Happy 13th Birthday, Bitcoin! How much longer will you live?

Bitcoin was launched with the creation of the genesis block on January 3rd, 2009 and turns 13 years old this January 2022. Despite multiple obituaries having been written by Central Banks and financiers, bitcoin has gone through a tumultuous childhood and has now entered its teen years. The top bitcoin holders control a greater share of the cryptocurrency than the most affluent American households control in dollars, according to a study by the National Bureau of Economic Research. The study showed that the top 10,000 bitcoin accounts hold 5 million bitcoins, an equivalent of approximately $232 billion. In the last 13 years, Bitcoin has either been used as a store of value, to facilitate millions of dollars of ransomware payments in 2021 or in multiple other criminal enterprise to the extend that the US Government regularly auctions off Bitcoins seized from criminals as reported by CNBC.

Nevertheless, bitcoin does seem set for a robust youth with supporters ranging from Jack Dorsey, who believe that Bitcoin has the potential to change the world, to Michael Saylor of Microstrategy, who keep increasing the number of bitcoins added to their portfolio. Over a 100 million users worldwide use Bitcoin or other cryptocurriences even though over $ 140 Billion worth of bitcoin is lost to people who have forgotten or misplaced their keys.
As bitcoin approaches adulthood by 2027, it is likely that it would have finally breathed it's last under the pressure of increased regulatory scrutiny, a destructive carbon footprint, and competition from other more environmentally friendly "cryptocurrencies" at a fraction of its value that scale better, process faster with far more complex transactions. But, the youthful bitcoin will not have died in vain. For it has lit a fire under central banks to start thinking about issuing digital versions of their own Central bank Digital Currencies setting off a revolution to provide a low-cost payment option that everyone has access to, thereby increasing financial inclusion and in the long term potentially financial stability.

Increased regulatory scrutiny of Fintech in Commodities Trading may impact Smart Contracts and Cryptocurrencies significantly

Back in October 2018, Brian Quintenz, the commissioner of CFTC, in a speech in Dubai, questioned the use of smart contracts in Commodities Futures Trading within the CFTC’s jurisdiction asking: "is the method by which it is being transacted on the blockchain compliant with CFTC regulations? If the contract is a swap, is it being offered to retail participants? Is it a product that must be traded on an exchange? Does the protocol itself perform exchange-like functions by facilitating trading, thereby potentially implicating registration requirements?". While the commissioner acknowledged that many smart contracts operate entirely outside of the CFTC’s jurisdiction, the open question was “if a smart contract is violative of CFTC regulation, then who is subject to an enforcement action?” The answer, implicitly holds the developers of the blockchain and the general users responsible, as they are typically unable to assess or police the legality of each application of the blockchain. In 2018, the CFTC had issued a primer on understanding smart contracts and their potential use cases.

Similarly, Congressional scrutiny of cryptocurrencies is increasing regulatory pressure on stablecoins and other cryptocurrencies and have the potential to destabilize the global monetary system In an interview with Bloomberg in August 2021, John Paulson predicted that “Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero.”. The selloff in Bitcoin on January 5th, 2022 as the Fed and other central banks pare back on excess-liquidity measures and prime the markets for higher rates in 2022 points to a vindication of Mr. Paulson's pediction. Barron's highlighted the selloff as another sign that Bitcoin is acting more like a tech stock than an inflation-fighting store of value–or digital gold, as its proponents argue.

Spot Markets in Coal, Electricity and Gold on the horizon in India to coincide with privatized coal mining and gold refining

Spot trading in Coal is on the horizon according to the Securities and Exchange Board of India (SEBI) to coincide with commercial coal mines becoming operational in this decade when 40 per cent of the coal in India will be mined by companies other than State run monopoly Coal India Ltd. India's coal imports have increased largely because of demand from new power plants which are designed to use only high grade imported coal.India imported 215 million tons in 2020-21 mostly from Australia, South Africa and Indonesia. Anil Kumar Jain, India's coal secretary, said in October that the country plans to eliminate imports of thermal coal by 2024.

India’s rush towards renewables is projected to boost trading on the energy spot market to more than quadruple in two years, according to Bloomberg. The share of power under long term contracts is expected to drop between 50 to 60 percent in the next few years.

In a separte report from the World Gold Council (WGC), titled Bullion Trade in India, part of a series of in-depth analyses on India’s bullion market, increasing import of gold doré — a semi-pure alloy of gold and silver — in the last few years has led to a massive expansion of gold refineries in India. The number of refineries rose from 3 in 2012 to 32 in 2020 with a combined refining capacity of 1,200- 1,400 tonnes. Of these, 23 refineries imported doré in 2020 and the top five refineries accounted for more than 70 percent of India’s doré imports.
According to WGC, bullion banking is one of the key pillars to address multiple challenges faced by India’s gold market, such as a lack of quality assurance, the unorganised state of the market and a lack of trust in international markets but with bullion banks like Bank of Nova Scotia exiting their precious metals business and many large bullion dealers (previously clients of the banks) setting up their own refineries, banks’ share of official imports shrank from 40 percent in 2017 to 19 percent in 2020 as the business shifted to refineries.

Gold imports continue to rise (and shine) in the world's second largest gold consumer market

India imported gold worth $34.6 billion in 2020 against $28.2 billion in 2019 with Swiss gold imports accounting for almost half at $16.3 billion. According to Bloomberg, India's gold imports at 900 tons in 2021, up from 350 tons in 2020 are set to be the highest in six years:

India is the world’s second-biggest gold consumer and imports almost all the metal it consumes with the World Gold Council has estimating that sales in the peak October to December period to be the best in at least a decade. The Securities and Exchange Board of India has allowed setting up Gold Exchanges from 2022 where trading in the form of electronic gold receipts (EGRs) at the excahnge is expected to help with a transparent domestic spot price discovery mechanism. The denomination for trading of EGRs and conversion of an EGR into gold is left to the exchanges but EGR trading will be subject to securities transaction tax and goods and services tax.The Directorate General of Foreign Trade issues license to entitities such as the State Trading Corporation (STC) of India to import gold in the form of 100 gm and 1 Kg bars with 0.995 and 0.999 purity, for Indian traders or jewellery manufacturers.