“Concentrated power is not rendered harmless by the good intentions of those who create it.” – Milton Friedman ||
Hello everyone! Hard to believe we are heading into the last month of the year… I know dates don’t matter much for the flow of events, but the psychological wrapping up of 2023 will be a welcome reset, even though I know 2024 could bring different troubles.
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IN THIS NEWSLETTER:
Bitcoin network effects
US overreach and the impact on crypto
Decentralized media is not the solution yet
WHAT I’M WATCHING:
Bitcoin network effects
Bloomberg crypto analyst Jamie Coutts [correction, I see that Jamie is no longer at Bloomberg, apologies!] points out an interesting on-chain detail that highlights the strengthening network effect in bitcoin adoption: it involves the number of “accumulation addresses”, defined as Bitcoin addresses with at least two BTC incomings and no outgoings. This dropped during the 2018 bear market, but increased during the 2022 bear market.
(chart via @Jamie1Coutts)
What’s more, the increase was notable, roughly 60%, and it accelerated as the price bottom approached.
Note that this does not measure the amount of BTC being accumulated. It measures the number of addresses doing the accumulating.
As Jamie says in his tweet, this suggests strong Bitcoin conviction, at a time when speculators or “tourists” were leaving in droves.
Even more intriguing, it highlights the potential ahead. Any network’s value relies on the number of users, and a continued uptick in accumulating addresses even in a truly bad market shows strong network growth.
If Bitcoin’s network continues to grow when things are bad, just think what could happen to this metric and the asset’s potential value when the market is in full upswing.
US overreach and the impact on crypto
It’s astonishing how fast we went from “let’s ban crypto” to “let’s control crypto”.
The Biden administration is asking Congress to broaden the Treasury Department’s sanctions powers, according to Deputy Treasury Secretary Wally Adeyemo. This would be the most significant expansion of the Treasury’s reach since the Patriot Act of 2001.
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