18 June 2022
Saylor Moon or Elon Dusk?
Weighing up influence and impact
Bitcoin holders are starting to feel a lot like Sisyphus. BTC once again couldn’t hold above $40k despite a fresh vote of confidence from Ringmaster Elon Musk, who tweeted last Sunday that Tesla would consider permitting sales of their cars via BTC again once unspecified energy concerns are allayed.
The existing literature is fairly outdated, but it shouldn’t be long before a stalwart of the industry, Nic Carter, releases a piece his team has been working on that gives an updated view of the state of renewable energy use in bitcoin mining. This and the fact that bitcoin is now volcano money in El Salvador.
Musk’s tweet paved the path for a week of optimism, helped on its way by a fresh announcement from uber-bull Michael Saylor, who unpacked plans for Microstrategy to free up around $1.5bn for the acquisition of more BTC. The Herculean plan evidences Microstrategy’s no-holds-barred approach to cementing their place in the new financial paradigm, having amassed 92,079 BTC to date.
While Saylor’s enthusiasm has become the norm over the past year, his maximalism for BTC seems to be reducing. Amid the flurry of financial disclosures made by Microstrategy in recent weeks, Saylor took time to clarify his stance on crypto, describing a future populated by diverse tokens tackling an array of real-world problems.
During an interview with CNBC, Saylor distinguished between BTC and Ethereum (ETH), likening the former to “digital gold on a high-tech network”, while going on to suggest that ETH could disrupt traditional financial institutions. Saylor’s remarks are an about-turn from a man who, not so long ago, remarked that there “is no second best” crypto after Bitcoin.
Despite the softening of one of Bitcoin’s most ardent maximalists, the price of ETH didn’t follow BTC’s resurgence from $30k lows over the past three weeks. BTC’s market cap dominance has increased in the last few weeks. Could it be that traders are rotating into sats in anticipation of a potential run for the market leading asset in the second half of the year, or doing so as protection against a violent downturn? All that history tells us is that BTC doesn’t fall as much as other assets in a bear market.
Fears of a death-knell for this cycle’s bull run seem to be accelerating. This weekend especially has been filled with many musings of money lost by your favourite cartoon characters on twitter.
But let’s look at some facts. BTC has become legal tender in El Salvador and we’re witnessing a peaceful transition of a significant amount of hash power out of China to other parts of the globe due to new regulations governing mining on the mainland. These are not small moves and one could argue both are healthy for bitcoin. This has barely registered in terms of market movement and this writer reckons that points to a deepening gulf between investor confidence and actual adoption. In a crowded room the loudest voices are heard first (those cartoon characters on twitter always have a lot to say).
It’s up to investors to discern whether to follow the clamours or the facts. With more countries considering following El Salvador’s bold foray into a digitized economy, BTC’s independence from the squabbles of mere mortals may not be as far off as one might think.
