A week of predictable unpredictability in the crypto world.

23 Nov, 2021
A week of predictable unpredictability in the crypto world.

Up and down. Up and down. That’s how Bitcoin – and the altcoin market goes. For those traders who understand the volatility of the digital coin world, this week’s pullback on Bitcoin’s price was nothing new.  Maybe the mainstream expected more as the hubbub of exchange traded funds (ETFs) grabbed headlines in November.  But for the savvy retail trader, this week was a “buy the dip” opportunity.

Consider the cycle:

“In just the past year alone, there have been five instances of 20% or higher daily gains, as well as five intraday 18% drawdowns,” Cointelegraph noted. “Truth to be told, the volatility of the past 3-months has been relatively modest compared to recent peaks.”

HODLers stood their ground. “However, even after a near 20% correction (-$13.5k) off the ATH, Long-Term Holders do not appear to be spending their coins in panic,” Glassnode tweeted.

Analysts remained stoic. “At the end of the day, I believe this is just a pullback before continuing higher in a bull market. The opportunity on the other side will be great for us as long we remain convicted on the way down,” William Clemente III wrote in his newsletter Blockchain Market Intelligence.

Square unveils decentralized Bitcoin Exchange “tbDEX”

Last summer, Square and Twitter CEO Jack Dorsey alluded to something coming this way with Bitcoin. He even tweeted “Bitcoin will unite a deeply divided country (and eventually the world).” Whatever.

Finally, this week, his foreshadowing took shape, as Square unveiled its proposal to build a decentralized Bitcoin exchange designed to make it easier for people to conduct transactions between the digital coin and fiat currency worlds.

“The vast majority of people receive wages and pay for goods and services in fiat currency,” the Whitepaper titled, “Introducing the tbDEX,” said.  “They must pay taxes in fiat currency. So how do we unleash the potential of bitcoin and decentralized financial infrastructure, when most of us still live in a world of fiat? To do so, we need to build bridges between the fiat and cryptocurrency worlds.”

The basis of the exchange is “social trust,” rather than a governing body, the paper said. “We propose a solution that does not rely on a federation to control permission or access to the network; nor does it dictate the level of trust required between counterparties. There is no governance token. Instead, the tbDEX protocol allows participants to negotiate trust directly with each other — or mutually and voluntarily rely on trusted third-parties to vouch for the counterparty.”

The exchange will feature on- and off-ramps to make it easier for people to conduct transactions. When tbDEX might launch remains to be seen.

Miners not welcome…in Europe?

While many U.S. states have opened their arms to mining operations, some European countries want to close that door.  Regulators in Sweden have proposed a ban on “proof of work” (POW) mining in the European Union, citing its environmental impact even when using “green” sources.

In the PoW protocol, many people compete to solve a mathematical puzzle to mine Bitcoin. The competitiveness of the method uses a tremendous amount of energy which many proponents say is wasteful.

“Our conclusion is that policy measures required to address the harms caused by the proof-of-work mining method. It is important that both Sweden and the EU can use our renewable energy where it provides the greatest benefit for society as a whole,” a joint statement by the generals of Sweden’s Financial Supervisory Authority and Environmental Protection Agency said.

The officials cited the banning of miners in China might lead to operations being relocated to European countries with vast renewable energy resources. “In the Nordic region for example, their appetite for renewable energy could undermine the transition towards climate neutrality and the efforts to meet the Paris Agreement goals,” Bitcoin.com reported.

Norway joined in on the conversation this week. "We are currently considering potential policy measures in order to address the challenges related to crypto mining,” a Norwegian official said according to Euronews.net. “In the context of this work we will look to the solutions proposed by the Swedish regulators, and our target would be common European regulations in this area."

And so, the anti-mining drumbeat begins. We’ll see if it gets stronger. While mining brings jobs and tax revenues, energy concerns may trump economics, even when it’s green energy.

“…the recent Swedish statement signals that the countries where miners seek green energy may not want them,” Fortune reports. “Sweden argues that Bitcoin production deploying renewable sources isn't environmentally friendly at all. It devours electricity that's sorely needed to wean bigger industries from fossil fuels, potentially forcing host nations to import dirty energy from abroad, making their emissions far worse.”

Joyce Pavia Hanson

Contributor

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