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Dispatch #2: MicroStrategy’s 100-Year HODL

Sep 18, 2020·2 min read
Dispatch
Dispatch #2: MicroStrategy’s 100-Year HODL

In this patch of your weekly Dispatch:

  • A public company redoubles its move from cash reserves to BTC
  • Uniswap launches a governance token; DeFi community loses mind 
  • Stablecoins remain the low key crypto success story of 2020

The Big Idea

MicroStrategy’s 100-Year HODL

Publicly-listed MicroStrategy made waves last month when they announced that they would be moving $250m of their cash reserves into bitcoin. The reason? A fear of inflation and an assumption of a weakening US dollar.

Interestingly, just days ago CEO Michael Saylor announced that the company was going way beyond its initial allocation, instead purchasing $425m worth of Bitcoin.

In an interview with CoinDesk, Saylor put the reasoning simply: “I want something that I could put $425 million into for 100 years.”

Many in the bitcoin space saw this as extreme validation. Ultimately, however, MicroStrategy is a listed company and as such, must focus on the response of investors. Since the first announcement on August 11th, MSTR is up 30%. The stock jumped 9% after the additional allocation was revealed on Tuesday.

Put differently, the markets like it.

So will this start a trend? It’s hard to say.

What is for sure is that the number of companies that even could follow suit isn’t unlimited. As Blockfolio put it, there’s only enough bitcoin for 550 other companies to make a similar move.

The Latest In…

DeFi

The SushiSwap vs Uniswap battle has been one of the best spectator sports in crypto. Over the weekend, SushiSwap changed its block reward post migration and quickly saw Uniswap zoom back out ahead in total value locked. On Wednesday evening, Uniswap announced the launch of its new governance token. Get yer popcorn!

The Latest In…

Institutions

Kraken is officially the first crypto exchange to become a US bank. Well, more specifically, they’ve been approved to become a Wyoming Special Purpose Depository Institution (SPDI). SPDIs give Kraken all of the benefits of being a bank - access to all 50 states’ banking markets, the ability to custody institutional assets, and more - but don’t allow fractional reserve banking. Frankly, SPDIs are like a more crypto ethos aligned version of a bank with all the upside for the industry. Congrats, Kraken!

The Latest In…

Regulation

There was quite a bit of regulation news this week. India seems poised to ban crypto trading. Nigeria’s SEC says digital assets are securities by default. Europe’s big new crypto legislation plan leaked early. And in the US, the SEC settled with Unikrn over their 2017 ICO, with Commissioner Hester Peirce dissenting and saying that the action could stifle innovation.

The Latest In…

Altcoins

Ethereum 2.0’s next testnet ‘Spadina’ is soon to go live. Meanwhile, one of Ethereum’s most-hyped layer one competitors is Polkadot. By early 2021, Polkadot projects will be able to mint their very own ERC-20-like tokens. Let the games begin!

The Week’s Most Interesting Data Story

2 Years to $1B. 2 Months to $2B.

USDC is a stablecoin on the rise, Coin Metrics data shows. It took the asset two years to grow to $1 billion in total circulating supply, but just two months to double that to $2 billion. Part of that growth is attributable to use in the COVID-19 crisis economy, both within crypto but also as an alternative for dollar strapped emerging markets. Recently, UDSC has been growing as a core asset in the DeFi space. Indeed, since July, USDC has been growing even faster than the world’s largest stablecoin by supply, Tether.

Overall, stablecoins have been adding $100m per day since July. Product meet market meet FIT.

Hot Topics

What the Community Is Discussing This Week

The Fed had its standard FOMC meeting review and presser this week. No one was super impressed with what they heard.

We know, we know, we mentioned it above. But seriously, this Uniswap token distribution is all anyone is talking about.

There may be another side to DeFi though. Does it have an issue with gender? And if so, is it unique to DeFi, or more about anons on Twitter?

What to Watch for This Week:

  • Does Uniswap’s token drive TVL and even the price of Ethereum up? 
  • Will the markets take a turn with the Fed’s continuation but no fiscal policy to match? 
  • Will the EU announce its crypto regulation officially?
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