Bitcoin is so 2021. Here’s why some institutions are set to bypass # 1 crypto and invest in Ethereum, other blockchains next year

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Happy Thursday! Welcome to Distributed Ledger, our weekly crypto newsletter. I’m Frances Yue, Crypto Journalist at MarketWatch, and I’m going to bring you the latest and greatest digital assets this week so far. Find me on Twitter at @FrancesYue_ to post comments or discuss crypto.

Crypto at a glance

Bitcoin BTCUSD, -0.46% was mostly stable from seven days ago, recording a loss of 0.2%. The cryptocurrency, which is down about 30% from its all-time high of $ 68,990 in November, has come under selling pressure in recent weeks as investors expected the Reserve Federal government accelerates its bond purchases and possibly increases interest rates three times. in 2022. However, after the Fed’s decision on Wednesday, bitcoin soared.

Ether ETHUSD, -0.38% has registered a loss of 5.9% over the past seven days, recently trading at around $ 4,028. It was down more than 15% from its all-time high of around $ 4,866, according to data from CoinDesk.

Dogecoin DOGEUSD, -0.37% traded up 3.4% in the past seven days, while another Shiba Inu dog themed coin SHIBUSD, -0.36 lost 4 , 4% in the last seven days.

Crypto Metrics Biggest Winner Price 7 Day Return% OKB $ 32 25.1% Avalanche 107.1 21% Quant $ 189.5 19.9% ​​XDC Network $ 0.095 19.4% Kadena $ 13.09 16. 02% Source: CoinMarketCap.com as of Dec 16 Price of biggest declines 7-day% return Decred $ 68.2 -21.9% WAX $ 0.48 -20.9% BitTorrent $ 0.0028 -15.5 % Theta Fuel $ 0.207 -14.3% Holo $ 0.008 -14% Source: CoinMarketCap.com as of December 16 Bitcoin what?

Clayton Gardner, co-CEO of crypto investment management firm Titan, told Distributed Ledger that as crypto embraces wider adoption, he expects more institutions to bypass bitcoin and are investing in other blockchains, like Ethereum, Avalanche and Terra in 2022, which all boast smart contract features.

Bitcoin does not support smart contracts, which are computer programs stored on blockchains.

“Bitcoin was originally viewed as a macro-speculative asset by many funds and for many it still is,” Gardner said. “If anything strengthens its use case, it’s a store of value. It’s not really being used as originally intended, perhaps from a medium of exchange perspective. “

For institutions looking for blockchains that can ‘produce intrinsic utility and value over time’, they might consider smart contract blockchains that drive the growth of decentralized finance and Web 3.0, the third Internet generation, according to Gardner.

“Bitcoin is still one of the most secure blockchains, but I believe layer one and two blockchains beyond Bitcoin, will handle the majority of transactions and activities from NFT (non-fungible tokens) to DeFi,” said Gardner said. “So I think the institutions see this and to the extent that they want to make the capital work in the coming months, I think it could be where they just pump the capital. “

Partisan divisions on stable coins

Partisan divisions are distinct from stablecoins, as a Senate Banking Committee hearing highlighted on Tuesday, with Republicans highlighting the benefits of these tokens and Democrats calling attention to the risks they can pose to them. consumers and the economy.

Massachusetts Democratic Senator Elizabeth Warren expressed concern that some stablecoins may not be fully collateralized, citing the largest stablecoin Tether, which held about half of its commercial paper reserves and certificates of deposit. according to its attestation report of June 30. Pennsylvania Republican Pat Toomey, on the other hand, touted the benefits of stablecoins, such as potentially speeding up payments and lowering costs.

The divisions among senators are significant, as the president’s task force called on Congress to quickly pass new legislation that would require the issuance of stable coins by insured banks in a November report.

However, some industry participants believe that whether or not a bipartisan deal is struck, people will find a way to access stablecoins.

“There is a growing consensus that those pushing to slow down the use of stablecoins are large financial institutions that are themselves working ‘quietly’ on their own cryptocurrency projects and / or of stablecoins, ”Carlos Betancourt, founding director of crypto hedge fund BKCoin Capital wrote in an email.

Decentralized social networks？

The price of Decentralized Social, or DeSo, a blockchain-powered cryptocurrency that supports decentralized social media applications, has jumped from around 74% to around $ 164 from $ 94, after Deso was listed on Coinbase. Pro Monday, before dropping to around $ 95, according to CoinGecko.

In the eyes of Nader Al-Naji, director of the DeSo foundation, decentralized social media has the potential to be “much bigger” than decentralized finance.

“Today, only a few companies control most of what we see online,” Al-Naji told Distributed Ledger in an interview. But DeSo “creates a lot of new ways for creators to make money,” Al-Naji said.

“If you find a creator when he’s little, or an influencer, you can invest in that, and then if he gets bigger and more popular, you make money and he wins and he gets capital early on. to produce his creative work, ”according to AI-Naji.

BitClout, the first app created by AI-Naji and his team on the DeSo blockchain, initially sparked controversy, with some finding out they had profiles on the platform without their consent, while users of the app purchased. and sold tokens representing their identities. These tokens are called “designer coins”.

AI-Naji responded to the controversy by saying that DeSo now supports more than 200 social media apps, including Bitclout. “I think if you don’t like these features, now you have the freedom to use any app you want. Some apps don’t have this feature at all.

Crypto companies, funds

In news from crypto-related companies, shares of Coinbase Global COIN, -4.31% traded down 2.7% to $ 251.3 on Thursday afternoon. It has fallen 4.8% in the last five trading days. Meanwhile, MicroStrategy Inc. MSTR, -5.29%, which carries billions of bitcoins on its balance sheet, fell 4% to $ 575. It was down 2.9% in the last five days on Thursday.

Mining company Riot Blockchain Inc. RIOT, shares fell 7.7% to $ 23.90, down 7.7% to $ 23.90, contributing to a 10% loss in the past five days. Shares of Marathon Digital Holdings Inc. MARA, -8.31% fell 8.8% to $ 35, contributing to a 14.7% drop in the week so far. Another miner Ebang International Holdings Inc. EBON, -8.03%, was down 4% to $ 1.30, with a decline of 1.1% in the past five days.

Overstock.com Inc. OSTK, -5.20% was down 6.7% to $ 63.40. Shares have fallen 18.6% over the past week, so far.

Block Inc. SQ, -4.56%, fell 4% to $ 167, with a loss of 10.7% in the past five days. Tesla Inc.’s TSLA, at -5.03%, traded 4.1% lower to $ 935.70, with a loss of 6.8% in the past five days.

PayPal Holdings Inc. PYPL, -1.00% fell 0.1% to $ 190.60, as it posted a loss of 0.6% in the past five days, while NVIDIA Corp. NVDA, -6.80% fell 6% to $ 286, contributing to its 6.2% loss over the past five sessions.

Advanced Micro Devices Inc. AMD, -5.37% fell 5.4% to $ 138.60 and posted a gain of 0.4% over the five-session period.

In the fund space, ProShares Bitcoin Strategy ETF BITO, -2.85% fell 3% to $ 30.30 on Thursday, while Valkyrie Bitcoin Strategy ETF BTF, -2.80% fell 3% to 18 , $ 70. VanEck Bitcoin Strategy ETF XBTF, -3.12% was down 3.3% to $ 47.40.

Grayscale Bitcoin Trust GBTC, -3.58% lost 3.5% to $ 36.40, with a loss of 1.9% in the last five sessions.

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