Nov 2, 2021
4 min read
Impact of ‘Meta’ on crypto, Tesla’s plans, and other infrastructural news
Week in short:
The crypto market is hanging about at its all-time high level without any significant movements. However, the news outlook is pretty positive, with some big announcements from large high-tech corporations and some perspective developments in the legal and infrastructural areas.
This week’s digest:
- Facebook announces its Metaverse
Mark Zuckerberg has announced the new name and focus for his company. It’s Meta now, and it’s going to create the Metaverse for the billions of users. What is the Metaverse? That’s a tricky question everyone is wondering right now. Some say it will be the new internet, and some say it’s just another fancy term for VR. I suggest reading this article to figure it out for yourself.
So what? At first sight, it’s not quite the news of the crypto economy. However, the concept of Metaverse relies a lot on blockchain and NFTs particularly, as these technologies are required to ensure the proper operation of digital ownership rights. There are two takeaways here. First, we might expect another wave of growth in the NFT area of the crypto economy, including both the NFT tokens and the infrastructural projects. It might be somewhat fundamental as this infrastructure will be required for FB’s and others’ metaverse projects. We might even lookout for some potential acquisitions here. Another takeaway is more speculative as the overall wave of interest towards the Metaverse will draw some attention to small crypto projects aiming to build their own Metaverse. I don’t think that it would be highly successful at their tiny scale, but anyway, FB’s statement might bring some investors’ attention to these small tokens.
*Link [watch, 8 min] - Tesla might sell cars for BTC again
In its quarterly report to SEC, Elon Musk’s company has indicated that it might restart selling cars for Bitcoin as it believes in the long-term potential of digital assets both as an investment and a liquid alternative to cash.
So what? The last time Tesla had announced such news, there was a highly positive response from the market. The opposite was true for the temporary crypto sales shut down due to the non-eco-friendly crypto mining process. The outcome is not clear for now, but as the mining moves towards “greener” practices, and given that Tesla still believes in crypto potential, we might expect their favorable decision on crypto sales sometime soon.
*Link [read, 2 min] - MasterCard is getting ready to deploy CBDCs
Another good news from the US companies’ quarterly reports. CEO of Mastercard has shared his positive outlook on the crypto industry. Notably, he called the CBDCs (the Central Bank Digital Currencies) as the most probable means of payment in the crypto landscape. That is why Mastercard is already working on the infrastructure for CBDC payments processing.
So what? It is hard to disagree that stablecoins (especially those issued by monetary authorities; CBDCs) are a much better option for payments than traditional cryptocurrencies due to their volatile nature. Obviously, it is not an investment instrument (unless you want to make a profit on the exchange rate changes), but this is an excellent infrastructural instrument as it could lead to much higher capital inflow into the crypto economy overall.
*Link [read, 2 min] - India plans to introduce the crypto regulation
According to recent reports, India does not plan to ban cryptocurrencies anymore (as initially proposed in 2019). Instead, it plans to develop the legislature and regulate crypto asset class similar to commodities (with appropriate taxation and so on).
So what? After the Chinese crypto ban, it was a significant concern of how many countries will follow a similar path. India was one of the countries with a high probability of doing so because of its official statements in 2019. Obviously, it would matter a lot for the crypto market due to the large Indian population. Current news sound promising as any regulation is better than the complete ban, so it’s already a positive even, but let’s wait for the details to see what they will offer for the crypto economy.
*Link [read, 4 min] - Volt Equity “Bitcoin Revolution” ETF goes live
One more crypto ETF is here, but it is quite different from others as it is linked to companies’ stocks rather than to Bitcoin itself. The underlying companies have significant exposure to Bitcoin, such as Microstrategy, Tesla, Twitter, Square, Coinbase, etc. What is also interesting is that the fund’s allocations will be adjusted based on the famous PlanB’s stock-to-flow model, which considers the impact of mining supply shocks on Bitcoin’s price.
So what? We get another traditional financial instrument allowing us to invest in the crypto market. It does not give us pure crypto exposure as there are definitely many other factors affecting the stock prices of underlying companies. However, it allows us to invest in large and successful high-tech companies and, at the same time, get additional exposure to the crypto market. In other words, that’s an excellent instrument to diversify the portfolios of many investors.
*Link [read, 2 min]
