The 52nd Bitcoinomics Newsletter

23 January 2023 - 29 January 2023 week Bitcoin & Economic News

Jan 30, 2023

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Bitcoin News

TL;DR
EU Lawmakers set up stricter Bitcoin regulations for Banks
Blockstream raises $125M to boost mining operations
Arizona Senator introduces a Bill to make Bitcoin Legal Tender in the State
Strike and Clover bring the Bitcoin Lightning Network to Merchants
New York introduces Bill to allow Bitcoin as a form of payment
US Senator Ted Cruz introduces a bill to accept Bitcoin in Capitol Hill buildings

EU Lawmakers set up stricter Bitcoin regulations for Banks
Economic spokesperson for the EU parliament’s European People’s Party Markus Ferber states that “banks will be required to hold a euro of their own capital for every euro they hold in crypto.”
Ferber mentioned that this was done in an effort to help prevent volatility in the crypto sector from spilling over into the financial system.
The Economic and Monetary Affairs Committee of the European Parliament accepted the measures, but will still need to be approved by the entire European Parliament and presented to the national finance ministers meeting in the Council of the European Union in order to be fully implemented.
Blockstream raises $125M to boost mining operations
As one of the largest Bitcoin mining companies in the world, Blockstream has over 500 Megawatts of capacity in its development pipeline.
To expand its institutional Bitcoin mining colocation services, leading Bitcoin infrastructure company Blockstream has announced that it raised $125 million in convertible note and secured loan financing.
The convertible note was led by Kingsway Capital, Fulgur Ventures, and other investors. The sole financial advisor to Blockstream is Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC.
This recent funding round closely follows Blockstream’s $210 million Series B capital raise from August 2021, which was used for funding the construction of several enterprise-class mining facilities with capacity for institutional hosting customers.
The funding was also used for strengthening Blockstream’s vertical integration through the acquisition of Spondoolies for the development of its own ASIC and enterprise miner.
Blockstream CEO Adam Back told BTC Times that “Blockstream had a strong 2022 with 3x revenue growth from 2021, and strong demand for hosting into 2023 to expand for, with a return to a bullish market, with Bitcoin up 40% in the first 3 weeks of 2023 alone.”
Arizona Senator introduces a Bill to make Bitcoin Legal Tender in the State
Arizona Senator Wendy Rogers has introduced a bill that would make Bitcoin legal tender in the state. The bill, titled SB 1235, was introduced by the Republican senator in hopes of amending the current list of legal tender within Arizona and adding Bitcoin to that list.
Furthermore, the bill defines Bitcoin as meaning “the decentralized, peer-to-peer digital currency in which a record of the transaction is maintained on the Bitcoin blockchain and new unites of currency are generated by the computational solution of mathematical problems and that operates independently of a central bank.”
Strike and Clover bring the Bitcoin Lightning Network to Merchants
CEO of Strike Jack Mallers announced on Twitter that Strike is now an integrated partner with Clover’s parent company, the payments giant Fiserv. A pilot integration launched by Strike with Clover has since been established, enabling businesses to accept Bitcoin over the Lightning Network, which means 6 million merchants and stores may soon easily accept Bitcoin payments.
Mallers’ announcement states that the integration extends beyond Strike. Instead, businesses will be able to receive Lightning payments “from Cash App to a node over Tor. If it can make a Lightning payment, you can use it,” he explains in the tweet.
“Ultimately, these payment giants want to see Lightning in action. They want to feel it, touch it, and see people use it. An open, instant, cheap, inclusive, and innovative payment network seems too good to be true. Time to show Lightning is the world’s superior payments rail.” said Jack Mallers, CEO of Strike.
New York introduces Bill to allow Bitcoin as a form of payment
A bill has been introduced to the New York Senate that would make Bitcoin and shitcoins a legal form of payment in state agencies. The legislation was set forth on January 26th and divulges changes to the state’s current financial law to introduce the use of Bitcoin and shitcoins.
Specifically, the legislation states that the act will, “amend the state finance law, in relation to allowing New York state agencies to accept cryptocurrencies as a form of payment.” Moreover, the legal document expresses the definition of cryptocurrencies and the guidelines between those digital assets and state agencies.
Conclusively, the bill states that “Each state agency is authorized to enter into an agreement with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payment of fines, civil penalties, rent, rates, taxes,” and more civil duties. The bill is set to change the very landscape of integrated digital assets in one of America’s largest cities.
US Senator Ted Cruz introduces a bill to accept Bitcoin in Capitol Hill buildings
The Republican Senator for the state of Texas, Ted Cruz, has just introduced a bill to accept Bitcoin and shitcoins in Capitol hill restaurants, vending machines, and other establishments. The legislation is currently on the congressional record and was introduced earlier this week.

Global Economic News

TL;DR
The US economy is in freefall despite of higher GDP numbers
The German (EU) economy is being systematically destroyed

The US economy is in freefall despite of higher GDP numbers
“US economy expanded at 2.9% annual pace from Oct-Dec, ending 2022 w/momentum despite pressure of high interest rates & widespread fears of a looming recession. Decelerated from Q3 3.2% annual growth rate.” by Holger Zschaepitz, Economist at Welt
“We loudly called for a dovish Fed pivot starting mid-2022. That pivot finally came on Nov. 2. Today's GDP data show why it was needed. Housing is in full-scale recession (blue), while fixed investment (red) is going that way. The pivot means we have a chance to avoid recession…” by Robin Brooks, Chief Economist at IIF
“Massive short US dollar as the carry trade is back with vengeance.” by Daniel Lacalle, PhD Economist.
Meanwhile the Americans fall behind on car payments at a higher rate than in 2009.
Last but not least, the debit balances have plummeted…
The German (EU) economy is being systematically destroyed
“Germany, where wages have lagged far behind inflation. Never before in post-war German history have there been 3yrs w/such poor real wage development as 2020-2022. Since Dec2019 prices have gone up by 12%, nominal wages increased by only 5.5%. (via @Tiefseher)” by Holger Zschaepitz, Economist at Welt
“How stupid is Germany?” by Willem Middelkoop, Entrepreneur at CDfund
According to BBG, Europe is facing a rapid contraction of mortgage lending as a jump in interest rates cause financing costs to surge, all but wiping out demand. Loans for house purchases fell below €5bn in Dec, a 70% decline YoY.

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These are just speculations, no investment advice!

“Halving progress 68%. “ by @therationalroot

“BITCOIN BULL RUN SIGNAL OFFICIALLY FLASHED!” by @rovercrc

“Bitcoin Spiral: The Halving Cycle. Measured in blocks — the top and bottom alignment of past two cycles is insane!” by @therationalroot

“$10k is still the likely bottom area and $23k-$24k is now a very valid new top.” by @profit8lue

“Realized return just popped positive! Sellers are now taking profit (green) instead of cutting losses (blue) .. big difference” by PlanB

“BITCOIN BULL RUN BEGINS. Bear markets last 1 year. Bull runs last 3 years.” by @AurelienOhayon

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You can use Bitcoin without the internet or a smartphone. Anyone, anytime, anywhere, with any device has a bank in their pocket.