• Marc Andreessen called for innovators and dreamers to „BUIDL“ in the wake of the COVID-19 pandemic.
• Ezra Klein criticized America’s political gridlock, arguing that it was preventing meaningful progress.
• Despite the difficult times we are facing, there is still room for innovation and improvement.
It’s Time to BUIDL
Marc Andreessen, co-creator of Mosaic and venture capitalist, published a call to action in April 2020 urging innovators and dreamers to “Build” in light of the coronavirus pandemic. Despite criticism from some quarters, even skeptics agreed that little was getting built in America due to decades of political stagnation and misspent investments.
America’s Political Gridlock
Ezra Klein argued that America’s inability to act was causing hardship for many people due to a lack of progress on public infrastructure projects. He attributed this failure largely to what political scientist Francis Fukuyama termed a “vetocracy” – an entrenched system of gridlock created by vested interests blocking meaningful change from happening.
Room for Improvement
Despite the difficulties brought about by the pandemic, there is still potential for technological advancement and innovation during these trying times. President Joe Biden has made “Build Back Better” one of his key campaign promises, suggesting investment into green energy sources as well as medical infrastructure upgrades so that citizens can better respond if faced with another pandemic or similar circumstances in future.
Crypto Industry Must Rebuild Trust
The crypto industry was hit particularly hard by the collapse of FTX earlier this year, leaving investors wondering if their funds were safe from nefarious actors or other external risks associated with digital assets. As such, it has become even more important for crypto companies to rebuild consumer trust by stressing transparency, security protocols and data privacy policies so that customers know their money is safe when dealing with cryptocurrency exchanges or other blockchain-based service providers.
It’s Time To BUIDL Week
CoinDesk is launching „BUIDL Week“ – an event taking place April 26-28th 2021 – which will bring together leaders across all areas of Web3 technology and crypto who share Andreesen’s goal: building something new and meaningful out of challenging circumstances. Participants will discuss how best to use blockchain technologies not only as a tool for economic development but also as a platform through which social issues can be addressed collaboratively on global scales like never before seen before.
• Grayscale’s Bitcoin Trust (GBTC) has seen its discount to net asset value (NAV) reach near record highs.
• The discount has been widening since news of Digital Currency Group’s exposure to disgraced crypto exchange FTX was reported.
• Bitcoin’s price surge and increasing regulation have forced Grayscale to decouple GBTC from the price of bitcoin, undermining its value.
Grayscale’s GBTC Discount Widens
Shares of Grayscale’s Bitcoin Trust (GBTC), the world’s largest publicly traded bitcoin fund, have seen its discount to net asset value (NAV) reach near-record highs. The discount has been widening since news of Digital Currency Group’s exposure to disgraced crypto exchange FTX was reported last week.
Bitcoin Price Surge Affecting GBTC Value
Bitcoin was up 40% in January, but has since retreated slightly, losing 9% for the month to date. This surge in bitcoin prices combined with increasing regulation have forced Grayscale to decouple GBTC from the price of bitcoin, which may have undermined its value.
Lowest NAV Since December 2022
The shares are currently trading at a 47% discount to NAV, the widest discount since late December 2022 when the discount hit a record 49%. Shares of GBTC have not traded at a premium since March 2021 according to data from TradeBlock.
Grayscale Fighting on „Many Fronts“
Sheraz Ahmed, managing partner at Storm Partners noted that “Grayscale is fighting a battle on many fronts with some of the most influential minds in crypto” but expects “the bitcoin trust to find calmer waters“. He added that “nobody saw the disaster of FTX before it was too late” and warned that “the fall of Grayscale could have a similar impact“.
As people turn their attention towards cryptocurrency investment vehicles such as GBTC, it is important they understand potential risks associated with them including regulatory issues and market volatility. Despite these risks being real however, many investors still view crypto investments as attractive long-term opportunities due their potential for high returns.
• Nigerians are paying a premium for the stability of the U.S. dollar, not bitcoin, according to an analyst
• Bitcoin premiums in Nigeria were attributed to cash withdrawal limits placed by the Nigerian government on its citizens
• The inflated bitcoin prices may not reflect a heightened demand for the asset but a continued demand for the U.S. dollar as the country’s local currency suffers
What is Bitcoin Premiums?
Nigeria’s bitcoin premiums – where the cryptocurrency was listed on local trading platforms for 60% above market prices – made headlines this week. Although the news was celebrated by the bitcoin community on social media, the inflated bitcoin prices may not reflect a heightened demand for the asset but a continued demand for the U.S. dollar as the country’s local currency suffers.
Why Is It Happening?
It all started when a number of media outlets drew attention to the high premiums, which they attributed to cash withdrawal limits placed by the Nigerian government on its citizens as it worked on swapping old bank notes for new ones. But if bitcoin demand went up as a result of this cash jam in Nigeria, then why did premiums stay constant?
What Caused The Premiums?
Conor Ryder, research analyst at digital asset data provider Kaiko looked into why this happened and found that „the premium didn’t substantially increase at all“ as a result of ATM limit order being imposed in early December last year. He believes that instead of reflecting an increased interest in buying crypto assets, these premiums reveal more about discrepancies between official and unofficial U.S. dollar exchange rates in Nigeria with traders favouring US dollars over other assets due to its stability and global acceptance.
Are Bitcoin Premiums A New Phenomenon In Nigeria?
No, Nigeria’s bitcoin premiums are not actually new and have been around since before December 2020 when ATM withdrawal limits were imposed in an effort to control currency devaluation problems plaguing Nigeria’s economy today yet still failing to make much difference due to their limited scope and reach within this vast nation state regionally divided both culturally and economically across its 36 states .
Conclusion: To conclude this analysis into whether or not Nigerian’s increasing demand for Bitcoins is real or just another symptom of their growing distrust towards their own currency it appears that while some individuals have shown interest in purchasing crypto assets as an alternative form of investment most Nigerians are simply paying higher premiums due more so out of necessity than choice; favoring US dollars over other forms of payment given its greater liquidity and global acceptance especially during times when their own domestic currencies fail them economically speaking