Bitcoin underperformed over the last few days, whilst alt coins experience increased demand. Bitcoin declined nearly 10% last week, however SOL rose 8%, and Eth rose 5%.
Why is Bitcoin underperforming?
Bitcoin now has significant exposure to price manipulation given the discrepancies between BTC/USD and BTC/USDT, as well as leveraged trading on the perpetual futures market, where people are shorting Bitcoin aggressively.
Bitcoins long term uptrend remains in tact, and the pullback offers a buy opportunity for Bitcoin HODLers.
Square’s White Paper for Decentralized Bitcoin Exchange
Square, the payments solution provider, released a white paper on Friday outlining a new decentralized protocol for exchanging digital assets.
The Protocol facilitates decentralised networks of exchange between assets, and provides a framework for establishing social trust. The protocol would use decentralized identity (DID) and verifiable credentials (VC’s) to establish the provenance of identity in the real world.
The Paper was announced by Square’s TBD department, a new division focused on developing non-custodial & defi services. The department will be charged with building the exchange.
The Emergence of Crypto Cities
El Salvador will create a “Bitcoin City”. Currently El Salvador is the only country where bitcoin is legal tender, and the President has now announced plans for a “Bitcoin City” along the Gulf of Fonseca, near a volcano.
The El Salvador Government plans on locating a power plant by the volcano to provide energy for the city & for BTC mining.
El Salvador plans to build a complete metropolis with residential and commercial areas, restaurants, public transport, and an airport.
El Salvador also plans to issue $1B US Bitcoin bonds to raise capital for the construction of the city. The bonds will pay initially 6.5%, however by the time 10 years has elapsed the annual yield will be 146%.
By taking so many BTC’s out of circulation El Salvador is anticipating the price of bitcoin increasing significantly. Given the ten year yield El Salvador is relying on BTC prices increasingly dramatically or they may land in hot water.