Long-term Bitcoin holders increased in 2021, yet BTC began 2022 with a sluggish start 🤷♂️; China’s digital yuan is now live on app stores🇨🇳📱; Nubank adds Games, Travel & Pets to its Super App📱
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Good day Everyone,
And Happy New Year to everyone who’s reading this for the first time this year 🥂 I wish you a prosperous, healthy, and productive 2022 🙌🏼
Today is Sunday, so it’s a brilliant time to catch up on the three stories that were moving the headlines this week in the financial technology world. You can uncover other stories, keep the FinTech pulse daily and get at least X5 more by becoming a subscriber. Join the community here:
And here’s a mix of 3 really interesting FinTech stories from this week:
Long-term Bitcoin holders increased in 2021, yet BTC began 2022 with a sluggish start 🤷♂️
The start 👀 Bitcoin has fallen more than 7% over the past seven days, and was down more than 1% on the first day of 2022, according to CoinGecko.
The oldest and largest cryptocurrency by market capitalization is hovering around $47,000 at the time of writing.
Selling pressure🇨🇳 One of the reasons for such market moves might be coming from China. Exchanges deplatforming Chinese citizens prior to the December 31 deadline may have added to BTC selling pressure.
Chinese users, following years of the government tightening the screws around crypto trading, had until Dec. 31 to leave the major Chinese exchanges, which were obliged to deregister them.
Alternative perspective 👉 Despite Bitcoin having lost 1/3 of its value since its all-time high of $69,000, the most popular crypto still closed the year up by 78%.
For the perspective, the S&P 500 finished 2021 with a gain of 26.9% for the year, or a total return of 28.7%, including dividends. So Bitcoin returned nearly x3 times that. Let that sink in.
Furthermore, long-term bitcoin holders, or those holding BTC for over 155 days as per Glassnode, increased their BTC holdings by 16% over 2021. Long-term holders currently own over 70% of the BTC supply.
What can we expect from 2022? Here’s the takeaway👇🏼
✈️ THE TAKEAWAY
Interesting year ahead. Despite the crypto market hitting new highs, long-term Bitcoin holders continued to accumulate, which only shows the conviction in the future of the asset. Furthermore, if we would look at gold - which is BTC’s direct competition when it comes to the store of value argument -, we would see that it finished 2021 as its worst year since 2015. The most actively traded gold futures have fallen 4.7% throughout a year filled with high inflation and record-breaking markets. Some analysts believe that the crypto craze may have drawn attention away from gold and other commodities, as some investors look to Bitcoin as a hedge against soaring prices. While nobody can tell what 2022 will be for the crypto markets and although current signs are rather bearish, it’s sure going to be an interesting year to live in. Again.
China’s digital yuan is now live on app stores🇨🇳📱
The launch 👀 China's Central Bank has finally launched its pilot CBDC wallet app for digital yan aka e-CNY on the Android and Apple app stores as it gears up for the upcoming Winter Olympics.
The digital yuan is a so-called Central Bank Digital Currency (CBDCs) — a kind of cryptocurrency issued and controlled by the government of a nation-state.
Long hours ⏰ In development since 2014, the Digital Yuan wallet has undergone extensive field testing across the country, with the pilot run handling transactions worth $5.34B as of June 2021. The Central Bank states that the CBDC had been used for over 70M payments across more than 1.3M scenarios.
The live pilot 👉 The wallet app has so far been available on an invitation-only basis, but its arrival on the app stores signals the Central Bank's determination to seed the technology across the population ahead of the showcase Winter Olympic games in Shanghai next month when it will compete for traction against the dominant commercial payment apps from Ant Group and Tencent.
Individual users in China may now hence download a version of the app to try out “personal wallet opening and management” and “e-CNY exchange and circulation services,” according to a tweet from BlockBeats, a local news outlet, which also featured screenshots of the app.
Yet, it must be noted that to download the trial app and activate the wallet, users must be physically located in one of 11 locations: Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian, and the Winter Olympics area.
✈️ THE TAKEAWAY
Trying to be a pioneer. While many countries around the world are investigating the technology as such, China has made a bold decision and seized an early lead in readying a CBDC for public use. One can remember that as far back as April 2020, its Central Bank said the digital yuan could be used during the Beijing Winter Olympics in 2022, which now appears to be a brilliant pilot launch event. But what does it all mean? At the core, the digital yuan is all about more control. The digital currency will enable the Chinese government to better track the flow of money through its economy and make better planning decisions. Cash still remains the dominant mode of transaction for payments in China, but new forms of payment that leapfrog card system have become extremely popular in recent times. That brings us to a second point - more competition. The digital yuan could also increase competition in China’s mobile payments market which is dominated by Ant Group’s Alipay and Tencent’s WeChat Pay. Finally, a digital yuan will enable China to bring its unbanked population into the mainstream economy. The ting is China has the largest figure for people without access to a bank, and a digital currency could enable more of them to participate in the mainstream economy without expensive banking products and infrastructure.
Nubank adds Games, Travel & Pets to its Super App📱
Expansion 🚀 Brazilian FinTech heavyweight Nubank has just added three new product categories – Games, Travel, and Pet – and ten new partner stores to its in-app e-commerce vertical.
The digital bank’s customers will now be able to buy products directly from the FinTech app, from stores such as Netshoes, Zattini, Shopee, Nike, Centauro, Booking.com, Xbox, Playstation, Hype Games, and Petlove.
This makes Nubank a clear Super App proposition.
Supper App play 👉 It can be reminded that Nubank’s in-app e-commerce platform as they call it was launched in November 2021 as part of the company’s strategy to expand its product portfolio.
Nubank currently offers credit cards, accounts for individuals and companies, investments, personal loans, insurance and it has already included the offer of products from partners in its app, such as international transfers from Remessa Online and, more recently, loans with vehicle guarantees from Creditas.
✈️ THE TAKEAWAY
Growing up. Nubank has been a massive success and a must-follow story for everyone in FinTech (that, in part, has led to their blockbuster IPO late last year). And yet, despite its state-of-the-art customer acquisition, the FinTech heavyweight must now show it can do more than just sign up new customers. And this is exactly what Nubank is doing with the Super App play. Add it also to the expansion into new markets, and it now only helps Nubank to maintain its differentiation from incumbents, but also brings it closer to profitability. I’m incredibly bullish on Nubank in the long run.
Disclaimer: I’m a shareholder of Nubank
🔎 What else I’m watching
Digital Dinero🇲🇽 The Central Bank of Mexico (Banxico) plans to launch a CBDC by 2024, the Mexican government confirmed in a tweet. Banxico joins the central banks of Brazil and Peru in Latin American countries developing a CBDC. Referring to the digital currency as “state-of-the-art payment infrastructure,” a Banxico official said a CBDC might improve “financial inclusion” in the 15th-largest economy in the world.
Apes aren’t boring 🦍 The cumulative sales figure for the 10,000-piece collection of Bored Ape Yacht Club now stands at roughly $1.03 billion, according to data site CryptoSlam. BAYC reached the milestone in the first few days of the new year, with roughly $55M in sales recorded since January 1. Not too shabby!
Another player in the BNPL space 😑 UK-based FinTech PollenPay has prepared to launch into the Buy Now, Pay Later space, with several retailers ready to offer its payment option from its first day of launch. Company officials stated that they witnessed the initial BNPL boom first-hand and began plans to refine and adapt the concept to fit the UK market. PollenPay offers customers interest-free instalment plans on purchases by charging retailers a small fee. What’s unique here? 🤔
💸 Following the Money
Cosmos-based base layer Umee raised $32M from community members through a token sale in preparation for its mainnet launch, slated for February 2022.
Global investment organization focused on FinTech Ribbit Capital has raised $1.15B in its alleged seventh fund, according to a filing with the US Securities and Exchange Commission (SEC).
Singapore-based Brankas, the Open Finance technology company, has announced the close of its $20M Series B investment round.
👋 That’s it for today! Thank you for reading and have a productive Sunday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
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