Billionaire hedge fund manager Paul Tudor Jones says he would want to have 5% in Bitcoin now that he sees how it can protect wealth in the long term.
In an interview with CNBC on June 14, when talking about Bitcoin (BTC) Jones stated that he likes investing in something that is “reliable, consistent, honest, and 100% certain”, and added that he favours Bitcoin as a portfolio diversifier.
Jones’s firm, Tudor Investment Corp, has US$44.6 billion assets under management (AUM) and has recently secured custodial ties with institutional crypto powerhouses Coinbase and Bakkt. Jones had previously recommended 1% to 2% BTC holdings in a portfolio in 2020 but has now stated that 5% would be a good allocation given the current state of the US Federal Reserve.
Uncertainty About Inflation
One of the reasons for changing his position is that Jones is “going all in on inflation trades” depending on US Federal Reserve decisions to address inflation by shifting its policies this week.
If they say, ‘We’re on path, things are good’, then I would just go all in on the inflation trades. I’d probably buy commodities, buy crypto, buy gold …
Paul Tudor Jones
If the FED decides not to do anything about inflation and prices continue to go up, investing in things that increase as price increases is a strategy (inflation trades). In the meantime, inflation data revealed the biggest price spikes in 13 years for two months in a row.
Additionally, Jones stated that stockmarket value has increased to 220% of the US gross domestic product (GDP); at the time the dot.com bubble burst, it was around 200%. This is something Jones said is of concern to him. The FED is currently meeting behind closed doors to discuss the economic figures, with a statement and press conference expected on June 16.
Michael Saylor is at it yet again, this time issuing debt to buy more bitcoin. Yesterday, he announced via Twitter that MicroStrategy had closed an offering of US$500 million in senior secured notes due in 2028 at an annual rate of 6.125%.
In the formal press release, some interesting information emerged:
MicroStrategy’s existing approximately 92,079 bitcoins are being held by a newly formed subsidiary, MacroStrategy LLC
The notes are fully and unconditionally guaranteed by MicroStrategy Services Corporation and certain subsidiaries (existing and formed in the future), and secured by all assets within such entities, including bitcoin acquired on or after closing
The notes however would not be secured by any existing bitcoin or bitcoin acquired from the proceeds of any sale of existing bitcoin
MicroStrategy May Sell $1 Billion in Stock to Buy More Bitcoin
In addition to the announcement above, MicroStrategy filed paperwork for the proposed sale of up to $1 billion in class A common stock, essentially giving the company the ability to sell stock, from time to time, as it deems fit.
Founder and CEO Michael Saylor has embraced the laser-eyes meme
According to the filing with the Securities and Exchange Commision (SEC):
We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin.
While it is not clear how much of the proceeds would be used to purchase more bitcoin, it would be surprising if Saylor deviated from the “convert corporate treasury into bitcoin” strategy that has been in place since last year.
Is the Bet Paying Off?
So far, with the Bitcoin price hovering at around US$40,000, it would appear as if it has:
MicroStrategy has purchased an additional 229 bitcoins for $10.0 million in cash at an average price of ~$43,663 per #bitcoin. As of 5/18/2021, we #hodl ~92,079 bitcoins acquired for ~$2.251 billion at an average price of ~24,450 per bitcoin. $MSTRhttps://t.co/fU6LN4WbKI
As Dan Held has said, for a company called MicroStrategy, this strategy may well be one of the best macro strategies yet.
Who Else Has Been Buying Bitcoin?
If you’re interested in following the latest developments in this space, be sure to check out our Crypto Institutional Purchases List 2021 which we regularly update when new announcements are made.
Let’s take a closer look at this week’s altcoins showing breakout signals. We’ll dive into the trading charts and provide some analysis to help you.
1. Mina Protocol (MINA)
Mina Protocol is a minimal “succinct blockchain” built to curtail computational requirements in order to run DApps more efficiently. Mina has been described as the world’s lightest blockchain since its size is designed to remain constant despite growth in usage. Furthermore, it remains balanced in terms of security and decentralisation. Mina is working on achieving an efficient distributed payment system that enables users to natively verify the platform right from the genesis block. Its technical whitepaper calls this a “succinct blockchain”.
Mina Price Analysis
At the time of writing, MINA is ranked the 223rd cryptocurrency globally and the current price is A$3.68. Let’s take a look at the chart below for price analysis.
Since the beginning of June, MINA has been in a gentle downtrend. The future likely holds more stop runs and erratic volatility until the chart forms more substantial high-timeframe levels.
A retracement might uncover support near A$3.50, which is the daily high of the last swing low. The high of the wick beginning near $3.02 may also provide support. However, bulls will likely remain wary of the current downtrend, making the low at $2.71 the likely next bearish target.
Just above, the daily gap beginning near $4.10 may provide resistance to bulls, possibly marking a future range high. A push through this level is likely to target the swing high near $5.12 – perhaps running to probable resistance near $5.38. Strength above this level might signal the start of a bullish trend, encouraging bulls to “buy the dip”.
2. Metal (MTL)
Metal (MTL) is the native currency of Metal products and an essential part of the Metal ecosystem. Sending and receiving any crypto to friends on Metal Pay is, according to the team, instant, and feeless. Designed to make cryptocurrency payments fast and easy, users pay zero fees when sending, receiving, buying or selling MTL.
MTL Price Analysis
At the time of writing, MTL is ranked the 190th cryptocurrency globally and the current price is A$2.91. Let’s take a look at the chart below for price analysis.
March 29’s 450% bullish daily candle has since bled near 85%, with the MTL finding a low near $2.02 in mid-May.
Bulls are buying each drop into support near $2.74, with higher lows forming each time. However, the equal lows near $2.56 create an attractive target for a stop run. Still, bulls might buy this dip near possible support beginning at $2.44.
Just over the June monthly open, $3.18 marks the beginning of a probable resistance zone. A breakthrough in this area might target the equal highs near $3.57 before running into possible resistance near $3.75.
A sustained move upward – perhaps from a market-wide bullish shift – could reach the swing high near $4.77 before encountering probable resistance near $4.87.
3. Venus (XVS)
Venus is an algorithmic money market and synthetic stablecoin protocol launched exclusively on Binance Smart Chain (BSC). The protocol introduces simple-to-use crypto-asset lending and borrowing solution to the decentralised finance (DeFi) ecosystem, enabling users to directly borrow against collateral at high speed while losing less to transaction fees. In addition, Venus allows users to mint VAI stablecoins on-demand within seconds by posting at least 200% collateral to the Venus smart contract.
XVS Price Analysis
At the time of writing, XVS is ranked the 144th cryptocurrency globally and the current price is A$33.02. Let’s take a look at the chart below for price analysis.
During five days in May, XVS dumped over 86% before finding support near $25.67. Consolidation above this level has created a series of relatively equal lows, which are likely to be swept before any longer-term bullish trend begins.
In the shorter term, the price might establish support near $32.72 before running the swing high at $37.28. If this bullish move occurs, the price could reach resistance near the June monthly open around $42.94 – and even sweep the swing high near $46.42.
Some support might exist at the daily gap near $20.11. A move this low would also fill the February monthly gap and set the stage for a possible bullish reversal.
If this level fails to hold, the price will likely explore the next monthly gap between $12.30 and $6.21. In this zone, the daily swing low at $8.66 makes a likely target.
Where to Buy or Trade Altcoins?
These three Altcoins have the high liquidity on Binance Exchange, so that could help for trading on USDT or BTC pairs. And if you’re looking at buying and HODLing cryptos, then Swyftx Exchange is an easy-to-use popular choice in Australia.
On the streets of Colombia, from Bogotá to Cúcuta, artists are selling intricately crafted handbags and other beautiful accessories made from Venezuela’s colourful bolívar bank notes.
The old Venezuelan bolívars (also known as bolívar fuerte) are no longer in circulation and have been replaced by bolívar soberano.
Venezuela 🇻🇪 has the 3rd highest level of #Bitcoin adoption in the world, as people increasingly use it to mitigate economic instability.
For instance, Bolivars, the local currency, are worth almost no more than the paper they're printed on, and used to create wallets and bags: pic.twitter.com/4gL6LOloMX
— Documenting Bitcoin 📄 (@DocumentingBTC) June 13, 2021
Old Bolívar Notes Worth More As Raw Material
Due to hyperinflation, Venezuela’s currency has been devalued to the point that it is literally not worth the paper it is printed on. The notes are worth more to artists as a raw material than as actual money. An item made up of 1,000 bills totalling 100,000 bolivares is worth around US 20 cents in notes, but can sell at around $20 as a purse. As one merchant in Cúcuta commented:
It would make more sense to rip this up and turn it into confetti than to try to use it to buy confetti, which would be more expensive.
Capino Porra (a merchant and retired Venezuelan military official)
Wallets and bags made from Venezuelan currency. Photo: Guillermo Legaria/Getty
The Government is So Poor It Cannot Even Afford to Print Money
Millions of Venezuelans have fled to neighbouring Colombia to escape civil unrest and a growing financial crisis. Venezuela is in dire straits. Even paper money itself is scarce. The government is so poor that it cannot even afford to print more money, forcing many to rely on bank transfers for even the smallest payments.
Cuba’s national bank announced on June 11 that it would temporarily put a halt to deposits in US dollars, blaming US sanctions that restrict its ability to use the dollar abroad.
According to a statement from the Central Bank of Cuba:
[…] it is increasingly difficult for Cuba to find international banking or financial institutions willing to receive, convert, process or process cash in US currency as a result of the extraterritorial effects of the blockade, and of the additional measures adopted by the United States in the last four years, which, to this day, remain in full force.
The bank said the move would not affect transfers of US dollars from abroad, the value of savings held in US dollars, or cash withdrawals (if funds are available at a given branch).
It tweeted that the suspension of deposits in US dollars will take effect from June 21:
— Banco Central de Cuba (@BancoCentralCub) June 10, 2021
US Dollars Won’t be Accepted as Payment
While Cubans are not restricted from holding them, US dollars won’t be accepted as payment in the country while the measures are in place. Foreign tourists travelling to the the Caribbean island nation have been warned to bring another currency or use international cards.
According to Cuba’s central bank the duration of the block on US dollar deposits depends on the lifting of US sanctions.
A Long History of Sanctions and Love-Hate for the US Dollar
The US’ embargo against communist Cuba began in 1958 – it is the most enduring trade embargo in modern history, with a range of economic sanctions imposed over the years. For one, the Cuban peso cannot be used for international trade.
Given this long-standing economic divide, use of US currency in Cuba has had a chequered past. Possessing dollars was once banned in the country and for many years Cuba imposed a 10% tax on greenbacks.
In 2020 it lifted that tax and introduced dollar-only stores, where US currency can be used to buy higher-quality goods to boost Cuba’s economy in response to falling revenues caused by a decline in tourism during the pandemic.
There is some speculation the central bank’s move to stop accepting deposits in dollars is an attempt to influence the black market price of the dollar.
One Redditor asked, “Will they take crypto now?”, and another joked: “I can’t wait to get my Coinbase debit card and go to Cuba to spend it all!”
Another more serious take from Reddit cryptocurrency thread: “I don’t think this will reduce demand for US dollars by locals. If anything, it will skyrocket the informal exchange rate with less dollars entering the country but [the] same – or more – amount of people demanding this scarce resource.”
On-chain analytics provide a unique data-driven glimpse into the innumerable dynamics at play within the free market for digital monetary technology. According to a recent article by on-chain Bitcoin analytics firm Glassnode, there are several indicators suggesting that this bull run is far from over.
Key points:
Long-term BTC HODLers continue to accumulate during bear markets
A new bear market BTC accumulation phase has started
Current bull cycle top has not yet been reached
Long-Term HODLers Continue to Accumulate
To illustrate, the chart below shows supply accumulation by long-term HODLers and how it consistently peaks during the bear markets.
Based on historical patterns, it would appear that a market top remains some way away.
Glassnode, 2021
Long-Term HODL Conviction Continues to Grow
To elaborate on an earlier point, Bitcoiners and smart money generally implement a simple strategy: accumulate Sats as cheaply as possible and then realise profits (if at all) late in the bull cycle. On-chain data reflects this as long-term HODLers increase holdings during bear markets and withdraw into cold storage.
This is outlined in the HODL waves chart below where it can be seen that older age bands (cool colours) are increasing in thickness, suggesting that coins are maturing and are held by strong hands. The thicker these cool bands become, the more supply is owned by long-term HODLers. As old coins are spent, they become reclassified as young coins (warm colours) with a corresponding increase to young HODL wave thickness.
Since Bitcoiners usually only spend their coins late in the bull cycle, one of the ways to identify a shift in macro sentiment is if there is a noticeable swelling in the young age bands.
Comparing the thickness of young age bands relative to previous market tops, it is evident that if history were to repeat itself, then this bull cycle is likely to accelerate further for some time.
Glassnode, 2021
This sentiment is also reflected in the Realised HODL ratio, which describes the cyclical nature of wealth transfer from weak hands to strong hands.
Importantly, bull market tops have been characterised by long-term HODLers transferring a portion of their wealth to new investors. This results in an increased liquid supply and creates a new maximum number of new holders.
Based on historical patterns illustrated in the chart below, it could be argued that a market top in this bull cycle remains out of sight, at least for the time being.
Glassnode, 2021
On-Chain Analytics: Best Viewed in the Broader Context
Despite these positive metrics, analysts often caution investors against relying entirely on on-chain analytics. In an emergent space with an array of diverse participants, each with their own incentives, it is important to always consider the broader context, including technical and fundamental analysis.
Interested in On-Chain Data? Read Further …
In March this year, we reported that a data metric called NRPL (Net Realised Profit/Loss) showed that people were taking profits – with the metric dropping negative for the first time since September 2020.
A multi-pronged taskforce that includes the Australian Tax Office (ATO), Federal Police, ASIC and the Australian Criminal Intelligence Commission (ACIC) is poised to investigate cryptocurrency transactions and their role in tax avoidance, fraud and money laundering.
The six-year-old SFCT (an acronym for the portentously named Serious Financial Crime Taskforce) claims responsibility for 40 current court cases involving individuals, along with 50 more operations it says are under investigation.
Focus On Money Laundering, Pandemic Stimulus Fraud and Misuse of Early Release Super Funds
Subjects of interest to the SFCT include the misuse of pandemic stimulus measures (such as JobKeeper), attempts to launder money via cryptocurrency, and fraud associated with last year’s early release of superannuation funds.
We’ve got a data matching program that we’ve had in place for a couple of years with digital currency exchanges … We are able to look at data matching to observe people’s spending habits, if they’re purchasing, say, luxury cars or real estate.
Will Day
In December 2018, the federal government injected $182 million in funding over four years to the ATO to extend its investigative brief. Also involved in SFCT activities are the federal Attorney-General’s department, the Commonwealth Director of Public Prosecutions, Border Force, and the Australian Transaction Reports and Analysis Centre.
Tesla will accept Bitcoin transactions again once its mining energy consumption is approximately 50 percent, as mentioned in a tweet by CEO Elon Musk.
Musk also clarified that Tesla only sold 10 percent of its BTC holdings to check if it was easily liquidated without “moving market”, while denying accusations of market manipulation.
— Documenting Bitcoin 📄 (@DocumentingBTC) June 13, 2021
Is Elon Manipulating the Market?
Musk has been mired in controversy in the past few weeks for reversing his positions on Bitcoin several times, which many in the crypto community have seen as a “pump and dump” strategy. Even gold bug and known Bitcoin detractor Peter Schiff has had plenty to say about it:
It’s easy to dump [Bitcoin] when you’re pumping up the price and suckering in buyers with market manipulation tweets. Bitcoin transactions were just a gimmick anyway to create the false impression that Bitcoin can function as either a viable medium of exchange or unit of account.
Peter Schiff, Twitter
Magda Wierzycka, CEO of financial services company Sygnia, has accused Musk of manipulating the market by engaging in various social media channels to cause price fluctuations for his own benefit.
The [Bitcoin] volatility we have seen is an unexpected function of what I would call market manipulation by Elon Musk. If that happen[ed] to a listed company, he would be investigated and severely sanctioned by the SEC.
A month ago, Musk announced that Tesla would no longer accept Bitcoin transactions due to environmental concerns, which sparked a heated thread where crypto advocates like Michael Saylor, CEO of MicroStrategy, and investor Anthony Pompliano counter-argued his position.
While Bitcoin does consume a lot of energy, countries such as Iceland and Norway use otherwise wasted geothermal and hydroelectric energy to power their mining rigs. The most recent country to join that list is El Salvador, which is planning to harness its wasted geothermal energy to power rigs to mine BTC in what its president claims is a 100 percent clean manner.
The primary energy coming from renewables worldwide is low compared to BTC, which is 39-73 percent, according to Documenting Bitcoin.
Additionally, Michael Saylor hosted a meeting last month with Musk and North America’s top BTC miners with the aim of discussing ways to promote Bitcoin sustainability and energy transparency, leading to the creation of the Bitcoin Mining Council.
Following last year’s CBDC tests – including free digital stablecoin “red envelopes” handed out to residents – China is continuing its tests to determine the usefulness of CBDCs.
The government of Xiong’an – a region situated 100km southwest of Beijing and known for acting as a testing ground for new technological developments across China – has announced that the salaries of certain residents will be paid in digital yuan, also known as renminbi (RNB).
Construction Workers’ Salaries Paid In Digital Yuan
The digital RNB salaries will be paid mainly to construction workers – at least for now. On payday, batches of RNB will be transferred from the construction company’s public wallet registered with the PBOC to the private wallets of workers.
The CBDC test run will be coordinated by the Shijiazhuang branch of the People’s Bank of China (PBOC), and will be supported by Xiong’an’s reform and development bureau management committee.
In order to carry out the test, the Chinese government designed an app based on the Blockchain Fund Payment Platform, which will assign a digital ID to each person taking part in the experiment.
In closing, the report states that the government will also be looking into ways to ensure workers can use their CBDC without the usual hassle of finding merchants that accept payment in new cryptocurrencies.
Other Countries Looking Into CBDCs
CBDCs, or Central Bank Digital Currencies, are tentative experiments being carried out in China, the EU, Ukraine, Australia and elsewhere that would bring the technological advantages of blockchain to the central banking system.
Sotheby’s sold a non-fungible token (NFT) artwork for a whopping US$11,754,000 this week, setting what the London auction house described as “a new world record [price] for a single CryptoPunk”.
Moments ago in our #London saleroom, an extremely rare “Alien” CryptoPunk #7523 from the collection of @sillytuna sold for $11.8M as part of our #NativelyDigital NFT auction – setting a new world auction record for a single CryptoPunk. pic.twitter.com/PDVUSttI3o
Titled “Covid Alien”, CryptoPunk 7523 is considered to be a rare NFT collectible, one of nine “alien punks” in a series and the only one with a COVID-appropriate mask.
The buyer is believed to be Israeli entrepreneur Shalom Meckenzie, the largest shareholder of online sportsbook and daily fantasy sports company DraftKings. Meckenzie has a net worth of US$1.6 billion, according to Forbes.
Once Free, Now Worth Millions
There are a total of 10,000 CryptoPunks, with no two exactly alike. When launched in 2017 by Larva Labs, original CryptoPunks were made available for free but several have changed hands recently for millions of dollars.
Two other “alien punks” sold for more than $7.5 million each, according to CryptoSlam, and seven more have gone for over a million each. In May, a collection of nine CryptoPunks sold for almost $17 million at Christie’s.
CryptoPunks are now among the most sought-after NFTs on the market … We’re excited to continue to explore new and interesting ways to present these cutting-edge works.
Michael Bouhanna, contemporary art specialist at Sotheby’s
Anyone can view the artworks represented by NFTs, but only the buyer has official status as owner. Do NFTs have value? It is debatable whether NFTs actually have value, especially at the prices they are being sold for. All manner of digital objects – images, videos, music, text and tweets – can be turned into an NFT. American rock group Kings of Leon released their latest album in NFT earlier this year, allowing fans exclusive access to limited-edition vinyl or future concert seats.
