Bitcoin correction weakest of 2021 so far, as hopes of Santa Claus rally rise

Bitcoin correction weakest of 2021 so far, as hopes of Santa Claus rally rise

Bitcoin has fallen just 17% from ATH which makes this correction the shallowest of the year so far.

In previous bull market cycles, there has been a measurable correction before a rally at the end of the year — and if history rhymes it could be on the cards again.

We’ve certainly experienced the correction: Bitcoin hit an all-time high of around $69K on Nov. 10 and has retreated around 17% to current levels.

Some mainstream media outlets such as Forbes have taken the view the current pullback has plunged markets back into bearish territory with the rather salacious headline: “Did Bitcoin Enter A Bear Market After Falling 20% From Its ATH?” on a Nov. 30 article.

But November's dip was actually the weakest correction of 2021, overshadowed by Bitcoin’s whopping 53.4% correction over three months between April and July. The most recent correction in September was the second deepest, reaching 37% from April's ATH.

In its Nov. 29 “Week Onchain” report, analytics provider Glassnode argued that the current correction is just “business as usual for Bitcoin hodlers” hinting that it may soon be over. It also confirmed that this current market correction is “actually the least severe in 2021.”

Barring a stock market plunge due to the Omicron variant situation becoming worse, some believe we may be on track for a Santa Claus rally. It's a term from the stock market when prices rise during the last 5 trading days in December and the first 2 trading days in January, however, it has also been noted in  crypto markets in previous years and is often shorthand for price rises throughout December.

Last December, saw a 47% surge in BTC prices throughout the month and December in 2017 witnessed an 80% pump to a new all-time high at the time. Both were in bull markets like today.

At the time of writing, BTC was trading at just over $57K so a Santa Claus rally similar to last year could see prices surge to top $80K before the year is out.

8848 Invest co-founder Nikita Rudenia is also confident about a Santa Claus rally commenting:

“Despite the obvious setbacks thus far, Bitcoin is still on track to close the year at $70,000 per coin and, should this feat be achieved, we may see the coin touch $75,000 in early 2022 before we get a major correction.”

Interestingly Ether is currently outperforming. The ETH/BTC ratio is the highest it has been since mid-May at 0.082 BTC per ETH or around 12 ETH per BTC according to CoinGecko. This could see ETH lead further price gains in December.

Related: Forget the milk and cookies, Santa is accepting Bitcoin this holiday season

After taking a deep dive into the on-chain patterns, Glassnode concluded that Bitcoin investors are in more profitable positions than during September’s correction.

“Both Long and Short-term Holders are holding more profitable supply than September's correction, which can generally be viewed as constructive for price.”

Glassnode reported that the total proportion of profitable supply held by short-term holders has increased by 60% since September. It summarized "in bull market conditions, this combination usually sets out a fairly constructive short-term outlook."

Hopes of a Santa Clause rally, therefore, are starting to grow. Such a spurt at the end of the year can be attributed to a number of factors such as holiday cheer and increased liquidity due to Christmas bonuses.

However, the new Omicron variant could put a dampener on the party if there is a major impact on global financial markets and more lockdowns are enforced or seem likely. According to Nasdaq, investors may be on the sidelines for the time being until more is known about the new viral strain.

On the upside, Bitcoin was trading at just $18,857 this time last year.

Bitcoin Is Not Just About Freedom From Interference, It Requires Active Participation

Bitcoin Is Not Just About Freedom From Interference, It Requires Active Participation

Advocates praise Bitcoin’s freedom from interference while deriding “positive” freedoms to act on free will. But Bitcoin requires both.

Negative freedom (also known as liberal freedom) is freedom from interference. There can be a master (a king, central authority, government, etc.), but as long as the master is benign and does not interfere, you are considered free.

To secure negative freedom, you need positive freedoms, but not for the same reasons as liberal thinkers have understood them. Defining freedom solely in the liberal sense brings out the traps that can be used arbitrarily. To overcome this predicament, Quentin Skinner and Philip Pettit offer a third alternative conception of freedom: freedom as non-domination.

In a recent conversation with Lex Fridman, Human Rights Foundation Chief Strategy Officer Alex Gladstein defined freedom (and Bitcoin freedom) as dichotomies: negative and positive. This duality was introduced by Isaiah Berlin, following Thomas Hobbes, John Locke and Benjamin Constant. Gladstein named speech, press, assembly, belief, participation in government, privacy and property as negative liberties. On the other hand, positive liberties are the rights to work, housing, water and vacation.

Because Gladstein's definition relies on the dichotomy that Berlin proposed in his seminal essay, “Two Concepts Of Liberty,” he unfairly marked positive freedoms as entitlements, like those granted in Cuba, Venezuela and the Soviet Union. Again, similar to Berlin's attack on positive liberties, Gladstein used an adversarial tone on positive freedoms. This argument is only valid if we endorse the binary definitions of negative and positive freedoms based on Berlin's work.

What Is Freedom? Negative And Positive

In a nutshell, the negative conception of liberty refers to the absence of something, e.g., interference, hindrances, barriers or constraints. Negative (liberal) freedom is simply freedom as non-interference. On the other hand, the positive conception of liberty refers to the presence of something. In this sense, the presence of something refers to an outside force that can exert influence over control, self-mastery, self-determination or self-realization (Carter, 2016).

In particular, Berlin defines two conceptions of liberty by providing the questions for which answers lead to the definition of each concept. In his words, the negative conception of liberty is an answer to the question, "What is the area within which the subject — a person or group of persons — is or should be left to do or be what he is able to do or be, without interference by other persons?"

In contrast, the positive conception tries to answer the question of, "What, or who, is the source of control or interference that can determine someone to do, or be, this rather than that?"

However, at some point, a third alternative arose (proposed by Skinner and Pettit), which was seen as freedom from dependence or domination, and became known as the "republican" conception of freedom.

Bitcoin Freedom As Non-Domination Freedom

Bitcoin freedom has been predominantly defined as negative freedom. The most common value of Bitcoin is its freedom from a central authority. Hence, the core value of Bitcoin freedom lies on the foundation cemented by liberal freedom as non-interference.

I have argued elsewhere that Bitcoin freedom offers a more comprehensive approach than liberal freedom. Pettit and Skinner independently excavated a third conception of freedom. This "new" version traced back to the writings of ancient Republican Rome. They introduced it as the freedom from domination (Pettit) or dependence (Skinner). I believe this new conception of freedom defines Bitcoin freedom more adequately.

Freedom as non-domination is a negative concept because it offers the absence of something. While the liberal conception of freedom valued the absence of interference, Pettit claims that his approach as the absence of domination provides a broader meaning. Domination, for Pettit, is simply an interference on an arbitrary basis. So, Pettit's definition of freedom broadens concerning the liberal conception by eliminating some forms of interference. To put it differently, if an interference is not injected on an arbitrary basis, then it is not exerting domination. Such a definition allows for freedom within a framework of non-arbitrary laws.

Freedom as non-domination is also a positive concept because it relies on active citizenship. However, the essence of active citizenship (positive freedom) differentiates it from Berlin's demonization. Berlin refers to positive freedoms as civic humanists understand them. Republican thinkers valued active citizenship immensely due to its pivotal role in securing freedom.

Unlike defendants of civic humanists, such as Hans Baron (1955), John Greville Agard Pocock (1975), Hannah Arendt (1993) and Iseult Honohan (2002), republican thinkers regarded civic citizenship as a consequential ideal. In other words, participating in political activity was understood by republican thinkers to be instrumental in securing freedom. On the other hand, civic humanists valued political participation as an end without any additional "required" purpose. The difference between the two approaches is critical because this distinction established the new idea of non-dominating interference (non-arbitrary interference) within the concept of republican freedom.

Bitcoin freedom is not liberal freedom because it offers more than just the absence of central authority and its interference. Security and ownership of data/value by administering the mechanisms of a trustless, transparent and decentralized system are the fundamental positive freedoms of Bitcoin. Furthermore, the availability of participating in the governance of the Bitcoin blockchain without any permission is another core positive freedom of Bitcoin. If we define Bitcoin freedom just as in the liberal sense (non-interference), we leave out the other half (positive freedoms), which helps secure the former.


  1. Arendt, H. 1993, “What Is Freedom?” in “Between Past And Future: Eight Exercises In Political Thought,” Penguin Books, New York.
  2. Baron, H. 1955, “Crisis Of The Early Italian Renaissance,” Princeton University Press, Princeton, N.J.
  3. Berlin, I. 1969, “Two Concepts Of Liberty,” in “Four Essays On Liberty,” Oxford University Press, London.
  4. Carter, I. 2016, "Positive And Negative Liberty," The Stanford Encyclopedia Of Philosophy (Fall 2016 Edition), Edward N. Zalta (ed.), URL = <>.
  5. Honohan, I. 2002, “Civic Republicanism,” Routledge, London.
  6. Pettit, P. 2002, “Republicanism: A Theory Of Freedom And Government,” Oxford University Press, Oxford.
  7. Pocock, J. G. A. 1975, “The Machiavellian Moment: Florentine Political Thought And The Atlantic Republican Tradition,” Princeton University Press, Princeton, N.J.
  8. Skinner, Q. 2002, “A Third Concept of Liberty.” Proceedings of the British Academy, 117(237): pp. 237–268.

This is a guest post by Burak Tamaç. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

True or false: 91% of surveys about Bitcoin and crypto are totally wrong

True or false: 91% of surveys about Bitcoin and crypto are totally wrong

Welcome to the statistically dubious world of cryptocurrency surveys. Here, we'll find out how many Aussies really own crypto, and why there are so many different claims.

When Tony Richards, the Head of Payments Policy at the Reserve Bank of Australia (RBA), read the recent survey results from Finder’s Crypto Report saying that almost one in five Australians owned crypto, he didn't believe it for a second.

However, the results had already been widely published around the country, gracing headlines for weeks. They even made their way into the recent Senate Committee on Australia as a Technology and Financial Center’s final report in October.

Welcome to the statistically dubious world of cryptocurrency surveys — an easy way for companies to get publicity by hawking survey results, but not necessarily a great way to stay informed.

The Finder survey from August claimed that 17% of Australians own at least one cryptocurrency — 9% own Bitcoin, 8% own Ether and 5% own Dogecoin.

Is the figure plausible?

Richards called these figures into question in his address to the Australia Corporate Treasury Association on Nov. 18, saying that he finds them “somewhat implausible.”

“I cannot help thinking that the online surveys they are based on might be unrepresentative of the population,” he said.

He referenced “important segments of the population” including the elderly, people living in regional areas, and those without reliable access to the internet, that online survey panels “do not capture well.”

His point echoes a similar sentiment outlined by Dr. Chittaranjan Andrade in his 2020 report for the Indian Journal of Psychological Medicine, where he claims online survey samples are often unrepresentative, regardless of the subject.

Online surveys are completed only by people who are “sufficiently biased to be interested in the subject; why else would they take the time and trouble to respond?” he wrote.

But the Head of Consumer Research at Finder, Graham Cooke defended the methodology, telling Cointelegraph:

“The respondents are selected based on age, gender and location to create a sample which fairly reflects the results that would be expected from a full national survey.”

“We are confident that this produces a trustworthy sample which is representative of the population,” he added.

In the 15-page report summarizing survey results, there are only a few lines at the end to explain methodology. It says: “Finder’s Consumer Sentiment Tracker is an ongoing nationally representative survey of 1,000 Australians each month, with more than 27,400 respondents between May 2019 and July 2021.”

The survey is conducted by Qualtrics, a Systems Applications and Products in Data Processing (SAP) company. Qualtrics’ website boasts, "in just ten weeks Finder lifted brand awareness 23 percent," but there was no additional information regarding survey methodology, and did not provide any on request from Cointelegraph.

A Finder spokesperson was able to confirm to Cointelegraph that: “Qualtrics collects respondents from various panels and can be incentivized in different ways. Some are paid a small fee for their participation, some earn a charity donation, for example.”

Different surveys have estimates 2M people apart

This is not to single out Finder’s survey for particular criticism: There appears to be a new survey every day and often their findings are at odds with one another.

Take the YouGov survey commissioned by Australian crypto exchange Swyftx, which found that the number of Australians who hold crypto is closer to 25%. The July survey collected responses from 2,768 adult Australians, and the figures were weighted using estimates from the Australian Bureau of Statistics. This survey was found to be compliant with the Australian Polling Council Code.

Source: Swyftx, Annual Australia cryptocurrency survey

However, both surveys can’t be correct. The population of Australia is 25.69 million. This means that Finder’s 17% of the Australian population equates to roughly 4.37 million people. Meanwhile, Swyftx’s 25% is about 6.42 million people. 

The difference between the two estimates translates to just over two million people — that’s more than the entire population of South Australia.

The numbers also don’t appear to be reflected on local platforms. Crypto trading platform Binance Australia told Cointelegraph that it had 700,000 users, Easy Crypto Australia said it had around 15,000 users, Swyftx has 470,000 users (many from overseas). BTC Markets has over 330 000 Australian users and Independent Reserve’s site claims 200,000 users.

Digital Surge, eToro, Coinspot, and Coinmama did not respond with user numbers.

Not all Australians use a local exchange to trade their crypto of course, but on the other hand, a significant proportion of users are signed up to multiple local exchanges. There appears to be a mismatch of hundreds of thousands if not millions between survey results and exchange accounts.

That said, Jonathon Miller, Australian managing director Kraken exchange, said that his platform came up with similar figures to Finder in YouGov market research in May.

The sample in that survey included 1,027 Australians aged 18 years and older, the data weighted by age, gender and region to reflect the latest ABS population estimates.

It found that ​​one in five (19%) Aussies have owned or currently own a cryptocurrency, and 14% (2.78 million) currently have a crypto portfolio.

Speaking to the Finder survey, Miller said: “I don’t think it’s going to be that far off. The point is that these surveys are probably representative.”

“If those numbers aren’t exactly right today, they will be tomorrow. I think it’s true that one in five Australians have crypto.”

How many BTC do I need to pay you to say you trust BTC? 

One issue that could be affecting the results of crypto related surveys is that respondents to some of these surveys are actually being paid in crypto. 

On Nov. 18, a Premise Data survey of 11,000 participants across 76 countries claimed that 41% of people globally trust Bitcoin (BTC) over local currencies.

The catch was, a separate survey of Premise’s “contributors” two months earlier reported 23% of its contributor base have been paid in BTC, and since 2016, the data collection company has paid out over $1 million in Bitcoin via Coinbase to survey participants in 137 countries globally. 

Principal Research Fellow at the Melbourne Institute of Applied Economic and Social Research Nicole Watson told Cointelegraph that “paying someone Bitcoin to complete a survey about cryptocurrency would bias the result.”

“People who know what Bitcoin is and want some would be more likely to take part,” she said. In short,  they’re not going to be reflective of the wider population.

Cointelegraph reached out to Premise about its survey methodology, but received no response.

What makes a trustworthy survey? 

In Watson’s opinion, online-only surveys are not representative of the wider population.

“Recruiting a sample online is likely to bias the sample towards people who spend more time online, visit certain websites, or use certain apps, depending on where the invitation to participate placed and who might see it.”

She explained that someone’s participation in a survey could be influenced by who is running it, what it is about, how long it will take, and what (if any) incentives are offered — all of which may bias the results.

“For a new technology like cryptocurrency, you can see how many of these factors could lead to a biased result.”

For research conducted in Australia, a good way to tell whether the findings are trustworthy is by checking whether it has been issued an “Australian Polling Council Quality Mark.” In the UK, you can look to see whether the polling company is a member of the British Polling Council (BPC), and in the U.S. the National Council on Public Polls.

The Australian Polling Council says that any survey or poll worth its weight should include a “long methodology statement,” including additional information like weighting methods, effective sample size and margin of error.

Eth2 devs put out call to community to help test out the Merge

Eth2 devs put out call to community to help test out the Merge

As the transition to Eth2 edges closer, Ethereum developers have launched a program for the non-technical users and technical users alike to help test the upcoming Beacon Chain merge.

Ethereum (ETH) developers have put out a call to the community to help test the long awaited Merge between the Ethereum Mainnet and the proof-of-stake (PoS) based Beacon Chain.

The Merge is a major milestone towards the transition to Eth2 as it will see the Ethereum network become a PoS blockchain, decreasing its energy consumption by 99%.

On Nov. 29 Ethereum developer Marius van der Wijden announced a new program to get the community involved in Merge testing that caters to three tiers: non-technical users, developers with limited experience in blockchain and highly technical and experienced blockchain developers.

For non-technical users the self-guided program provides them tasks such as setting up consensus layer clients, reporting failures and sending transactions.

For technical users, they can select objectives such as running their own validators, deploying and testing contracts and setting up their own testnets, while highly technically users can review the spec, propose invalid blocks and splittin the network by voting on invalid blocks.

The program calls on all participants to document as much of their work as possible and share it online under the “TestingTheMerge” hashtag on Twitter. Wijden has also pointed the community towards the Ethereum R&D discord channel to maintain communication throughout the testing program.

“The program is not compensated, but if you find a critical bug (consensus issue/panic), I’ll buy you a beverage of your choice at the next DevCon!” Wijden teased in the program outline.

Related: Even with Ethereum 2.0 underway, L2 scaling is still key to DeFi’s future

According to the Eth2 page on, The Merge with the Beacon Chain is set to officially complete by Q1 or Q2 of 2022. The Merge is seen as the final chapter in the blockchain’s evolution to PoS consensus, however there is still more work to do before the transition to ETH 2.0 and sharding is complete.

The final piece of the puzzle is the Shard chains upgrade slated for late 2022 (AKA 'sharding'), which will see the network's load spread across 64 new chains to help the network scale its capabilities in a decentralized manner, with the aim of ramping up transactions per second and bringing down gas fees in the process.

Grayscale tells SEC 'no basis' to approve Bitcoin futures ETFs and not spot ETFs

Grayscale tells SEC 'no basis' to approve Bitcoin futures ETFs and not spot ETFs

A letter to the secretary of the SEC outlines discrepancies in its rejection of Bitcoin spot ETFs and acceptance of Bitcoin futures ETFs.

Grayscale Investments has fired back a the U.S. Securities and Exchange Commission (SEC) over the recent rejection of VanEck’s spot Bitcoin ETF application.

The operator of the Grayscale Bitcoin Trust (GBTC) issued a letter to Secretary of the SEC, Vanessa Countryman, on Nov. 29 to argue the SEC is wrong to reject spot Bitcoin ETFs since it has now approved three Bitcoin futures ETFs, one each from VanEck, Valkyrie, and ProShares.

Grayscale argues that the SEC has “no basis for the position that investing in the derivatives market for an asset is acceptable for investors while investing in the asset itself is not.”

It claims the SEC violated the Administrative Protections Act (APA) by failing to treat the two Bitcoin ETF products the same.

A Bitcoin futures ETF allows traders to speculate on the future price of Bitcoin (BTC) via derivatives, while a spot Bitcoin ETF would allow traders to trade on the current price of the asset, thereby functioning similarly to holding the asset.

Grayscale is hardly a disinterested party with an application filed in October to list GBTC as a Bitcoin spot ETF, with a decision possible as w Christmas Eve. On Nov. 12, the SEC rejected VanEck’s similar application on the grounds that it was not consistent with the requirements of the Securities Exchange Act of 1934 (Exchange Act).

Grayscale disagrees with those grounds for rejection.

“We believe this rationale failed adequately to take account of significant regulatory and competitive developments since 2017 when the Commission first considered, and denied, a national securities exchange’s application to list and trade shares of a spot Bitcoin ETP.”

In approving Bitcoin futures ETFs, Grayscale believes the SEC allowed applicants to sidestep the requirements of Section 6(5)(b) under the Exchange Act which Bitcoin spot ETF applicants must adhere to.

Section 6(5)(b) is designed to “protect investors and the public interest” by preventing fraud and market manipulation while also disallowing “unfair discrimination between customers, issuers, brokers, or dealers.”

Related: Invesco launches spot Bitcoin ETP on Deutsche Borse

Grayscale had predicted that its Bitcoin spot ETF could be listed as soon as July 2022, but it is unclear whether that prediction will become reality.

GBTC has about $37.1 billion assets under management with 692,370,100 shares outstanding.

Bitcoin Is The World's Most Efficient Value Settlement Network

Bitcoin Is The World's Most Efficient Value Settlement Network

On-chain analytics show Bitcoin is the most efficient value settlement network, settling more than $60 trillion in transfer volume to date.

The below is from a recent edition of the Deep Dive, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

This year has been an impressive one for proving how much value the Bitcoin network can settle and how efficiently it can do so. Over its lifetime, Bitcoin has settled more than $60 trillion in total transfer volume and over $21 trillion in change-adjusted transfer volume.

Nearly 70% of the total value transferred on the network, in USD terms, has come in 2021. Total transfer volume and change-adjusted volume have grown 5.5x and 5.1x from last year, respectively. That doesn’t include the pending December volume for this year either.

Source: Glassnode
Bitcoin's transfer volume in trillions of dollars.

Annualizing the total transfer volume for the year puts Bitcoin on pace to settling nearly $45 trillion in 2021. As a competing monetary network with final settlement, that puts Bitcoin at near 6% of volume as a percentage of the average annual Fedwire volume over the last seven years.

Source: Yassine Elmandjra, ARK 

As Ruling Class Plunder Becomes The Norm, Bitcoin Lets Individuals Stand Up

As Ruling Class Plunder Becomes The Norm, Bitcoin Lets Individuals Stand Up

By opting into money that is built on proof of work, individuals are calling out the increasing ruling class plunder, vocally or silently.

The below is a direct excerpt of Marty's Bent Issue #1120: "They have made plunder the norm." Sign up for the newsletter here.

If you couldn't tell, we're living through a bit of a societal decay at the moment. And if we're being brutally honest with ourselves, we've probably been living through a bit of a societal decay for decades, it's just much more obvious at the moment. There are many variables that led to the current frayed society that seems lost and somewhat desperate. We can point to the money printing, a media and political class that seem hell bent on sowing division, a combination of complacency and apathy, and a number of other factors.

However, there is a common factor beneath all these factors that has created an environment where societal decay is inevitable. Furthermore, this common factor is something that man has known about for centuries and we have been warned to avoid by great thinkers throughout history; when those at the top of the economic/power structure don't live by the same rules as those below them it will lead to an inevitable societal and moral collapse as those below the upper rungs of the power structure become privy to the unfairness of the system.

In the wake of the 2008 financial crisis the fact that we live in a two-tiered society broken up into a ruling class and its cronies who can plunder with little to no repercussions and the rest of us who do not have that ability. Or should I say, did not have that ability. It seems that we've reached a point where some of the "have nots" have had enough of watching the members of the ruling class run amok and are deciding to get what they perceive to be their fair share. This sentiment and follow up action is becoming pervasive in cities around the country that have neutered their police departments and decided not to prosecute petty crimes like theft. It has become increasingly popular for flash mobs to run into stores and absolutely ransack them without any fear of repercussions.

It seems that plunder became such an entrenched way of life for the ruling class in the US — as is evidenced by decades of the Fed's ability to take advantage of the Cantillon effect, politicians taking advantage of insider trading and subsidy grifts, and the media whoring itself out to self-interested advertisers like Big Pharma at the expense of their viewers — that plunder is becoming authorized by our legal system catering to an increasingly immoral society that favors clout chasing, excess and vanity over virtue.

With that being said, there are plenty of examples to the contrary. There are many out there who recognize the injustice that exists and increasing depravity that is becoming pervasive in our society and are becoming more vocal. Calling for a return of law an order, a restructuring of the incentive games the ruling class is currently taking advantage of, and a return to logic. These people are out there and their numbers are growing, but they don't seem as influential as those still dead set on continuing the plunder... yet.

As we've said many times in this rag over the last two years, it feels as if we are at a crucial juncture. We can continue to spiral into complete decay by furthering the normalization of plunder, taking our society into a darker and darker state. Or, we can encourage strong men to stand up, call out the plunder, and DEMAND that those plundering are brought to justice.

In a way, getting into Bitcoin is an action that gets us closer to justice. By opting into a money that is built on Proof of Work instead of Proof of Proximity to the monetary spigot that enables plunder, individuals the world over are standing up, calling out that plunder vocally or silently, and voting with their decision to store their wealth in a much fairer system that makes a Cantillon-style plunder impossible. Let's hope more and more people opt-in to this system so that we can shorten the darkness.

SoftBank-Backed Brazilian Bitcoin Exchange Raises $50 Million In Extension Round

SoftBank-Backed Brazilian Bitcoin Exchange Raises $50 Million In Extension Round

2TM, the owner of Mercado Bitcoin, had captured $200 million in July and is now valued at about $2.15 billion.

  • 2TM, the owner of Brazil’s biggest bitcoin exchange, Mercado Bitcoin, has raised $50 million in an extension round.
  • Now valued at $2.15 billion, the group had captured $200 million in July from SoftBank Group Corp.
  • Mercado Bitcoin has over 3 million clients, while the country’s stock exchange has 3.8 million individual investor accounts as of the first semester of this year.

2TM, the owner of Mercado Bitcoin, the biggest Latin American bitcoin exchange, has raised an extra $50 million in an extension round that initially captured $200 million from SoftBank Group Corp, reported Bloomberg.

The company received investments from private equity firm 10T Holdings and Tribe Capital, a venture capital fund based out of San Francisco with investments in FTX and Kraken. Brazilian venture capital firm PIPO Capital Gestao de Investimentos Ltda. is also participating in the round, per the report.

“After a torturous path trying to explain a technology as disruptive as blockchain, we are now able to convince Brazilian investors about its possibilities and also venture capitalists about the potential of Latin American markets,” 2TM co-founder Gustavo Chamati told Bloomberg.

Chamati said the investment's proceeds would be geared toward growth and the development of new products. His company aims to expand into Chile, Colombia, Mexico, and Argentina.

“We are very happy to bring to our firm specialized investors such as Tribe Capital and 10T Holdings,” 2TM CEO Roberto Dagnoni told Bloomberg, adding that they plan on getting another round of private investment before considering going public.

2TM’s Mercado Bitcoin has reached over 3 million clients and traded more than $7.1 billion, more than all its previous years combined. The exchange was the first to be created in Brazil in 2013 and has since grown into a unicorn startup. For context, there were 3.8 million individual investor accounts on the country’s stock exchange in the first semester of 2021.

Ethereum approaches a new ATH, but derivatives data reflects mixed emotions

Ethereum approaches a new ATH, but derivatives data reflects mixed emotions

Ethereum price appears en-route to a new all-time high, but data shows retail and pro investors are slightly skeptical about the current rally.

Today Ether (ETH) price briefly touched $4,760, exciting investors and reminding the world that the altcoin is a mere 2.2% below the $4,870 all-time high reached 20 days ago. While the spot price action might be intriguing, let’s see what’s happening in Ether’s derivatives markets.

Ether ETH/USD price at Bitstamp. Source: TradingView

While it is possible to draw a descending channel that shows support at $3,960, today's 5.4% positive move seems decoupled from Bitcoin's (BTC) negative performance.

Earlier today, commodities and stocks took a hit after the U.S. Federal Reserve acknowledged that inflation is more than just a "transitory" trend and Fed chair Jerome Powell said that the bank's relaxed money policies could end sooner than anticipated.

Retail traders are not fully confident

To understand how confident traders are about Ether's price recovery, one should analyze the perpetual contracts futures data. This instrument is the retail traders' preferred market because its price tends to track the regular spot markets.

In any futures contract trade, longs (buyers) and shorts (sellers) are matched at all times, but their leverage varies. Consequently, exchanges will charge a funding rate to whichever side demands more leverage, and this fee is paid to the opposing side.

Ether perpetual futures 8-hour funding rate. Source:

Neutral markets tend to display a 0% to 0.03% positive funding rate which is equivalent to 0.6% per week. This indicates that longs are the ones paying and data shows retail traders have been mostly neutral since Nov. 4 and the last move above 0.07% happened on Oct. 21.

Top traders have reduced their long positions

Exchange-provided data highlights traders' long-to-short net positioning. By analyzing every client's position on the spot, perpetual and futures contracts, one can better understand whether professional traders are leaning bullish or bearish.

There are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.

Exchanges top traders ETH long-to-short ratio. Source:

Despite Ether's 17% rally over the past four days, top traders at Huobi and OKEx decreased their longs. This move was even more evident at OKEx because the indicator made a drastic move from favoring bulls by 120% on Nov. 25 to a meager 30% advantage three days later.

Currently, data indicates that whales and arbitrage desks have reduced their long exposure, while retail traders remain suspicious of the recent bull run.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

$3.3B Bitcoin mining company Griid to list on NYSE via SPAC deal

$3.3B Bitcoin mining company Griid to list on NYSE via SPAC deal

The company projects it can mine up to 25,000 BTC per year by 2024.

In a filing with the United States Securities and Exchange Commission on Tuesday, special purpose acquisition company, or SPAC, Adit EdTech Acquisition Corp, announced it would merge with Cincinnati-based Bitcoin (BTC) miner Griid at a $3.3 billion enterprise valuation. SPACs are blank check companies created for the sole purpose of acquiring other firms. After the deal consummates, Griid will list on the New York Stock Exchange under the ticker symbol GRDI. The deal is expected to close by the first quarter of next year.

According to its investor presentation, Griid expects to mine 637 BTC this year with a total hash rate of 187 petahash per second (PH/s) from all miners combined. By 2024, the company projects it can mine 24,348 BTC per year, with its total hash rate surpassing 26,180 PH/s. In context, the total hash rate of the entire Bitcoin network as of Tu is approximately 156,000 PH/s.

The firm also claimed that newly designed chips in its mining machines can surpass one of the best application-specific integrated circuit Bitcoin mining devices out there, the S19 Pro. Comparing its proprietary machine to the S19 Pro, Griid boasts that it is 15% more efficient, 50% cheaper and results in 130% more gross profits per year. Currently, about 70% of the company's Bitcoin mining operations are carbon-free.

Trey Kelly, CEO of GRIID, issued the following statement regarding the development:

We are building an American infrastructure company with the largest pipeline of committed, carbon-free power among public bitcoin miners at the lowest cost of scaled production.

David Shrier, CEO of Adit EdTech, added:

Carbon-free mining is the future of Bitcoin. GRIID’s combination of a large pipeline of low-cost, carbon-free power, distinctive access to next-generation ASICs, and market-leading execution position them to generate attractive profitability and growth.

Griid business metrics | Source: Company Investor Presentation


UAE issues first NFT stamps in the Middle East

The United Arab Emirates has adopted a favorable approach towards crypto. Now, its postal operator is issuing NFTs to commemorate National Day.

The United Arab Emirates’ postal operator is issuing nonfungible token (NFT) stamps to commemorate the federation’s 50th National Day, offering further evidence that digital collectibles are gaining mainstream appeal globally. 

Emirates Post Group, or EPG for short, announced this week that it has become the first postal organization in the Middle East and North Africa to issue digital-collectible stamps. The new stamps, which will be unveiled on the Dec. 2, National Holiday, consist of blockchain-based digital twins that will be sold as digital collectibles linked to their physical counterparts.

A total of four stamps, each with a distinct design consisting of a national theme, will be issued. Buyers will be able to see the digital design linked to the physical stamp they purchase after scanning a QR code printed on the card. To activate the digital collectible on the blockchain, users must scan a QR code hidden behind the card.

EPG CEO Abdulla Mohammed Alashram told Cointelegraph that embracing NFTs aligns with the company's vision of becoming more digitally oriented. In the wake of the COVI-19 pandemic, EPG is "exploring how the implementation of blockchain technology can streamline and enhance our operations and introduce other competitive advantages." 

When asked whether the NFT stamps are a one-off foray into blockchain or part of a broader strategy to embrace the new technology, Alashram said EPG plans to launch more digital stamps in the future: 

"The adoption of the latest advancements in digital technology in our operations is also to address the technology-savvy generation who prefers digitally accessible services. As part of our efforts to bridge the gap between traditional postage stamps and the digital world, we are also working to launch more NFT stamps."

The UAE has adopted a progressive attitude towards blockchain technology and digital assets, with local regulators pushing a slew of crypto-friendly regulations. In September, local authorities established a new regulatory framework that supports cryptocurrency trading and related activities in Dubai’s economic free zone, potentially opening the door to wider adoption and innovation in the emirate.

Related: Dubai finance watchdog approves listing of Bitcoin fund

In late October, the Dubai Financial Services Authority, also known as DFSA, clarified regulations around so-called investment tokens. The framework is intended to provide legal certainty for both investors and market operators.

Bitcoin Miner Griid Plans To Go Public In $3.3 Billion Merger

Bitcoin Miner Griid Plans To Go Public In $3.3 Billion Merger

The Cincinnati-based miner is expected to list on the NYSE under the ticker symbol GRDI in a SPAC deal with Adit EdTech to close in Q1 2022.

Bitcoin Miner Griid Infrastructure LLC announced today it had entered into a definitive merger agreement with Adit EdTech Acquisition Corp. to list on the New York Stock Exchange (NYSE). Adit EdTech will acquire Griid Holdco LLC, a newly formed holding company and parent of Griid, in a deal that values the combined company at about $3.3 billion.

Upon completing the transaction, the company is expected to operate as Griid Infrastructure Inc. and list on the NYSE under the ticker symbol GRDI. The miner is expected to receive approximately $246 million in cash from the acquisition corporation at closing; Griid said its existing management team would continue to lead the business.

“We are building an American infrastructure company with the largest pipeline of committed, carbon-free power among public bitcoin miners at the lowest cost of scaled production,” Griid’s founder and CEO Trey Kelly said.

Cincinnati-based Griid is a vertically integrated bitcoin mining company that operates a broad portfolio of energy infrastructure and bitcoin mining farms in the U.S.

Merging with blank-check companies has become a popular strategy for bitcoin miners seeking to go public, and Griid is the latest to jump on that bandwagon. On November 19, Bitdeer Technologies shared similar plans. The spinoff firm from giant mining chip maker Bitmain said it had agreed to merge with Blue Safari Group Acquisition Corp. in a deal that would value it at $4 billion.

“Griid’s combination of a large pipeline of low-cost, carbon-free power, distinctive access to next generation ASICs, and market-leading execution position them to generate attractive profitability and growth,” said David Shrier, CEO of Adit EdTech.

According to the statement, the proposed transaction was unanimously approved by the boards of both companies and is expected to close in the first quarter of 2022, subject to conditions including the receipt of regulatory approvals and approval of Adit EdTech’s stockholders. Wells Fargo Securities LLC advised Adit EdTech for capital markets and mergers and acquisitions (M&A) advisory services.

Bitcoin, stocks and commodities correct after Fed chair mentions policy change

Bitcoin, stocks and commodities correct after Fed chair mentions policy change

BTC, stocks and commodities took a hit after the Federal Reserve acknowledged that inflation is more than just a “transitory” problem and hinted that tapering could occur sooner than expected.

Global financial market took a hit on Nov. 30 after comments from U.S. Federal Reserve Chair Jerome Powell hinted that inflation and the Omicron COVID-19 variant are growing threats and that the bank's easy money policies could end sooner than anticipated.

Prior to Powell's comments, Bitcoin (BTC) had been on the rise and the digital asset had rallied 6% from a low of $55,840 in the early trading hours on Nov. 30 to an intraday high at $59,200, but the price was hammered back below $57,000 after the Fed's remarks.

BTC/USDT 4-hour chart. Source: TradingView

At the time of writing, Bitcoin has managed to climb back to $58,000 but a series of technical indicators signal that traders are not confident about BTC's next move.

Stocks and commodities take a hit

It wasn’t just Bitcoin that was hard hit by the Fed's comments. According to economist and CryptoQuant analyst Jan Wuestenfeld, the dollar index (DXY) increased while the DOW, gold and other equities indexes pulled back. 

DXY vs. Gold vs. BTC/USD vs. SPX. Source: Twitter

Wuestenfeld said,

“US dollar index appreciating on Powell remarks that the FED might speed up taper (no matter how believable). Everything else going down. Gold included.”

Related: Vladimir Putin says cryptocurrencies 'bear high risks'

The Fed "behaves in a binary way"

Deeper insight into the actions from the Fed was provided by market analyst and former treasury employee Nik Bhatia, who highlighted the fact that the Fed “doesn’t have the ability to react to dynamic conditions” and instead “behaves in a binary way.”

Bhatia said,

“If things are going well, it can tighten policy. If the economy is in trouble, it eases policy.”

According to Bhatia, “inflation is running hot in the United States” with “headline statistics pointing to multi-decade high increases in aggregate price levels.”

At the same time, the Fed has implemented “a monetary policy at essentially the easiest it has ever been,” leading Bhatia to caution that “with inflation waking up, this will soon come to an end.”

Bhatia said,

“The Fed is clearly heading into a policy error in which it tightens policy despite longer-term growth and inflation expectations coming down, due to tighter monetary policy itself (that’s why it’s called policy error).”

It's no longer "transitory inflation"

Interstingly, Powell's comments acknowledged that the year-long mantra of “transitory inflation” is now coming to an end, with the Federal Reserve chair suggesting that it's time to “retire” the transitory narrative.

While it’s refreshing to see a bit more honesty coming from the Fed, cryptocurrency pundit Anthony Pompliano pointed out that the average person knew all along that the inflation was anything but “transitory” in nature and will likely remain an issue well into 2022.

The overall cryptocurrency market cap now stands at $2.638 trillion and Bitcoin’s dominance rate is 41.2%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

ENS DAO delegates offer perspective on DAO governance and decentralized identity

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop.

Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community. 

Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers.

Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. AlphaWallet also supports ENS avatars.

Zhang, also known as @Victor928, is among the top 30 delegates with the most voting power. When asked about how he plans to keep contributing to the DAO, Zhang said:

My biggest concern currently is voting power. The second largest voting power is Coinbase, a big corporation. We need to make sure the ENS is always a public group, always a neutral service, not influenced or controlled by any single party for its own interest.”

Related: ENS’ director of operations says that DAO-based governance ‘has always been the plan’

During the ENS token airdrop, 100 million total ENS tokens were distributed. While 25% went to users with .eth domans, another 25% of the tokens were allocated to those who “contributed in significant ways to ENS over the last four years.” The other 50% remains in the DAO community treasury.

As an external contributor, Zhang received 46,296.3 tokens. At the time of publication, this number of tokens amounted to $3,320,311.15. Zhang is among 27 contributors to receive this exact amount.

Zhang confirmed that he is, “holding it all. I’m not cashing any tokens out. As long as ENS continues to grow in the right direction, I don't see any competitors. So that means the value is much bigger than the current market cap, if we’re looking at it as an investment.”

The day of the airdrop, Brantly Millegan, AKA “Brantly.eth,” ENS’ director of operations, tweeted about the “responsibility” bestowed upon users and added how it’s up to the ENS community to use decentralized identity “wisely.”

Gregory Rocco from Spruce discussed this concept of decentralized identity with Cointelegraph. He developed Spruce, a secure sign-in with Ethereum, or SIWE software, precisely to help users own and control their digital identities, rather than give up that data to large corporations.

He is referring to large centralized corporations such as Google, Twitter or Facebook that offer web2 users the option to login to third-party apps and services using their respective Gmail or Facebook details instead of having to create and remember individual usernames and passwords for each new account.

According to Rocco, these traditional logins have the “ultimate control” over user identifiers because “if Google pulled the rug on you, you wouldn't just lose access to Google services, you'd also lose access to every service that you signed into using Gmail.”

The Ethereum Foundation and ENS recognized this issue and announced a Request for Proposal for the creation of a Sign-In with Ethereum package using Oauth. Spruce was selected to offer a decentralized identity alternative in September.

The goal of SIWE is to enable users to control their public identifier by owning their private keys or as Rocco put it: “‘your keys, your crypto’ but also ‘your keys, your identifier.’” Not only does Spruce’s toolkit establish a blockchain-based identity, but it also enables verifiable proof of identity, ownership of assets and DAO membership. This is important for a user to prove his or her value to the ENS ecosystem and earn rights to upcoming airdrops.

When asked how it feels to be a delegate, Rocco said:

“I feel this motivation to stay on top of everything for ENS and be on board and establish that social contract. I believe in the future of ENS and support participation in user-controlled systems. That paradigm is the first step towards enabling users to have more control over their identity and data.”

Decentralizing identity ultimately empowers the ENS DAO and builds up its credibility as a truly decentralized organization. Both Zhang and Rocco are champions of collective ownership and hope to further promote the usage of ENS in the Web 3.0 ecosystem.

Leapfrogging Legacy Banking To A Bitcoin Standard

Leapfrogging Legacy Banking To A Bitcoin Standard

How looking at the history of technological adoption can give us insights into where Bitcoin could be embraced the fastest.


Throughout time, technology has proven to change our lives by leveraging efficiencies in energy. New ways in how we hunt have saved time and energy for innovation and to live more intentionally. Currently, Bitcoin presents an immense opportunity to change the lives of those who are burdened by old forms of manipulated money and preserve their time and energy. It is the first self-sovereign, programmable money that is proving to destroy expectations of every “expert” imaginable. At the intersection of money and technology, Bitcoin's network effect is spreading like a mind virus to all corners of the globe. This is not a coincidence but the manifestation of a zero to one moment; a radical new technology that will change nearly everything it touches.

This article explores the idea that some regions and nations have a higher susceptibility to adoption in new monetary networks. Specifically, I will outline how the unbanked populations of emerging countries can leapfrog legacy systems, straight into a new monetary standard. But first, let's lay the groundwork for understanding how this can happen with some concepts.

Democratization Of Technology

To understand leapfrogging, let’s first look into something that naturally happens when humans produce technology: the democratization of technology. As we make technology, the cost reduces, while the ease of production increases. Our tools get better, people’s skills improve, securing the material for production gets easier, logistics improve, and everything is less costly as humans continue increasing the output/yield over time. Simply put, cost goes down, while production goes up.

Figure 1.

A great example is the printing press. Before this innovation, each book had to be typed out or written one by one and distributed almost by osmosis. This means books were more expensive and were only in the hands of the few. After the printing press, people were able to automate a portion of the process by creating blueprints of the books. This cut down labor costs, and there was a huge explosion in printed material. This may have put people out of work; but it also introduced better dissemination of information to a wider group of people and new opportunities to produce more books for less cost and effort.

Another example is photography. Historically, taking photos on film took hours to produce in a dark room. The film had to be brought to a local expert and it would take several days to get back the finished product. Smartphones and photoshop technology made this essentially free. It was then possible to download an app or use the built-in app on smartphones, take pictures, and immediately process them. Democratization of technology has been happening across every single aspect of human society since the beginning of time. Humans create tools to make it easier and cheaper to survive. Each tool becomes better, we then expand and evolve with less energy improving the quality of life.

Fast-forward to the internet age. Emerging countries are just now tapping into the power of the internet. Although there are many factors underlying the reasons for expansion, one thing that is known is that technology builds on itself, making each successive technology easier to produce. Not only is there growth, but there is exponential growth. Certain times throughout history, technology has made such a large leap forward that it allows extremely poor countries to skip the legacy technology and quickly adopt the new one. This is called leapfrogging.

Leapfrogging Explained

Leapfrogging is when the cost to produce one technology is too great for a population, so when a new, drastically cheaper technology is created it’s quickly adopted and the old tech is skipped. This is the coexistence and benefit of separate populations within society. Let's look at the mobile phone revolution as a way to explain leapfrogging. Some societies did not have the wealth or infrastructure to adopt landlines and phone communication when it was brand new, but when the mobile phone was introduced, this gave mostly everyone around the world the ability to opt-in.

Figure 2. Landlines in the U.S., 1900–2019.

Figure 2 shows the number of landlines in the U.S. population from the 1900s to 2019. Throughout the entirety of the 20th century, the landline was being adopted in the U.S. Consequently it only took a decade to dethrone this old technology. The decline started when the benefit of cell phones outweighed the cost compared to landlines. This is where democratization hit the tipping point and we saw a huge jump from one technology to the next. Now it’s extremely cheap to use technology that is 100 times or even 1,000 times more advanced than the previous. Mobile phones usurped landlines because they were more affordable, easier to use and more mobile. Figure 2 shows how quickly a society can adopt a technology that has significantly more benefits than the previous, even in an advanced society.

A similar thing is happening with television and the internet. Netflix came out and disrupted how people consume media on the television. As more platforms emerged, and people realized they could pay a fraction of the cost for a Netflix subscription rather than $100 for cable and a bunch of commercials, the switch was easy. Legacy systems were bogged down by all of the brick-and-mortar stores and overhead costs. They could not compete and pivot quickly enough, so they lost their seat at the table.

Figure 3. Number of telephone subscriptions in the U.S. versus worldwide.

When comparing fixed telephone subscriptions to other countries, the U.S. was way ahead of most. Many factors were contributing to this. Wealth played a huge part, but much of it was the production and first movers’ advantage. The U.S. was the first country to set up telephone lines from Boston to Somerville Massachusetts and expanded from there. Other countries did not have this opportunity, so they were laggards in the technology simply by default. It also made it easy to have a grid to run on top of, being a technologically advanced country with a power grid. Because it was so resource-heavy to set up this grid, this took over 30 years to build up the infrastructure.

Figure 4. Landline subscriptions compared to GDP per capita, 2019.

One of the main reasons why it was so hard to increase telephone subscriptions in other countries is because of the initial cost. You can’t just tap into a telephone line, there needs to be a large grid, infrastructure and companies/governments willing to build out this grid. Figure 4 shows that there is a rough line at a GDP per capita of $5,000 to get off zero and start communicating via landline. As the GDP per capita grows in a country, it is more likely they adopt fixed landlines. This is a huge barrier to entry as they try and compete to be a part of the 21st century. With telephones, it brings an easier flow of information across long distances quickly. These are important technologies that helped first-world countries advance quicker than their counterparts. This technology could mean the difference between surviving and thriving in the modern era.

Figure 5. Mobile phone subscriptions versus GDP per capita, 2019.

Things get much different when you start looking at mobile phones in Figure 5. To have a mobile phone is drastically cheaper than having a landline, all costs considered. Before, you needed the infrastructure and everything that came with installing a landline phone. But with mobile phones, even at a GDP per capita of less than $1,000, you get ~50% penetration of adoption within the population. All of the countries that were left out of communication with landlines, now have leapfrogged the old technology, right into a new standard of mobile phones.

People benefit, businesses benefit and countries benefit immensely from these technologies. With mobile communication, people have higher leverage over their energy output. Businesses and life in general are more efficient, in turn creating a higher GDP for the country. It is a feedback loop that is good for all of humanity. When one group of people creates new technology, everyone benefits at one point or another.

From Landlines To Mobile Phones To Internet-Connected Smartphones

Not only are poorer countries leapfrogging into mobile phone communication, but they are, in turn, jumping right into the internet age. On top of that, (Android) smartphone costs are dropping significantly every year, with the average cost down by 50% from 2008 to 2016. With the growing ability to connect with the rest of the world comes more opportunities to learn and grow with the rest of the world. An incredible amount of information is available on the internet, and the benefit of being on the network is immeasurable.

Figure 6. Mobile versus landline subscriptions, worldwide, 1960–2019.

When comparing the numbers of mobile phone users to the numbers of landlines, you get a huge disparity in the pace at which they were adopted. Fixed landlines were around for almost 50 years before they started to see some real competition. Thinking back to our Figure 5, this makes sense, because the cost to build infrastructure is drastically higher than that of mobile phones. The opportunity a landline brought to civilization was immense, but the cost-effective mobility of cell phones transcends previous communication technology by a longshot.

As of September 2021, the world’s population was ~7.89 billion people. Of that, there are 10.5 billion cell phones with network connections. That is 2.52 billion more activated phones than there are people. This becomes thought-provoking when adoption data starts to reveal where mobile phones are headed next.

As people adopt mobile phones, smartphones are becoming cheaper and more abundant. The cost of production for smartphones is less and less each year, and soon there will be little reason to have a cell phone without internet connection because the cost difference will be so minuscule. Smartphone abundance is allowing people around the world to tap into the internet and it is estimated that “by 2025, 72% of all internet users will solely use smartphones to access the web.”

Figure 7. Share of the population using the internet, 1990–2019.

Currently, the world is in a transitionary period of communication. Not all of the world has access to the internet, only 65%, with an increasingly rapid pace of adoption. Because it is so inexpensive to get a mobile phone, and the benefits are immense, the world is being onboarded at an incredible rate.

To answer the question “What is Leapfrogging?” we can look directly at mobile phones. But it’s not just one leapfrog, it’s more of a continuous onboarding to the digital revolution for the entire human population. Things are getting cheaper, and technology is moving exponentially forward, toward a more connected future. Soon, everyone will have access to the internet and will bring about new and exciting opportunities for the world to grow. With the high rate of adoption in communication technology, mobile phones swept across low-GDP countries allowing information to spread. Smartphones are a small hop away from mobile phones. With smartphones comes all sorts of opportunities not to mention the connection to the world's internet. In developing countries, the internet is starting to hit its hockey stick moment. Adoption continues to grow and as smartphones get cheaper, more people in the world have access to the internet, connecting them to their local and global economies and new innovations will come about in unforeseen ways.

This begs the question, what monetary network will they use to transact in the digital age? It's taken years to get the legacy banking system up to speed. We’ve bootstrapped and “Frankensteined” many different ways to connect the internet to a centuries-old banking infrastructure, but these newly onboarded countries have the opportunity to skip that altogether. With no legacy banking infrastructure rooted within the nation, this leaves the door wide open for a new legacy.

Leapfrogging Onto A Bitcoin Standard

It seems the stage is set for a paradigm shift. A perfect storm is brewing in populations that lack bank accounts and access to store their wealth. Coupling this with connection to the internet, and 21st-century e-commerce and monetary system, it is impossible for countries not to adopt it. Because bitcoin is a global asset with no intermediaries, its infrastructure is inherently global. Any improvements to the network, the entire world will benefit automatically without having to update the old tech. Unlike landlines, there is no infrastructure to build, and the barrier to entry is almost zero. You just opt in with a bit of hardware and an internet connection.

As of 2017, according to the World Bank, there are 1.7 billion adults in the world without a basic transacting account. Most of these countries with higher rates of unbanked are poor, have high rates of inflation and lower currency stability, not to mention a disconnected state government ripe with problems. This is extremely common when looking at currencies in other low-GDP countries. So, what are some of the biggest factors in which people would want or need to adopt Bitcoin? If we can answer this question, then maybe we can quantify and pinpoint which countries have the biggest opportunity and most to gain from adopting a Bitcoin standard.

Figure 8. World’s most unbanked countries (Source).

Figure 8 shows the top-10 most unbanked countries as of February 2021. The Oxford dictionary defines “unbanked” as “not having access to the services of a bank or similar financial organization.” Much like building the infrastructure for landlines, it’s expensive to build banks and serve the local economy. Not to mention, many of the people living in these countries don't have the amount of money that would warrant the cost of owning a bank account. Some even share bank accounts with members of their families to save on costs. There is a huge opportunity to solve the problem of banking in low-GDP countries, but many of the digital banking companies around the world are constrained by regulation and geographical jurisdiction. It may be hard to grasp the importance of a bank account having never lived without one, but without a bank, citizens cannot secure funds safely. Without secure funds, the future is uncertain. This is where Bitcoin can solve some of the problems in these less developed and emerging countries. There are three specific ways in which these problems could be solved.

1. Bank the Unbanked

Bitcoin gives everyone the ability to be their own bank with something as little as a cell phone. All that's needed is to be connected to the network and accept funds. The smartphone does all of this. It allows people to download a bitcoin wallet, connect to the internet and start transacting. There are many ways in which one can use this wallet. Coincidentally, the countries above who have low banking numbers within their population, also have mobile phones and high internet penetration. This is an open door from a technological standpoint, allowing people to opt into Bitcoin and secure their funds digitally.

In addition to using the Bitcoin network to transact on your phone, you can also use it as a cold storage solution. Cold storage is similar to a savings account. This savings account or cold storage is disconnected from the internet, making it harder for people to steal your funds. With the old technology of banks, you would have to pay for this solution, but with Bitcoin, it's free, just download the software and/or buy a hardware wallet. There are some cold storage solutions where you can pay for a hardware device, but creating a phone wallet and securing your keys, gives the people an entry point and on-ramp to storing their wealth in a digital bank.

2. Securely Store Value Over Time

The second opportunity is the store of value function. Many of the countries that have unbanked populations and poverty issues are a result of a currency problem. In my previous article, “Bitcoin As A Pressure Release Valve,” I wrote that certain countries have hyperinflated currencies with no option but to turn to the black market. Most of the time, these countries use the U.S. dollar to transact since it holds its value better relative to their currency. Strictly from a monetary standpoint, bitcoin is scarce. It is the most scarce form of money there is. There will only ever be 21 million bitcoin in existence and when the value rises, the production does not increase. This is called elasticity or the lack of elasticity in bitcoin’s case. Unlike fiat money, no government, central bank or agency can print more. And unlike gold, silver or any other commodity, when the demand rises, the amount that is mined stays the same. The first completely inelastic asset in existence is a result of preprogrammed architecture, with consensus in the network that’s default is to not change the protocol.

People that live in countries where the money is known to be manipulated, understand Bitcoin almost immediately. When the idea of something that can't be manipulated is presented, the concept of scarcity and 21 million is understood. With the reality of incorruptible money, the current regime in power can't stuff their pockets without alienating the population through force. These people understand this idea because they have experienced it firsthand. When food prices rise faster than people can spend a weekly budget on groceries, it is immediately apparent the importance of a completely scarce, un-manipulatable asset.

In developed countries with low levels of unbanked, people have ways of storing their wealth. They have a 401k and IRA, and most people own property. This is a way of storing value over time. It may not be completely efficient, but it is sufficient enough to escape some level of inflation. The alternative would be to keep your dollars in a savings account, and the real yield of that is negative and not a smart way to store money. These countries put money in financial devices, because it is the smart thing to do and it preserves time and energy. Unbanked countries have no way of storing long-term value. It is degraded and evaporated through manipulation and high levels of money printing. Emerging countries cannot store time and value into financial instruments. There is no Apple stock or S&P 500 to put money into. They are stuck with low levels of wealth that are stolen away on an ever-moving treadmill. There is no way of truly saving value or energy spent over time.

For the first time, Bitcoin gives the world, particularly those in emerging countries, the ability to hold their value in a closed system that cannot be inflated. Much like the opportunity the mobile phone brought to change communication, bitcoin is the first “store of value'' that is available for low-GDP countries to buy and hold. It allows them to securely transfer their wealth over time, without fear of inflation or confiscation. Add on top of that, if they need to transfer wealth out of the country and flee an oppressive regime, bitcoin is the first asset that gives the ability to do so. Large amounts of gold cannot be taken on a plane or property and homes cannot be transferred to another country. Bitcoin gives people the freedom to do what they want with their earned value, without fear of a centralized power removing it. Bitcoin preserves the fundamental human right of property.

3. Connection to the Digital Economy

The third problem Bitcoin solves is connecting and transacting digitally. Being a digitally native asset, bitcoin smooths the rails of commerce allowing low-GDP countries to join the 21st century of commerce. This is huge, and what cell phones did for communication, digital commerce will do the same. It immensely increases our ability to transact and exchange value. Bitcoin allows anyone, anywhere, to join a digital transacting network and exchange value natively over the internet, whether in person or without knowing them at all.

Digital economies move at the speed of light, while old-school economies move at the speed of osmosis. This brings more time and efficiency for people on both ends of the transaction. Businesses spend less time on transactions, widen their addressable market, and start putting more time and effort into other things that can improve their work. It is the difference between transacting daily in cash and using a preprogrammed point of sales system. It is simply better.

Not only does Bitcoin make things easier and frees up more time, but it is programmable money. Like the internet, Bitcoin can be built in layers. Each layer brings a new way to use it that widens the possibilities and use cases. What the internet did for communication, Bitcoin will do for money.

Combining all three of these factors, you get a massive magnetic pull toward adoption of the new technology. It is hard to slow the movement of technological adoption and impossible to stop. Like throwing a match on a tinder-filled hillside, years of opportunity build up in countries that lack technology where innovation and adoption prepare to explode at the right moment.

Quantifying Bitcoin Adoption In Low-GDP Countries

Figure 9. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume in Vietnam (Source).

Looking at every one of the top-10 countries from Figure 8, they all have meaningful adoption in Bitcoin and it is growing every week. Not only is Vietnam number two on the unbanked list, but it is also number one on the “Chainalysis 2021 Global Adoption Ranking.” In fact, looking at Figure 10 of adoption through LocalBitcoins and Paxful, USD volume shows that every one of the countries in the top-10 list of unbanked have meaningful adoption.

Figure 10. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume.

What does this tell us about Bitcoin adoption in unbanked countries? It tells us that it's working. Continuing to see these trends improve will be good for Bitcoin adoption and not to mention the countries in which they are adopting it. All the ingredients are there. Most are unbanked with high internet access and an unreliable currency that isn't natively digital. All you need is time for the adoption to take hold.

There are also some concerns that come up when thinking about Bitcoin adoption. Like, “How can they adopt bitcoin when it is so volatile?” Well, there are a few solutions to this problem. The first is that when a population has no choice, something as volatile as bitcoin could mean the difference between losing 30% or losing 90% over the span of one year. Keep in mind that bitcoin is already solving three of the major problems listed above, we are just remedying the problem of volatility.

First, look at just bitcoin and its use cases today. For some countries, their currency is just as volatile if not more volatile than bitcoin. Not only that, but it is volatile to the downside, continuing to lose value as the government steals and prints away spent time and energy. If bitcoin were to be used, sure it might be volatile, but this volatility is either short lived, or it’s to the upside.

Now look at bitcoin while using it for everyday transactions through Strike, as a more technical solution. This solution is currently available now in El Salvador as a test case and is starting to roll out to more and more countries. People use the Bitcoin and Lightning rails every single day but transact in USD, choosing to either save in bitcoin or not. This solution gives the best of both worlds. One, a population has the ability to transact short term in a currency that isn't volatile, like other emerging countries. Two, this gives access to the payment rails of Bitcoin and the ability to save in the most scarce asset in existence. Looking back historically, bitcoin has grown at a 200% compound annual growth rate and this has the opportunity to conserve and grow wealth immensely. For someone in a developing world, this is life changing.

As this trend of adoption in underbanked countries continues, new and exciting ways where Bitcoin is used will emerge. For the first time in history, countries have the ability to store wealth in something that cannot be stolen. It gives the opportunity to transact freely without the permission of the state or government, and it allows people to break free from imposed serfdom. Bitcoin is here and it is only getting bigger. There is a change in the tides of time, and Bitcoin is a once-in-a-millennia technology that is pulling the shores.

This is a guest post by Mitch Klee. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.