Review of the crypto space top news 07.06.2021
Another week has passed in the crypto space, filled with both good and not so good events. Whatever it is, the crypto industry lives and develops, despite neither Musk’s chatter, nor China’s bans.
News digest of the past week
Overall, it wasn’t such a bad week. Bitcoin consolidation continues, Ethereum led by Vitalik Buterin is fighting its demons, and El Salvador aims to legalize Bitcoin.
But, let’s take it one step at a time.
- Elon Musk rants about Bitcoin in his Tweets again
The BTC rally on June 3 was short-lived due to Elon Musk’s recent tweets, which again led to a decline in the value of Bitcoin.
If he managed to achieve some success with his fans by raising the price of Dogecoin or Bitcoin when Tesla announced that it had bought BTC for $1.5 billion, then now Elon Musk is incurring the wrath of the crypto community and cryptocurrency holders, who are now very much asking him to shut up.
With a banal tweet, Elon Musk really caused the cryptocurrency market to fall again, causing the community to be perplexed. Everyone is tormented by only two questions: what does he ultimately achieve by playing this stupid game, which, however, has significant consequences for the prices of cryptocurrencies, and especially for Bitcoins. And the second question: when will he finally shut up?
Thus, the Tesla CEO dropped Bitcoin by more than 3% just by mentioning the lyrics of the rock band Linkin Park’s song “In the End”. But it didn`t end there. This tweet might have gone unnoticed if it hadn’t added a broken heart next to the Bitcoin hashtag.
This was more than enough to lower the price of Bitcoin, to the detriment of traders and investors who were hoping to see a bit of a recovery. But no one again took into account the unexpected intervention of the CEO of Tesla, who again came to shit everything.
The purpose of Elon Musk’s tweets is unclear: does he like to play with prices in the crypto market, or is he just kidding around. This remains a mystery, and these repeated tweets are beginning to seriously infuriate the crypto community and traders.
Even Binance CEO Changpeng Zhao, known as “CZ,” took to Twitter, accusing Elon Musk of damaging other people’s finances with his tweets.
However, it should be noted that the SpaceX CEO’s tweets seem to have less and less impact on the market over time, so it is hoped that in the long run, the market will eventually ignore the unimportant tweets from the “fancy” Tesla CEO.
- Vitalik Buterin says Eth2 takes Longer than Expected
The Ethereum environment is in the process of moving from the Proof-of-Work consensus mechanism to Proof-of-Stake, as a step in the development of the system. The difference between them is that PoW requires a lot of energy, while PoS provides the power for mining according to the percentage of coins owned by the miner. Thus, the miner will lose its tokens in case of malicious actions.
During a virtual fintech forum at the StartmeupHK festival in 2021, Ethereum co-founder Vitalik Buterin said that the transition to PoS is actually taking longer than expected. According to Buterin, initially the team thought that the process would take a year, but it will take six. He added that the complex task is likely to last much longer than initially expected.
The Ethereum co-founder also noted that the creation of Eth 1 took eighteen months, although they had planned that it would take three months. Buterin said that most of the problems are not technical, but related to people. In particular, over the past five years, there have been various intra-team conflicts that have led Ethereum to the life stage where it is now.
Immediately, one can`t help but think of the validators who blocked their five million Ethers in the Eth 2 staking. They were promised that the Ethereum 2.0 upgrade would end next year, and only then would they be able to withdraw their funds. But the speech about six years Buterin did not start before. Although, in principle, this is so similar to Vitalik.
Will Ethereum Move Bitcoin?
As cryptocurrencies somehow stabilize while remaining unstable, a new debate is emerging. Can Ethereum take the place of Bitcoin in the ranking of the most valuable cryptocurrencies? Some people think yes, but Stanley Druckenmiller thinks no.
Recently, an extensive report by Goldman Sachs stated that Ethereum may well push Bitcoin into the background. Its analysts, including Jeffrey Curry, emphasize the greater adaptability of cryptocurrency to smart contracts. The Bloomberg article also quotes Pat Lavecchia of Oasis Pro Markets LLC, who believes that the growth prospects for Ethereum look more attractive. With Proof of Stake (PoS), Ethereum can claim to consume much less energy than PTS.
Billionaire Stanley Druckenmiller is among those who do not think so. According to him, Bitcoin has already won the battle for the number 1 store of value in the crypto space due to its age and fixed money supply. On the other hand, it is very doubtful that Ethereum will be able to maintain its place as the undisputed leader of smart contracts.
The uncertainty that persists makes the forecast very difficult.
To know whether Bitcoin or Ethereum will win the battle in the long run, we need to be able to predict the dominant use of cryptocurrencies, which will depend on future regulations. It is also necessary to anticipate changes that will upset the corresponding cryptocurrencies, for example, the evolution of the Ethereum money supply. In particular, EIP-1559 provides for the elimination of the basic commission paid for each transaction. Thus, Ethereum could potentially become deflationary, making it even more attractive than BTC as a means of saving.
Moreover, if you follow the vision of Bitcoin maximalist Michael Saylor (he claims that the financial system will be built on Bitcoin), the inherently excellent maneuverability of Ethereum will make it the best candidate to implement this vision.
The future of cryptocurrency is still very uncertain, but the risks depend on the coin. Bitcoin is clearly legalized. The volatility must stop for it to establish itself as a means of saving. The regulations required for Bitcoin to comply with the rules governing international capital flows should not call into question its role as a means of saving. For Ethereum, everything is more complicated because of the greater complexity.
Who will be interested in decentralized finance if Ethereum is regulated? Will ETH 2.0 deliver on its promise of scalability? Many questions remain.
Ethereum clearly has a certain potential, which can be dangerous to ignore. But for now, Bitcoin’s position remains in a better position. We will have a better idea of the situation when Ethereum completes its metamorphosis into PoS.
Bitcoin Miner Profits Fall 15% To $1.45 Billion In May
It has been a devastating month for the cryptocurrency market with a rapid succession of events that have led to massive sell-offs of Bitcoin and altcoins. The market cap fell to $ 1.2 trillion from a peak of $ 2.5 trillion, and bitcoin miners were not unaffected either, as they witnessed a 15% drop in profits.
According to BTC PEERS, Bitcoin miners generated at least $1.45 billion in revenue last month. This value is 15.01% lower than the revenue in April – $1.7 billion.
The debate over Bitcoin’s energy use and the mining ban last month caused a host of problems for the leading cryptocurrency in the form of price adjustments. It all started when critics focused on the level of energy consumption of the digital asset.
Tesla CEO Elon Musk has shared concerns about Bitcoin’s carbon footprint for the world and announced that his electric car company will no longer accept cryptocurrency for payments due to environmental concerns. This led to the fall of the leading cryptocurrency from its ATH, to below $50,000. After this decision, rumors also spread that his company could get rid of its bitcoin holdings, which will sow even more fears and doubts in the market. However, Musk denied claims that Tesla will sell its Bitcoins.
The state of the market deteriorated further when news of the ban on Bitcoin mining and trading in China hit the market. The Asian country accounts for a significant percentage of the world’s Bitcoin mining. This led to its price being only $30,000 on May 19.
Historically, investors tend to panic and sell their digital assets in a bear market. On-chain analytics shows that short-term investors sold their BTC assets at a loss after the news from China. A drop in the Bitcoin price also leads to a loss of interest in trading the asset, followed by fewer transactions to confirm, which ultimately led to a drop in Bitcoin mining revenue.
- Salvador’s President Wants to Make Bitcoin Legal Tender
The mass adoption of Bitcoin has accelerated along the way, as El Salvador’s president Nayib Bukele said Saturday at the Bitcoin 2021 conference in Miami that he will send a bill to Congress next week to make PTS legal tender in his country, citing the cryptocurrency’s potential.
Strike, a mobile payment app that was launched in El Salvador in March, said it approves of the president’s idea, and is working with the country to make the use of bitcoin technology a success.
Strike founder and CEO Jack Mullers stated: “This is the chance for Bitcoin that has been heard all over the world.” The CEO presented a video of the president and was quoted at a conference in Miami: “The adoption of an inherently digital currency as legal tender provides El Salvador with the most secure, efficient, and globally integrated open payment network in the world.”
President Nayib Bukele on Twitter called promoting financial inclusion a “moral imperative” and a step toward growing El Salvador’s economy by providing access to credit, savings, investment, and secure transactions.
As for money transfers, the president said that currently most of this $ 6 billion is lost due to intermediaries. Thanks to the use of Bitcoin, the amount received by more than a million low-income families will increase by billions of dollars annually.
He also noted that 70% of the population of El Salvador does not have a bank account, and works in the informal economy, and that the introduction of Bitcoin “will improve the lives and future of millions.”