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Efficient Frontier

The United Stablecoins

Welcome back to Efficient Frontier’s biweekly newsletter! We hope you enjoy our update on the Federal Reserve’s “Stablecoin mania” and our birds-eye Bitcoin market wrap

Stabelcoin mania at the Federal Reserve

Why is this story important despite not being as big as NFTs or as cutting edge as DeFi?

Google search trends over the last 5 years for CBDC, stablecoin, NFT and Bitcoin

Recent events

November 2021 — US Treasury publishes a report on stablecoins

Conclusion

According to the Fed’s new report on CBDC’s it does not intend to create a centrally controlled dollar anytime soon, writing they will not “proceed with issuance of a CBDC without clear support from the executive branch and from Congress, ideally in the form of a specific authorising law” and only with “broad public and cross-governmental support”.

Stablecoin volatility during Bitcoin and Ethereum crashes. Source: The Federal Reserve
Caption: Stablecoin supply has reached $145 billion this week. On-chain volume of stablecoins was $542 billion in January.

Bitcoin Market Wrap

On January 28th we wrote “sentiment doesn’t have much lower to go” — this time we got it right and since then, Bitcoin’s price grew mostly at a steady pace from $37,000 to a high of $45,300. There were also two highly volatile days: February 2nd which saw a $2,000 drop, and February 3rd with a $4,000 rise to $41,780.

Bitcoin Fear & Greed index VS Bitcoin price. Orange: January 23rd. The YTD high being 93 and low 8. Source: CoinGlass
Above: Binance long/short ratio by account below Bitcoin’s price. Green — traders are long, Red- most traders are short

Ark’s $1 million Per-Bitcoin and other bizarre activity

The last weeks were charged with unique news only the crypto world could produce- from the colourful couple arrested for laundering $3.6 billion in Bitfinex’s stolen Bitcoin, the massive $320 million DeFi hack, and the ENS DAO cancellation scandal, to Tezos blockchain, the ICO which raised $220 million in 2017, becoming an official sponsor of the world famous Manchester United football club.

News & links

  1. $53 million in Ethereum raised for Julian Assange’s legal defence fund
  2. China and Russia pledge to build financial trade network independent from dollar system
  3. First ever metaverse mortgage used to sell a virtual house
  4. Meta (formerly Facebook) joins the Crypto Open Patent Alliance
  5. Canadian protestors raise 21 Bitcoins after GoFundMe suspension
  6. Microsoft is hiring a cryptocurrency Director of Business Development

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Efficient Frontier

Efficient Frontier

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Leading research & algorithmic trading firm for the cryptocurrency markets efrontier.io