2022W19 - WTF happened in Bitcoin this week?
Bitcoin is money, crypto is an experiment.
TLDR: Is bitcoin at risk? El Salvador keeps buying bitcoin, MicroStrategy is not selling, LFG dumped their ~70,000 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.
This week was a crazy one, with the news of the Luna’s and UST’s collapse, people losing all of their “savings”, and even some wondering if this is bad for bitcoin, there have emerge many questions, into trying to understand:
What really happened?
Is bitcoin or crypto at risk?
Are stablecoins really stable?
I am not an expert but we could start by saying that there is a difference between “stablecoin” such as USDT, which allegedly is backed completely by dollars in a vault, and an algorithmically backed stablecoin as UST, but in both situations there is counterparty risk, which one must trust the entity issuing the token.
Coming back to the UST “stablecoin”, which completely collapsed this week, it all started whet it began losing its peg and algorithmically forcing the foundation to sell their ~70,000 bitcoin to attempt and recover its 1UST-1USD peg, unsuccessfully.
The fear kicked in, and as people started to get out of it, some finding out they had them locked on “staking, to generate XX% yields”, it became a death spiral as people quickly lost confidence. This naturally affected the bitcoin price, as they quickly dumped that huge amount of bitcoin in the market, generating a big amount of liquidations where even other institutions were selling bitcoin to cover their own losses. The downfall cascade didn’t stop until it reached lows down to $24,500 in some exchanges.
In essence, people got greedy, and irresponsible. The main lesson is that crypto is an experiment, and many got hurt, are getting hurt and will continue to get hurt by this “search of yield”, without stopping to understand where is this “yield” coming from.
Is bitcoin at risk? No it is not, bitcoin remains unchanged, bitcoin is just money, and that is exactly the only thing it needs to be. It is the first digital scarce asset ever to be invented, and it is hard to be modified, which gives confidence to the user, it personally gives uncle Bam the confidence to be secure that his monetary energy can be stored in there for the long term, as it has lived 13 years without having its core parameters changed.
There is only going to ever be 21 million bitcoin, and that so far is a guarantee, which is why, I find safety in sats, and I hope more people start to understand that they can find safety here too.
THE NEWS!
1. Nayib Bukele, announced El Salvador to have bought the dip. The country added 500 bitcoin to its balance sheet, and currently holds 2,301 BTC.
2. MicroStrategy, Michael Saylor’s company faced unrealized losses for the first time as Bitcoin droped below their average purchase price of $30,700. People raised worries as MicroStrategy has taken a loan out with some bitcoin as collateral, to which the calculation lead to a price of $21,000 for their position to get liquidated. To which Saylor responded, that they won’t be selling any bitcoin.
3. SBI Motor Japan is now accepting bitcoin and another cryptocurrency in an effort to provide cross-border access to used-cars for unbanked users.
4. Townsquare Media, a digital media company, announced that during Q1 2022, the they purchased $5 million of bitcoin stating that the company believes in bitcoin’s “long-term potential.”
5. Jack Henry & Associates has partnered with NYDIG to offer bitcoin services to legacy financial institutions in software as a service model.
6. A home was purchased for $65,000 in bitcoin making local history as the first real estate transaction with the peer-to-peer currency in Louisville, Kentucky.
7. The spanish futbol team Relai Club Deportivo (RCD) Espanyol will begin accepting bitcoin and other cryptocurrencies for match tickets, merchandise and food and beverages next season.
8. Continental Diamond, a St. Louis-based jewelry store, has partnered with BitPay enabling its customers to use bitcoin as payment.
9. Nubank, the largest Brazilian bank, now allows customers to buy, sell and hold bitcoin in the bank's mobile application. Additionally, the fintech company, announced that they will allocate 1% of their equity to bitcoin.
10. MARA, a cryptocurrency infrastructure company backed by Coinbase, will advise the Central African Republic on bitcoin adoption after making it legal tender.
11. Distributed Ledger Inc and GulfQuest Maritime Museum have partnered for a sustainable bitcoin mining project recently approved by the City of Mobile, Alabama.
12. Two new bitcoin ETFs launched today in Australia, a spot bitcoin fund directly acquiring bitcoin and a de-facto fund of funds.
13. Relai, a savings app focused on bitcoin, is crowdfunding through Crowdcube to launch a bitcoin debit card.
14. David Marcus, former lead of Facebook Messenger, announced the creation of Lightspark, a Lightning Network infrastructure company.
15. Emirates Airline confirms it is exploring accepting bitcoin as a payment option for future use
FUNDAMENTALS.
Bitcoin Long Term Hodlers, or addresses of bitcoin with more than a year of history without moving, continue on All time High levels, with 65% of the showing their confidence in the system.
Bitcoin 30-day Hashrate continues hitting all time highs, while
New non-zero balance addresses continue to increase, meaning adoption continues.
As a summary note..
In these weeks of price volatility, it is important to step back and remember why is it that we are into bitcoin. In these hard retracements, some of us could get distracted by the price and even forget bitcoin’s fundamentals, but if we take a closer look they are unchanged.
The only difference in bitcoin between today and a couple of weeks ago is:’
Lower price
More adoption
Essentially, if the volatility hurts you, you might either be over exposed or your level of conviction isn’t high enough. I can’t do your research for you, but if a weekly reminder of how things move in the right direction could help you in your journey as a bitcoiner, in being part of this financial revolution, part of the fight for financial inclusion and freedom; then I will continue bringing this weekly reminders of the good news adoption around the world.
I think that as Bitcoiners, we should strive for more adoption. Starting with ourselves, adopting a bitcoin standard, we can then inceltivize our community to adopt it too. Some people believe that “we shouldn’t, as if adoption was inevitable and would like to have cheaper prices to accumulate more sats”, but lets remind ourselves that while for some this is an investment, for some countries, it is their only option.
So lets continue stacking sats and sharing the gospel, as I would like to see a future where people could easily integrate to this open monetary network, and receive payments without the need of having monopolies like Visa or Mastercard taking away a big portion of the value in fees, while not even offering a quick final settlement.
Working together, we could see more places like El Palmarcito Beach, in our own countries, and traveling would be a blast by only needing to have a bitcoin wallet.
Have a great weekend niblings.
Stay humble & stack sats.
Supported by:
How to buy bitcoin? (With Relai through Revolut)
If you are in Europe, I made a pretty simple guide with 3 steps, which avoids you having to set up an account on an exchange, give them all of your personal information, plus custody of your funds.
Did you find value on this? You want to contribute to Uncle Bam?
Then feel free to donate, a cup of coffee would be highly appreciated.
But more importantly, share this with your friends and family..
Lightning Address:
cherryskate01@walletofsatoshi.com