News about Bitcoin and cryptomonnaies is constantly boiling. It may happen that informations capitals get lost in the daily flow of information and you miss important points.
This format is there to remedy that. We come back to the news of the past week in theHebdo Crypto in order to keep you informed on the current situation of cryptocurrencies.
🔬 The local must-see
For the unmissable of this week, we find Thomas who comes back to the mother of financial bubbles, to know the South Sea bubble. Occurring 300 years ago, it is nonetheless interesting to study.
What is a bubble?
Before we dive into the history of South Sea Company, let’s define what a financial bubble is. A bubble is a augmentation, rapid and often irrational price of an asset, which will be followed by a slump : the bursting of the bubble.
Our story takes place in 1720. The British crown is heavily in debt after a war of succession with Spain (1701-1714). Trade with the colonies is flourishing. The Company has been granted the monopoly of trade in the South Seas in exchange for its management of the this britannique.
It has been a few years since the Compagnie des Mers du Sud imports slaves from Africa towards the Americas. However, these operations are not a great commercial success. Indeed, taxes imposed on this business following the war with Spain reduced profits.
In order to facilitate the management of the British debt, the Company undertakes to bring together all outstanding debt securities. It offers a simple exchange: a debt security for a share of the company with a guaranteed minimum dividend of 5%. This 5% was therefore a minimum dividend with a strong potential for an increase due to the Company’s monopoly.
Daniel Defoe, director of the Company, then undertook to manipulate courses by all means at its disposal. False rumors about profits in the South Seas, corruption of parliamentarians, use of prestigious personalities to attract small investors. This market manipulation partially approved by the British government has paid off. The price of the titles was 128 pounds sterling in January 1720 and reached 1,050 in June 1720.
Read the entire article to understand everything about this bubble : The South Seas, chronicles of a speculative madness.
🗞 News in brief
▶ Andre Cronje hits the headlines once again. The developer behind yEarn has unveiled a new yCredit project the 31st of December. However, a few days after launch the project was the target of a hack.
▶ Anonymous currencies abandoned by trade. The Bittrex exchange has announced that it withdrew the Currency, the Dash as well as the Zcash of its offer, and without giving a reason.
▶ Optimism is expected to hit Ethereum on January 15th. This second layer solution should allowimprove scalability of the Ethereum network. Many DeFi applications have already expressed their willingness to migrate there.
▶ US banks will be able to use stablecoins for their operations. This occurs after a authorization granted by the OCC.
▶ VanEck returns to the charge with its Bitcoin ETF. Repeatedly refused by the SEC, the company VanEck has just reiterate his request about the creation of a Bitcoin ETF in the United States.
▶ Latest video from Rogzy, ideal in this period of bull run to remind the basics not to get ripped off.
📊 The 4 metrics of the week
➤ $ 692 million, it’s the income recorded by miners in the Bitcoin network in December 2020. Although this does not represent a record, this value had not been recorded since the bull run of 2017.
➤ 280 000 dollarsis the amount in BTC (or 8.5 BTC) which was given to Julian Assange by a generous donor. This donation comes following the rejection by England of the US extradition request.
➤ $ 1.2 billionis the amount of BTC held by the investment fund Three Arrows Capital. This exhibit is made through Grayscale.
➤ $ 3.97 billion, it’s the record that beat theopen interest on Ethereum derivatives. Thus, Ethereum futures and options have never been so in demand.
✉️ The tweet of the week
The tweet of the week goes to Augustin and its super thread intended for beginners.
Have a good week on the Journal du Coin! 🙂