We’ve seen accelerating signs that interest in DeFi functionality and investment is growing. The flood of counterarguments his tweet received is just the beginning. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. And Diem, formerly Facebook-linked Libra, is partnering with Silvergate Bank to launch a U.S. dollar-pegged stablecoin. Not any longer. By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy. So Tesla has invested heavily in sustainable energy and it has invested heavily in bitcoin. We all know that environmental questions are complicated, the problems are often misunderstood and “simple” fixes are anything but. A bearish tweet from the entrepreneur on bitcoin and Tesla reneging on using it as a payment method sent crypto ⦠And officials are waking up to the potential to attract cryptocurrency-related businesses to their areas. What does that mean? Elon Musk has confirmed that Tesla will stop accepting Bitcoin payments, citing the environmental impact of mining the asset. As usual, the crypto market focused on the immediate narrative: If Elon Musk says that bitcoin is bad for the environment, other large investors will probably worry about public scrutiny and decide to sell, right? Coindesk Dogecoin also dropped by 13% to a low of 37 cents. I am not a mind reader and have no insider knowledge of the thought process behind publishing that statement. Tesla announced that it would start accepting bitcoin as payment back in February, at the same time as it announced a $1.5 billion investment in the asset. U.S. hedge fund giants Millennium Management, Point72 Asset Management and Matrix Capital Management are all at varying stages of launching cryptocurrency-focused trading funds, with plans to start earning returns using decentralized finance (DeFi) platforms, according to sources. But numbers are also pointing to a shift: In the second half of 2020 and so far in 2021, supply growth in the other top four stablecoins in terms of market capitalization has easily outpaced that of the market leader. Many have been doing this anyway. That might be about to change. This is astonishing, given that most DeFi platforms have not been audited, have no oversight and have relatively low liquidity (by institutional standards). UPDATE (April 26, 22:20 UTC): Adds comments from Tesla CFO Zach Kirkhorn. An recent exchange between MEGAâs Kit Dotcom and Teslaâs Elon Musk discussed the merits of Bitcoin Cash. Authored by CoinDesk’s head of research, Noelle Acheson, it goes out every Sunday and offers a recap of the week – with insights and analysis – from a professional investor’s point of view. The price of bitcoin plummeted following Elon Musk's announcement that Tesla would suspend the purchasing of vehicles with the cryptocurrency. Earlier this week, Tesla exacerbated an already nervous market mood with the announcement that it was no longer accepting the cryptocurrency as payment for its products. This week, we found out that those suspicions were correct. Additionally, the over-the-counter price for the Grayscale Bitcoin Trust (OTCMKTS:GBTC) started trading at a discount to its net asset value; both of these factors are ratcheting up the pressure on the U.S. Securities and Exchange Commission to approve a bitcoin ⦠Not necessarily, despite widespread speculation on the matter. (Reuters) -Tesla Inc will no longer accept bitcoin for car purchases, Chief Executive Elon Musk said on Wednesday, citing long-brewing environmental concerns for a swift reversal in the company's position on the cryptocurrency. And Tesla’s signaling that bitcoin is a good reserve asset and a useful payment method presents an intellectual disconnect – if bitcoin is worth holding as a fiat debasement hedge, why would users part with it? coindesk.com - Daniel Cawrey ⢠2h. It Ainât Easy Tesla is not making it attractive to pay for a model S, 3, X or Y in bitcoin (BTC, -3.97%). Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses.". TAKEAWAY: Last week it was Citi, the week before that it was U.S. Bank. Politicians will come to realize that bans will merely send the activity elsewhere. But he is far from stupid. Tesla Bitcoin News - Et on thursday â bringing the coin's price down to about $49,300, according to cryptocurrency news website coindesk.. But a quick scan of the fine print suggests that ⦠Throw into the mix the still controversial concept of decentralized self-sovereign currencies, and you have the considerable challenge of identifying social priorities, let alone protecting them. In February, it was BNY Mellon and Deutsche Bank. Investment bank Cowen Inc. will offer crypto custody services to hedge funds and asset managers. CoinDesk notes that three bitcoin exchange-traded funds launched successfully on the Toronto Stock Exchange during the first quarter. And the greater the mining industry involvement in renewable energy initiatives, the cleaner its image will become, removing a potentially significant barrier to more widespread investment in the bitcoin market. Elon Musk’s electric vehicle company purchased $1.5 billion worth of bitcoin in February. This is a far cry from the global ambitions of the original project, which aimed to put the convenience of blockchain-based electronic money in the wallets of all Facebook users – the network will be permissioned, accessible only to approved participants, so the extent of its reach remains to be seen. Weâve Got Answers â Motley Fool April 2, 2021; 3 Top Growth Stocks to Buy Right Now â Motley Fool April 2, 2021; Report: Food processors to pay less for potatoes in 2021 as farming costs climb â iFIBER One News April 2, 2021; ⦠The largest stablecoin by far is tether (USDT), which has for years been grappling with a cloud of suspicion that its tokens are not fully backed by dollar reserves. It is also exciting in that more money entering the ecosystem brings attention, funding, legitimacy and more scrutiny. The sale trimmed Tesla’s position by 10%, Tesla CFO Zach Kirkhorn said on an earnings call Monday. As for credibility, when Twitter co-founder Jack Dorsey tweeted last month that “Bitcoin incentivizes green energy,” Elon Musk responded: “True.”, And, you have a potential breach of fiduciary duty, something Elon Musk is no stranger to. For now, tesla only accepts bitcoin â not bitcoin fork products. There’s also the tool of energy subsidy tweaks. The pie charts showed that almost half of all reserves (65% of the 75% “cash & cash equivalents”) is held in commercial paper, which is not always liquid, nor does it reliably hold its value. Plus: Did this week mark the start of a meaningful shift in the stablecoin market? TAKEAWAY: Cowen may not be as well known as names such as UBS, but it is over 100 years old and represents a profound shift in institutional attitudes toward this “rebel” market. Earlier this week, crypto exchange FTX – one of the top five crypto derivatives exchanges in terms of volume, according to skew.com – and its retail subsidiary Blockfolio started allowing users to fund their accounts with the second-largest stablecoin, USDC. With this tweet, the price of BTC dropped almost 8% within three hours, producing a significant slump in the market value of the firm’s bitcoin holdings. If bitcoin is a “reserve asset,” a hedge against fiat debasement, then why would users want to use it as a payment token? Kirkhorn said on the call that Tesla invested in bitcoin to earn yield on its excess cash in a low-interest-rate environment. coindesk.com - Earlier this week, Tesla exacerbated an already nervous market mood with the announcement that it was no longer accepting the cryptocurrency as ⦠Why Teslaâs Reversal Is Good for Bitcoin - CoinDesk - Flipboard And bitcoin-based payment rails are spreading. Tesla’s mission, according to the headline on the “About” section of its website, is to “accelerate the world’s transition to sustainable energy.” Last week, Tesla entered the S&P 500 ESG Index (up 9.8% year to date at time of writing, slightly ahead of the S&P 500), which selects stocks based on environmental, social and corporate governance scores relative to others in the same industry group. The leading cryptocurrency ⦠Tesla CEO and self-dubbed Technoking is back-pedaling on the company's stance about bitcoin and has suspended purchases of its electric vehicles with the cryptocurrency. Bitcoin Falls Below $50K on Elon Muskâs Tesla U-Turn, Gearing Up for Coinbase ⦠Tesla sold some of its bitcoin stash in the first quarter for $272 million in proceeds. This week it disclosed multi-million dollar positions at the end of Q1 2021 in several listed crypto mining stocks: Riot Blockchain ($61.8 million), Marathon ($75 million) and Canaan ($4.2 million). The sale trimmed Teslaâs position by 10%, Tesla CFO Zach ⦠Tesla CEO Elon Musk tweeted that the electric vehicle maker would suspend car purchases using bitcoin, citing environmental concerns. It could range from fiscal incentives to spend more on energy R&D to outright operational bans unless the energy mix meets certain criteria. Telsa will continue to accumulate bitcoin through customer transactions and will make bitcoin-related announcements in the future, Kirkhorn added. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a, Bitcoin Drops After Musk Suggests Tesla May Sell Holdings, Says It Hasn’t Yet, Bitcoin, Ether Dive While Some Alternative Cryptocurrencies Hit Record Highs, Market Wrap: It’s ‘Doge Day Afternoon’ as Memecoin Jumps 47%; Ether and Bitcoin Rise, Banks Are Already Cracking Down on Crypto, Indian Traders Say, Vitalik’s Regift of Unsolicited DOGE Knockoffs Sends Memecoin Prices Plunging, Bitcoin Suffers Biggest Pullback This Year With Drop to 3.5-Month Low, No Reason to Fear Central Bank Digital Currencies, A Central Bank Digital Currency Would Be Bad for the US. In many cases, bitcoin mining can boost activity in struggling economies that have good natural resources but low infrastructure spend. This week saw what could be the start of a meaningful shift in the stablecoin market. So, with this move, Tesla comes across as one, lazy and irresponsible on the research side – Tesla shareholders have every right to wonder why the company is just finding out about the energy consumption mix now – and two, hypocritical: Why is supposedly contaminating BTC acceptable for the balance sheet, but not as a possible (but unlikely) convenience to users? And Tesla confirmed that it is not selling its current stake in BTC. Renaissance Technologies seems to be following a similar strategy. The sale trimmed Teslaâs position by 10%, Tesla CFO Zach Kirkhorn said on an earnings call Monday. Bitcoin, Ethereum, and the rest of the market has dipped since he made the announcement. While the company continues to deal with global supply chain crunches like semiconductor shortages or ship port capacity, he said the bitcoin market is a liquid market with an optimistic future. The company's recent move is more about policy than price. Removing that option feels like another PR stunt, and a ham-fisted one at that. Swiss financial giant UBS Group is in the early stages of planning to offer digital currency investments to affluent clients, according to a Bloomberg report. 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It is significant, however, in that it is the first time we have a U.S. bank launching a stablecoin. Related: Tesla’s Bitcoin Selling Shows How BTC Is More Than Digital Gold âThe total hashrate is around 150 exahashes a second right now. (This will not impact the balance sheet, which values bitcoin at the lower of cost or market value.). First, let’s look at why the Tesla statement was not that significant, and then we’ll look at why it does actually have meaning. Writing reports is not enough. Elon Musk's electric vehicle company purchased $1.5 billion in BTC in February. However, for the majority of Tesla’s target audience, bitcoin is unlikely to ever be a better payment option than straightforward bank transfers or platinum credit cards. Even back then, the payment option felt like a PR stunt. TAKEAWAY: These positions are tiny relative to the fund’s $115 billion in AUM, but meaningful compared to the companies’ size – they account for approximately 3% of Riot’s and Marathon’s market cap. Going forward, as more crypto companies go public, corporate strategy will become a more significant selection factor, allowing investors to complement direct investment in crypto assets with the potential upside (or downside) of business risk. Tether has a much more significant role as a trading pair and a much higher outstanding supply than other cryptocurrencies. This implies that Renaissance could switch out of them at any time, which could trigger significant volatility in the respective share prices. The expectations game, which consists of guessing what others think you’re thinking, then makes reducing positions the sensible thing to do, regardless of fundamentals. The tesla ceo sent the price of bitcoin and other cryptocurrencies plummeting. The economic impact of removing something hardly anyone would want anyway is negligible, both for Tesla and for the demand for bitcoin. So what is really going on here? The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In the slide deck accompanying the company’s first-quarter earnings results Monday, Tesla mentioned the sale of some bitcoin: "Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in 'Restructuring & Other' line) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items.
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