Views from the Hehmeyer Trading Desk — Week of October 5, 2020

Big news hit the cryptosphere this week when payment app Square (NYSE: $SQ) purchased around 4,709 Bitcoin at an aggregate purchase price of $50 million (approximately 1% of the company’s total assets), representing the latest institutional endorsement of the world’s oldest cryptocurrency. Announcing the news on Thursday, Square’s CFO Amrita Ahuja commented: “We believe that Bitcoin has the potential to be a more ubiquitous currency in the future. For a company that is building products based on a more inclusive future, this investment is a step on that journey.” CEO Jack Dorsey also went on to tweet out a white paper explaining how Square went about buying Bitcoin, encouraging others do to the same.

Following the announcement, Bitcoin’s price jumped 2.5% while shares in Square rose 1%. Square is now the second publicly listed company after MicroStrategy to invest in Bitcoin as part of their financing strategy. In an interview with The Block last month, MicroStrategy CEO Michael Saylor said that Bitcoin is “the best money every created” and, in an interview with Bloomberg, predicted other private and public companies will likely get into Bitcoin in the next three to six months.

Following the announcement, Bitcoin rallied to just over $11,000 on Friday after trading from a two-week range of about $10,500 to $10,800. According to Coindesk’s Bitcoin Price Index, this rally is the highest since September 20. Bitcoin’s market capitalization.

Key Crypto Headlines

“Square, Twitter CEO Jack Dorsey’s payment company, has purchased $50 million worth of bitcoin.”

Bitcoin Tops $11k for the First Time in Almost 3 Weeks

“Bitcoin broke through $11,000 on Friday, reaching its highest price in almost three weeks.”

60 Employees Leave Coinbase Over CEO’s Pledge to be Apolitical

“More than 60 Coinbase employees have taken an exit package after CEO Brian Armstrong said in a controversial blog post last month that the company would not participate in social activism.”

Visa’s Crypto Strategy is Driving its Next Stage of Growth

Hear from two Visa executives, Terry Angelos (SVP Global Head of Fintech) and Cuy Sheffield (Senior Director, Head of Crypto) most responsible for its crypto and blockchain strategy.

Bank of Japan to Begin Digital Currency Proof-of-Concept in 2021

In a recent document from the Bank of Japan, the central bank stressed the need for offline availability.”

Bloomberg: Correlation Between Bitcoin and Gold Reaches Its Highest Level in 10 Years

“But that may not mean what you think it means.”

OPINION: Ethereum is Manhattan and Everyone is Moving to the Suburbs

“Few predicted the swift acceleration in the decentralized finance (DeFi) economy this year. The fervent activity in the space has sent DeFi assets skyrocketing to almost $11 billion — equivalent to almost twice the size of the economy of Barbados. Similarly, assets under management held by Decentralized Autonomous Organizations (DAOs) have hit bumper levels, supported in large part by the continued growth in the decentralized economy.”

Binance Overtakes Huboi, OKEz as Biggest Derivatives Exchange

“Overall trading volume was down on derivates exchanges, but one day set a new yearly high.”

Hehmeyer Happenings

This morning, our CEO Chris Hehmeyer participated in the formal launch of the Global Digital Asset and Cryptocurrency Association. In celebration of the launch, Stradley Ronon and the Digital Asset Working Group brought together a distinguished group of panelists to share their perspectives on the evolution of the cryptocurrency industry, the value of self-regulation, and the development journey of the Global DCA. Chris spoke alongside Bill Foster (US Congressman & Co-Chair of the Congressional Blockchain Caucus), Richard Sandor (American Financial Exchange), Dennis Chookaszian (Board Director and Former Chairman and CEO of CNA Insurance), Tony Pettipiece (Chairman of the Board — GRIP (DIFC) Investments), Kristin Boggiano (CrossTower), and Nicole Kalajian (Stradley Ronon). Hehmeyer has been a supporter of the Global DCA, with Hehmeyer Partner and Managing Director David Nuelle sitting on the board.

News from Hehmeyer.