Crypto is often discussed in terms of an inflation hedge, and what's happening with a couple of fiat currencies and their respective values illustrates why this point consistently rears its head. In other crypto news, a major mobile game developer is getting set to launch a web3 game with crypto tie-ins, and Amsterdam is now home to Europe's first spot bitcoin ETF.
Trouble is brewing for the Russian ruble and Argentine peso. The ruble was valued at less than one penny at the start of the week. Much of the ruble’s volatility stems from Russia’s ongoing war in Ukraine and uncertainty over the energy market.
Things aren’t looking much better for Argentina’s peso, either. Argentina has historically battled high inflation, and Argentines who get their hands on pesos tend to spend them immediately before they lose value or swap them for another currency – USD is a top choice. U.S. dollars are so popular in Argentina that the political candidate who came in first during primary elections on August 13 wants the country to adopt the dollar as its national currency.
Could bitcoin be a more stable bet for ruble or peso holders? Maybe. Bitcoin is considered by some to be an inflation hedge because it has a total supply of 21 million BTC. This differs from fiat currencies, which governments can simply produce more of when the economic conditions call for it. Bitcoin is frequently referred to as digital gold.
The price of other safe haven assets like gold haven’t budged much (neither has bitcoin for that matter) on the news of these two fiat currencies losing value.
Zynga’s upcoming web3 game “Sugartown” is rushing to get in on the blockchain-based gaming craze. Zynga kind of wrote the user manual when it comes to highly addictive (if slightly repetitive) mobile games with breakout hits like its “Words With Friends” and “Farmville” titles. Take-Two Interactive, the gaming studio behind the popular “Grand Theft Auto” franchise, bought Zynga for $12.7 billion last year.
If that number seems out of proportion, let’s zoom out and look at the video game biz by the numbers:
- 3.2 billion people globally played video games in 2022
- Combined spend on video games in 2022 = nearly $200 billion
- Mobile gaming alone generated $103.5 billion of revenue last year
Al fun and games? There’s serious moolah at play when it comes to video games. And the web3 of it all enables publishers to incentivize players with things like gated content, or NFTs, that players can earn as rewards for in-game achievements.
Several existing mobile games push the web3 gaming envelope further with a “play-to-earn” model. Step’n pays users in crypto for reaching their daily step goals, while the Tekkon app rewards users in crypto as they take snapshots of shoddy infrastructure around their cities.
More reading: Crypto and gaming
Europe is getting its very first spot bitcoin exchange-traded fund (ETF). Jacobi Asset Management listed the bitcoin ETF on Amsterdam’s Euronext stock exchange on August 15. Despite all the recent hoopla about getting a spot bitcoin ETF up and running in the U.S., the European markets are first out of the gate. The application for Jacobi Asset Management’s bitcoin ETF was approved almost two years ago.
Things got a bit rocky for crypto in the intervening months, though, with Terra USD’s collapse and the FTX bankruptcy being a couple of notable bumps in the road for crypto in 2022. Still, the opportunity for investors to gain exposure to crypto without holding it themselves is a big upside for asset managers who want to debut spot bitcoin ETFs.
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