The Biggest Company in Crypto Has BIG Plans!

Forget Binance, forget Coinbase and forget MicroStrategy. The most systemically important company in all of crypto is Tether, the issuer of the USDT stablecoin. If you had to guess what form an extinction-level event for the crypto industry might take, then the collapse of Tether would be a solid guess.

It’s safe to say that Tether has had its fair share of critics over the years, but, despite all the questions around its origins, reserves and much else besides, the fact remains that it and USDT have held fast through thick and thin. USDT’s market cap recently breached the $100 billion mark and shows no signs of stopping. In short, Tether has rolled with the punches and weathered the storm.

This resilience, coupled with USDT’s dominance of the stablecoin market, has made the man at the helm of Tether, Paolo Ardoino, one of the most significant figures in crypto. Paolo became Tether’s CEO late last year, having served for many years as its chief technology officer. As such, he’s a man whose thoughts and opinions count for a lot.

Paolo was one of the big guests at the recent TOKEN2049 conference in Dubai, which is where Jessica was able to sit down with him and ask some pressing questions about what’s next for Tether, USDT and the rest of crypto as a result. In today’s video, you’ll see what they had to talk about. You can watch it right here.

about. You can watch it right here.

📈 Crypto Market Forecast 📈

By now you’ll know that the crypto market is driven by macro factors and crypto-specific factors. Up until now, most of the factors that have been moving the market have been crypto-specific. This is evidenced by the fact that the correlations between crypto and the stock market had been weakening, particularly the correlation between BTC and stocks.

However, it’s possible that we will see this correlation start to return this week. In other words, it’s possible that crypto will be driven more by macro factors for a while. This simply because the Bitcoin halving is now behind us. In the absence of any additional bullish crypto-specific factors (like the spot Ethereum ETFs), crypto will be at the mercy of macro.

This is a problem, because the macro situation isn’t looking too good. Geopolitical escalation is the biggest concern, and, until recently, the focus had been on the Middle East. However, it’s quite possible that we will soon see the focus shift back towards Europe. That’s because US politicians may have approved more aid to Ukraine by the time you read this.

At the same time, investors are now reportedly pricing in the possibility that the Fed will keep interest rates higher for longer until March 2025. This is a 180 from early 2024, when investors were expecting half a dozen rate cuts. But the funny thing about investing is that consensus outcomes rarely occur (everyone expects it, and it doesn’t happen).

In this case, it appears that the global economy could be starting to weaken. This is evidenced by the fact that there has been a sudden uptick in layoffs from large companies in the US. Another nugget of evidence is the expectations for the Q1 GDP print in the US, which will be released later this week: 2.2% vs 3.4% previous, a more than 1% contraction.

Whereas the big company layoffs can be explained by cutting costs to increase profitability and share prices, the significantly lower GDP expectations are harder to fathom. That said, it’s possible that they’re related to seasonal effects (as many economic prints are). Even so, there’s no denying that the global economy is weak. The US seems to be the last man standing.

Now take a second to consider that BTC had been holding up quite well despite all of these macro factors. That’s just because of all the tailwinds from crypto-specific factors like the spot Bitcoin ETFs and the Bitcoin halving. By contrast, the S&P 500 has continued to tumble, and could fall as low as 4800, since this is roughly the point at which the recent rally began.

Without crypto-specific tailwinds, BTC could therefore perform a sort of catch-up trade with the stock market. The catch though is that it would catch up in the other direction - down. This would be a bigger deal than you think, because many were under the impression that BTC had become a sort of digital gold. BTC’s response to recent events suggests otherwise.

What this means is that BTC holders who bought because they believed BTC was digital gold could be disappointed, and many could throw in the towel (that is, sell or take profits). Combine that with the enormous amount of leverage we have in the crypto market, and you have a recipe for a downside surprise that could come as soon as this week. Be ready just in case.

💲 Runes Mania Part 2 💲

If you’re a regular reader of our newsletter, you’ll remember that we covered Casey Rodarmor’s ‘Runes’ protocol in our 28th Jan 2024 issue.

In that article, we gave a quick run-down of what the Runes protocol is all about and warned you against falling for the deceptive marketing tactics used by certain Ordinals projects. These projects were caught making false claims about their provenance and were using the word ‘Runes’ as part of their name to slyly trick investors into giving them more attention than they would otherwise deserve.

That said, today’s article will share our thoughts about the potential and long-term viability of Runes within the Bitcoin ecosystem and why we believe it will be integral to ensuring Bitcoin’s future survival. We will also share our thoughts on which projects will likely come out on top within the Runes ecosystem when it launches.  

Before we dive in though, here’s a quick recap of the Runes protocol and its history for those who need it.

Casey Rodarmor is the man who launched the Bitcoin ‘Ordinals’ protocol in December 2022. It gained popularity as a medium to mimic the NFT tech on chains like Ethereum. Inspired by the success of Ordinals, anonymous developer domodata launched the ‘BRC-20’ protocol on the 8th March 2023. BRC-20 allowed users to launch altcoins using Ordinals tech. This saw similar success to Ordinals.

However, Casey was sceptical about the BRC-20 project and viewed it as an inefficient approach to altcoins on Bitcoin. Instead, in September 2023, Casey proposed ‘Runes’ – a new homogeneous token protocol that supposedly addresses some of the shortcomings of BRC-20s from a technical standpoint. In the words of Casey himself, “Runes is built for degens and memecoins.”

By the time you’re reading this, Casey’s Runes protocol is probably live.

The activation of the Runes protocol was strategically timed to coincide with the Bitcoin halving, with expectations set for a block height of 840,000.  At the time of writing, this was set to occur on 19 April 2024, 22:35 UTC.

With the Runes protocol now live, we’re going to see intense speculative action happen on top of the Bitcoin network. This will likely come in waves, as we’ve seen with previous iterations of BTC meta-layers, including both Ordinals and BRC-20s.

There will be an initial, hype-fuelled wave of activity on Runes that will slowly subside in the months that follow the launch.

While investors who attempt to trade Runes (the name of the fungible token standard on Runes Protocol) at the initial stage will likely see outsized gains, most will lose out on profits as they refuse to time their exit when the hype falters.

This makes Runes protocol a high-risk, high-reward play in the short-term.

We suspect this fall in momentum will be led by transaction fees on Bitcoin hitting a new all-time high. The sudden spike in fees will come from projects attempting to front-run others in launching their tokens on the Runes protocol.

However, if history is any indicator, the Runes market will see a gradual maturation similar to that of Ordinals. This will allow it to see a more sustained second wave of activity and price action. This is why we remain hyper-bullish on Runes protocol and other BTC meta-layers in the long term.

In fact, we believe these meta-layers will be an integral ingredient in ensuring the survival of the Bitcoin network in the long term.

In other words, the BTCFi narrative is essential to securing the future of Bitcoin, not just as an asset but as a network.

If you’re confused by that assertion, we highly recommend you read our segment on ‘The State of Bitcoin’ in the 31st December 2023 issue of this newsletter.

The TLDR is that Bitcoin currently faces a fundamental design risk that could make it economically unfeasible for miners to secure the network as the years go on. One of the best ways to address this risk is to subsidise the miners’ perceived losses by supplementing them with additional income from a rise in transaction fees.

This rise in transaction fees will come from a rise in activity and transactions on top of Bitcoin, led by innovations such as Casey’s Runes protocol.

On that note, if you’re looking to get your hands busy with Runes on launch, there are three projects we suspect will dominate the leaderboards, at least during this first wave of speculation.

Two of these are ‘pre-Runes’ projects. For context, ‘pre-Runes’ refers to projects that launch Ordinals collections which promise to deliver Runes tokens to holders when Casey launches the base Runes protocol.

For the sake of understanding, this is similar to an NFT project on Ethereum promising to airdrop tokens on a particular layer 2 network once it goes live.

The two projects we suspect will do well are Rune Coin and Runestones. Both of these were covered in that 28th Jan newsletter issue highlighted earlier. Our simple theory is that both have enough provenance and hype around them at the moment. They also happen to be rivals. Rival communities often push each other up inadvertently.

The third project we believe will do well is Rune 0 (UNCOMMON•GOODS). This is officially the first Rune hardcoded within the protocol by Casey Rodamor himself. Multiple factors lead us to be bullish on Rune 0.

The first is ‘provenance’ – hardcoded by Casey. The second is game mechanics. Casey has designed Rune 0 to be freely mintable for four years (until the next halving) with one ‘UNCOMMON•GOODS’ token being minted per transaction. By designing Rune 0’s minting phase to last until the next halving, the fundamental value of each Rune 0 mined is the value of the transaction fee paid to the miners for minting a new token. This means that Rune 0’s value is driven by transaction fees on the Bitcoin network.

That said, this is all pure speculation and we will just have to wait and watch to see whether or not our predictions turn out to be correct. Keep your eyes peeled…

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🔮 Video Pipeline 🔮
* How To Win In Crypto: Our ultimate strategy revealed!
* Airdrops: Our step-by-step beginners guide!
* Blackrock Tokenising Worlds: Their master plan revealed!
* Runes Mania: Here’s Everything you need to know!

🏆 What's New at This Week? 🏆

* M6 Labs Crypto Market Pulse: Navigating The Stormy Crypto Seas
* Where to Buy XRP in 2024: Complete Guide!
* AIOZ Network Review 2024: The Swiss Army Knife of Web3
* DEX Marks the Spot: Digging into Decentralised Exchanges
* Best RWA Projects 2024: Bridging Digital and Physical!
* Evolution of Memecoins: Financial Parody or Revolutionary?

📖 Quote of the Week 📖

Sometimes, you come across someone in crypto who seems to have been really lucky on a few trades. They found a coin that made massive gains and you’re left wishing you had their good fortune. However, what you don’t see is the hours of research that went into those trades and the numerous ones that didn’t work out. The harder you work, the luckier you get.

“Opportunity is missed by most people because it is dressed in overalls and looks like work” - Thomas Edison

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor. 

Guy Turner

Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.

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