The crypto industry and market both continue to grow at one of the highest adoption rates in history. A recent Chainanalysis report revealed an 880% increase in crypto adoption this year alone. This, coming on the heels of another report, showed crypto growth doubled from 100 million to 200 million since January. As the market stays hot, no one wants to be left behind, but a select few are betting against it.
Why the contradiction of opinions? You guessed it, inflation, which continues to be felt in the market as costs keep rising. Just this week, the Fed decided to not raise interest rates, demonstrating a delayed response to tapering inflation.
Also this week, Billionaire Peter Thiel’s Palantir announced that they will be accepting Bitcoin payments for their software services. (Bitcoin Magazine) This is in addition to adding $50 million in gold bars to their balance sheet in anticipation of a potential “Black Swan” event, as well as to combat the depreciation of over $2.3 billion in cash in the reserve. The longer the cash sits, the less it’s worth, and that’s the simple truth.
Speaking of Black Swan events, enter Michael Burry, who you may know from his portrayal in The Big Short as the man who bet big against the housing market before the mortgage crisis of 2008. He is back at it, piling on short positions geared specifically at Tesla, perhaps in part due to a growing beef with its founder, Elon Musk. Earlier this year it was revealed that he owned a total of over 800 thousand puts against Tesla, an action it appears he took after Musk ignored his Twitter advice. Bearing in mind Musk’s relation to crypto, it should not be a surprise that Burry has more than once come out strongly against cryptocurrencies, citing a prediction of “the mother of all crashes” for Bitcoin that would eventually cripple the market. (Coindesk)
It’s true that crypto has seen some wild swings over the last past year, but while the market does what markets do, it’s clear that crypto projects and companies aren’t wilting. Innovators keep prioritizing advancement while taking the necessary steps to address public concerns. The B Word conference, which included Elon Musk and Twitter CEO, Jack Dorsey, was a pertinent example, as the speakers identified sustainability initiatives and ways to make the crypto market a more accessible and green facet of modern commerce.
There are two sides to every story, and perhaps the best match to Burry’s disruptive candor is Cathie Wood herself—the ultimate disruptive investor. Wood, founder of ARK Invest and co-host of The B Word conference, is an avid Tesla investor, innovative tech follower, and crypto enthusiast. ARK Investments is known for ARK innovation ETFs, which gear portfolios toward “disruptive innovation” investments that will fund potentially revolutionary tech advancements. With a mindset like this, it’s no wonder Wood is an avid Bitcoin and crypto bull.
In a predictable move, Burry decided to short millions against ARK Investments, citing inflation as being the reason it would eventually bust. Wood, in retaliation, made a recent argument predicting that crypto brings down commodity prices by inherently lessening inflation as a whole and creating a space where innovative tech will be encouraged. This was met with a moderate level of scrutiny, something Wood isn’t unfamiliar with due to her reputation for having an avant-garde investment strategy. None of this was enough to affect the market, but it was enough to elicit a public response from Wood, stating, “He doesn’t understand the innovation space.” Burn.
And she may just be right, as the positive crypto industry headlines just keep coming. For example, Wells Fargo announced a passive Bitcoin fund this week for its wealthy investors. Wells now joins the ranks of its fellow big-bank peers, such as BNY Mellon and JP Morgan Chase, that are turning to the world of crypto.
Kevin O’Leary, or Mr. Wonderful, sat down to give his input on institutional crypto adoption, citing their proclivity toward Bitcoin as the most viable asset for engagement.
“Bitcoin is the property of preference to institutions,” said O’Leary. “There’s at least a trillion dollars worth of demand if we can get the sustainability issues and the ethical issues around where it’s mined.” (Cryptopotato)
And it’s not just Bitcoin. Galaxy announced the launch of a new institutional DeFi fund, called the Bloomberg Galaxy DeFi Index. The fund exposes institutional investors to UNI, AAVE, COMP, and other Ethereum-based tokens. (DeCrypt)
“Why now? It really comes from client inquiries,” said Steve Kurz, the global head of asset management at Galaxy Digital. “DeFi, which is in many ways one of the most revolutionary aspects of the space, has become much easier for institutions to understand intuitively versus Bitcoin or Ethereum because there’s a model; there is lending, borrowing, synthetics, swaps and derivatives. So as much as it’s an early part of the asset class, it’s something that I think institutions have been able to dig their teeth into, and so we were being reactive to that.” (Blockworks)
The wildly differing opinions about Bitcoin and crypto only highlight the immensely positive change they’re bringing to the market. The fact that there are influential investors on both sides of the aisle just goes to show how revolutionary the crypto movement really is. Whatever the future may be, the financial industry is giving it the attention it deserves. Don’t blink, or you’ll miss the well-funded future of this industry.
Top market movers as of August 20, 2021
- Avalanche (AVAX) +100%
- Terra (LUNA) +66%
- Serum (SRM) +60%
- Cosmos (ATOM) +31%
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Forbes > "BlackRock Joins Fidelity And Vanguard As A Bitcoin Mining Investor"
Coindesk > "Wells Fargo Launches Passive Bitcoin Fund for Wealthy Clients"
Coindesk > "Cathie Wood vs. Michael Burry Isn’t About Tesla – It’s About Inflation"
Decrypt > "Crypto Custodian Fireblocks Adds Former SEC Chairman Jay Clayton to Advisory Board"
Decrypt > "Mike Novogratz's Galaxy Digital Rolling Out DeFi Index Fund"
Cointelegraph > "62% of Robinhood’s Q2 crypto revenue was from Dogecoin trading"
Cointelegraph > "Stablecoin adoption and the future of financial inclusion"
CNBC > "Second-largest U.S. mortgage lender will accept payment in bitcoin"
Cointelegraph > "Ethereum’s rise to No. 1 crypto ‘seems unstoppable,’ says deVere Group CEO"
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