Nickel News Roundup - Week 49

• Bitcoin achieved a new All Time High on Tuesday, as it rebounded strongly from the Thanksgiving holiday sendoff, registering over $19,982 on Coinbase.
• Following the new high, there was a swift sell-off as traders took profits, pushing price down towards the $18,000 mark. BTC surged back to $19,490 within a few hours, and at the time of writing appears to be forming a base around $19,350.
• Ethereum also recovered well, rising from Thanksgiving dip of $480 up to a new yearly high of $635 as the upgrade to Ethereum 2.0 began, before losing value alongside the BTC sell-off, which took it to a low of $560. ETH is currently priced at $612.
• The overall cryptocurrency market cap recovered in tandem with the leading two cryptocurrencies, reaching its highest value since January 21st 2018, at over $587bn; around $7bn above the previous week’s high, but more than $100bn above the lows of Thanksgiving’s market-wide retrace. At the time of writing, the total market cap has dipped slightly to $578bn.
• DeFi also hit a new ATH, recording $14.7bn Total Value Locked on Tuesday, approximately $300m above the previous week’s high. As of writing, it remains above last week’s high, at $14.6bn.

Bullish momentum returned to the market as Bitcoin recovered strongly from last week’s dip, rising to surpass its ATH on several major exchanges. However, as Bitcoin failed to continue, a retrace was experienced and the price consolidated. This was mirrored across the rest of the cryptocurrency market.

• Visa is the world’s most valuable financial services firm, eclipsing JP Morgan earlier this year. It operates the world’s largest electronic payments network.
• Their reach is truly global; meaning integration of crypto into their systems has great potential to accelerate the accessibility and adoption of digital assets.
• The Visa and BlockFi credit card will be available to customers “in all 50 states” of the USA, indicating widespread regulatory approval.
• Shipping of the cards will begin in spring next year, offering users a 1.5% reward in Bitcoin on all purchases.
• Visa also announced widespread support of the ERC-20 stablecoin USDC on Wednesday, with Forbes reporting; “effective immediately, the partnership will see Circle working with Visa to help select Visa credit card issuers start integrating the USDC software into their platforms”.
• Cuy Sheffield, Visa’s Head of Crypto commented that Visa are excited “to connect USDC to our global payment network”.
• Visa estimates that $120 trillion in payments annually are made using checks and instant wire transfers, costing up to $50 per transaction. Using USDC and blockchain could lead to significant savings for Visa’s 60m merchants.
• These announcements came soon after Visa CEO Alfred Kelly declared an interest in cryptocurrencies, saying “Crypto is a developing part of payments in the world... As digital assets (in all their forms) are more seriously considered by governments to be legitimate and an actual economic instrument, it becomes more strategic for a card network to plug into it”.

• Both AllianceBernstein and Guggenheim Funds Trust declared support for cryptocurrencies as a legitimate financial vehicle this week.
• Inigo Fraser-Jenkins, co-head of portfolio strategy at Bernstein research, believes that changes in the social and policy environment have made cryptocurrencies a more viable part of an asset diversification strategy; with Bitcoin cited as both an attractive medium of exchange and store of value.
• Guggenheim Funds Trust meanwhile filed an amendment with the SEC, allowing it to invest up to 10% of its Macro Opportunities Fund into Grayscale’s Bitcoin Trust.

• As one of the world’s foremost financial index providers, S&P Dow Jones plans to launch cryptocurrency indices next year is another step towards mainstream recognition and legitimisation of digital assets in traditional finance.
• Pulling in data on 550 crypto assets, the crypto indices could bring attention to multiple cryptocurrencies beyond market-leaders like Bitcoin, Ethereum, and XRP.
• Peter Roffman, global head of innovation and strategy at S&P Dow Jones announced “With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks”.
• Having data from a trusted source such as an S&P Dow Jones index may open the door to development of a variety of crypto-based financial products and benchmarks.

• As Bitcoin continues its strong price performance this year, mining difficulty increases with more miners competing to generate new Bitcoins.
• Mining difficulty is now within 5% of its previous ATH, set in October, indicating a continuous uptrend in people (and businesses) competing to mine BTC.
• Increases in mining difficulty are viewed as indicators of previous bull cycles in 2013 and 2016, as they physically demonstrate increased interest and demand for Bitcoin. 

• The first phase of the Ethereum 2.0 blockchain upgrade successfully launched on Tuesday, beginning the transition to a full Proof of Stake consensus mechanism.
• Those holding 32 ETH can act as “validators”; nodes securing the network in exchange for a shared of newly minted ETH created by the staking consensus.
• Becoming a validator requires technical expertise; but major exchanges Coinbase and Binance have both announced plans to streamline the process for those who wish to participate as validators, pledging more details in early 2021.
• Locking ETH for several years and moving towards staking on exchanges may lead to a reassessment of Ethereum as a store of value.

• The original “Libra” incarnation of the planned international stablecoin raised concerns from regulators citing concentration of power in Facebook’s hands.
• The rebrand to Diem follows an organisational revamp, aimed at reducing reliance on Facebook, with a new white paper clarifying Facebook holds no special rights.
• Despite the departure of some association members during Libra’s regulatory issues, there is still significant business backing to spread adoption, with the likes of Uber, Shopify, Spotify, and Lyft all signed up.
• The “Diem dollar” is now regulatory-compliant on a protocol level, and ready to launch on a technical level.
• Diem’s approach differs from Libra in terms of plans to issue multiple stablecoins pegged to specific fiat currencies, rather than one coin pegged to a basket of international currencies.
• The Diem Dollar is expected to launch in 2021, but no specific date has been provided.