What’s causing crypto prices to rise?
This week, Mila Kunis releases her animated NFT series, Stoner Cats, featuring Ethereum co-founder Vitalik Buterin. [Rich Polk via Getty Images]
Fasten your seatbelts — crypto prices are on the move again. In this week’s Bytes, we’re breaking down some of the key reasons behind the market’s run-up. Also this week: we’re exploring research about central bank digital currencies (CBDCs), a new survey of investors’ feelings about crypto, and the role Ethereum co-founder Vitalik Buterin plays on Mila Kunis’ animated NFT show about *checks notes* … stoner cats? Let’s jump in right meow.
Why crypto prices are rising
The status of CBDCs around the world
The results of a big crypto survey
Bitcoin hit a six-week high on Monday. What caused prices to spike?
After three stormy months — in which Bitcoin fell 40% from April’s $65,000 high — is the sun maaaaybe beginning to break through the clouds? On Monday, BTC briefly climbed above $40,000 for the first time in six weeks as the broader market also jumped, with Ethereum rising close to $2,400. What might have triggered Bitcoin’s biggest upswing in six weeks? Let’s take a look.
Amazon caused a stir last week by posting a listing for a “Digital Currency and Blockchain Product Lead.” And then, early on Monday, an anonymously sourced emerged claiming the e-commerce giant would begin accepting BTC as early as this year.
Prices spiked before Amazon any near-term plans to accept crypto. But the company did express interest in the : “We’re inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon.”
Meanwhile, a much publicized between Tesla and SpaceX’s Elon Musk, Twitter and Square’s Jack Dorsey, and ARK Invest’s Cathie Wood generated a flurry of headlines. Among Musk’s revelations: SpaceX, like Tesla, holds BTC; Tesla will likely resume accepting BTC after pausing; and he personally holds ETH in addition to BTC and DOGE. “I pump, but I don’t dump,” he added, laughing.
Nearly were liquidated on Monday. In a massive “short squeeze,” traders who had bet that BTC prices would continue falling were forced to exit their positions at a loss after prices jumped. This may have triggered a cascade of buying, pushing prices even higher.
Wall Street and venture funds invested $1 billion in crypto firms over the last week. Crypto exchange FTX from investors including SoftBank, Thoma Bravo, and Coinbase Ventures. NFT marketplace OpenSea in a funding round led by Andreesen Horowitz. Meanwhile, Ethereum-scaling solution Polygon the launch of a $100 million fund focused on crypto gaming. ( has also invested in OpenSea and Polygon.)
Why it matters… If you’re a harcore HODLer, temporary price swings probably don’t matter a whole lot to you. But BTC’s around the Amazon rumors could be a signal that investors have an appetite for crypto to take off as a payment system — not just a gold-like . And with more institutional money entering the industry, the next innovation could be around the corner.
Eighty one nations are exploring central bank digital currencies, China leads major economies
According to a from The Atlantic Council, 81 countries — making up 90% of the world’s economy — are exploring central bank digital currencies (CBDCs). Five countries have already launched, while another 14 (including China) are currently testing pilot currencies. Where in the world are CBDCs rolling out? And what do they mean for the future of money? Let’s dig in.
CBDCs are a completely digital version of government-issued money. Unlike Bitcoin, CBDCs are centralized legal tender, created and controlled by a government or central bank. Like Bitcoin, they can be used for fast (even real-time) and inexpensive payments, worldwide.
Five countries, clustered in the Caribbean, have fully launched CBDCs: The Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, and Grenada. Fourteen nations, including China, Sweden, and South Korea, are currently testing pilot currencies.
The number of countries working on CBDCs doubled during the pandemic. As crypto gained steam and COVID revealed new use cases for digital currencies — from contactless payments to the distribution of stimulus funds — funding for CBDC research spiked.
China is poised to become the first major economy to fully roll out a CBDC. Even though the digital yuan is still in its pilot phase, it’s already being used for transportation, meals, and more in parts of the country.
Visitors to China will also be able to use the digital yuan without having to open a . Though it’s not clear when this feature will be available, some U.S. lawmakers have already Americans from using it during the 2022 Beijing Winter Olympics, citing privacy concerns.
There’s still a lot of uncertainty about how a CBDC would work in the U.S. The director of MIT’s research effort, Neha Narula, listed some key unknowns around privacy, distribution, and offline access in a : “If there is a digital dollar, privacy is going to be a very, very important part of that.”
Why it matters… The CBDC narrative is often framed around opposing camps — “the U.S. vs. China,” for instance, or “crypto vs. CBDCs.” But many experts see both CBDCs and crypto as part of the global financial system’s toward a cashless future. As MIT’s Nerula told the podcast: “They will coexist and there’s use cases for both.” One potential outcome? The innovation happening in both CBDCs and crypto could make the entire financial system faster, more innovative, and more equitable.
Gallup reports rising interest in Bitcoin, especially among younger investors
Bitcoin adoption has grown substantially, with 13% of U.S. investors between the ages of 18 and 49 reporting that they own BTC, compared to just 3% in 2018.
The 18-49 demo also saw a large decline in “Bitcoin-averse” responses, which fell from 56% to 38%.
Crypto knowledge is on the rise, especially for younger investors. While only 38% of the broader population say they’re familiar with crypto, 62% of the 18-49 group “have heard of and know something about bitcoin or other cryptocurrencies” (up from 48% in 2018).
What’s driving the trends? “Purchasing [crypto] has become easier for average Americans through crypto exchanges such as Coinbase, Kraken and Gemini,” reports Gallup. “And large investments in bitcoin by well-known companies such as Tesla, Square and Morgan Stanley ... may be giving it more mainstream credibility.”
Cat's Out of the Bag
Ethereum co-creator Vitalik Buterin voices a “stoner cat” in Mila Kunis’ animated NFT show
Last week, Ashton Kutcher tweeted a featuring Mila Kunis and Vitalik Buterin explaining crypto concepts in the Hollywood couple’s kitchen. The trio also revealed a surreal bit of news: Buterin will be voicing a character named Lord Catsington in Kunis’ new animated NFT show, (out tomorrow), which also stars Kutcher, Chris Rock, Seth MacFarlane, and Jane Fonda. To watch, you’ll need to buy a “collectible NFT.” The entire cast will be paid equally in ETH, and according to one of the show’s , they “had to teach Jane Fonda how to set up a MetaMask wallet.”
What is a dollar cost averaging?
A gradual investment strategy that does not rely on “timing the market”
A method to automate crypto purchases on Coinbase
A way to invest any amount of money at regular intervals of time
All of the above
Find the answer below.
All of the above