  Insights, news and analysis for the professional investor By Lawrence Lewitinn, Managing Editor for Global Capital Markets December 26, 2021 Sponsored by  Prices as of 12/26/21 @ 00:00 a.m. UTC If you were forwarded this newsletter and would like to receive it, sign up here.
Happy Boxing Day to subscribers in the U.K. and a number of its former colonies. And speaking of putting things in boxes: This week's Briefing column by Lawrence Lewitinn challenges the notion that bitcoin and other cryptos are "risk assets." Well, they're not not-risk-assets, but as Lawrence shows they behave differently than older varieties of chancy stuff, and that has important implications for the year ahead.
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The Briefing With 2021 just about in the rearview mirror, it’s a good time to reassess the notion that cryptocurrency is still a risk-on asset class. After all, crypto’s risk will help determine how to allocate assets in 2022.
For many traders, the massive selloff of March 2020 is still a memory, be it one of great pain or profit. Bitcoin and ether as well as just about every cryptocurrency took a nosedive as if they were chained to falling equities and bond yields back then. It was around that time we started to hear the refrain that crypto is a risk-on bet, meaning it performs well when investors are feeling adventurous and poorly when they get skittish.
And it may be risk-on, since it’s a wager on the future of finance; if money is going to move to the blockchain, owning the money of the blockchain is a reasonable way to play it.
Of course, here’s where one inserts an obvious chart: One showing a stack of correlations.  The black line shows the correlation between bitcoin and the S&P 500, the index that represents the U.S. stock market. If equities are generally a risk-on bet (compared to bonds), then one would assume bitcoin would be highly correlated to the index or at least move in that direction.
Except, well… no, it’s not.
Read the rest of the column here.
– Lawrence Lewitinn
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Chain Links Billionaire CEOs Jack Dorsey and Elon Musk speak out against Web3 and Ethereum. TAKEAWAY: While Dorsey and Musk are outspoken Bitcoin enthusiasts, the duo has been outspoken over the role venture capital plays in Ethereum’s ecosystem. Without citing anything specific, Dorsey mentioned that Web3 has a “single point of failure” and is controlled heavily by firms like a16z.
Wyoming’s Senator Cynthia Lummis looks to propose clear crypto guidance in 2022 in order to fully integrate digital assets into the financial system. TAKEAWAY: Being one of the outspoken regulators regarding the crypto section of the infrastructure bill, Lummis has since voiced her support for positive crypto regulation. She and other crypto-friendly regulators have helped bring the potential of digital assets in front of the Senate and other regulating bodies in the back half of 2021.
Cash flows from Bitcoin mining fall between 36% and 50% after months of record revenues. TAKEAWAY: Bitcoin mining profitability soared over the summer following a rapid BTC price increase and China’s crypto crackdown. Chinese miners coming back online and companies in the western world investing heavily into new equipment pushed Bitcoin’s hashrate back near May’s highs. This coupled with bearish market conditions in November and December had a significant impact on mining profitability.
Bakkt President Adam White announces his departure, following a 77% drop in Bakkt’s stock. TAKEAWAY: Bakkt, which offers a suite of retail-focused crypto products, saw its market capitalization nearly 5x in October before bleeding back to $10. Volatility and turnover seem to be recurring within the crypto industry, potentially a result of the sector's infancy and overregulation.
– Teddy Oosterbaan
 Introducing CoinDesk’s new Digital Asset Classification Standard, which was created in response to the significant growth of the number and types of digital assets offered in the market and the realization that traditional classification standards used for equities and other asset classes could not be adapted accurately to classify digital assets. Read more about DACS.
Podcast episodes worth listening to:  Deeze on Why 2021 Was the Year of NFTs One of the NFT community’s leading voices and hosts discusses the year that was.
A ‘Best of’ 2021 Holiday Special: Haiti’s Transition Into Modern Finance Reflection: a year-end replay of one of our favorite shows from 2021.
Bitcoin Politics: A Year of Reflection and 2022 Predictions A crypto recap of the year and predictions for the year ahead. A wide-ranging exploration and look at some of the existential threats for the growing asset class.
A Crypto Future Is Coming for Investment Advisers What will you do when a client walks in with a portfolio that looks nothing like one today?
Nexo’s Antoni Trenchev on the Stories That Shaped Crypto in 2021 The key trends, from regulation to NFTs to the mainstreaming of Bitcoin.
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