adam Back: Blockstream To Build Zero Emission Open Source Mining Project With Square Inc |
| Coinbase is Buying Crypto?! | The Best Business Show
|
| | Professional Trader Shares Crypto Market Update | Eric Kasanowski | CryptoWeekly Podcast |
|
| Subscribe to the CryptoWeekly YouTube Channel |
|
| | Discover Which Digital Currencies are Set to Hit "All-Time Highs" and the Coins that Could Soar
1,000%... 10,000%... 100,000% or More
47 of the world's top digital currency experts are all coming together for one of the most anticipated events of the year.  |
|
|
| Bitcoin Prints 5th Straight Green Weekly Candle |
The momentum continued for Bitcoin and the entire crypto market last week. Bitcoin printed its 5th straight green weekly candle and its second straight candle above the bull-market support band. While momentum seems to be slowing, we are still setting higher daily highs, and higher daily lows, for the time being, signifying no change in momentum as of yet. If we see stagnation in the Bitcoin price, while still above the bull-market support band (weekly timeframe), expect the altcoin market to catch fire.
View the chart here. |
| Altcoin Dominance Breaks Out From Bull Flag Above Critical Support |
Altcoin dominance may be in store for another breakout week soon, given the long-term bull flag setup that has been forming since March. With Bitcoin back up above the bull-market support band, the climate is right for another altcoin rally. After bouncing aggressively off the ascending green line of support on the week of August 9th, we feel that there is still room to run for altcoin dominance.
In this stage of the "liquidity wave," value has been flowing from Bitcoin to large-cap cryptocurrencies. If history gives us any indication, the next logical step for liquidity to flow is to the mid-cap coins, and eventually the small caps. By understanding the cycles of liquidity in the crypto market, you can give yourself an edge on determining the next coins to make their rally.
View the chart here. |
|
TOKEN2049 is the premier crypto event, organized annually in Hong Kong and London, where founders and executives of the leading crypto and blockchain companies share their views on the market. We shine a light on the global developments while taking a unique and widening perspective on the ecosystem and its vast opportunities. ​ Meet the pioneers, the early believers, highly influential and established opinion leaders. TOKEN2049 brings together the global crypto industry, uniting entrepreneurs, investors, developers, industry enthusiasts, and global media - and creates unparalleled networking opportunities. This is the community that will define what’s next in the space.
Register for Europe:7-8 October 2021 | London Register for Asia: 23-24 November 2021 | Hong Kong |
|
| | | Want to Sponsor the Newsletter? |
|
| We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
|
|
|
|
|
|
