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Bitcoin over $100,000, but still beaten by Ethereum and Nvidia

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This week I'm asking for your help via a survey about this newsletter. Also: a look at Bitcoin's jump above the $100,000 mark, Ethereum and the start of altcoin season, Hawk Tuah girl is in trouble, AI applications to watch out for and crypto gifts for the holidays.

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Bitcoin over the $100,000 mark and back again

It is always enjoyable when something huge happens in an area that the BBC heartily dislikes but has to report on. Think of Max Verstappen winning the world title and thwarting Briton Lewis Hamilton's record.

With the face of a spoiled child being served Brussels sprouts and chicory, the reporter filed this report, about the moment Bitcoin became worth more than $100,000 this week. Most media only report the investment risks, but have been completely overlooking some crucial elements of Bitcoin for years.

What is unique about Bitcoin is that it is a completely decentralized network with no central party controlling the number of coins in circulation, so unlike a system with a central bank. As a result, there is also no "crypto-bank account", but you have complete control over your own assets.

How important that is, Netscape founder and investor Marc Andreessen explained in Joe Rogan's podcast through a detailed explanation of the concept of being "debanked;" what happens when you lose your bank accounts and credit cards as a person or company without any explanation. This has happened to many entrepreneurs in the fintech and crypto world in recent years. More and more people worldwide, and not just in undemocratic countries, therefore value self custody of their assets.

Big difference between 2018 and 2024

The often-quoted brilliant Jennifer Zhu Scott recalled last week a panel she participated in at the 2018 World Economic Forum in Davos, when Bitcoin first took its place on the main stage. Zhu Scott debated with Nobel prize winner Robert Shiller and a top executive from Sweden's central bank:

"At the time, coming out openly for Bitcoin was a career risk. But I believed in the ideal. I understood its powerful implications for the world and chose to champion it. Many of the ideas I shared six years ago have become reality.

  • Bitcoin has disrupted gold more than the dollar.
  • Smaller countries have begun to include Bitcoin in their national reserves.
  • Bitcoin wasn't going anywhere-it embodied the ideal of decentralization, and that ideal remains incredibly powerful.

While the rise of Bitcoin has been extraordinary, the ecosystem has evolved in ways I had not fully anticipated:

  • Decentralization vs. Centralization: Bitcoin was born from the ideal of decentralization. Today, however, the ecosystem is becoming increasingly centralized, with figures like Michael Saylor exerting excessive influence.
  • The Obsession with Price: Six years ago, I argued that price was the least important aspect of Bitcoin; its real strength lay in decentralization. Yet Bitcoin is now seen as an asset and the conversation is almost entirely about price movements.

I am proud to have been one of the early pioneers in this field. Thanks to Satoshi Nakamoto's revolutionary vision, we have witnessed the birth of countless breathtaking projects aimed at enabling scalable decentralization. In an era where AI is consuming our data, creating deepfakes and undermining trust, I am grateful for the emergence of Web3 technologies-those offering solutions such as data sovereignty, immutability and authentication. These tools provide a counterbalance in a world increasingly defined by unchecked digital power.

To those who rejected the picture I painted eight years ago: I smile today. Bitcoin's journey is far from over, and this milestone is just the beginning of what is possible."

From Davos to Hong Kong

The debate, in which things got especially feisty between Zhu Scott and Schiller, can be seen here. In retrospect, it is downright scandalous to see how crypto was portrayed in a certain light at this conference, where supposedly free exchange of ideas takes place.

First of all, the panel was called "The Crypto Asset Bubble." That is especially hilarious when you consider that the price of Bitcoin at that time was $11,000; so anyone who had bought Bitcoin at that time would have seen that investment increase in value nearly tenfold within seven years. Do me a bubble like that more often!

But the text with which the moderator introduces Bitcoin really defies all standards of decency: "Bitcoin emerges from the world of nerds and criminals." As a half nerd, I then always think, "what if you replace the word 'nerd' here with Jews or Asians?" Suddenly the same sentence is a lot less acceptable.

By the way, 2018 was the last time I attended the World Economic Forum. Next month, the media will again report in full on the party in the mountains, which I wrote about earlier:

"Participants reported that the number of women they encountered in Davos was as high as the number of MMA fighters at the annual Women's Hairdressing Day. Women are almost as rare during WEF as dark-skinned people. Like motorcyclists on a Sunday ride or penguins in a zoo, I caught myself in Davos politely waving back or nodding to other fellow pigmented people.

A week later, no WEF participant can remember what else was discussed or agreed upon, because unlike the COP climate conferences, for example, Davos is not about jointly formulating measurable goals. There is old-fashioned networking and job hunting.

Because I am sorry to disappoint the conspiracy thinkers, but there is no talk at WEF of world domination by a small, ruling elite at the expense of the common people; there is not much thought about the future at all. WEF excels mainly in zizagging into the future, looking in the rearview mirror - with glasses dipped in the cheese fondue."

In fairness, the "Swiss network effect" was very useful to me personally. I got to know Zhu Scott just before WEF at a crypto conference in St. Moritz, after which I concluded through her appearance on the panel with Schiller that she has a special gift of being able to position her immense knowledge of even the most intricate technical details, within global trends and developments.

Zhu Scott was kind enough to spend a few hours in Hong Kong a few months later to tutor this rather useless Dutchman on decentralization and blockchain. In my experience, this accessibility and willingness to share knowledge is more often seen in the crypto world than in the traditional IT sector, not to mention the financial world.

No one expects it to happen again, but over the last five years Ethereum has been a much better investment than Bitcoin and even better than Nvidia.

Ethereum did much better than Bitcoin

By investors worldwide, including those from the traditional financial industry, Bitcoin has been accepted this year as an investment product that is best compared to investing in gold: it is not used as a means of payment, but as a long-term investment. That is why it remains striking that if you look at the market with a view over five years instead of five minutes, Ethereum has appreciated more than twice as much as Bitcoin.

Indeed, if we compare the performance of the two largest crypto currencies with that of the three most valuable companies in the world, it appears that Ethereum has even outperformed stock market darling Nvidia. That's not saying it will be the case again in the next five years, but it's still interesting to keep in mind.

Christmas season? It's altcoin season

When Bitcoin's price rise has been very rapid, as it has been in recent months, it is usually a matter of time until some profit taking happens and the proceeds from that sale of Bitcoin are invested in other cryptocurrencies: altcoins.

That happened last week, when many altcoins peaked, including BNB, Dogecoin (DOGE), XRP and Chainlink (LINK). In the previous cycle, in 2021, altcoins outperformed Bitcoin for nearly five consecutive months.

In the crypto world, it's not Christmas, but altcoin season. Source: Coinmarketcap.

The question, of course, is which sectors within cryptocurrencies will benefit the most from the upcoming altcoin season. To the frustration of all sincere blockchain developers, at the moment it seems especially all meme coins, all crazy coins without any underlying value, will benefit the most.

Hawk Tuah Girl goes crypto

She was world famous for a few days this summer: Haliey Welch, better known as hawk tuah girl. Last week she was accused of involvement in large-scale scams by releasing a coin called HAWK that became worth nearly half a billion dollars in a short period of time, after which it collapsed completely(91% drop).

Now, few will have expected the same stringency of monetary policy from Ms. Welch as from Alan Greenspan, but this was pretty ugly. Stephen Findeisen, better known as YouTuber Coffeezilla, was quick toexpose the so-called  rug pull. But also completely unknown or random people can issue tokens, even kids.

Teenager makes meme coins

"On the evening of November 19, art adviser Adam Biesk was finishing work at his California home when he overheard a conversation between his wife and son, who had just come downstairs. The son, a kid in his early teens, was saying he had made a ton of money on a cryptocurrency that he himself had created.

At first, Biesk paid little attention to it. He knew his son was experimenting with crypto, but the thought that he had made a small fortune before bedtime seemed far too unlikely. "We didn't actually believe it," Biesk says. But when the phone started ringing incessantly and his wife was inundated with angry messages on Instagram, Biesk realized that his son was telling the truth-albeit not quite the full story."

In an excellent article, Ars Technica explains how and why Pump.Fun appears to be a new home for anyone looking to quickly release their own meme coin. The method is simple: the potential profits with meme coins are always coupled with immeasurable risks. Only suitable for the gambler with a strong stomach.

Interesting crypto categories

As every week, I want to emphasize that I am not providing investment advice, but these appear to be interesting categories of cryptocurrencies:

  • Real world assets (RWA): These are cryptoprojects that represent tangible, physical objects, such as gold, real estate, art or commodities that are "tokenized." By converting these into digital tokens, they can be more easily traded and managed, while ownership is transparent and verifiable in the blockchain.
  • AI tokens (which may or may not actually have anything to do with AI): This refers to crypto projects that capitalize on the theme of artificial intelligence, but do not always actually incorporate substantial AI technology. Some projects attempt to actually integrate AI applications, such as "smart contracts" with machine learning functionality, while others simply use the term "AI" from a marketing standpoint.
  • DePin or DePIN (Decentralized Physical Infrastructure Network): This is a blockchain-based model for decentralized management of physical infrastructure. This could include networks for Internet access, energy or mobility, in which the infrastructure is not controlled by one central body. Imagine: Uber with only drivers and customers, with no central organization taking 20-30% of revenue.

Venture capital firm Andreessen Horowitz published a nice overview yesterday of what it believes to be promising sectors in 2025.

Short news

Tesla is buoyed by Musk's bromance with President Trump, but Ethereum also rose strongly this week.
  • Tesla, Ethereum, Amazon and Meta are the winners of the stock market week, which actually had no losers. Yes, the S&P500 lagged behind tech stocks and crypto stocks, but the risk profile is also lower. At 28% up, the S&P500 is having a phenomenal year. Especially compared to savings accounts...

It's a funny contest run by AI experts and scientists: get an AI bot to declare its love to you and win thousands of dollars.

"It can be helpful to agree on a 'proof of humanity' word that your trusted contacts can ask you," Near wrote. "Should a strange and urgent voice or video call from you come in, this can help them confirm that they are really talking to you and not a deepfake/deepcloned version of you."

When someone suggested this on X last year it may have seemed far-fetched, but now the FBI advises  families to put together their own secret password, or security phrase. When scammers and criminals then try to impersonate a member of the family over the phone, for example a supposedly lost child asking her parents to send her money quickly, the family password or security phrase can be used to verify who is on the line. My guess is that many families will choose to use phrases from popular movies as security phrases, such as from Harry Potter or Home Alone.

As many as 87% of all startups that participated in Y Combinator's program, which ends with a pitch to investors, were AI-related in some way. But while the focus is mostly on consumer applications, the greatest use of AI is actually taking place within enterprise environments. Techcrunch advises companies to look closely at CTGT, Galini, Raycaster and HumanLayer.

Most analysts overestimate energy demand and underestimate technological advances. That is the gist of an argument by The Economist, which has looked at estimates of the global cost of an energy transition to a carbon-free world made by various economists, consultants and other researchers-the kind of estimates that are routinely used as the basis for policy.

These estimates range from about $3 trillion a year to nearly $12 trillion a year, huge sums. But these figures are grossly exaggerated. The good news, according to The Economist, is that the energy transition is going to be many times cheaper.

I don't claim to put all of the suggested products on my wish list myself, but you'll agree that this description of a Christmas gift does grab attention: "the Chipped Social Nail Set includes NFC-equipped nails that can connect to blockchain experiences and crypto wallets, creating an interactive way to show off your crypto style. It's the perfect gift for the bold, stylish crypto fanatic in your life." How did we ever live without NFC nails connecting to your crypto wallet?

I close with once again the kind request to complete the short questionnaire about this newsletter. Thank you very much in advance!

Michiel Frackers
Michiel

I try to develop solutions that are good for the bottom-line, the community and the planet at <a href="http://bluecity.solutions">Blue City Solutions</a> and <a href="https://jointracer.io">Tracer</a>.

By Michiel

I try to develop solutions that are good for the bottom-line, the community and the planet at Blue City Solutions and Tracer.