"There are decades where nothing happens, and there are weeks where decades happen" Vladimir Ilyich Lenin
Ahlan wa sahlan, and welcome to the 66th edition of CoinMENA's weekly newsletter, Kalam Crypto. “There are decades where nothing happens, and there are weeks where decades happen", this was one of those weeks. We seem to be on the verge of another banking crisis, former Coinbase CTO bets bitcoin will reach $1 million within 90 days, KSA looking at bitcoin as a store of value, and Fidelity quietly launches their crypto trading desk. All that and more, so let's dive into this week's letter, and talk crypto:
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Global News 🌍
1 Million Dollar Bitcoin Bet: The former CTO of Coinbase, Balaji Srinivasan, lit up Twitter this week when he made a public wager that BTC price will reach one million dollars within 90 days! He explained his logic in a thread, where he essentially shows evidence that banks are insolvent, and the regulators and central banks knew about it months ago but hid it from the public. He is betting that Central Banks are about to inject unprecedented amounts of liquidity into the markets to shore up the banks, and in the process lead to hyperinflating the dollar. While we agree that continuous printing of fiat currency leads to currency devaluation, hyperinflating the dollar within 90 days seems extreme. The post is titled “BitSignal” because he urges everyone to buy bitcoin asap, as it is the only life raft and the best vehicle to protect yourself from hyperinflation. Time will tell. Worth noting that Balaji is considered by many a very smart and measured intellectual. These remarks seem out of character for him. When asked about it, in a Twitter Space he replied: “I’m not a bitcoin maximalist, but we are all bitcoin maximalists now”.
Banking Crises: We may be on the verge of another banking crisis. According to the Fed, 333 regional U.S. Banks are in a similar position to Silicon Valley Bank (which failed last week). This Wall Street Journal article claims the number of banks at risk is 186! The Fed responded by announcing a $25 billion Bank Term Funding Program (BTFP), which days later ballooned to $2 Trillion! Last week, the amount of emergency funds withdrawn by banks from what’s called the “discount window”, which is essentially a rainy day fund for banks exceeded the 2008 great financial crises withdrawal levels! See the chart below. In addition, Credit Suisse, a 167-year world systemically important financial institution was just acquired by UBS in a government-brokered deal between Switzerland and France to rescue the Swiss bank. Meanwhile, bitcoin is up 30% so far this week.
Fidelity Crypto Goes Live: Fidelity now allows all of its retail customers to trade bitcoin directly from its website, making this option available to over 30 million brokerage accounts. This move sets a precedent for the world's largest brokerage firms to establish bitcoin onramps, and greatly benefits bitcoin's potential liquidity profile, as $3.9 trillion in client assets now have direct access to BTC.
Local News 📍
KSA looking at Bitcoin As Store of Value: Last week during the Saudi Financial Sector Conference, His Excellence Mohammed Al Kuwaiz remarked “We are unlikely to look at Bitcoin as a means of payment but we might look at it as a store of value.” KSA has not announced any plans to regulate crypto yet. However, HE mentioned that this classification will accelerate the KSA’s plans to license crypto trading and service providers. KSA regulating crypto would be a major boon for the MENA crypto economy.
Keep An Eye On 👀
#bitcoin decoupling from Nasdaq, S&P500, and Dow Jones.
Tweet Of The Week 🐥
Has to be Balaji’s 1M BTC in 90 days bet!
CoinMENA News 🗞
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Quiz Corner ✅
Last week’s question: What is a stablecoin?
Answer: A cryptocurrency that maintains a stable value
This week’s question: How are new bitcoins created?
a) They are printed by a central bank
b) They are mined by solving complex mathematical problems
c) They are given out for free to new users
d) They are purchased from a bitcoin exchange
See the answer in next week’s newsletter.