November 25, 2020 | Issue #145
Editor's Note: Happy Thanksgiving. Try not to brag too much about your unrealized BTC gains at the dinner table, don't talk politics, and stay safe. Here's another roundup of good-reads worth sharing.



ETH 2.0 Is Set to Launch

Ethereum 2.0 needed at least 16,384 validators to stake a combined 524,288 ETH by Nov. 24th in order for the proof-of-stake (PoS) blockchain to launch.

Many doubted they would hit their genesis target (including us) along the way, but so much for that. The ETH team pulled together a clutch 2.0-minute drill 4th quarter comeback, earning them the threshold needed to initiate the upcoming upgrade.

The pivot to PoS from proof-of-work (PoW) is intended to improve network scalability, which throughout Ethereum’s history has been an ongoing pain point for both users and developers.

The Ethereum Foundation has set a soft launch date for Dec. 1. Until then, a parallel proof-of-stake blockchain dubbed “the beacon chain” will run alongside the existing Ethereum network.

PayPal Volumes Already Making a Statement

A couple weeks ago, PayPal launched their new service that enables customers to buy, sell, and hold cryptocurrency directly from their PayPal accounts...

And it’s already having a massive impact on Bitcoin's diminishing supply.

In Pantera's November 2020 Blockchain Letter, dubbed Bitcoin Shortage, they claim that BTC volumes on Paxos (the underlying crypto partner for PayPal) have skyrocketed since PayPal enabled crypto purchases on Nov. 12th.

"When PayPal went live, volume started exploding. The increase in volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of Bitcoins... If their growth persists, PayPal alone would be buying more than all of the newly-issued BTC within weeks."

Related: In an interview this week with CNBC, PayPal's CEO Dan Schulman discussed the company's plans to expand their crypto services, and doubled down on the idea that Bitcoin is more than just an asset. Schulman also elaborated on how exactly Bitcoin operates on the PayPal platform.


The No. 1 Stock for America’s New Energy Revolution

The great American “reset” is here. But it’s not what you might expect.

Experts project a certain “free energy” device will create a trillion dollar industry – and one company is at the forefront.


Dissecting Today's Bull Market

Two competing theories have transpired to explain BTC’s rapid rise to $19,000.
  • Some have speculated that this rally is being predominantly driven by increased regulatory scrutiny in China, which has prevented miners and market participants from selling their BTC.
  • Others attribute it to increased institutional participation after Bitcoin received a trove of endorsements from high-profile macro investors.

📊 In this post, CoinMetrics evaluates the merit of each of these narratives through the use of network data.

Hot Take: GBTC Arbs Driving This Bull Market?

Founder and CIO of Praetorian Capital, Harris Kupperman, aka “Kuppy,” thinks Bitcoin is a massive ponzi scheme. You can disagree with that statement all you want, but investors shouldn't overlook his primary thesis: The effect of GBTC on the price of Bitcoin is paramount.

Kuppy describes how deep-pocketed institutional investors can earn 40% returns annually with using essentially risk-free arbitrage: Buy GBTC in the daily offering and short free-trading GBTC.

He notes that as long as demand for free-trading GBTC exceeds the supply of GBTC, there will be arbs who capture that spread and accelerate the process of GBTC cornering the market. He believes this will single-handedly squeeze prices way higher and eventually cause a catastrophic collapse.



🔒 Binance Gives US Users 14 Days to Leave Exchange

Binance is getting serious with its US-based customers.

They are now sending out emails to US users and giving them 14 days to close their account. After the 14 days, those who fail to close all active positions and withdraw all funds will have their accounts locked.

OCC Proposes Rule Prohibiting Large Banks from Discriminating Against Crypto Companies

In 2013, The United States Justice Department under President Obama initiated "Operation Chokepoint." The operation was meant to shut down fraudulent businesses and companies at risk for money laundering by pressuring banks to close their accounts.

Of course, since then, many legal but frowned-upon industries such as oil & gas, adult performers, and of course, crypto companies were discriminated against.

On November 20 though, the OCC is attempting to curtail the practice by prohibiting banks from discriminating against politically disfavored but otherwise legal businesses... like crypto.

TLDR: Marco Santori, the Chief Legal Officer for Kraken, sums up what it all means here.


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