May 8, 2021 • 8M

Ep 22. Bitcoin showers anyone?

Galaxy buys BitGo. NYDIG and FIS partner to help banks. Bitcoin water heater.

 
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Some say Crypto is a scam. Others swear it's a breakthrough technology. But which is it? Join us, as we explore Crypto in real life (IRL).
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Mayday! Mayday! We have a situation. Crypto continues to move at the speed of light. Also, it’s May already! There’s still time to hit the gym to get that summer bod. Get it.

This week, a lot of the developments point to the continued maturation of the sector. Obviously, there is still a long way to go but let’s celebrate the progress. In the explore section we introduce a set-up that enables you to earn bitcoin while taking a hot shower. Intrigued? Let’s go.

News

1. Galaxy Digital buys BitGo for $1.2B

  • Galaxy Digital and BitGo may not be familiar names. BitGo stores digital currencies for companies like Nexo. Galaxy is focused on institutions too.

  • Lately, I have been thinking about consolidation in the crypto space. There are more than 14,000 banks in the US but the top 3 account for 30% of all deposits.

  • I expect a cluster of large diversified digital currency companies will emerge and consolidate. Galaxy is on that list. It’s rumored to be going public later this year.

2. NYDIG and FIS partner to enable banks support crypto

  • Bravo! This was a smart move. FIS is a leading provider of bank technology systems. NYDIG enables institutions to buy, sell and hold crypto.

  • I love this partnership because most banks are incredibly risk averse. This union brings credibility and helps ease the process for banks to support crypto.

  • I expect NYDIG will partner with other technology providers. Additionally, its competitors like Paxos and Anchorage could do the same. It’s gonna heat up!

3. US Bank enables customers to buy, sell and hold crypto

  • I was impressed to learn that US Bank established its Blockchain & Digital Currency Practice in 2015 when Bitcoin was $200.

  • Billions of dollars are flowing out of bank accounts to Coinbase and friends. Those dollars are not coming back. This is a threat to bank’s business model.

  • I expect more banks to offer these services, especially given the FIS and NYDIG news. Crypto exchanges should brace themselves for increased competition.

4. Visa partners with Tala to give the underbanked access to USDC

  • Tala is serving the global underbanked. It allows anyone with a smartphone to apply for a loan without credit history and receive a decision in minutes.

  • Tala will now issue Visa payment cards linked to its digital wallets. Its customers will be able to spend USDC at more than 70 million merchants worldwide.

  • I love the mission of Tala. 3 billion people are underbanked. Some of them are in my extended family. I think this partnership could help support remittances and other use cases. I’m rooting for y’all!

5. Grayscale sponsors NFL’s Giants

  • Recently, FTX won the naming rights to the Miami Heat arena. Now crypto has come to football. These sponsorships send a clear message: crypto is here to stay.

  • Grayscale is the world’s largest digital asset manager with $46B under management. It’s based in New York, it’s fitting to sponsor the home town team.

  • This got me thinking, if I struck it big, what team would I sponsor. Right now, it would be the Houston Rockets. The name was just made for skyrocketing crypto. Plus, Houston is where I got my first job after college there and I still have lots of friends and family there. Can you imagine the Ogunnaike Arena? Hahaha!

Explore

Did you know your water heater could produce bitcoin?

  • Ok…that is not technically true. It’s more the other way round, your bitcoin miner could heat water for all your domestic needs.

  • Wise Mining provides a set-up to do that! Bitcoin mining is the use of powerful computers to solve hard problems that yield bitcoin. It produces a lot of heat.

  • This waste heat can be captured and recycled to heat water and reduce your energy consumption.

  • This might make sense if you were already planning to mine. However, if you weren’t planning to do that, beware that mining is energy intensive. Prepare for your electric bill to rise but it could be profitable over the medium term.

Question of the week

What are your thoughts on dogecoin?

First of all, I am not an investment professional nor do I provide investment advice.

My friend’s friend bought $200 of dogecoin in 2018 and it’s now worth about $40k! Remind me, what was I doing in 2018?!

What are your goals?

  • Traders make money from volatility. It almost doesn’t matter what commodity it is. If it moves, they are happy to trade it and make a quick buck.

  • Long-term investors study the fundamentals to understand if it solves a real-world problem. If it does, they then consider if the price is fair.

I’m gonna guess that you are the latter. Do your own research and remember don’t invest anything you are not prepared to lose. Personally, I have zero dogecoin. Good luck!