The Crypto 1%

Good morning. Today we've got a tech industry brain drain, crypto's version of Farmville, and more! Don't forget to forward to friends and family to give them some background before you field endless questions at holiday season dinners and get-togethers.

What this is:
A "Top 5" of crypto, digital asset, and other blockchain related news sent to your inbox on a daily basis

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Top 5:

1. Bitcoin’s ‘One Percent’ Controls Lion’s Share of the Cryptocurrency’s Wealth
According to a report from the National Bureau of Economic Research, the top 10,000 bitcoin accounts control ~5 million of the ~19 million bitcoin that have currently been mined. This means that .01% of bitcoin holders control 27% of the bitcoin supply. In comparison, the top 1% of U.S. households control about a third of all wealth according to the Federal Reserve. The report argues that the this concentration of wealth presents a systemic risk to the Bitcoin network and that the majority of gains associated with price appreciation are concentrated with a small group of investors. Our friend, @CaitlinLong_, presents an alternative view below.

2 The New Get-Rich-Faster Job in Silicon Valley: Crypto Start-Ups
The best and brightest from the tech industry are ditching their boomer jobs and moving into crypto where they see an opportunity to build transformational technology with parallels to early computing and the internet. To list a few high profile moves: Jack Dorsey stepped down as Twitter CEO to focus on payments company Square (now Block), Brian Roberts, former Lyft CFO, left for OpenSea, and David Marcus, Meta's crypto lead, left to focus on his own crypto project. The draw to crypto companies and projects is so intense that companies like Google have started offering additional stock grants to employees that are ripe for poaching and have included retention concerns on the CEO's weekly agenda. With opportunities for massive pay-days and less bureaucratic cultures, the exodus to crypto isn't likely to end soon.

3. Solana Gaming Project DeFi Land Announces Public Testing Launch on December 22
DeFi Land, the agriculture simulation game on the Solana blockchain, is launching its public testing phase on December 22 at 11am ET. The launch follows a six week period of testing with 3,000 verified users of which a third were active daily on the game. DeFi Land will be the first game on Solana to conduct a public testing prior to its full launch, scheduled for Q1 of next year. According to Bitcoinist,

"The farm-themed project brings disparate DeFi protocols under a single roof, making it altogether easier for users to manage their portfolio from a single dashboard – while having the opportunity to earn additional income in the metaverse. Key to the game is its native DFL token, which will variously be used for governance, staking, trading and NFT crafting."

Crypto gaming projects have exploded in 2021 with around 70 new crypto games launching each month. In response to this demand, Solana Ventures announced the launch of a $150 million fund focused on crypto gaming startups.

4. Ethereum Launches Kintsugi Testnet to Prepare for Merge
The merge is coming, the merge is coming! The Ethereum Foundation expects that the the merge, which will replace the existing proof-of-work consensus mechanism with proof-of-stake, to take place in the first half of 2022. A step towards that merge is the release of the Kintsugi testnet, which will provide the Ethereum community with an opportunity to experiment in the post-merge environment in order to identify issues before actual launch.

5. Bitcoin Is Moving In Lockstep With Treasury Yields?!
In the tweet below, @CalebFranzen, argues that over the last ~9 months bitcoin prices are moving in concert with yields on 10-year Treasury bonds and that this is reflective of bitcoin serving as an inflation hedge. Typically, an inverse relationship between "risk-assets", such as technology stocks, and Treasury yields exists in the marketplace. As one goes up the other goes down, and vice-versa.

From @APompliano:

So if this short-term trend continues to play out, what would that mean for bitcoin? Again, no one knows for sure. But it would be very interesting if the prevailing consensus view is misplaced and bitcoin would actually benefit from increasing interest rates. That would violate the framework that many people have been viewing the digital currency through.

The real test for this potential correlation will come in 2022, when the Fed begins to raise interest rates in their fight against inflation.

Top Sharers of the Crypto Top 5:
1. Cameron S. - New York, NY
2. Jake Y. - Greenville, SC
3. Lauren A. - Nashville, TN

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.