The 5-minute newsletter on the important stuff in finance — reporting what's going on, and why.Let’s see what's going on this week: Long-Anticipated US Bitcoin ETFs on the Horizon Bitcoin's Battle with $50k: Where We Are DeFi's Trustless Nature vs. Trusted FinTech Second NFT Wave Lifts Solana and Ethereum Can Robinhood Maintain Its Dominance? Bitcoin ETFs – New Floodgate for BTC Price Breakout After dozens of denials, SEC Chief Gary Gensler is likely to approve futures-based Bitcoin ETFs ahead of those handling physical BTC. Canada is experiencing what looks like a 'first mover' advantage with Canadian Bitcoin ETFs—will the US see the same? ( link ) While the wait for a Bitcoin ETF continues, institutions are turning to businesses with crypto-heavy business models for exposure to digital assets. ( link ) Futures-Based Bitcoin ETFs are Still Better than None If there's one persistent trend out there, it's that people older than 65 are the least likely to onboard the crypto train. This hesitancy applies even when they understand the blockchain backbone and have a favorable view of cryptocurrencies. That age bracket also holds more than double the net worth of the median US household, at $266k. With inflation fears entrenched, would provide the means to catch two fish with one worm. By mimicking BTC's performance without needing to hold any deflationary Bitcoin, ETFs would allow an easy entry into the United States ETF market worth $6.6 trillion. The exponential growth of ETF popularity speaks for itself, largely owed to fewer tax liabilities. Bitcoin ETFs Total net assets of exchange traded funds (ETFs) in the US (source: Statista.com). On the flip side, Gary Gensler is hesitant to provide this popular investment vehicle, citing Bitcoin’s volatility issues and custody security. As he keeps stalling, 5 Canadian BTC ETFs have accumulated $2.5 billion in half a year’s time. Seeing investor demand rise, Gensler seems amenable to a compromise. After signaling that a more regulated futures-based Bitcoin ETF is preferable, ProShares and Invesco were the first to jump on the opportunity. By the year’s end, if anything could push Bitcoin beyond its previous ATH price of $63.5k, an approved ETF might just do the trick. Bitcoin Struggles to Breach $50k Resistance Coinbase Bitcoin balance reaches a nearly 4-year low, at just over 700k BTC in total. ( link ) Bullish factors vie against Bitcoin’s poor historic September performance. ( link ) Whales Keep Accumulating BTC Since the $30k Level On Wednesday, Bitcoin closed at $48,279. On Thursday, Bitcoin crossed (several times) into the beloved $50k territory only to retreat. Having reached the highest price point since May 15, it is now safe to say that Elon Musk’s tweeting massacre has been nullified (let's keep it that way). The question is, what comes next? Governed by whales, the Bitcoin space is difficult to predict. However, Coinbase’s BTC drought—not seen since December 2017, when we had less BTC in circulation—dropped some bread crumbs. The first conclusion we can draw is that institutional investors—hedge funds, pension funds, and even large banks—are starting to view Bitcoin as a refuge from the Fed’s infinite money supply machine. Source: TradingView.com That would explain the accumulation phase, with supply shock as a happy side effect. If its momentum continues to build, Bitcoin could even break out beyond $50k. However, if that turns out to be the case, it would be a rarity. After all, historic data clearly shows that September is the part of the year when Bitcoin performs poorly, having previously traded in the red 70% of the time between 2014 to 2020. Maybe this September will be different. FinTech Handing the Innovation Torch to DeFi 1inch, DeFi decentralized exchange aggregator, to reach $2.2 billion valuation. This marks a faster valuation growth than seen in three iconic FinTech firms – PayPal, Square, and Robinhood. ( link ) As a gateway to DeFi, MetaMask wallet’s user count surges by 1,800% over the past year, topping 10 million accounts. ( link ) Trust Is High in Demand Everyone loves how FinTech simplified finance. With a few taps on your phone’s apps, you can send and receive money, exchange it for crypto, or engage in stock trading. PayPal, Square’s Cash App, and Robinhood each represent the streamlining of finance that was difficult to envision just a few decades ago. As FinTech exemplar, Cash App added $11 billion to Square’s coffers since 2019, source: MacroTrends.net Yet, this is only the superficial layer. Blockchain-powered DeFi goes deep to cleave two kinds of platforms: trustless vs. trusted. We have seen how PayPal and Robinhood handle trust when you give it to them. PayPal can deplatform at a whim as any bank could, and Robinhood could do the same by implementing trading restrictions on select stocks (lookin' at you, GME and AMC). Furthermore, FinTech’s trust is invested in the hiring of thousands of costly personnel. Then, that personnel could close your account, a reputation . In contrast, DeFi relies on smart contracts to offer a trustless service. The trust then shifts from humans to technology itself, something that even those can attest to. Coinbase already gained trapped in Afghanistan This is why 1inch gained so much value in less than a year, outpacing titans of the FinTech industry. In turn, FinTech is there to provide an on-ramp for DeFi, raking in the crypto profits along the way. To boot, Gensler’s proclamation that “half of our markets” doesn’t inspire trust either. tap into dark pools NFTs: The Best Blockchain Marketers Imaginable Solana, one of half a dozen potential “Ethereum killers”, recently outperformed Ethereum by over 500%. ( link ) OpenSea, a top NFT marketplace covering 98% of NFT trading volume, exceeded $3 billion in August trading volume—with a team of just 37. ( link ) The NFT Phenomenon Continues to Excite the Crypto Market Many crypto opinion makers portrayed the NFT craze in the first half of 2021 as a one-off phenomenon. To their surprise, July and August saw an increase of more than 850% in NFT traffic, largely subsumed by OpenSea. It had even been reported that a 12-year-old earned $400k from selling a “ ” NFT collection. Weird Whales Source: Dune Analytics At this point, it is safe to say we have passed the point of “in the eye of the beholder” narrative and entered deep into the ultra-speculative market. Notoriety is the name of the NFT game. The fact that a tween could earn $400k itself gives his NFT collection a boost as he breached a societal expectation. As with the previous NFT frenzy, the blockchains hosting them are the biggest winners. Predictably, Ethereum is the top beneficiary, reaching its highest price since May and closing in on $3,800. However, people have begun to notice faster blockchains with drastically smaller transaction fees. Solana doesn’t need to complete a Proof-of-Stake upgrade because it has been built upon it from scratch. Although it hosts 7X fewer dApps than Ethereum, this just may be Solana’s breakaway moment, with the helping hand of , selling for $66 million. Degenerate Apes Robinhood’s Eroded Reputation is Catching Up Fidelity Investments announced the doubling of its workforce to handle an intake of 1.7 million new retail accounts, adding 9,000 new jobs to meet the demand. ( link ) Robinhood (HOOD) stock plummets by 7% when Gary Gensler signaled that a ban on payment for order flow (PFOF) is on the regulatory table. ( link ) PayPal has announced plans to expand its service to stock trading. Could this be a mortal blow to Robinhood? ( link ) Dubbed as Overvalued by Analysts, $HOOD Gains Meme Stock Properties Not many traders have experienced greater betrayal as GME/AMC retail investors. Putting faith in Robinhood’s “democratize finance for all” motto, they counted on the popular broker to provide a neutral platform to short squeeze Wall Street hedge funds. In the aftermath of placing sell restrictions on those very same stocks, Robinhood’s core business model was revealed to be at odds with its customers. Robinhood makes a significant portion of its income by routing trades to market maker Citadel Securities, which is either part of—or closely related to—the Wall Street bigwigs that WSB’s apes were trying to squeeze. This is the price for zero-commission trading, previously ignored as unimportant. At the mere suggestion that this business model could be cut off, HOOD took a nosedive. source: Yahoo Finance Yet, Robinhood competitors have a lot of catching up to do. The market share inertia behind HOOD is immense, with 21 million users to draw from. Nonetheless, both and Fidelity are closing in. Last summer, Fidelity Go removed fees for accounts trading under $10k. With a 156% rise in new Fidelity accounts from last year, it seems Robinhood’s reputational baggage has a price tag of its own. eToro Throughout H1 2021, Robinhood has been struggling to break even, with both diminishing revenue per user and greater net income losses per quarter. Then again, come rain or shine, there is always a new crop of retail investors looking for an easy-to-use trading app, carefree about it its past misdeeds. Tweets of the Week "48k in February: - GBTC Premium (Grayscale buying) - Long term holders (LTHs) selling - Mkt leveraged long BTC w/ BTC - 30% annualized futures basis 48k in August: - GBTC discount (no buying) - LTHs accumulating - BTC margined derivs decreasing - 10% futures basis Different." @DylanLeClair_ “Aside from a one-off spike 2 weeks ago, long-term holders aren't taking exit liquidity. Imo the dead cat bounce narrative is dead.” @WClementeIII “Most people don’t appreciate how valuable the underlying metadata of NFTs is. Imagine being able to see how the Mona Lisa traded hands over centuries. It adds a whole new dimension of value to digital art that is hard to find in antiques. Quite excited to see punks in 50 years” @santiagoroel “In 100+ years data: Such depressed earnings’ yields have always led to very significant market meltdowns. Great Depression. 1937-8 Recession.Tech Bust. Average return for the subsequent 3 yrs being close to -53%. Thinking the Fed can sustainably taper here is just nonsense.” @TaviCosta “Yep, retest done at $46,400 and most likely we're going to consolidate and have a breakout above $51,000 for #Bitcoin. Starts to look fine.” @CryptoMichNL Share Five Minute Finance It's the smart thing to do for your friends. Your future self will thank you too, after receiving some free swag thanks to your unique referral code: 5 - FMF Stickers (cooler than they sound) 10 - FMF Bottle Opener (works well, trust us) 15 - FMF Coffee Mug (start the day off right) 25 - FMF T-Shirt (not just a gym t-shirt) 50 - FMF Pint Glass (will be shipped empty) 100 - FMF Sweatshirt (insanely comfortable) Send this link to your friends to get free swag: tokenist.com/newsletter/r1347a10e/ Join Five Minute Finance Newsletter here .

Solana

Flow

Maker

Coinbase

fees

OpenSea

Robinhood

5 Minute Finance: ROCK.JPEG, Institutions Gain BTC Exposure, Stablecoins Mature

Welcome to the Five Minute Finance Newsletter! Subscribe here for free.

Read My Stories

Too Long; Didn't Read

BTC TESTS $50K, TRUSTLESS DEFI VS. TRUSTED FINTECH, SOLANA SOARS

BTC TESTS $50K, TRUSTLESS DEFI VS. TRUSTED FINTECH, SOLANA SOARS

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

5 Minute Finance: BTC & ETH SUPPLY SHOCK, BURRY'S APOCALYPSE, SIMONS SAYS AMC

(1/100) Crypto Countdown: Golem

A Research Report on the Trader $JOE DeFi Platform

07/03/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

01/06/2018: Biggest Stories in the Cryptosphere

5 Minute Finance: BTC & ETH SUPPLY SHOCK, BURRY'S APOCALYPSE, SIMONS SAYS AMC

(1/100) Crypto Countdown: Golem

A Research Report on the Trader $JOE DeFi Platform

07/03/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

01/06/2018: Biggest Stories in the Cryptosphere

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps