Client Access 
Communications
Another week in two parts on the cryptocurrency market. Indeed, after the successful defense of the 200-day moving average led to a rebound in the final days of last week, we have seen a subsequent slight pullback in the last three days. Nonetheless, we can only be encouraged by the week that is ending. Indeed, the price has temporarily risen above $50,000 apiece for bitcoin, a level that had been lost since last May. More importantly, this is another week in the green for the fund, with a rise of a few percentage points.
We mentioned the Poly network hack last week, when the hacker returned the majority of the stolen funds. What was the worst theft in the history of the industry is now history. All of the funds still in the hands of the perpetrator were returned on his own earlier this week. The company has announced that it is beginning to refund its users. The anonymous hacker admitted that returning the money had “always been the plan”.
Various national crises bringing economic instability have led people to turn to cryptocurrencies in recent years. It seems that the current situation in Afghanistan is no exception. Indeed, there has been a sharp increase in bitcoin purchases in the country. This helps protect the savings of those fleeing the country, as well as providing some financial security in case of a bank run. The benefits of digital currencies are numerous during such a crisis. They allow access to the global economy from Afghanistan, some protection against an inflationary spiral, and most importantly, personal control over one’s wealth when the risks of being robbed are more present than ever.
Cryptocurrencies as an alternative, if not a complete replacement of national currencies? If such a claim was the stuff of libertarian fads just a few years ago, it seems that a majority of bankers now see this possibility as plausible. “We uncovered several findings that illustrate a seismic shift in financial services resulting from the evolution of blockchain-based digital assets” wrote consultants led by Linda Pawczuk at the accountancy company Deloitte in a report that found 76% of finance professionals think bitcoin and crypto could serve as an alternative to or replacement for fiat currencies in the next five to 10 years. 73% of the 1,300 executives surveyed also say their companies need to integrate the industry in order to avoid losing competitive advantage. “The foundation of banking has been fundamentally outlived and financial services industry players must redefine themselves and find innovative ways to create economic growth in the future of money,”
After Golman Sachs, it is the turn of the giant CitiGroup to prepare to offer bitcoin exposure to its clients. The firm will do so via bitcoin futures contracts on the Chigaco Merchantile Exchange. Regulatory approval is reportedly imminent.
We had another example of how cryptocurrencies are increasing transactional freedom for everyone this week. This one follows the banning of all explicit content on the OnlyFans platform. While everyone may well have their own opinion on the ethical principles behind the company, there is one certainty. It is not these same principles that led to the decision. On the contrary, it is the banking pressures towards the company and the transactions recorded by its members that are at the source of this determination. To this end, the same concept, but built on a smart contract basis, solves this pitfall. This is what the brand new Myystar platform offers. It is now a classic formula. When traditional transactional methods hinder the business activities of some players, it is to the freedom offered by cryptocurrencies that they turn.
It’s been a few weeks since Michael Saylor and MicroStrategy have been the subject of a paragraph in this weekly newsletter! Now, they have once again proceeded to add additional bitcoins to the company’s treasury. 3,907 bitcoins were added at an average price of $45,294, for an expenditure of $177M. The company has a whopping 108,992 BTC, acquired at an average price of $26,769.
The craze of non-fungible tokens, these cryptographic assets that are differentiated from each other and allow the limited possession of collectibles for example, has climbed a few more levels. Indeed, the image of a rock has just been sold for 400 ETH, or $1.3M. As for Visa, it has made a smoking publicity stunt, making news all over the world following the purchase of a CryptoPunk NFT (non-fungible token) for 49.5 ETH, or about $150,000. The company bought this simple image…
Over the last 60 years, Visa has built a collection of historic commerce artifacts – from early paper credit cards to the zip-zap machine. Today, as we enter a new era of NFT-commerce, Visa welcomes CryptoPunk #7610 to our collection.” The company wrote via Twitter.
Budweiser also seems to want to join this parade. Indeed, the American company has changed its Twitter profile picture to a rocket in the colors of the brand drawn by NFT artist Tom Sachs. Above all, rumors say that the company would have bought the domain name Beer.eth for the sum of 30 ETH.
In any case, it will be noted that these companies will have had to convert their fiat currency into cryptocurrencies to acquire the desired items. This differs from the argument of some detractors that one must always convert one’s cryptos into fiat currency to buy something. This reinforces the role of cryptocurrencies as a true transactional currency.
Finally, it should be noted that the bitcoin network’s hash rate continues to rebound following the banning of Chinese miners in June. The latter has indeed recovered the threshold of 150 exahashes per second, which is three times the low level of June 28th. The higher the computer work, the safer the network. There has also historically been a positive correlation between the hash rate and the price of bitcoin. At the rate things are going, a new high could be only months away. All without China, which was, until a few months ago, the main player in the industry. Do we need to emphasize once again the engineering behind the balance of the network and the resilience it brings?
Technically speaking, everything remains on track despite an initial rejection of the $50,000 area. No surprise after the last few weeks’ push against this highly symbolic area. The 200-day moving average has produced the desired springboard and it still seems plausible that local support at $48,000 will hold, which would allow a new short-term test of the highs reached a few days ago. The $46k area would have to be lost with conviction for some initial concern to emerge. The $42k-$43k area should then still offer a strong technical buying opportunity. For now, however, the signals are pointing up.
Rivemont Investments, manager of the Rivemont Crypto Fund.
The presented information is as of August 25th, 2021, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
