Kiffmeister’s #Fintech Daily Digest (01/04/2021)

I’m not planning to post every year-end summary of Fintech developments, but there are a couple that stood out for me. The first one’s a “top stories” and the last two are chronological: 

Meanwhile the price of bitcoin briefly fell below $30,000 from nearly $34,000 within a couple of hours this morning (ET), as about $1.1 billion worth of leveraged positions were unwound. Most of it occurred on Binance, followed by Huobi and OKEx, with bitcoin positions forming most of the liquidations, followed by ether (ETH) and litecoin (LTC). Since then it ground its way back up and was trading between $31,000 and $31,500 when I hit the “publish” button.

What’s Driving the ETH Price Rally?

Ethereum (ETH) broke past $1152 hours early in the morning (ET) of January 4. Reasons for the recent spike could be its growing utility within decentralized finance, support for NFTs and upgrades to the Ethereum network with the successful implementation of EIP 1559 into the ETH 2.0 upgrade on Beacon Chain. The Ethereum Improvement Proposal (EIP) 1559 does two main things—it establishes the market rate for block inclusion and effectively burns the majority of the ETH in the transaction fee. This change to Ethereum’s gas management has significant implications to the monetary system and policy of Ethereum EIP 1559. Burning the bulk of the ETH in transaction fees provide a deflationary mechanism to Ether’s supply, which adds to the scarcity of Ether and long-term security of Ethereum. 

Shenzhen to Double Digital Yuan Giveaway in China’s Latest Lottery Test

Shenzhen is giving residents the chance to win 20 million digital yuan in another “red envelope” giveaway. On January 1, 2021 the lottery opened, allowing the city’s residents to register through the “i Shenzhen” platform to be included in the draw. The lottery is aimed to test China’s in-development central bank digital currency (CBDC) in the hands of the public. A total of 100,000 red envelopes will be distributed, with winners to be awarded 200 digital yuan each to spend from January 7 to 17 at around 10,000 physical merchants.

Ukrainian Ministry of Digital Transformation to facilitate CBDC infrastructure with the Stellar

The Ministry of Digital Transformation of Ukraine and the Stellar Development Foundation signed a Memorandum of Understanding and Cooperation, within which they will work on the development of a strategy for virtual assets in Ukraine. The focus of the partnership will be on development of virtual asset markets, implementing stablecoin and regulation, and developing the National Bank of Ukraine’s digital currency (e-hryvnia). 

Bitcoin *is* a religion by basically any definition of the term

According to Bloomberg’s Joe Weisenthal, Bitcoin is the first true religion of the 21st century. Sometimes people call Bitcoin a religion pejoratively, as a way to sneer at its disciples. Or they call it a cult. Or they just use “religion” to imply that the whole thing is irrational. But maybe it’s literally a religion. There’s plenty of evidence for it…