2022/45

28 November 2022 - 04 December 2022 week Bitcoin & Economic News

Dec 04, 2022

This newsletter contains charts and other interesting pictures too. Some Email clients auto-block pictures, so don’t forget to enable them!

Bitcoin News

TL;DR
Fidelity officially launches Bitcoin trading services to its 40 million clients
Bitcoin miners experience a massive shortfall in their returns
Brazil just made Bitcoin a form of legal payment
TP ICAP approved to launch institutional Bitcoin exchange in the UK

Fidelity officially launches Bitcoin trading services to its 40 million clients
It had been a long time coming after the announcement of a waiting list, as Fidelity is officially opening its retail cryptocurrency trading accounts. The investment firm is now making digital asset trading available to its clients.
“The wait is over,” was the opening remark in an email sent to users today. Moreover, the notice informed customers that a Fidelity brokerage account would be needed to open a new Fidelity cryptocurrency account.
Huge investment firms are opening to Bitcoin when Bitcoin is in one of its biggest dips in its history. They know that every dip ends sooner or later because the fundamentals haven't changed. Bitcoin doesn’t give a shit about its current Price, it just works and it will work tomorrow too! This is one of the most important features of Bitcoin that you can always rely on!
Bitcoin miners experience a massive shortfall in their returns
In each cycle when the bear market starts to bottom some of the Bitcoin miners get rekt. This is starting to be a law. Why? Because the block reward with the ever lower Bitcoin price is not enough to compensate for their energy expenditure (this is their biggest cost). We (me too) thought that this cycle will be different because there is a possibility to use the mined Bitcoin as a collateral for a loan. With this loan the bear market can be “survived”. Sadly no one thought that this bear market would cause such low Bitcoin prices with such high energy bills. This is causing some miners to default which in the long run makes Bitcoin mining more decentralized. (related BBG article)
BTC holders have witnessed approximately 3,738 days of profits since 2015. On the opposite side, Bitcoin holders would have gained little or nothing for about 747 days in the same period. At the time of writing, BTC trades at $16,146 showing a 24-hour change of -1.72%.
“Bitcoin miners have been selling relatively aggressively. Combined with the hash rate decline and thus today's hash ribbon bearish cross, this indicates we are indeed in a period of miner capitulation.” by Will Clemente Co-Founder of ReflexivityRes
“To give an idea of the Miner Capitulation impact: Unspent Miner Supply went down by 4k in 2.5 weeks. For comparison Terra/Luna was 80k in just 2 days.“ by Root (@therationalroot)
Brazil just made Bitcoin a form of legal payment
Brazilian lawmakers have approved a complete regulatory framework for the trading and use of Bitcoin and shitcoins in the country.
The bill applies broadly to a sector which it calls “virtual assets,” and now only needs the President’s signature before it becomes law. It does not make bitcoin or any cryptocurrency a legal tender in the country.
The bill tasks the executive branch with selecting government bodies to oversee the market. The expectation is that the Central Bank of Brazil (BCB) will be in charge when bitcoin is used as payment, while the country’s securities and exchange commission (CVM) will be the watchdog when it is used as an investment asset. Both the BCB and the CVM, along with the federal tax authority (RFB), helped lawmakers craft the overhaul legislation. (more details here)
“Brazil just made bitcoin a form of legal payment. This is big because:
- It is the 7th most populous country
- 12th biggest economy globally
- Founding member of BRICS
- Leading member of Mercosur
- Biggest economy in South America
- It has sloths” by Lark Davis
TP ICAP approved to launch institutional Bitcoin exchange in the UK
TP ICAP, the world’s largest interdealer-broker, has registered as a digital-asset provider with the U.K.’s Financial Conduct Authority as it attempts to break into the crypto world with its Fusion Digital Assets marketplace.
The company, a giant in infrastructure for wholesale markets for traditional finance, is working with custodian Fidelity Digital Assets to offer a platform to match orders and execute spot crypto trades.
“Until now, the wholesale digital-assets market has lacked the credible infrastructure and assurance necessary for [financial market players] to allocate capital,” Duncan Trenholme, co-head of digital assets at TP ICAP Group, said in a statement. “Over time, we believe blockchain will lead to the tokenization of traditional asset classes.”

Global Economic News

TL;DR
Germany where inflation sky high, but real wages, trade balance and more are plummeting
Relatively strong USD while the economy is drifting into a deeper recession

Germany where inflation sky high, but real wages, trade balance and more are plummeting
“German Food CPI jumped 21% YoY in Nov, the highest food price inflation since the start of the statistic & way higher than in other Eurozone countries. In Italy, food inflation is just 14% & in Spain 16%.” by Holger Zschaepitz, journalist at Welt
“Wages are lagging far behind inflation, so Germans are getting poorer. Nominal earnings were up 2.3% in Q3 YoY but inflation rose 8.4% in the same period, so real (price-adjusted) earnings plunged by 5.7%, the largest real wage loss since statistics began.” by Holger Zschaepitz, journalist at Welt
“Deep German recession is coming. One puzzle is that German retail sales volumes have help up, even though consumer confidence has collapsed to below COVID 2020 levels. That puzzle is ending. Real retail sales fell -2.8% m/m in October and are now down -5.2% y/y (blue) in Q4 2022.” by Robin Brooks, Chief Economist at IIF
“Germany's trade surplus in the first 10 months of 2022 is down EUR 10 bn on average per month from the same period in 2021 (black). Two-thirds of that drop is due to energy (red). One-third is a lower non-energy surplus (blue). Weaker German competitiveness is starting to show up…” by Robin Brooks, Chief Economist at IIF
Relatively strong USD while the economy is drifting into a deeper recession
“Huge decline in the Dollar against the G10 over the past month (black), while the Dollar has fallen much less against EM (blue). It's tempting to think this is about the dovish Fed pivot, but: (i) there is no dovish Fed pivot; and (ii) much of this is a false dawn on the Euro…” by Robin Brooks, Chief Economist at IIF
“Treasury yields are signaling mounting concern that the US labor market is close to breaking. (...) The Fear Gauge suggests that the Fed won’t be successful in engineering a soft landing of the economy as it seeks to align demand in line with supply.” by Zerohedge article
While the US Jobs increased 263k in November (the 23rd consecutive monthly gain), the Real excess disposable income is gone (BBG)
“Pending US home sales drop 37% YoY… the largest decline on record…” by Wall Street Silver

Thank you for reading Bitcoinomics Newsletter. This post is public so feel free to share it.

These are just speculations, no investment advice!

“When BTC lost the ~$19500 level as support…It broke down into the ~$13900-$19500 Monthly Range. Monthly Candle Close is coming up soon. A Monthly Close below ~$19500 would likely confirm the ~$13900-$19500 Range as its new playground” by @rektcapital

“Similar situation to 2015, where the Bitfinex crash destroyed the most recent uptrend. Recovery now is slower due to a general recession, but Bitcoin WILL go up again. 2023” by @StockmoneyL

“Some day we'll go back above Realized price.” by @therationalroot

“$BTC / $USD Deviation to 11-14k. Bottom in. Pump to +30k in 2023.” by @ToniGhinea

“November closing price $17,170 .. bear bottom?” by PlanB

“BITCOIN: THIS OPPORTUNITY WON'T LAST LONG!!” by @rovercrc

Share Bitcoinomics Newsletter

Bitcoin Shorts

Funny Bitcoin short stories

Governor of Texas: "Bitcoin is good for the power grid" (video)
$3.5 BILLION Bitcoin taken off Coinbase in just 4 days!
Non-whale Bitcoin investors break new BTC accumulation record!
Italy to impose 26% capital gains tax on Bitcoin and shitcoin profits larger than €2,000
Tucker Carlson Today Beyond Bitcoin 12/1/2022 (video)
53% of Mexico's population can't access the traditional financial system - Association of Mexican Banks. Mexico needs Bitcoin!
CFTC Chair says only Bitcoin is a commodity, walking back from his previous remarks that suggested ether could also be one.
School kids in Brazil are using Bitcoin to buy fruit. (video)
There are 1,000,000 addresses that hold 1 full Bitcoin
Bitcoin processed its 785,000,000th transaction today.
Less than 1% of bitcoin usage is associated with "crime".
17% of Americans hold Bitcoin