Making Sense of a Big November

By JAKO | jako | 11 Dec 2020

We all know what the markets were doing this past month, but I'd like to take a look at some possible reasons why they were doing it.

Here are a few stories that caught my eye. Focusing on BTC, ETH and XRP here. About 400-500 words.

1. Utility

I see two main utility drivers of ETH and XRP demand this past month:

A successful staking push to meet the requirement for ETH2
XRP's Flare Spark airdrop

ETH2

The Spark airdrop snapshot date is/was Dec. 12, 2020. The ETH2 genesis node went live Dec. 1.

All that ETH (32 minimum to run a validator node) is locked up "for the foreseeable future".

That is, until the current mainnet system becomes a shard.

The staking push had the effect of making ETH more useful in the short term and limiting its supply over the medium (long?) term.

XRP/Flare

The impact on XRP's usefulness is a little more dubious.

Will Spark be worth anything? Will people hold onto their XRP after the snapshot date? Lots of questions there.

2. Popularity (some links below)

There have been some high-profile, high-value BTC moves reported beyond the usual speculative whale rhetoric. I'm hopefully skeptical.

Fake News?

This kind of news could indicate more widespread adoption. It could also just indicate the publication of adoption.

At this point it's still feasible to hide crypto ownership interests, even from the most powerful organizations in the world. Even if you should be disclosing them and especially using privacy-focused intermediates.

Undisclosed Assets

For public figures, this might simply be the first time they decided to tell us they're buying BTC. Who knows what they own? Not the IRS.

The same goes for many corporations. Then there's the added possibility of subsidiary holdings, partner interests, Cayman bank accounts of C-suite execs and board members, crypto yachts, and so on.

I'd like to think that market and opinion leaders are coming on board permanently. But there's the possibility they're hyping to dump at a pre-determined target.

I hope I'm just being paranoid here.

Trend Towards Popularity

Overall it's getting easier for people to trade BTC and its derivatives. There's also some emerging centralization.

Everyone loves convenience, right?

3. Social

There's a theory circulating that people are betting on coins instead of sports. There's probably some truth behind that claim.

Most of the non-crypto people I talk to see it as a get-rich-quick scheme (or terrorist/porno money). A lot of Americans lost their jobs. They still have savings. They're bored, a little desperate, and tools like Coinbase make it easy to buy.

4. Macro-Market

USD fell in November. DXY (international USD index) went down from 94ish at the beginning of the month to 91ish at the end, finishing at 97 percent. Comparing rising coin prices to a flagging national currency exaggerated the change.