For the first time in months the
crypto markets are noticeably down. Bitcoin had a quick correction to just
below $30,000 and Ethereum, which was hanging out around its previous all time high,
has given up a few hundred dollars of gains. Sad as it may be, this dip isn’t all bad news.
Just 1 month ago we were at $22,000, so BTC at $30,000 is still a pretty good deal.
And to be
honest we were due for a pullback. On Bitcoin’s rise to $20,000 in 2017, there were a couple of
big 30% drawdowns before the price went higher. At any rate, even if prices are down a
bit, the news is still pretty bullish. Blackrock is getting into Bitcoin, a supposed
double spend ended up being more FUD than reality, and crypto staking continues to be a popular way
for crypto investors to make money. Make sure to smash those like and subscribe buttons and
buckle up for this week’s Exodus Crypto News Welcome everybody, it’s Friday the 22nd day of
January and we’re glad to have you along. The biggest news of the week is that Blackrock, one
of the largest institutional investment firms in the world, has indicated that
they’re interested in trading Bitcoin. The investment firm has more than
7 trillion dollars in assets under management and their entrance into crypto
would add another layer of legitimacy. Remember, it’s not like Blackrock is
some longtime fan of the orange coin. In 2018 Larry Fink, the CEO
of Blackrock, said, quote, “I don’t believe any client
has sought out crypto exposure. Right now I can tell you, worldwide, I have not
from one client who said ‘I need to be in this.’” How times change… From skeptical in 2018 to buying
Bitcoin futures in 2021.
That’s the plan anyways, as Blockrock has mentioned that they’ll be
getting exposure to BTC via the futures market. That’s a good start, but if Blackrock’s ultimate
goal is to protect the purchasing power of their client’s funds, maybe they’ll
start buying BTC later in the year. We’ll keep an eye on it and let
you know as the story develops. Speaking of developing stories,
recently there has been some FUD about a potential double spend on the Bitcoin
network. A double spend would be a flaw in which a single coin can be spent more than once. For
example, I have only one bitcoin in my wallet, but somehow I’m able to send that
one coin twice as if had two coins As we’ve come to expect, Bitcoin critics were
quick to pronounce the death of the network. However, there’s a lot more to the story than
the critics would have you believe.
It’s true that a duplicate set of coins from the same
wallet ended up in two different blocks, however, that doesn’t mean
a double spend took place. Only one of those blocks was accepted
as valid by the Bitcoin network, and the other block was discarded. The technical
details here are beyond the scope of this video to explain however this block reorganization
is a fairly normal occurrence with Bitcoin and no cause for alarm. The fact that so many
people found it FUD-worthy is probably a good indication that there are a lot
of new Bitcoin investors who don’t understand how the network works and added
to the quick drawback of the BTC price. As we already alluded to,
Ethereum finally broke its previous all time high. On January
19th of this year, ETH hit $1,432. A new record! Etherians everywhere have been
waiting for this to happen for about 3 years, especially since Bitcoin more than doubled
its previous all time high at one point. This price growth comes on the back of
an expanding DeFi ecosystem and last year’s rollout of staking. Even though
the first stage of ETH 2.0 launched just a few months ago, there are already
2 million ETH being staked which is about 2% of all Ether in existence.
good to see, and once staking withdrawals are enabled we’ll probably see the amount
of staked ETH really take off. Click the little banner right here for more information
about Ethereum staking on the Exodus blog. So besides Ethereum there are lots of
different cryptocurrencies that support staking. In fact, 2020 was a great year
for earning a passive income with staking. The cryptocurrency infrastructure firm Staked
has estimated that investors earned more than $20 billion in rewards for staking in 2020.
That’s a fairly significant return once you consider that for much of 2020 the total
crypto market cap was only about $300 billion. That means that staking returned about 8%
of the total crypto market cap last year. Furthermore, Staked has predicted that 2021
is going to be even better for Proof of Stake cryptocurrencies.
Twenty-five percent of
the top 100 most valuable cryptocurrencies are all using a Proof of Stake consensus
mechanism. As crypto prices increase, the returns that investors can get by staking
coins in these networks will also grow. Why is staking so popular? For one thing, many people consider
staking to be more energy efficient than the mining process bitcoin uses.
Mining requires a lot of energy to power, whereas staking just requires a laptop
and a reliable internet connection. Another factor is that it’s easier to stake
than mine. Investors can buy some crypto, like Ethereum, and start staking that same day. The final factor is that staking can offer a
really good return! Staked has estimated that the average return for staking is 11.2% per
year. That’s a great return, especially when you consider how few opportunities there are to
earn a good return in the traditional markets. So crypto continues to grow. Whether it’s
Blackrock getting into the Bitcoin game, or Ethereum breaking its previous all time high, blockchain technology is showing
the world what it’s got. Wherever you are, whether it’s
Barcelona, Budapest or Boston, we hope you have a great weekend
and keep stacking those sats. Until next time, HODL on!