Copper’s Weekly Update – 11 January 2021

Highlighting what went right, and what went wrong, in this week’s crypto news analysis.

Copper Team

2020 was weird and behind us. Or so we thought.

11 days into 2021 we’ve already seen a mob led by a man wearing a viking hat descend on the US Capitol, and the world’s most powerful man get kicked off social media. Things we’re not even mentioning: UK mutant virus on the loose.

Given the unrelenting flood of insane news in the mainstream media, you can be forgiven for not being up to speed with the world of crypto.

Last Thursday, the market capitalisation of all cryptocurrencies reached $1 trillion for the first time as Bitcoin soared past $40,000. With the price of Bitcoin having since dropped by about 11%, attention has turned to altcoins such as Dash and Bitcoin Cash. The latter soared from $420 to as high as $630 in the past 48 hours.

But don’t expect the spotlight to stray away from Bitcoin for too long. According to various reports, Joe Biden is assembling a multi trillion dollar Covid-19 relief package which is expected to boost inflation, weaken the US dollar and bring more buyers for Bitcoin.

According to Michael Sonnenshein, the newly appointed CEO of Grayscale, investor interest in Bitcoin as a way to safeguard against rising inflation has been increasing among a wider range of institutional investors. He told Bloomberg on Friday: “We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions and endowments.”

Below is our weekly roundup of industry news. If you’d like to get in touch with us about any of our products or services, we look forward to hearing from you. Just send us a note.

Top stories of the week

OCC says banks can use stablecoins in payments

The Office of the Comptroller of the Currency (OCC), last week approved the use of stablecoins for the settlement of financial transactions by banks.

The federal banking regulator made this announcement in an interpretive letter published on Monday, January 4, 2021. The letter further disclosed that banks can also now make use of public blockchains to store, process, validate, record, and carry out payment transactions. However, they need to ensure that they strictly adhere to existing laws and regulations guiding crypto-based transactions in the United States.

Read more

Crypto exchange Bakkt nears merger with Victory Park SPAC

On Friday, Bloomberg reported that US-based cryptocurrency exchange Bakkt is planning for a public listing with a merger with blank-check acquisition firm, VPC Impact Acquisition Holdings. According to the report, the two companies are already in advanced talks.

Bakkt is known in the crypto market for its derivatives products, including its futures and options on bitcoin.  The merged firm could have a valuation above $2 billion, according to the report.

Read more

JPMorgan says Bitcoin could rise to $146,000 long term as it competes with gold

In a note published last Monday, JPMorgan made a bold long-term price target for Bitcoin, claiming the cryptocurrency could rally as high as $146,000 as it competes with gold as an “alternative” currency.

However, analysts argued that Bitcoin’s price volatility needs to drop for institutions to make large allocations. The convergence of Bitcoin and gold volatilities is a “multi-year process” and suggests that the $146,000-plus target is a long-term objective, JPMorgan noted.

Read more

In case you missed it…

⚡️ Morgan Stanley boosts over 10% stake in BTC-backer MicroStrategy. Read more

⚡️ An astonishing $2bn is now staked in Ethereum 2.0. Read more

⚡️ Argentina’s Ripio acquires second-largest crypto exchange in Brazil. Read more

⚡️ Italian Banking Association launches experimental digital euro project. Read more

⚡️ Scaramucci’s $25m Bitcoin fund opens to investors. Read more

⚡️ UK’s ban on crypto derivatives goes into effect. Read more

⚡️ Kyrgyzstan’s central bank opens up crypto draft laws to public discussion. Read more

⚡️ Grayscale Investments clears out XRP in its digital Large Cap fund. Read more

⚡️ Kenya to earn $46m as new tax targeting crypto exchanges comes into force. Read more

⚡️ Chaos on Capitol Hill pushes Bitcoin ever further. Read more

⚡️ Ethereum bursts into list of top 100 assets in the world by market cap. Read more

⚡️ Finland decides to sell $75m worth of seized BTC. Read more

⚡️ Bitcoin’s market value now exceeds that of Facebook. Read more

⚡️ South Korea to implement 20% tax on crypto profits in 2023. Read more

⚡️ Coinbase acquires trading execution platform Routefire. Read more

⚡️ As gold crashes, Jim Cramer says money is ‘all going to crypto’. Read more

⚡️ Bitcoin to reach $200k predicts Social Capital CEO Chamath Palihapitiya. Read more

⚡️ Crypto-exchange Deribit adds Bitcoin options with $300K strike. Read more

⚡️ Bank of England governor on Diem: ‘Where’s the business model?’ Read more

⚡️ Major South Korean Bank Shinhan is set to offer crypto custody-related services. Read more

⚡️ Ripple’s Series C lead investor Tetragon sues company in wake of SEC charges. Read more

⚡️ Elon Musk, the world’s richest man, wants to be paid in Bitcoin. Read more

From Copper

Coppercasts Episode 11: David Marsh, Chairman & Co-Founder, OMFIF


CopperCasts returned for its first episode of 2021. Episode 11 welcomes David Marsh, a financial commentator in Europe and the US, and author of highly-acclaimed books. In the Show & Tell segment, David identifies ways that central banks can evolve to keep up with the horsemen of fintech. He also calls for partnership ecosystems between CBs and new private sector payment technologies to preserve fair competition and drive further efficiency in payments.In the longer audio-only podcast, David and Tyler delve deeper into the key changes that big tech is driving in central banking, including the development of central bank digital currencies and their role in promoting financial inclusion. Read more

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