Bitcoin reacts to record inflation
The next Gorillaz? Meet Kingship, Universal Music Group’s virtual NFT “band” featuring four Bored Apes. [Image via UMG]
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Bitcoin sees volatility amid historic inflation data. The crypto network also underwent a major upgrade called “Taproot.” We’ll break it all down.
NFT “virtual bands” are music’s next trend. The music world is having a non-fungible moment.
The week in numbers. The percentage of Americans trading crypto, the price of a U.S. Constitution “first printing”, and other key figures to know.
Amid historic inflation, Bitcoin faces volatility and launches “Taproot” upgrade
Bitcoin is having a moody week. Yesterday, BTC stumbled below $60,000 — less than a week after it notched an all-time high near $69,000 after the U.S. its highest inflation numbers in over . In the days between these price fluctuations, we saw what felt like a month’s worth of headlines, including the SEC a BTC spot ETF (only have been approved so far), a major Bitcoin network upgrade launching, Russia considering mining legislation, and more. So how is all this impacting Bitcoin? Let’s dive in.
Crypto markets tend to be volatile — and it’s not always obvious what causes prices to temporarily tumble (or rise). Market watchers who spoke to proposed a variety of theories for yesterday’s dip: some investors may have taken advantage of high prices to secure profits, and some may be seeking more certainty around crypto .
October saw a record 6.2% year-over-year jump in the consumer price index. Trillions of new dollars in federal aid during the pandemic helped Americans buy more goods , as global have suffered historic levels of stress and congestion. So what does this have to do with Bitcoin? Bitcoin was designed to resist inflation via a fixed supply — only 21 million BTC will ever exist. However, fears that the Federal Reserve might raise interest rates to stem inflation could have halted BTC’s recent momentum as an “inflation hedge.”
Taproot, Bitcoin’s biggest network upgrade since 2017, , adding support for more efficient and private transactions. The update can also potentially power new Bitcoin-based crypto apps and , while providing smoother integration with the, which facilitates cheap and near-instant payments. This week the value of BTC locked in Lightning reached a
Meanwhile, the Bitcoin network’s total mining power has recovered over 90% from July lows after China’s miner crackdown. North America has replaced China as the world’s leading mining destination, responsible for of the world’s BTC mining activity. Meanwhile, Kazakhstan accounts for 18%, and Russia — which is that would allow the government to capitalize on the country’s growing hashrate — accounts for 11%.
Why it matters… As inflation fears continue to rise, some analysts believe Bitcoin as investors’ preferred hedge asset. Over the last year, Bitcoin's price has risen more than 250% while gold has actually lost more than 1%. But it’s important to remember that inflation doesn’t automatically signal “endless gains” to every BTC trader — and the prospect of higher interest rates has the potential to spook markets of all kinds, including crypto. How will it all shake out? Only time will tell.
The rise of Bored Ape-themed “virtual bands”
In less than a year, NFTs have grown from an obscure corner of the crypto universe into a mainstream obsession, driven in no small way by the music biz. At first, the projects tended to be simple, like Kings of Leon’s being sold as an NFT in March or Shawn Mendes’ of personal items like his guitar in May. This fall, more ambitious NFT strategies have emerged — including NFT communities like Bored Ape Yacht Club (BAYC) linking up with industry giant Universal Music Group and mainstream hitmaker Timbaland. Let’s get into it.
Universal signed four Bored Ape Yacht Club avatars as part of a NFT-based metaverse band. What does that even mean? Glad you asked! The world’s biggest record label has with the owner of the four NFTs to launch a new “band” called Kingship. Plans for the group include performances at metaverse events and eventually releasing a line of digital collectibles.
Timbaland, who has produced hits for Jay-Z, Justin Timberlake, and Missy Elliott, a separate partnership with Bored Ape owners via his new metaverse-themed production company Ape-In Productions, which is set to release a song called TheZoo. Timbaland also as a series of NFT collectibles, in which each element of the song (drum parts, basslines, vocals) is an NFT fans can mix and match to create their own remixes.
A key feature of BAYC is that NFT owners receive to their avatars, meaning they can sign their digital friends up for virtual bands, license them to appear in advertising, or rent them out for a range of other purposes — which likely wouldn’t fly with other major NFT projects. (Try licensing your NBA TopShop clip of that Derrick Rose layup to ESPN and see what happens!) The specific Bored Apes in Kingship belong to NFT whale , an early collector of hundreds of Apes.
Why it matters... What’s the source of all these Ape-themed acts? BAYC creator Yuga Labs has some serious music-biz muscle in its corner. In October, the NFT project to pursue music, TV, film, and other projects. Oseary, who bought an Ape of his own prior to the deal, is arguably the biggest player in artist management — his boasts an artist roster that ranges from Britney Spears to the Weeknd. Many saw the move as a sign that NFT communities will be an important part of the music industry’s future. Or as Celine Joshua, founder of Kingship and UMG's Web3-focused puts it, “We’re literally inventing what’s possible in real time.”
Numbers to Know
Estimated auction at Sotheby’s for one of thirteen surviving “first printings” of the United States Constitution. A group of strangers quickly organized a called to raise funds (in ETH) to purchase the document with the goal of putting the “Constitution in the hands of The People” by loaning it to a museum. Other plans for the document, should they win? “We’ll NFT-ify, and meme-ify in the way that we do,” one ConstitutionDAO member.
Average NFT sale price on November 12, according to — an all-time high. But the news wasn’t all good — the total number of art and collectible NFTs (not including gaming) recorded last week fell to 86,870 — around three times less than in October.
60 to 120
Percentage of U.S. adults who say they have “ever invested in, traded, or used” crypto, according to a by the Pew Research Center. Meanwhile, 86% of Americans say they’ve heard at least “a little” about crypto.
Which company launched the first Bitcoin ETF in the U.S.?
Find the answer below.