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wNews: Bitcoin “Threatens” the Dollar, Says Peter Thiel

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wNews: Bitcoin “Threatens” the Dollar, Says Peter Thiel | Crypto Briefing


















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This week’s wNews digs into Peter Thiel’s recent comments surrounding Bitcoin’s threat to the U.S. dollar and how this plays into China’s hands. 

Thiel has often made headlines throughout his career. A master of the inflammatory soundbite, the PayPal founder again took the media industry by storm. During a roundtable discussion at the Richard Nixon Seminar, he and others discussed Big Tech and China as the two were related to American national security matters. 

A notable Bitcoin advocate, Thiel also described the leading digital asset as a “financial weapon” that China could use against the great red, white, and blue. Many were quick to call it the end of the entrepreneur’s pro-crypto stance. Others chalked it up to another 4D chess move from the grandmaster. 

Bears overran BTC on the day, but the leading cryptocurrency is now inches from all-time highs. Ethereum has done much of the same, officially crossing its local high today. Several conflicting indicators now suggest several narratives are at play for both assets. 

Finally, this week’s crypto to-do list merges two of the hottest trends: DeFi and Layer 2.  

All that and more, below.

Thiel’s Breach of Bitcoin Maximalism

Peter Thiel has long been an outspoken advocate of all things privacy, liberty, and free markets. It’s thus only natural that the entrepreneur eventually discovered Bitcoin. His comments on Apr.7, however, suggested that perhaps his fervor for the asset is waning. 

At the Richard Nixon Seminar, he said: 

“Even though I’m a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether if at this point Bitcoin should also be thought of in part as a Chinese financial weapon against the U.S.”

The context of this quote is also crucial. 

Various former government officials dotted the audience, including Mike Pompeo and Robert O’Brien. Both officials were responsible for national security in the United States under Donald Trump. Indeed, both Pompeo and O’Brien had been responsible for building the former President’s stance on China. 

These days the standoff with the world’s second-largest economy has only gotten tenser. On Apr. 9, the U.S. deployed various tactical warships and amphibious military vehicles into the South China Sea. 

South China Sea Map
Source: VOA

This stretch of the sea has long been a theater for international politics. The Chinese government sometimes oversteps its territorial bounds, claiming that an extra few kilometers have always belonged to them. A neighboring country in the region, be it Japan, the Philippines, Vietnam, or otherwise, then sounds the alarm bells of sorts. 

In the latest development, 44 Chinese vessels continue to occupy the Whitsun Reef not far from the Spratly Islands. The Philippines’ defense secretary, Delfin Lorenzana, has been the primary bell-ringer, indicating that these ships “should be on their way out.”

The alarms engage larger, more powerful military forces, including the United States, European nations, and other larger Asian countries, to assist. Often these bouts end in a stalemate, but the stakes are still high. 

One slight miscommunication can cause a diplomatic meltdown between any countries involved. 

Thus, with a physical conflict top of mind, Thiel has also introduced a worrisome “financial weapon” to the mix. He added

“[Bitcoin] threatens fiat money, but it especially threatens the U.S. dollar. [If] China’s long Bitcoin, perhaps from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works.”

With this, the maximalists reclaim Thiel to their ranks. 

Many have long-touted Bitcoin’s ability to overthrow the dollar and that doing so would never be easy. Now, Thiel has confirmed what that upward battle will really look like. 

Market Action: Bitcoin (BTC)

In the first quarter, Bitcoin’s price doubled from $30,000 to $60,000 this year. It reached its peak earlier in March and has been in consolidation since. 

Around the end of March, the selling pressure likely arose from investors booking Q1 profits and rebalancing their portfolios

Still, the market remains bullish due to progress around the new asset class. Paolo Ardoino, CTO at Bitfinex, told Crypto Briefing: 

“As Bitcoin hovers near the$60,000 mark, the fixation on price is no longer so pervasive. Bitcoin continues to win wider acceptance as an asset that is here to stay as corporations across the globe quietly explore how to integrate Bitcoin and cryptocurrencies into their business models.” 

A trader can view the short-term (4-hour) BTC price action depending on either perception: bullish or bearish. 

Organically, the price has been forming higher lows; however, it has faced a lot of resistance around $60,000. Investors should consider both perspectives. 

First, bearish. 

BTC / USD
Source: Trading View

A head and shoulders pattern appears to be forming around Bitcoin’s top, threatening a drop to lows of $41,000. The lower peak of the recent push to $60,000 raises apprehension around compounding sell pressure. 

Bitcoin’s underlying price has formed a supporting trend with higher lows, and buyers may argue that the base head and shoulders pattern should be flatter. 

The higher lows have been a sign of relief for the bull, indicating dip-buying action. 

As the head and shoulders pattern threatens reversal, the ascending triangle points towards continuation. 

BTC / USD
Source: Trading View

The target of the breakout to the upside is $75,000. 

Bitcoin’s price is slowly entering the thin resistance and support bands between $55,500 and $59,000. A breakout on either side of the band is expected to be explosive. 

Traders must also be cautious of fake breakouts and wait for confirmation on the daily and weekly chart. Moreover, due to low liquidity during the weekends, the volatility could run higher in the next two days. 

Bitcoin on-chain indicators have also entered the overbought region. The number of wallets in profit is currently at its all-time highs, suggesting that a long-term pullback is near. 

The counterargument has been that the levels of indicators like HODL waves are below the peak during 2013 and 2017, raising the possibility that 2021 will be no different. 


Market Action: Ethereum (ETH) 

While Bitcoin has failed to break above its local peak of $60,000, Ethereum’s native token ETH is looking forward to a second consecutive weekly close above its previous high of $1,936. 

ETH / USD
Source: Trading View

The consolidation above resistance has built positive market sentiments around the cryptocurrency. The most humble target of the pattern is above $2,750, with support near $1,950. 

The funding rate for ETH perpetual contracts has cooled down, which also favors the bulls.

The futures derivatives market reflects the uncertainty around generational tops in the cryptocurrency market after an emphatic run above previous all-time highs. 

Ether gained over 180% in Q1 and is up 20x from last year’s bottom after the stomach-churning crash in March 2020. 

The next positive catalyst for ETH could come from additional institutional acceptance as a base layer for transactions, like VISA, or investment as a store of value. 

Crypto To-Do List: Use Aave on Polygon 

2021 has been a big year for Ethereum

The entire ecosystem has seen rapid development, with the most recent updates suggesting that Proof-of-Stake could launch before the year is out. However, with gas fees already soaring along with the price of ETH, several rising scaling solutions have taken the spotlight of late. 

Many of DeFi’s leading projects have actively looked at tackling the scaling problem, with many announcing plans to launch on Layer 2 in recent months. Synthetix went live on Optimism, a highly-anticipated Optimistic Rollup solution. Uniswap announced it would build on Optimism after launching V3 too. 

Aave, meanwhile, recently launched on Polygon. 

Previously known as Matic, Polygon uses Plasma and a sidechain with its own Proof-of-Stake mechanism to scale Ethereum. It also plans to add ZK-Rollups, Optimistic Rollups, and standalone chains in the future. Running traffic away from the Ethereum mainnet means it can process transactions at high speed and low cost.

Aave’s expansion to the Polygon network should help make DeFi more accessible to the masses. Plus, it’s already available now. 

The following step-by-step guide details the process for depositing and borrowing funds from Aave: 

  1. Log in to the Polygon network through MetaMask or another wallet. It takes one click to sign the request. 
  2. Deposit ETH using the Matic Bridge. Part of the transaction fee will be converted to MATIC tokens to pay for activity on the Polygon network. Using the bridge can take a fair amount of time, so it can be worthwhile to group transactions together. 
  3. Sign in to Aave
  4. Change to the Polygon market in the top right corner. The Aave interface will remain the same. 
  5. Deposit ETH to Aave through the “Deposit” tab. The transaction will need to be approved before the deposit can be made. 
  6. Visit the “Borrow” tab to borrow DAI. When choosing an amount to borrow, Aave shows the ‘Health Factor’ of the loan. A smaller loan has a ‘Safer’ health factor. 
  7. The loan will show in the dashboard once confirmed. 

Once funds are sent to Polygon, each transaction on the network should process at high speed. It’s also very cost-effective to use the network: transactions cost the equivalent of fractions of a penny. 

As more projects start to look at scaling solutions for Ethereum, DeFi should become more accessible for regular users across the board. Thanks to Aave’s Polygon market, lending and borrowing on the network are already possible at a low cost than Ethereum mainnet. 

Nevertheless, many of the same risks as using DeFi on Ethereum apply: loans can result in liquidations. Caution is advised. 

Disclosure: At the time of writing, some of the authors of this feature had exposure to ETH,  AAVE, SNX, MATIC BTC, UNI, and POLS. 

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptobriefing.com/wnews-bitcoin-threatens-dollar-says-peter-thiel/

Blockchain

DOGE is Young People’s Middle Finger to the System, Says Mike Novogratz

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Mike Novogratz, in a research report, stated that Dogecoin is “the most honest shitcoin”, calling it a “store of value” for young people wishing to express a “little bit of a middle finger to the system”.

Dogecoin’s Recent Price Action

DOGE has entered a steep and stunning climb during the past few months, going from mere pennies to over $0.65. Young people betting on the speculative and volatile crypto asset have made staggering amounts of money thanks to the recent insane rate of return.

Many theorize that this rise has been fueled by Tesla founder and business mogul Elon Musk, who often refers to Dogecoin on his infamous Twitter profile, tweeting in a (usually) positive manner. Oftentimes when an “Elon tweet” comes out regarding Dogecoin, it gives a nice little boost to the price.

Most recently, Elon Musk revealed that he would be hosting SNL, dropping a single hint: Dogefather. This enigmatic message has spurred thousands of young people worldwide to invest in DOGE, which, although extremely risky, has been facing undeniably bullish price action as of late. Will Elon Musk’s SNL special provide the fuel needed for DOGE to power through to over a dollar, or will it be a ‘sell the news’ event?

Novogratz Draws Parallels to GME

Novogratz, in his interview, urged people to “listen to what Dogecoin is saying”, as he sees it as very comparable to the GameStop fiasco (where a group of young retail traders pushed GME to new heights, partially in an attempt to liquidate hedge funds that were shorting the stock).


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“There is nihilism and excitement to it,” Novogratz stated, adding, “there’s something really pure about it.”

Indeed, Dogecoin is not a successful ‘company’ in the traditional sense, and there is little to no innovative development work going on behind the scenes, but we’ve seen (in the stock market, for example) that the power of the masses if placed behind a single unifying idea, can work wonders.

It’s a massive game of tug of war — whether or not Dogecoin can sustain this dizzying momentum remains to be seen. One thing is for sure: millions of people will be tuning in to watch SNL this week.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/doge-is-young-peoples-middle-finger-to-the-system-says-mike-novogratz/

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Blockchain

Latin America’s Biggest Online Marketplace, MercadoLibre, Disclosed Bitcoin Holdings

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On a financial results report dated May 5th, e-commerce giant MercadoLibre dropped the bomb. The company is the latest institution to add Bitcoin to its balance sheet. It follows MicroStrategy, Square, and Tesla’s highly covered buys. Bitcoin’s institutional adoption is in its infancy, but advancing non-stop.

In the financial highlights for 2021’s First Quarter, the company wrote a succinct:

As part of our treasury strategy this quarter we purchased $7.8 million in bitcoin, a digital asset that we are disclosing within our indefinite-lived intangible assets.

A modest allocation, considering MercadoLibre has almost $4B in assets, a cash reserve of $1.1B. It also has a market capitalization of approximately $76B. However, the move might be part of a bigger plan. The company recently opened a section on their website dedicated to real state commerce in Bitcoin and Bitcoin only. The pilot program includes 75 properties and 7 real state agencies willing to accept the cryptocurrency.

Related Reading | JPMorgan Partners With Singapore’s DBS to Launch Blockchain-Based Payment Platform

The Bitcoin-on-the-balance-sheet club

The investment puts MercadoLibre in a pretty exclusive club. The institutional adoption pioneer was MicroStrategy, a company that then issued bonds to buy even more Bitcoin. Twice. At the time, Bitcoinist reported:

Microstrategy announced today that it purchased $15 million worth of Bitcoin. The company’s CEO, Michael Saylor, tweeted this morning that his company had bought approximately 253 BTC, bringing its total holdings to about 91,579 BTC.

After that, Square announced a moderate buy of $50M worth of Bitcoin, and months later another one of $170M. It’s worth noting that the company buys and sells BTC through their flagship product CashApp. And that it keeps buying more. Six months ago, Bitcoinist reported:

Ikigai Asset Management’s Hans Hague recently noted that per his analysis, Square and Grayscale alone have accumulated $2.3 billion worth of Bitcoin in the past quarter.

The biggest player of all, of course, is Elon Musk’s Tesla. Reports that the company made more money from that investment than for selling cars are all over the Internet. In any case, Tesla made a big splash when it entered the space. Bitcoinist reported:

Traders flocked into the cryptocurrency market a day after American carmaker Tesla announced that it had purchased $1.5bn worth of Bitcoin as “alternative reserve assets” to their cash holdings.

In its filing with the Securities and Exchange Commission, Tesla said it plans to buy more Bitcoin in the future and—maybe—even enable its use as a medium of payment for its products and services.

MercadoLibre stock chart

MercadoLibre stock chart | Source: MELI on TradingView.com

Related Reading | Southampton FC Extend Partnership Deal with Blockchain Leader The Coingaming Group

More about MercadoLibre

It may not be a big name in the European and North American markets, but MercadoLibre is ubiquitous in Latin America. The company operates in:

  • Argentina
  • Brazil
  • Chile
  • Uruguay
  • Mexico
  • Spain
  • Bolivia
  • Venezuela
  • Colombia
  • Ecuador
  • Peru
  • Costa Rica
  • Dominican Republic
  • Guatemala
  • Honduras
  • Panama

In the quoted financial results report, they describe themselves as: 

Founded in 1999, MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of the necessary digital and technology-based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform which allows users to buy and sell in most of Latin America.

A question remains, will Bitcoin holdings make MercadoLibre’s stock rise?

Featured Image by Mark König on Unsplash - Charts: TradingView

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings/?utm_source=rss&utm_medium=rss&utm_campaign=latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings

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Novogratz’s Galaxy Digital set to acquire BitGo for $1.2B

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Galaxy Digital is in the process of acquiring BitGo for $1.2 billion, which would be settled in stock and cash

Galaxy Digital, the firm owned by popular investor Mike Novogratz, is set to acquire BitGo, a leading independent digital assets infrastructure provider. The deal is worth roughly $1.2 billion and will be paid in both stock and cash.

In a press release yesterday Galaxy Digital said, “The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale.”

Several reports surfaced last month, suggesting that the two companies are in advanced talks regarding an acquisition. Mike Novogratz, CEO and Founder of Galaxy Digital, said the acquisition of BitGo would turn his company into a one-stop-shop for institutions, boosting their efforts to institutionalise digital asset ecosystems and blockchain technology. Novogratz added, “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”

Per the terms of the agreement, BitGo shareholders are set to receive 33.8 million newly issued shares of Galaxy Digital common stock. Furthermore, they will be paid $265 million in cash, which brings the total value of the deal to approximately $1.2 billion.

BitGo is one of the leading regulated custodians in the cryptocurrency sector. It currently provides services to over 150 exchanges and 400 institutional clients. BitGo controls over $40 billion in assets under management by supporting the custody of over 400 coins and tokens.  BitGo CEO and Founder Mike Belshe said joining Galaxy Digital is an exciting new chapter for the company, allowing their clients to access a wide set of financial solutions.

Galaxy Digital planning to go public in the US

Galaxy Digital is a publicly-listed company in Canada. However, the firm is planning to officially list on a US stock exchange this year. In that regard, the company’s board of directors approved a proposed reorganisation and domestication designed to help the company achieve its goal of going public in the United States.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinjournal.net/news/novogratzs-galaxy-digital-set-to-acquire-bitgo-for-1-2b/

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