The First CBDC is Coming!!
The European Union has been quicker off the mark than most when it comes to crypto regulations, as witnessed by the recent passing of the MiCA bill by the European parliament. However, it appears the EU is also leading the pack when it comes to central bank digital currencies (CBDCs) as well.
In late April, the European Central Bank (ECB) published its third progress report for the digital euro. The report focuses on, among other things, the access to, distribution of and functionalities of this CBDC project. Make no mistake, it is coming and perhaps sooner than you may think.
Even though other CBDC projects around the world have already shown that people don’t want this technology, the allure of added control and surveillance is too much for governments and central banks to resist. The dominos are getting ready to start falling.
For our video today, we’ve gone through this latest progress report and highlighted the key takeaways from it. We’ve also identified perhaps the only thing that may be able to stop the project dead in its tracks…
You can watch that video here.
📈 Crypto Market Forecast 📈
We’ve got another busy week ahead of us. Starting tomorrow, Bybit will begin requiring KYC from all its users. If non-compliant users decide to close out their short or long positions, we could see a dump or pump, respectively. However, it’s likely this has happened already. Another thing that will happen tomorrow is the official launch of the Solana phone. This could be bullish for SOL, but it’s possible that this has been priced in already too.
From Tuesday, Digital Currency Group or DCG will have two days to pay its subsidiary Genesis Digital $630 million. Gemini has warned there’s a risk that DCG will be unable to pay these debts and could default as a result. The fact that DCG CEO Barry Silbert recently sold shares of Grayscale’s Ethereum Trust for the first time suggests the firm is facing significant financial stress. If DCG does default, this could drag down the markets.
Then on Wednesday, the Consumer Price Index or CPI for April will be published. Recent inflation trends suggest that headline inflation will continue falling, whereas core inflation could continue its reacceleration. The response from the markets will likely be mixed: positive because the headline is coming down, but negative because core is going up. Note that it’s core inflation that the Fed has been factoring the most into its rate hike decisions.
In addition to the above, we could see some news from Voyager Digital as soon as next week. The bankrupt crypto platform will reportedly begin liquidating its assets and paying back users in the next few weeks. It’s not clear how this will affect the markets, if at all. There are also rumours that Ripple will be meeting with the SEC next week to discuss a settlement. I would take these rumours with a hefty pinch of salt, considering we’ve heard them before.
On that note, it’s important to remember that the SEC has a series of pending enforcement actions against the crypto industry. The regulator recently scrapped its definition of ‘digital asset’, something that’s only going to increase regulatory uncertainty in the US. Fortunately, the SEC has until 13th May to respond to Coinbase’s legal request for regulatory clarity. Unfortunately, the SEC’s track record suggests it will simply push back this deadline.
On the geopolitical front, it’s possible that Ukraine will begin its long-anticipated spring counteroffensive this week. There are even some reports suggesting that it’s already begun. Regardless, there are signs that the war is escalating once again. One of these is the alleged drone attack on the Kremlin by Ukrainian forces. Ukraine has denied involvement and Russia is now blaming the US. It’s possible that it was just a false flag operation, but who knows?
As spring gets underway, things are most definitely hotting up.
🌅 The BRC-20 Hype 🌅
Bitcoin hit all-time highs this past week.
Sadly though, we’re not talking about the price of BTC.
Instead, I’m referring to some key performance indicators of the Bitcoin network. Specifically, the network’s hash rate (aka the Bitcoin blockchain’s total computing power) and its daily number of processed transactions, both of which hit all-time highs of 439 exahashes per second (EH/s) and 682,000+ transactions respectively on 1st May.
Interestingly, this sudden surge in network activity seems to come from a renewed interest in the Ordinals protocol. Notably, of the 682,000+ transactions processed on 1st Mayt, over 300,000 of those were Ordinal inscriptions.
What’s even more shocking is that a majority of those inscriptions were “text-based”, instead of the usual image-based ones that are akin to NFTs.
Safe to say, like most of you I was also scratching my head trying to figure out why anyone would want to make text-based inscriptions instead of the usual cool jpeg ones. Last time I checked, this was the 21st Century, after all.
Well, my investigation has revealed the culprit to be something called “BRC-20.”
Sounds a tad familiar, but surely not?
In simple terms, BRC-20 (Bitcoin Request for Comment-20) is an “experimental token standard” that was created using the Ordinals protocol. Specifically, BRC-20 - like Ethereum’s ERC-20 - seeks to allow users to create fungible tokens on the Bitcoin blockchain.
That’s right, someone found a way to make the Bitcoin NFT generator (aka the Ordinals protocol) create fungible tokens instead. Well I never…
Jokes aside, it is important to note that although BRC-20 is modelled after ERC-20, both fundamentally differ in implementation.
Most notably, BRC-20 tokens don’t make use of smart contracts. Instead, every single deploy, mint and transfer of any BRC-20 token results in a new inscription created on the Bitcoin network.
This means that you don’t need to use crypto exchanges or DEXs to trade BRC-20 tokens, since the Bitcoin blockchain itself becomes the exchange.
Confused? Allow me to explain.
As I mentioned earlier, every interaction with a BRC-20 token needs to be initiated with the relevant inscription on the Bitcoin network. In this case, the inscription data is a script file that attributes tokens to satoshis, with trades of these BRC-20 tokens working through Partially Signed Bitcoin Transactions (PSBTs).
This means that to complete a BRC-20 token trade, the interested buyer just needs to come along and complete the transaction.
Of course, Bitcoin wallets like UniSat make this infinitely easier by providing an interface and tool that specifically indexes BRC-20-related on-chain data and allows users to create the inscriptions needed to execute the various functions of deploy, mint and transfer from right within the wallet.
(Special shout-out to this video guide by pazNGMI for helping me understand how to set up and use a UniSat wallet.)
At the time of writing, the BRC-20 ecosystem is relatively thriving, with a market cap of $169 million and a total of 11,693 BRC-20 tokens. Though most of these BRC-20 tokens seem to be meme coins with no utility for now.
Metrics and usability aside, the most interesting consequence of the BRC-20 hype is the rise in interest towards the development of Bitcoin layer-2 networks.
Specifically, the recent BRC-20 hype has led to a massive hike in transaction fees on the network, with an additional 135 BTC paid to miners so far. Notable industry participants, such as Blockstream Developer Lisa Neigut and Grayscale believe this presents an opportunity for a Cambrian explosion in layer-2 protocols for Bitcoin, as the drive for functionality on the network persists.
Needless to say, I’ll be keeping a close eye on future developments.
📊 Personal Portfolio 📊
BTC 36.39% | ETH 31.75% | USDC 16.98% | USDT 6.80% | USD 3.44% | ATOM 3.32% | DOT 1.31%
🛒 NEW CB Store Merch Drop 🛒
The events of the last year have highlighted how important crypto security is. Your seed words are literally the most important thing to keep secure.
However, most people only think about the theft of these seed words and do not consider other potential mishaps like water and fire damage. But, fear not because today, you can guard against all those nasty eventualities by using a metal seed wallet to engrave those all-important seed words - all whilst looking stylish at the same time.
We’ve recently designed a new cryptoverse seed wallet, with an awesome crypto solar system design. So, if you want to upgrade your security then you’ll want to check out our NEW Cryptoverse Seed Wallet drop! Stock of this new addition to our merch store is limited and you might want to hurry so you're not disappointed!
👉 Get your metal Cryptoverse Seed Wallet whilst stock lasts!
🔮 Video Pipeline 🔮
- Is The Crypto Bull Run Back?!
- Gold vs. Bitcoin: The Ultimate Showdown!
- Crypto Bull Run Sectors To Watch: You need to watch these!
- WEF Jobs Report: What you need to know!
- Sui Review: Hot or not?
🏆 What's New At CoinBureau.com This Week? 🏆
We’ve been working hard on refreshing our website CoinBureau.com behind the scenes and are pleased to announce that the revamp of our blog has now gone live! So, anyone that wants to read up on the latest happenings in the crypto space will want to check that out.
📖 Quote of the Week 📖
Many people can grow despondent because they had a vision 2-3 years ago where crypto would be now. However, when focusing on the short term, we neglect the monumental long-term gains.
“People overestimate what they can do in one year and underestimate what they can do in 10 years” - Bill Gates
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 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.