Monday, November 16th, 2020
Your Weekly Update On All Things Crypto
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Biden Assembles Crypto-Savvy Cast for Financial Policy Transition Team
After a long and grueling US presidential election race, Joe Biden has finally emerged victorious. Just one week after the election, the new President-elect has already started to assemble his transition team. One of Biden's most notable selections was Gary Gensler to lead his Financial Policy Transition Team. Gensler is a former professor at MIT, Chairman of the Commodity Futures Trading Commission (CFTC) and partner at Goldman Sachs. He has a long history of service in Washington, having served as a key financial regulator under President Obama, and serving in the Treasury Department during the Clinton Administration. Gensler also boasts an extensive history working along-side the cryptocurrency industry. "He testified before Congress about cryptocurrency and blockchain on multiple occasions, pushing back against comparisons between cryptocurrencies and Ponzi schemes." In a 2019 op-ed, Gensler called Blockchain a "Change Catalyst" and has noted that shared ledger technology has already been "A catalyst for central banks, big finance and big tech."

Biden rounded out his Financial Policy dream team with a few other heavy-weights with notable connections to the crypto industry:

Simon Johnson - Economist and professor at the MIT Sloan School of Management, and lead digital currency researcher. Johnson co-authored a paper with Gary Gensler about the extensive impact blockchain technology can have on the financial world. He also served on CoinDesk’s advisory board.

Chris Brummer - Law Professor and the Faculty Director of Georgetown University’s Institute of International Economic Law. Brummer testified before the U.S. Congress regarding Facebook’s Libra project.

Mehrsa Baradaran - University of California at Irvine School of Law professor, specializes in banking law. Baradaran testified as an expert witness at a Senate Banking Committee hearing on regulatory frameworks for blockchain and cryptocurrencies.

Lev Menand - One of the original creators of the digital dollar concept, is an academic fellow and law professor at Columbia University. He served as a senior adviser to the Deputy Secretary of the Treasury in 2015-16 and has also worked as an economist at the Federal Reserve Bank of New York’s bank supervision group.

Regardless of the position the Biden administration eventually takes on the cryptocurrency industry as a whole, it is surely a good sign that the transition team is being led by someone as knowledgeable about the space at Gensler.
BitPay Rolls Out Cryptocurrency Payroll Services
Payment service provider BitPay announced their new payroll service this past Friday, BitPay Send, which will enable businesses to pay employees, contractors, customers and vendors in cryptocurrency. The company is one of the largest Bitcoin payment processors in the world, originally allowing customers to pay merchants in BTC (and BTC cash) at checkout. BitPay customers pay their invoices directly to BitPay in cryptocurrency, Bitpay then locks in an exchange rate and uses modern tech to convert the Bitcoin into fiat before sending to the merchant.

The goal of BitPay is to revolutionize the financial industry; creating faster, more secure, and less expensive payment systems on a global scale. In developing their platform, BitPay has basically eliminated chargeback fraud, created borderless payment networks, and allowed users to deposit funds in any currency at a 1% flat rate compared to the 3% credit card company average.

BitPay Send is the newest extension of their offering. Instead of operating as a customer to business payment solution, Send allows businesses to pay their workers in cryptocurrency without having to hold any themselves. It has rolled out many applications such as; customer-cash out requests, contractor payments, reward issuance, settlement management, and payroll services like BitWage.

With more and more people adopting cryptocurrency as a means of value exchange, it only makes sense to close the loop and allow people to finally get paid in digital currency, regardless of their employer. BitPay Send allows businesses to streamline their payroll process to multiple recipients online, simultaneously. Business risks are mitigated as they do not need to hold the cryptocurrency themselves, and their payroll costs are reduced. Another step in the direction for the mass adoption for cryptocurrency.
Galaxy Digital Makes 2 Strategic Acquisitions
Cryptocurrency merchant bank Galaxy Digital purchased Drawbridge Lending, a digital asset borrowing and investing service, and Blue Fire Capital, a two-sided liquidity provider for future digital markets and assets. Galaxy Digital is “the bridge between the crypto and the institutional worlds.” The company’s mission is to promote the growth and advancement of the underlying ecosystem and tech behind digital assets and blockchain. With 6 offices in key cities and banking hubs around the world, Galaxy Digital is a major trading desk connecting the global cryptocurrency investing community.
The acquisitions were made public in a press release Friday, Nov 13. The terms of the deal were not disclosed, but Galaxy did announce that the move would bring DrawBridge’s over $150 million in third-party assets into the firm. CEO, Michael Novogratz said “The acquisitions will enable Galaxy Digital to further amplify their strong position as a go-to trading desk in digital assets and more rapidly grow our innovative portfolio of trading products and services.”
Bitcoin: Cleared For Take-Off
Bitcoin continued its climb last week, breaking out of an ascending wedge formed just below $16,000 and finally peaked at just shy of $16,500. Bitcoin has rallied over 50% in the last month and a half. In its entire history, Bitcoin has only been above its current prices for a total of two weeks. While euphoria has clearly returned to the market for the king of crypto, there may still be substantial upside before we see a major correction. We have now broken every major resistance in Bitcoin's history, and the air is clear for another push it's all-time high of $20,000 within the next few months.

With that said, we must also caution that any time an asset pumps 50% in less than two months, there is always a possibility of a major consolidation as investors take profit. We must be aware of how quick this climb has been, and not fall victim to the assumption that the only direction for Bitcoin is up. If we do see a correction however, it is unlikely that the price would fall below its last major resistance level of $12,500.
Alt-Coin Dominance at an Inflection Point
Alt-coins are flashing positive signals on the SMS indicator, after their steep Q4 decline. With Bitcoin going on such a meteoric rise over the past two months, we expected liquidity to flow out of the alt-coin market, and into the King-coin. But alt-coins have still managed to hold the ascending line of support it has formed since September 2019. If we re-test this line and it continues to hold, it looks likely that we are headed for another alt-coin cycle as dominance reverses and begins to increase. If this critical line breaks, we expect Bitcoin to continue to gain momentum vs. the alt-coin market. This chart will be very important to watch over the coming weeks, as it will illuminates market sentiment for alt-coins as they compare to Bitcoin.
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Matic Network (MATIC)
Before decentralized applications make it to the mainstream, Ethereum has some major scaling issues that need to be solved, Matic Network aims to do just that. Matic Network brings massive scale to Ethereum using an adapted version of Plasma with PoS based side chains. With the upgrade to ETH 2.0 likely to be postponed, we believe this will lead to a greater need for layer two scaling solutions. After a 70% retracement vs Bitcoin from recent highs, Matic seems to have found support at its lowest point since August of 2019.
OMG Network (OMG)
Similar to Matic, OMG aims to increase the scalability and functionality of the Ethereum Blockchain. The OMG Network is a trustless, non-custodial, Layer-2 scaling solution for transferring value on Ethereum. They are the only production-ready scaling solution for the Ethereum blockchain and are focused on enabling enterprise adoption. OMG seems to have found its bottom after a 78% retracement vs. Bitcoin. If ETH 2.0 development is delayed, OMG will serve as a much-needed stop-gap, allowing the scalable transfer of value on Ethereum.
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