2021W23 - WTF has happened in bitcoin this week?
Bitcoin becomes a legal tender
TLDR: Bitcoin becomes legal tender, Saylor to buy $500 million in bitcoin, White house advisor discloses personal $1-5million, Latin American countries showing interest in bitcoin.
Hey there niblings, it’s uncle Bam again, with a summary of the most insightful events in the Bitcoin space. Back at it again digesting all the important news for you.
Bitcoin has become a legal tender in El Salvador. This has been a bold move, by becoming the first country to do so. The country’s decision comes from an intention of economic inclusion where 70% of the population do not have access to banking services, but many do have smart phones and internet. Additionally, almost 20%, of the country’s GDP or around $6 billion is made up by remittances, where more than $1 billion is lost in transaction fees, a problem which bitcoin strives to solve.
The news was first announced in Bitcoin Spaces, in a group chat hosted by Nic Carter, where president Bukele was answering questions to Bitcoiners with doubts about their decision. Interestingly he was asked whether they would add bitcoin to their balance sheet and if mining bitcoin was in the country’s plans, to which he responded:
- They will start with a $150 million dollar trust with exposure on bitcoin
- About mining, they had not given thought on that yet, but would definitely be open to evaluate the opportunity.
This changed just the next day, when he announced they will be leveraging the volcanic geothermal energy available in El Salvador to build a clean bitcoin mining facility.
And this is how the week started.
1. MicroStrategy announced proposed private offering of $400 Million of Senior Secured Notes to acquire additional Bitcoin. The company received a large number of orders totaling $1.6 billion from hedge funds, and even the FED.
They will be receiving $500 million, from investors, bearing an interest rate of 6.125% with the purpose of buying bitcoin.
MicroStrategy had amassed 92,079 Bitcoins as of early June, acquired for about $2.25 billion at an average of about $24,450 per bitcoin.
Rumors in the street say Michael’s purchases will likely begin on Monday 14th, but there is no way of confirming this, it is also likely that the purchases have already began.
2. Square allocates $5 million in bitcoin to its Bitcoin Endowment program. and has selected educational program Black Bitcoin Billionaire as the first-ever recipient for a grant from the program. Black Bitcoin Billionaire is receiving 1 bitcoin from the endowment, according to Square.
Square currently has over 8,000 bitcoin in their treasury, currently generating yield through a yield-generating loan to Genesis. - Bitcoin Magazine.
3. The Bitcoin Law was passed in El Salvador the 9th of June of 2021. The law will require all economic agents that are technologically capable of receiving BTC as payment must accept it as payment — though instant conversion to USD is made available to anyone who doesn’t want to take price risk.
The bill includes, no tax for bitcoin appreciation.
"It will bring financial inclusion, investment, tourism, innovation and economic development for our country" - Bukele
4. Tim Wu, Top antitrust advisor at the White House, disclosed owning between $1 million and $5 million worth of bitcoin, being bitcoin the largest holding in his financial portfolio.
5. Warren Buffett just invested $500 Million in Nubank - a Brazilian digital bank which plans to offer investments in Bitcoin ETFs.
6. Victory Capital Management, which have $157 billion in asset under management, plans to offer a private fund composed of bitcoin and ethereum.
7. Bitcoin mining company HUT 8 is listing on NASDAQ and is expected to be trading the 15th of June.
8. Ledger, a hardware wallet for bitcoin and additional currencies, completes a $380 million Series C fundraising valuing the company at more than $1.5 billion.
9. David Guetta, the famous DJ, is selling a residence in Miami for $14 million, and is accepting bitcoin for it.
FUNDAMENTALS
11. The amount of bitcoins being held by long-term holders is at the moment signaling a rapid reaccumulation reaching numbers similar to late January, where these number decreased rapidly. It is possible to assume that big players have stopped with the sell-off and looking forward to continue appreciation, just as smaller players continue to accumulate and setting a base price for bitcoin in the mid $30,000s.
In other words the ratio of people accumulating bitcoin, seems to be outpacing the people selling.
As a summary note..
The interest sparkled in neighbor countries and around the world not only google searches of El Salvador and its real estate have spiked, but also the countries’ politicians showing their support for the Bitcoin Law, and for bitcoin in general, by turning their profiles into lazer eyes.
The Bitcoin adoption in El Salvador has been accompanied by the US company Strike, led by Jack Mallers, which serves as an interface for the sender to pay with either bitcoin/dollars while the receiver deciding whether to receive bitcoin/dollars with close to zero fees. In this scenario both entities are using the currency of choice without the need to make the counter-party chose the same one.
Jack has been approached by different governments, and has disclosed that there are several countries on the pipeline which his team will be working with to launch Strike and help the country get on board on the biggest open monetary network ever existed, Bitcoin.
The trend seems clear to me, bitcoin is in its path to adoption. It started with companies adding it onto their balance sheet, and now countries making it legal tender and adding it to their treasury reserves. This is a race to adoption, and the first countries to be bold enough to harness the opportunity, will likely be the ones who benefit the most. A wealth transfer opportunity for small countries to become prosperous.
Have a great weekend niblings.
Stay humble & stack sats.
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Reference:
1.https://finance.yahoo.com/news/microstrategy-boosts-bitcoin-linked-junk-155933763.html
2.https://bitcoinmagazine.com/business/square-endows-black-bitcoin-billionaire
3.https://www.cbsnews.com/news/el-salvador-bitcoin-legal-tender/
4. https://www.politico.com/news/2021/06/07/white-house-tech-critic-bitcoin-492093
5. https://fortune.com/2021/06/10/bitcoin-warren-buffett-invest-nubank-crypto-microstrategy-bond-binance-gamestop-gme/
6.https://cointelegraph.com/news/157b-victory-capital-plans-to-enter-crypto-market
7.https://finance.yahoo.com/news/hut-8-mining-announces-anticipated-110000657.html#:~:text=TORONTO%2C%20June%2011%2C%202021%20%2F,%2F%20%2D%20Hut%208%20Mining%20Corp.&text=It%20is%20expected%20that%20trading,under%20the%20symbol%20%22HUT%22.
8.https://www.businesswire.com/news/home/20210609005985/en/Ledger-completes-a-380-million-Series-C-fundraising-valuing-the-company-at-more-than-1.5-billion-to-strengthen-its-position-as-the-leading-secure-gateway-to-digital-assets
9.https://www.thefreudgroup.com/en/property/setai-residences-for-sale-crypto-david-guetta/