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Bitcoin Could Become ‘Digital Gold’ if Volatility Drops and Regulators Step in, Says Bridgewater Exec

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Bridgewater’s director of investment research Rebecca Patterson has said that bitcoin could become digital gold if the cryptocurrency’s volatility drops and its liquidity improves with “regulatory certainty.”

Patterson’s words came during an interview with Bloomberg, first reported on by Business Insider. During the interview, Patterson revealed she would not call bitcoin an “alternative currency” and argued instead the flagship cryptocurrency would be better compared to gold as a store of value.

She added she believes bitcoin has the potential to become “digital gold,” but only after problems associated with its volatility, liquidity, and regulatory status are resolved. Patterson pointed out that as institutional investors they can’t say “with confidence yet” bitcoin will be digital gold.

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The flagship cryptocurrency has value to investors as a hedge against fiat currency inflation, as investors eye crypto while worrying about fiat currencies losing their value with “all this central bank printing.” To trigger Bridgewater to invest in the cryptocurrency, she wrote, a few things would have to improve.

Per the executive, Bridgewater would need to see its volatility drop as “right now bitcoin can move 10% on a tweet, that’s not exactly a store of wealth for most institutional investors.” Moreover, the firm would need to see greater liquidity, which she believes may come from “regulatory certainty.” She said:

The more you get a real regulatory ecosystem developing around bitcoin and other currencies, the more other types of investors are going to be comfortable coming in, that’s going to bring the liquidity, that’s going to reduce the volatility.

It’s worth noting most analysts believe regulators stepping in could hinder bitcoin’s growth. This month, Treasury Secretary Janet Yellen claimed bitcoin is “an extremely inefficient” way to conduct monetary transactions.

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Futu Niuniu and Tiger Securities can’t search for Bitcoin ETF market data

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  • China’s largest stock trading platform, Futu Niuniu, Tiger Securities, can no longer search for Bitcoin ETF market data.
  • The blackout comes at the backbone of their success after BITO’s listing.

Futu Niuniu and Tiger Securities have been unable to search for the market data of two Bitcoin ETFs, including Valkyrie’s BTF or ProShares BITO. The Chinese government seems to enforce its regulations even on companies working abroad. The blackout comes at the backbone of their success after BITO’s listing. BITO was the number one hot stock in the Tiger Securities app. It is not yet clear why the companies cant search for Bitcoin ETF currently.

Tiger and Futu played an integral part in a record number of Chinese IPO deals. These, despite threats from China to block any future American involvement. Last year, the two firms advised on 26 U.S.-based IPOs. Besides, they also helped their clients get listed abroad through offshore listings.

Futu and Tiger facing risks of new personal data privacy law

Futu and Tiger have attracted one million brokerage clients, which has helped provide trading flows in droves. In early September, tech stocks were falling in the entire United States. The two entities helped contribute almost $1 billion to Tesla Inc.’s value.

Yet, Futu and Tiger are both facing risks as China’s new personal data privacy law takes effect on Nov 1.

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The Chinese authority is cracking down on big technology firms focusing on crypto. Yet, these same giants have found success in the US with IPO underwriting.

Investors in China are taking their money to brokers that help them invest overseas. But these firms could run into problems with data privacy rules and compliance risks.

China targets the most extensive stock software

China’s latest round of governing attacks has come in a flurry, targeting cryptocurrency. The People Daily News lists Chinese online agents next on the list for firm oversight and docility. The total crackdown comes as China braces itself arising from trade wars with America.

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Futu, reacting to a piece that discussed how they protect user data, said. “Since our launch, Futus has insisted that the security of information and data is supreme.”

“Futu stands firm on its pledge for strict compliance with relevant laws & regulations,” they said.

China plans to execute a new law to govern cyberspace and enhance national security. The Personal Information Protection Law takes effect on Nov 1. And it will complement China’s Data Security Law. It’s okay for the country’s investors to invest abroad in cross-border Connect schemes. And Qualified Domestic Institutional Investors (QDII). 

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The new rules will regulate the export of personal data. They are posing a challenge and a threat to online brokers. In most cases, these brokers provide cross-border trading services for mainland Chinese citizens.

Futu and Tiger Securities don’t have brokerage licenses on the mainland. But, Chinese citizens can open accounts with them online. Citizens must submit personal data related to ID cards, bank cards, and tax records for this to happen.

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NFTs ‘on Bitcoin’: Yes, That’s a Thing!

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Non-fungible tokens (NFTs) are all the rage right now. From CryptoPunks to Bored Apes, millions in crypto are exchanging hands for pixel art, tokenized memes, and crypto collectibles. 

For the most part, the action takes place on the Ethereum (ETH) blockchain, which has made some hardcore bitcoiners skeptical of this new crypto market segment. However, there is also a market of NFTs secured by the Bitcoin (BTC) blockchain.

Read on to learn about what’s happening with Bitcoin-secured NFTs. 

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NFTs are moving beyond Ethereum

Until recently, Ethereum has been the go-to blockchain for minting and trading NFTs. That is changing quickly, however, as Ethereum high gas fees have pushed out many would-be market participants, making NFTs on other chains more attractive. 

The Bitcoin blockchain has also a role to play here.  

While NFTs “on Bitcoin” don’t exist purely on the Bitcoin blockchain (in a way that ERC721 tokens exist on Ethereum), they are secured by the Bitcoin blockchain. The additional tech stack that powers the ability to issue and secure NFTs with Bitcoin is provided by the likes of CounterpartyStacks, and the Liquid Network

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Let’s dive in and take a look at some of the most prolific NFT projects secured by Bitcoin.

Rare Pepes & crypto art on Scarce City

Scarce City is a Bitcoin-secured art auction platform that enables artists to sell their artwork for BTC. 

The Scarce City team claims that “Bitcoin’s finest goods should be sold according to the network’s properties of pseudonymous, borderless, permissionless, trust minimized, and verifiable authenticity and supply.” 

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On the auction platform, art is sold via Lightning-powered auctions to “keep auction participants accountable by collateralizing their bids through instant, anonymous, low-fee Lightning Network payments,” the team explains on its website.

In addition to giving artists the ability to sell their physical art in exchange for BTC, the marketplace also sells an NFT series based on the Pepe The Frog internet meme, called the Rare Pepe collection. 

Rare Pepe NFTs are powered by Counterparty – an open-source protocol built on top of the Bitcoin network – that uses the Bitcoin blockchain to record data. 

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By securing NFTs on Bitcoin, these digital collectible cards arguably have a chance of lasting longer than NFTs secured by newer chains that may end up disappearing (or forking) in a few years’ time. For NFT holders, that is something to consider. 

NFT skins for Bitcoin gamers

Bitcoin-secured NFTs are not only limited to artworks and dank memes. They also have applications in the gaming world. For instance, Lightnite, a play-to-earn online game powered by Lightning payments, utilizes Blockstream’s Liquid Network to enable players to purchase and earn in-game items in the form of NFTs. 

The Liquid Network is a Bitcoin sidechain that can facilitate the trading of these and other Bitcoin NFTs. While it was created by Blockstream, it’s currently governed by a federation of parties and operated on an open-source blockchain platform called Elements. 

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In a blog post, Blockstream explains that Lightnite players receive a unique Liquid token in their account every time they purchase or earn a skin. These tokens can then be withdrawn to a personal Blockstream wallet for safekeeping or to trade with other Lightnite players. Should a Lightnite player receive a skin outside of the game, they can deposit the Liquid token in their Lightnite account to receive the skin and deploy it in the game. 

Lightnite skins are not the only NFTs floating around on the Liquid Network. Another notable NFT project on Liquid is Raretoshi. 

Raretoshi is an NFT marketplace that enables artists to sell rare digital art for L-BTC (pegged bitcoin on Liquid), benefiting from lower transaction costs and the ability to get paid in bitcoin. 

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NFTs on Stacks: Web 3.0, built on Bitcoin

Stacks says it is a decentralized, open-source network built on Bitcoin that aims to unleash Bitcoin’s potential as a programmable base layer to build “a better Internet.” That means that developers can mint NFTs and build NFT marketplaces that are secured by the power of the Bitcoin network. 

The Stacks team says that “Bitcoin has all the properties that decentralized apps and smart contracts need: the security, the settlement assurances, the capital, and the network effects.” 

In light of Stacks’ Bitcoin-powered technology stack and the rising popularity of NFTs, it comes as little surprise that the first NFT ventures have already started to emerge on Stacks. 

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StacksArtSTXNFT, and Boom are examples of up-and-coming NFT platforms operating on the Stacks chain. 

Interestingly, Satoshibles – an NFT collection by bitcoiners for bitcoiners that launched on Ethereum – announced that it plans to move to Stacks via an NFT bridge between Ethereum and the Stacks blockchain. 

“Using Satoshi as our mascot, we have always felt that we are the NFT for Bitcoin enthusiasts, however, it’s a pretty hard sell when your project is on Ethereum,” the Satoshibles team admitted. 

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To bring its series of 5,000 algorithmically generated, Satoshi-themed NFTs close to the Bitcoin community, Satoshibles holders will be able to port their NFTs to Bitcoin via Stacks.

As the NFT market continues to grow and more NFTs “powered by Bitcoin” emerge, we could see even more money flowing into non-fungible tokens, especially when collectors can trust that their NFTs are secured by Bitcoin. 

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In a blog post, Blockstream explains that Lightnite players receive a unique Liquid token in their account every time they purchase or earn a skin. These tokens can then be withdrawn to a personal Blockstream wallet for safekeeping or to trade with other Lightnite players. Should a Lightnite player receive a skin outside of the game, they can deposit the Liquid token in their Lightnite account to receive the skin and deploy it in the game. 

Lightnite skins are not the only NFTs floating around on the Liquid Network. Another notable NFT project on Liquid is Raretoshi. 

Raretoshi is an NFT marketplace that enables artists to sell rare digital art for L-BTC (pegged bitcoin on Liquid), benefiting from lower transaction costs and the ability to get paid in bitcoin. 

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NFTs on Stacks: Web 3.0, built on Bitcoin

Stacks says it is a decentralized, open-source network built on Bitcoin that aims to unleash Bitcoin’s potential as a programmable base layer to build “a better Internet.” That means that developers can mint NFTs and build NFT marketplaces that are secured by the power of the Bitcoin network. 

The Stacks team says that “Bitcoin has all the properties that decentralized apps and smart contracts need: the security, the settlement assurances, the capital, and the network effects.” 

In light of Stacks’ Bitcoin-powered technology stack and the rising popularity of NFTs, it comes as little surprise that the first NFT ventures have already started to emerge on Stacks. 

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StacksArtSTXNFT, and Boom are examples of up-and-coming NFT platforms operating on the Stacks chain. 

Interestingly, Satoshibles – an NFT collection by bitcoiners for bitcoiners that launched on Ethereum – announced that it plans to move to Stacks via an NFT bridge between Ethereum and the Stacks blockchain. 

“Using Satoshi as our mascot, we have always felt that we are the NFT for Bitcoin enthusiasts, however, it’s a pretty hard sell when your project is on Ethereum,” the Satoshibles team admitted. 

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To bring its series of 5,000 algorithmically generated, Satoshi-themed NFTs close to the Bitcoin community, Satoshibles holders will be able to port their NFTs to Bitcoin via Stacks.

As the NFT market continues to grow and more NFTs “powered by Bitcoin” emerge, we could see even more money flowing into non-fungible tokens, especially when collectors can trust that their NFTs are secured by Bitcoin. 

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Think Bitcoin: Jack Dorsey warns, “hyperinflation is going to change everything”

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Inflation is gradually kicking in around the world, and some people believe it’s the outcome of the lax monetary policy of Federal Reserves and the significant increase in money supply during the outbreak of the coronavirus pandemic. To beat inflation, many experts and investors have advised investing in real assets such as precious metals (e.g., gold, silver, etc.), including digital assets like Bitcoin, which is considered a better inflation hedging asset. 

Inflation is ticking

In January 2021, the United States inflation rate was around 1.4%, but currently staggering around 5.4%. As of October 21, the Inflation Expectations in the country were also seen at the highest levels since 2006, according to the founder of Compound Capital Advisors, Charlie Bilello. 

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Not just the United States. Data from Trading Economics reveals that other G20 countries are also seeing a spike in inflation points, including Argentina, Canada, Germany, Spain, and many others. This will be a frightening development if the trend goes on for long.

Think Bitcoin: Jack Dorsey warns, “hyperinflation is going to change everything” 1

It may be too early to predict hyperinflation, but many people are seemingly not going to take chances. Jack Dorsey, the CEO of Twitter, believes hyperinflation is going to change a lot of things. It’s unclear how severe this can affect the livelihood of people, but it’s speculated that real assets holders are going to benefit in such a situation, or at least preserve their money from devaluation.

Bitcoin is hope

Amidst the uncertainty, many people are betting on the leading cryptocurrency asset to hedge against inflation. Peter Thiel, the founder of Paypal, is one of the people who are hopeful on Bitcoin, to the extent he wished to have purchased more BTC. “I feel like I’ve been underinvested in it,” Thiel said during an event hosted by non-profit Lincoln Network. 

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