The Weekly Wrap - 25 June 2021
Jun 25, 2021 - 5 min read
1. Bitcoin ETF in Brazil
The Facts:
- On Wednesday, June 23, a Bitcoin ETF went live for trading on the Brazil stock exchange.
- This marks the first time a Bitcoin ETF is tradeable in Latin America.
- In the U.S., the SEC has delayed its decision on Valkyrie’s Bitcoin ETF until August.
Why it’s important:
- The ETF will allow more investors to access the crypto markets through traditional financial markets.
- It also provides regulatory clarity for institutional investors from the Latin America region.
2. EIP-1559 is one step closer
The Facts:
- The Ethereum Ropsten testnet successfully hard forked to a version including EIP-1559.
- On the Ethereum mainnet, EIP-1559 is scheduled to go live with the London hardfork.
- Holders of ETH do not need to take action because of the upgrade.
Why it’s important:
- EIP-1559 will improve the user experience on Ethereum by allowing for more predictable fees.
- In addition, part of the transaction fees will be burned, decreasing the annual net issuance of new ETH to pay for protocol security.
3. Taproot coming to Bitcoin
The Facts:
- The Taproot upgrade for Bitcoin has found sufficient support from miners, and will activate at block height 709’632 (ca. in November).
- Taproot will enable Schnorr signatures, which comes with privacy and scaling benefits.
- For example, it allows for multi-signature transactions to be indistinguishable in terms of signature size from single-signature transactions.
Why it’s important:
- Taproot is the most anticipated upgrade coming to Bitcoin since years. The improved privacy and scalability features will enable developers to further improve user experience on Bitcoin.
- It brings benefits for the Lightning Network, Bitcoin’s second layer scaling approach, and allow more privacy when opening and closing channels.
Number of the Week
Bitcoin options expiring on June 25
4. BIS and Israel on CBDCs
The Facts:
- The Bank for International Settlements (BIS) supports the implementation of central bank digital currencies (CBDCs).
- CBDCs would take the role of “modernizing finance and ensuring Big Tech does not take control of money”.
- The Bank of Israel is testing Ethereum’s technology for their digital shekel.
Why it’s important:
- More and more countries join the race for the first fully functional and widely used CBDC. China certainly still leads this race, with multiple pilots and small-scale implementations already in progress.
- Nonetheless, other countries are making progress, and almost every major central bank globally is looking into the topic and exploring options.
Disintermediating can be quite helpful for financial stability.
5. Iran seizes mining gear
The Facts:
- Iran seized around 7’000 mining machines on June 22.
- This comes after Iran had banned Bitcoin mining in late May to reduce the number of power blackouts.
- Besides Iran, China continues to enforce their regulation on mining, forcing many mining farms to shut down.
Why it’s important:
- Iran hosts about 4.5% of the total Bitcoin mining hash rate according to Elliptic. China’s actions are certainly more impactful, but Iran’s stance on mining should not be neglected.
- Bitcoin miners are typically highly mobile, though, and are attracted to wherever energy is cheaply available to maximize their profit margins.