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State of Bitcoin: Rate Hikes and After Effects
For the full article check it out here.
Top stories from the week:
- FED Raises Interest Rates 0.5%: The Federal Reserve Chairman Jerome Powell announced that the FED will be raising rates by 0.5% which is the largest move since the year 2000. This move is in an attempt to combat inflation, but unfortunately for the FED and everyone in the world inflation is already here. The damage has been done with the money printing that took place in 2020-21 and it seems like that may not slow down. It seems like the FED is in a difficult position where no matter what they do, they will either help in the short term and hurt the long term health of the economy or vice versa. The market started initially with a spike upwards because the FED did not raise rates by 0.75% and only raised by 0.50%, but the following day everything (including BTC) has seen a sharp decline in price. This may be unfortunate timing, but it is making Bitcoin look somewhat correlated to the stock market. There will come a time that Bitcoin is fully uncorrelated from the stock market, but at this time it is a tough argument to make.
- SEC Doubles Staff to Monitor Crypto Activity: The SEC is upping the Crypto Assets and Cyber Unit force that monitors crypto from 30 to 50 people. Since the SEC created this task force, it has executed 80 enforcement actions against unregistered and fraudulent crypto-asset offerings and platforms monetary relief of greater than $2 billion. It is important to note that the SEC notes Bitcoin is not a security and does not fall under the same umbrella as Bitcoin. It is interesting that the SEC makes these distinctions and is something I believe is the real story here. SEC is monitoring shitcoins, not Bitcoin because well if used as designed it is nearly impossible.
- MicroStrategy Margin Call if BTC falls Below $21k: Now there is a lot of misinformation floating around about the earnings call that MicroStrategy had earlier this week, when CFO Phong Le answered the question when MicroStrategy would have to go through a margin call if Bitcoin price fell drastically. That number that Le suggested was Bitcoin falling below $21k. A lot of bears are quick to jump at the downfall of Michael Saylor and MicroStrategy, but essentially this would mean that MicroStrategy would need to either pay off the loan with cash flow or put up more Bitcoin as collateral on the loan used to purchase more Bitcoin. MicroStrategy would not fail if Bitcoin falls below $21k, it simply would need to put up more money/collateral. This would not be ideal for MSTR of course but it something that the company is prepared to deal with in case of a drastic turn of Bitcoin.
- Jack Mallers Solves Email Spam with Lightning: Jack Mallers posted a long winded Twitter thread to essentially say that he will be requiring $1 to be sent over the lightning network in order to be sent an email to his reacher.me email. This new email, reacher.me, will require an invoice in order for the email to be sent to his actual email. This will limit spam and will allow users of reacher.me to declutter their inbox. Overall this seems like a great product and another great use case for the Lightning Network as “internet money” is being used to solve some of the internet’s biggest problems.
- Binance Commits $500 million to Elon’s Investment in Twitter: Strike now currently allows you to tip via the Lightning Network to various Twitter accounts in order to tip influencers for their work they provide. Binance is a major crypto and Bitcoin exchange that is now investing $500 million into Twitter by backing Elon’s investment. Although I believe it is a positive for Elon to purchase Twitter I’m somewhat worried about his shitcoin past. Binance now has the potential to influence decisions, but as we have seen in the past Elon does what Elon wants typically, so lets hope that the trend continues and Elon does not get influenced by any web3 or crypto companies investing in Twitter.
- Bentley University will Accept Bitcoin for Tuition: Bentley University in the state of Massachuttes will now accept Bitcoin and crypto payments for tuition. The details have yet to be ironed out but this is a step for hyper-bitcoinization. I think it is a step in lowering tuition costs. Will tuition payments rise at the rate of Bitcoin? Will appreciating or depreciating Bitcoin price affect how much you owe? These are some questions and details that need to be ironed out, but once they do this could be appealing for more universities going forward.
A quick look on chain:
Current price: $36,495
Market Cap: $732.2B
Spent Output Profit Ratio: 0.998
Current block height: 734481
Mean block interval: 8min. 33sec.
For the full article check it out here.
greencandleinvestments.substack.com
State of Bitcoin: Rate Hikes and After Effects
Week ending: 2022-05-06
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