Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
“I do own Bitcoin; Tesla owns Bitcoin; SpaceX owns Bitcoin,” he said.
Musk was speaking at “The ₿ Word” — a virtual event dedicated to Bitcoin — alongside Twitter CEO Jack Dorsey and Ark Invest CEO Cathie Wood, and the erratic tech billionaire suggested Tesla was on the verge of accepting the cryptocurrency again following promising signs that the percentage of renewable energy used for mining was increasing.
Tesla’s $1.5 billion foray into Bitcoin earlier this year sparked a major BTC price rally. However, Tesla’s suspension of Bitcoin as a payment method over environmental concerns in May appeared to tank the price of Bitcoin, with BTC crashing around 40% over the past two months.
Now that there is a diminishing Chinese coal-powered hash rate after the mining ban, it appears that Musk is warming up to digital gold again. Musk has stated that, after he does a bit more “due diligence” on mining sustainability and can confirm it’s backed by 50% renewables or more, Tesla may re-enter the market.
One wonders what said due diligence this entails, and why he didn’t do it before the $1.5 billion Tesla BTC buy.
Musk also revealed, for the first time, that he holds Ethereum (ETH), and unsurprisingly reaffirmed his support for the meme-inspired Dogecoin.
“I do personally own a bit of Ethereum, and Dogecoin of course,” he said.
Speaking of Musk’s favorite cryptocurrency, trading volume for Dogecoin increased by more than 13 times during the second quarter of 2021, nearly tagging $1 billion daily.
According to data compiled by Coinbase and reported by Business Insider, Dogecoin trading volumes soared 1,250% between April and June, with $995 million worth of DOGE changing hands daily on average during the quarter.
By comparison, Dogecoin’s average daily volume for the first quarter of 2021 was $74 million.
While those figures are sure to spark hype among the fiery-eyed Dogecoin community, the subject of the top canine coin may be a touchy one for Coinbase.
A Coinbase user has filed a class-action lawsuit seeking $5 million in damages because of an allegedly misleading Dogecoin campaign.
According to court documents, plaintiff David Suski said he was deceived into trading $100 of Dogecoin for entry into a $1.2 million sweepstakes offer on Coinbase. The lawsuit asserts that Coinbase failed to communicate that a person could enter the sweepstakes without purchasing $100 of Dogecoin.
Ethereum co-founder and lead developer Vitalik Buterin has urged the Ethereum community to innovate beyond the confines of decentralized finance, or DeFi.
Buterin was speaking during his keynote at the Ethereum Community Conference in Paris on July 21, and described non-financial utilities as “the most interesting part of the vision of general-purpose blockchains.”
The 27-year-old outlined several non-financial applications for Ethereum, including decentralized social media, identity verification and attestation, and retroactive public goods funding.
The Ethereum co-founder has had a busy week, and after speaking at the Ethereum conference, he also surfaced in Ashton Kutcher’s and Mila Kunis’ living room. He wasn’t trespassing of course, and was there as part of the promotion for Kunis’ NFT project dubbed “Stoner Cats.”
Buterin launched into a lengthy explanation of Ethereum’s fundamental components and articulated how the smart contract protocol differs from “single-purpose” chains such as Bitcoin.
While Buterin is looking beyond the decentralized bounds of finance, digital asset management giant Grayscale is looking to gain exposure in the sector.
On July 19, Michael Sonnenshein, CEO of Grayscale, announced a new investment vehicle aimed at DeFi assets.
In an interview with CNBC’s Squawk Box, the CEO chimed in to announce Grayscale’s plans for a DeFi Fund and index. Detailing the purpose of the new product, the Grayscale CEO said the fund would offer exposure to DeFi assets, such as Uniswap and Aave, for its institutional clients.
During the same week, Sonnenshein stated he thinks that only a “couple of maturation points” separate the United States from its first Bitcoin exchange-traded fund, or ETF.
After many rejections of BTC ETFs in the past, along with 13 ETF applications under consideration, Sonnenshein is undeterred and said the firm is “100% committed” to transforming its Bitcoin product, the Grayscale Bitcoin Trust, into an ETF once conditions are right.
Despite the majority of Japanese citizens reportedly wanting the Olympics canceled over pandemic-related concerns, the event is going ahead.
The U.S. government has already got its eyes on the 2022 Winter Olympics in Beijing, however, and three U.S senators signed a letter urging Olympic officials to forbid American athletes from using the digital yuan during the upcoming event earlier this week.
In a July 19 letter to the U.S. Olympic and Paralympic Committee board chair Susanne Lyons, Republican Senators Marsha Blackburn, Roger Wicker and Cynthia Lummis, also a BTC proponent, requested that officials prevent U.S. athletes from using or accepting the digital yuan.
The senators asserted that the athletes’ use of the central bank digital currency can be “tracked and traced” by the People’s Bank of China.
The senators stated that the Chinese government recently rolled out new features for the digital yuan, giving officials the ability “to know the exact details of what someone purchased and where.”
If Olympic officials approve of the request, China will, unfortunately, have to deploy other methods to track and trace the U.S. athletes that do enter the country.
Winners and Losers
At the end of the week, Bitcoin is at $32,580, Ether at $2,070 and XRP at $0.60. The total market cap is at $1.35 trillion, based on CoinMarketCap data.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Telcoin (TEL) at 26.82%, SushiSwap (SUSHI) at 26.17%, and Axie Infinity (AXS) at 23.12%.
The top three altcoin losers of the week are Mdex (MDX) at -25.55%, THORChain (RUNE) at -18.98%, and Theta (XDC) at -11.26%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“I might pump, but I don’t dump. I definitely do not believe in getting the price high and selling it or anything like that.”
Elon Musk, Tesla CEO
“Moving beyond DeFi is not about being against DeFi. I actually think […] the most interesting Ethereum applications are going to combine elements of finance and non-finance.”
Vitalik Buterin, Ethereum co-founder
“Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are ‘stablecoins’ in anything other than name.”
Paxos, stablecoin provider
“I think that digital art is probably going to last a lot longer than galleries. I mean, you probably won’t be going into galleries. We’ll be sitting in bars showing each other what we’ve recently bought on our phones, and that’s kind of what we do now.”
Damien Hirst, world-renowned contemporary artist
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”
Gary Gensler, SEC Chair
“More than ever, we need to take advantage and harness the potential of these new technologies to ensure that we are better equipped and more united in the future, in order to make our planet a more livable, equitable place for all.”
Irakli Beridze, head of the Centre for Artificial Intelligence and Robotics at the United Nations Interregional Crime and Justice Research Institute
“If a Bitcoin ETF is coming through the Gensler administration, my view is it’s not going to happen this year. […] There’s also been quite a bit of sort of a body of language and rhetoric and points that have been made by the staff with previous applications that need to be addressed. And so this isn’t a slam dunk.”
Greg King, CEO of Osprey Funds
“Recent calls to establish a more appropriate standard for technologically complex digital assets have turned into a firestorm since the Ripple case was filed. Some tech policy experts closely following the case have called for a ‘Ripple Test’ to replace Howey.”
George Nethercutt Jr., former member of U.S. Congress
Prediction of the Week
Ever since the crypto downturn began around May 12, the bears have been on parade as they forecast doom and gloom for the future price of BTC.
This week, Cointelegraph reported that a pseudonymous chartist who goes by the name “Bitcoin Master” shared concerns about Bitcoin’s potential to undergo an 80% average price decline upon breaking bearish on its 50-day simple moving average (SMA). The analyst noted that if the said fractal plays out, BTC/USD exchange rates could crash to as low as $13,000.
The 50-week SMA represents the average price traders have paid for Bitcoin over the past 50 weeks. Over the years, and in 2020, its invalidation as price floor has contributed to pushing the Bitcoin market into severe bearish cycles.
However, previous market cycles haven’t been impacted by Elon Musk’s inclination to cause mayhem in crypto through his tweets, so we may see a 50-week Musk tweeting average become the accepted method for BTC price predictions in the future.
FUD of the Week
The United States Securities and Exchange Commission, or SEC, may soon issue new rules for the regulation and registration of security-based swaps, including cryptocurrency.
In a speech to the American Bar Association Derivatives and Futures Law Committee, SEC Chairman Gary Gensler outlined that, from November, new requirements will go into effect, which include internal risk management, supervision and chief compliance officers, trade acknowledgment and confirmation, and recordkeeping and reporting procedures, to name a few.
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime,” Gensler said.
Speaking during a July 20 interview with TheStreet, Jim Cramer, the host of CNBC’s Mad Money, questioned Tether’s lack of transparency and asked why the firm hasn’t disclosed the composition of its commercial paper, which accounts for a large percentage of its holdings.
Tether’s brief reserve breakdown in May showed that, as of March 31, three-quarters of its reserves were held in cash, cash equivalents, other short-term deposits and commercial paper. Within that category, commercial paper accounted for 65.39%, with cash alone accounting for just 3.87%.
“I am concerned about Tether, and I’m not gonna stop sounding the alarm until I know what Tether has. They’ve got about $60 billion in commercial paper. Tether, open up the kimono, what commercial paper do you own?” Cramer said.
Ralph Hamers, CEO of Swiss bank UBS, said on July 20 that he does not fear missing out on crypto, citing that it’s an untested and volatile asset.
Speaking to Bloomberg, Hamers asserted, “Clients are looking at different alternatives, and they hear about crypto, and there is a bit of a fear of missing out as well. They read it in the papers, but they also see the volatility.”
Commenting on the bank’s approach to providing exposure to crypto for its wealth management clients, the UBS CEO emphasized that he holds no FOMO towards crypto, noting, “We don’t offer it actively. […] We feel that crypto itself is still an untested asset category.”
Hamers, of course, works within the confines of the traditional finance and banking system, which is a well-tested industry that has caused multiple global financial crises.
Best Cointelegraph Features
Plan B’s stock-to-flow model is the closest it’s ever been to being invalidated as Bitcoin stagnates in the $30,000 range.
Chinese authorities seem to be putting things in order rather than declaring war on crypto, aiming to further weaken the U.S. economy.
The SEC’s approach to crypto must be modified to more clearly articulate how securities laws should apply to digital assets.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.