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Crypto Digest — May 30th, 2021

Week in short:
Recently we’ve seen a huge market downturn which led to mass panic and position liquidations. Its effect is still in place, and all the major cryptocurrencies are trading low. However, we’ve also seen BTC struggling to break the $30k mark as institutions, and other large investors strongly buy at these prices. As for me, this whole situation looks like a large correction which was expected rather than the beginning of the bear market. Hardly anyone believed that BTC could have achieved the $100k mark without a significant correction like this one. So no need to panic! (yet)

To sum up with some brilliant thought, let’s turn to W. Buffett: “Be fearful when others are greedy. Be greedy when others are fearful.”

This week’s digest:

  1. Goldman Sachs changes its mind
    The world’s largest investment bank declares crypto a new asset class.
    So what? 1 year ago, they stated that crypto is not an asset class and not a suitable investment for their clients. Well, time changes. In their report, they are describing quite obvious things about crypto, so nothing worth reading there. What is actually important is that now the market could expect more capital inflows from GS’s clients due to this event.
    *Link [read, 3 min]
  2. Is the world’s largest investor coming to crypto?
    BlackRock says it’s studying crypto as an asset class that potentially could offer countercyclical benefits.
    So what? BlackRock has ~9 tln USD under management, and currently, they do not invest in crypto. If it changes, the market could see another huge institutional investor, hence the huge capital inflow. In the last 6 months, we've seen that such things can contribute a lot to the market growth. Moreover, when we think about such large money coming into crypto, another potential growth area is the financial infrastructure which obviously will be required.
    *Link [read, 1 min]
  3. “Potentially promising”
    Elon Musk discusses the usage of renewable energy for mining.
    So what? Musk, recently the largest crypto influencer, calls renewable energy potentially promising for mining. It looks like he is gradually starting to revert the negative trend. The trend he started with his previous tweets. This is important because 1) we all hope for Musk’s positive attitude towards crypto because that has a direct impact on his followers and Tesla crypto holdings (whichever is more important) and 2) mining energy usage is actually a problem (not that large as described by “green” guys, but still large), so solving this problem should have a significant impact on the market, and Musk is usually good at solving hard problems.
    *Link [read, <1 min]
  4. PayPal is becoming even more crypto-friendly
    It plans to allow customers to withdraw crypto to third-party wallets
    So what? As you may have heard, PayPal already allows buying and selling goods for crypto, so this feature was kind of expected. But anyway, it’s important because it significantly improves the mobility of crypto capital which is obviously good for its wide acceptance and value.
    *Link [read, 3 min]
  5. Coffee and fuel for Bitcoin at a large scale
    Large US chain of convenience stores and coffee shops announces to accept cryptocurrency.
    So what? Customers of 622 stores would be able to pay for their purchases with crypto. Sounds like a good step towards mass adoption. Do you remember the times when only rare hipsterish coffee shops were starting to accept BTC payments just for fun? While now it is eBay, PayPal, Tesla (on hold), many other digital companies, and it is moving to a more traditional segment of convenience stores.
    *Link [read, 4 min]



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