What a difference a week makes!

Last Friday, Bitcoin was hovering around the $30 000 mark and investors were nervously wondering if it was going to drop below that psychological barrier. By Tuesday the following week Bitcoin had touched $40 500 and, although it lost a bit of momentum, it still managed to close the week up by 20%. 

Suddenly the news is turning bullish again. A scroll through the headlines reveals Bloomberg saying ‘Bitcoin is more likely to hit $60 000 than drop again,’ while the CEO of Digital Assets Data dropped the astonishing prediction that a single Bitcoin will be worth $1 million within the next 10 years.

The reasons for the rally were unclear, although there were strong rumours circulating that global giants Amazon were set to announce they would accept Bitcoin as a payment. That announcement didn’t happen but if it does, the upside will be tremendous and a game-changer. 

It’s great to see such excitement in the market but a dose of caution should be a large part of your crypto diet, as too often we’ve seen the market prove everyone wrong. 

In other news, Ripple and it’s digital asset XRP seemed to brush off the long-running SEC lawsuit when it announced a new On Demand Liquidity (ODL) corridor in Japan. ODL which used to be known as xRapid uses XRP as a bridge currency between two banks in order to remove the need for pre-funding using crypto liquidity. High transaction costs in normal banks have been identified as a key problem that XRP can solve and this is a great example of a real use case for cryptocurrency that should show no signs of slowing down. 

It’s worth noting that XRP’s price has been depressed for some time thanks to the big, confusing lawsuit with the US Securities and Exchange Commission, but the rest of the world has just shrugged and continued to innovate with XRP and move the whole industry forward. 

At Cape Crypto, we continue to innovate no matter what the price. Our goal remains to be the quickest and easiest way for South Africans to own a piece of this dynamic, growing market with the lowest trading fees in the whole country. Remember that you can spend as much or as little as you want to get started right now. If a coin does go up to a million dollars, wouldn’t you hate to know that you missed out on that opportunity. 

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Many people realised that prices in the region of $60 000 for Bitcoin were too high, and expected a correction…but this dip has gone lower and longer than what we had hoped for. On the 22nd of June, the price hit a low of $30 000 but has climbed back up to $35 000 in recent days. But, what they say about the weather in Cape Town can also be said for Bitcoin prices…if you don’t like it, just wait five minutes and it’ll change. 

Aside from the crazy price gyrations, there is a lot of innovation and impetus still driving the market forward. 

Billionaires continue to drive the market. This time it’s not Elon Musk who is making waves, it’s Twitter founder and CEO Jack Dorsey who recently hosted a live Twitter Spaces conversation with mogul / musician Jay-Z about Twitter’s acquisition of Tidal. 

Tidal is a music streaming service that was founded by Jay-Z with an emphasis on giving more back to musicians than Apple Music or Spotify do. Twitter recently acquired the company and, with Dorsey being a huge Bitcoin evangelist, there was a lot of discussion about how crypto could be used in the streaming media world going forward. 

CoinTelegraph wrote that ‘Jay-Z and Jack Dorsey have hinted that their music streaming service, Tidal, could be eyeing integrations supporting NFTs and smart contracts. They believe they can capture significant market share by using blockchain technologies to offer empowering tools to artists.’

It’s not too hard to imagine some new kind of product where music, twitter and cryptocurrencies come together to provide something new and exciting for the market and help musicians rebuild after the devastating loss of touring revenue from the pandemic. 

At the time of writing, many crypto enthusiasts are waiting (im)patiently for the launch of the Spark token from the Flare Networks. This company is bringing the next generation of smart contracts to the integrated blockchain, and mayn of those in the know say that they are really getting it right. Flare’s token, known as #Spark, is going live any day now, and is being handed out to all XRP holders who had a positive XRP balance in December of 2020. No-one is quite sure yet what each Spark token will be worth, but for many XRP holders, this could be just the kind of boost they need to make up for the big losses that have occurred over the last few weeks. 

Right now, up and down in the markets just feels like business as usual. Our only advice is to HODL and to keep building your portfolio with CapeCrypto. See you soon!

It’s a clear sign that the industry is developing and heading in the right direction. Every day brings new stories about new coins, new technologies…making widespread adoption seem inevitable. 

Last week in our YouTube chat show, we spoke about how India had stepped back from the brink of outlawing cryptocurrency. The Reserve Bank of India announced that no banks should be penalising customers for dealing in cryptocurrencies. The New indian Express newspaper ran a story with the headline that “India may move to classify Bitcoin as an asset class.”

It’s a huge relief for the millions of crypto enthusiasts in India and a signal that the Indian authorities understood that cryptocurrencies like Bitcoin and Ethereum will have a role in the economy of the future, whether they like it or not. 

This week, the news was even more bullish. The small South American nation of Ecuador announced that Bitcoin would be accepted as legal tender in that country, with immediate effect.

As if that wasn’t enough, the country declared that there will be no capital gains tax for Bitcoin, since it will be a legal currency, and that immediate permanent residence will be granted to crypto entrepreneurs. These are extremely bullish sentiments from the small country that is attempting to disrupt the world’s global economic model in spectacular form. 

 
It’s not the only one. 

Just last week, Brazil announced that it was going ahead with plans to develop a central bank digital coin, known as a CBDC, and it’s not the only one. The European Central Bank is also working on a digital euro and tech firms like Ripple, Ethereum, Stellar are all lining up and doing whatever they can to make that happen. 

Finally, the nature of a decentralised currency means that it’s not only nations that can issue coins. There has been a lot of talk recently about cities issuing their own coins and, in so doing, raising money for vital infrastructure projects. The city at the forefront of this right now is probably Miami, which is fast becoming the new San Francisco in terms of its ability to attract digital innovators to live there, thanks to the forward-thinking leadership of Mayor Francis Suarez.

He’s ushering in a new phase of ‘startup cities’ that function holistically with their own coins a central feature of how that will work.

As Marc Andreesen wrote on Politico…”Policymakers shouldnt’ t be trying to copy Silicon Valley. Instead, they should be firing out what domain could be specific to their region – and then removing the regulatory hurdles for that particular domain.’ 

 Cape Town coin, anyone?