Checking the crypto market scoreboard for 2021
Ignore the day-to-day noise. As we enter the fourth quarter, crypto is on track for another banner year.
Re-sharing below the latest edition of #Web3Weekly, my regular newsletter about decentralization. This installment covers Sept. 26 to Oct. 2, 2021. If you’d like to get #Web3Weekly in your inbox every Sunday, please subscribe here.
The crypto market certainly finished the third quarter with a bang last week. Heck, token prices have so much momentum lately that even JPMorgan Chase chief Jamie Dimon, who called bitcoin a “fraud” back in 2017, is guardedly changing his tune now.
As we head into year-end, this is also a good time to check how crypto has performed so far in 2021 compared to other assets. Here’s the rundown through Saturday:
- S&P 500: +16%
- Bitcoin: +63%
- Ether: +361%
- Global Crypto Market Cap: +180%
- US Dollar Index: +5%
- Gold: -7%
- Crude Oil: +56%
I love to “zoom out” like this periodically, as most other crypto press tends to focus on very short-term market moves. On a longer timescale, it becomes obvious crypto is having another banner year so far, helped by increased interest from both retail buyers and Wall Street.
It also strikes me that the outsize gains in ether and other altcoins versus bitcoin in 2021 so far bespeak an increasing focus on blockchain as a software platform, not just a currency mint. That vision is really at the heart of the Web 3.0 movement, so it’s good to see it gaining some market validation.
We’ll see how things go through year-end, when I’ll be sure to update the scoreboard again. In the meantime, let’s get to some headlines:
- A transaction for $100,000 in ether ran up a network fee of $23.7 million, initialy paid by the exchange Bitfinex. The miner that validated the transaction, DeversiFi, agreed to return the fee as a show of goodwill. But the incident highlighted users’ persistent frustration with high transaction costs, known as gas fees, on the Ethereum network.
- Visa published a whitepaper for a “universal payments channel” to make privately issued stablecoins and central bank digital currencies interoperable. The project aims to promote adoption of blockchain-based payments for everyday purchases.
- Twitter is working on new features to enable users to add non-fungible tokens (NFTs) to their accounts on the social network. Software developer Mada Aflak unveiled Twitter’s initial experiment with the new functionality.
- The decentralized finance platform Compound erroneously payed out $80 million in its COMP governance tokens due to a software bug.
- Coin Center, a crypto research and advocacy nonprofit, wrote a blistering open letter to the World Wide Web Consortium (W3C) on distributed identity. It said development of open-source digital identifiers for users is being “being waylaid by the objections of centralized digital identity providers” like Google and Facebook. It also accused a fellow nonprofit, the Mozilla Foundation, of raising “irrelevant” concerns about the environmental impact of blockchain-based identity.
- The Telos Foundation livestreamed a comprehensive update on development of its own Ethereum Virtual Machine. Release of the new EVM, which is designed to offer compatibility with Ethereum-based apps at lower transaction cost, now looks imminent. (Disclosure: I’ve done consulting work for the Telos Foundation in the past.)
- Ozy Media shut down amid a brewing financial scandal. The New York Times reports that the company’s chief operating officer impersonated a YouTube executive during a pitch to Goldman Sachs for $40 million in funding. Wow.
- In the world of NFTs, it seems a Warhol or Pollock artwork isn’t worth as much as… a Vanyerchuck?
That’s it for now. Thanks for spending some time with the newsletter today! A full revision history of it, including earlier drafts, is available here. If you’d like to get updates like this in your inbox every Sunday, please join our email list here.
As ever, a quick disclaimer: This newsletter is intended for journalistic purposes only, not as investment advice. For the latter, please DYOR and consult appropriate financial pros to make the most suitable choices for your needs.