Why Michael Saylor And MicroStrategy Are The Biggest Risk To Bitcoin

Bitcoin price is in a precarious position, on the ropes after a nasty selloff and on the cusp of losing support. All while this happens, MicroStrategy CEO Michael Saylor continues to buy BTC, adding to the corporation’s already sizable position.

While there are plenty of market participants that cheer the corporate crypto bull on each time it happens, the more the company holds the most systemic risk it brings to the first ever cryptocurrency and its underlying network. Here’s why.

Dear Michael Saylor: Stop Buying Bitcoin For The Sake Of The Network

Disclaimer: The below is the opinion of the author and may not be representative of Bitcoinist. 

Popular opinion is everything these days. If you aren’t woke, well, you might as well not exist anymore. The hive mind tends to think all alike, and going against the crowd leads to being an outcast.

At the expense of going against popular opinion and the risk that comes with it, there’s a need to call attention to the risk that’s being created in the top cryptocurrency by market cap, thanks to one specific actor: Michael Saylor.

The entire point of Bitcoin was so that no third-party or one actor could influence the network of money itself. Even Satoshi Nakamoto disappeared from existence for this very reason.

The emergence of figureheads in crypto is rather new, with the likes of Elon Musk coming out of nowhere and then suddenly commanding the masses of crypto holders. They listened. Dogecoin went to the moon like the spaceman said and its since come crashing back down to reality now that they billionaire isn’t coming to buy their increasingly heavy bags.

Related Reading | Why Bitcoin Doesn’t Need Musk, Saylor, Or Anyone Else

The impact of Musk cannot be understated, especially because Tesla has nowhere near the position as MicroStrategy. The Saylor-led company has turned from software solutions firm to crypto-exposure asset, and it has done well for MSTR shares and the company’s bottom line. That is until now.

bitcoin michael saylor

A satirical take on all the times Saylor stacked more BTC | Source: BTCUSD on TradingView.com

Because Saylor kept on loading up on BTC throughout the last year, he’s potentially now at a loss on his buy in price, and because he keeps adding to his position, he could become a target of whales who want to force the corporation to liquidate its positions.

Saylor has stayed strong while Musk has floundered, so the man still deserves credit for his commitment to the cryptocurrency and its adoption. He’s also a great guy, spending time talking to toddlers online about crypto and promoting education and advocacy across the world.

The problem is, however, is his lack of risk aversion could lead to him and his firm to become a target. And because Musk turned, there’s an example of the damage that can be done when this happens now on record. If Saylor was forced to sell, and turn his back on Bitcoin – how bad could things realistically get?

Related Reading | By The Numbers: Here’s How Much MicroStrategy Has Made On Bitcoin

Centralization of so many coins in one man’s hands can have dangerous implications even if they have the best intentions, and it is completely counter to what crypto is supposed to be all about.

The next time you consider cheering on Saylor’s next BTC purchase – and he will keep buying, even launching notes to pay for more coins – think of what might happen if he were to jump ship.

Also, consider the fact that Michael Saylor topped the list of dot com bubble era losers, losing billions in dollars at the time. Let’s hope lightning doesn’t strike twice with his investments again.

Featured image from iStock Photos, Charts from TradingView.com

Vaneck Files Prospectus With US Regulator to Launch a Bitcoin Mutual Fund

Vaneck Files Prospectus With US Regulator to Launch a Bitcoin Mutual Fund

On June 21, the wealth manager Vaneck filed a prospectus to launch what it calls a Bitcoin Strategy Fund. The prospectus filed with the U.S. Securities and Exchange Commission (SEC) explains the fund will procure bitcoin exchange-traded products and futures.

Vaneck’s Fund Will Invest in Bitcoin Futures and Pooled Investments Tied to the Leading Crypto Asset

While the fund manager Vaneck waits to hear a decision about its exchange-traded fund (ETF) registration, the company applied with the SEC to release a mutual fund for investors who want exposure to bitcoin. The registration filed on June 21, also notes that in addition to the Fund’s bitcoin-related investments, “the fund expects to have significant holdings of cash and fixed-income investments.”

Vaneck will invest in bitcoin futures contracts, leverage the CME CF Bitcoin Reference Rate (BRR), and also “invest in pooled investment vehicles that invest directly or indirectly in bitcoin.” The crypto mutual fund will be dubbed the “Bitcoin Strategy Fund” and the fund’s “share price and return will fluctuate with changes in the market value of the fund’s portfolio securities.”

The fund Vaneck discusses in its prospectus will not procure bitcoin (BTC) directly and of course, the prospectus filing mentions the risks involved with cryptocurrency markets. “The value of bitcoin and, therefore, of the fund’s bitcoin-related investments, could decline rapidly, including to zero. You should be prepared to lose your entire investment,” the Vaneck filing warns.

Vaneck’s Bitcoin ETF Delayed Twice and the Firm’s Ethereum ETF Prospectus Waits in the Background

Vaneck further details that the fund’s risks are not solely tied to the volatility of bitcoin prices as the fund comes with other risks as well. The wealth manager’s registration form with the SEC mentions the risks involved with pooled investment vehicles, target exposure and rebalancing, borrowing and leverage, tracking errors, credit issues, and interest rate discrepancies as well.

Meanwhile, Vaneck has been making moves in Europe with its exchange-traded products and the wealth manager is also looking to launch an ethereum-based ETF. Vaneck’s proposed ethereum ETF filing is aiming for a Cboe BZX listing. The company’s bitcoin (BTC)-based ETF filed back in December 2020, has so far been delayed twice by the SEC as far as the regulator’s decision is concerned.

What do you think about Vaneck applying with the SEC to launch a bitcoin mutual fund that invests in bitcoin futures and pooled investments? Let us know what you think about this subject in the comments section below.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Mysterious Dogecoin Whale Sees $8 Billion Fortune Crumble as $DOGE Price Plunges

The mysterious Dogecoin whale that holds around 28% of the cryptocurrency’s supply has seen the value of its DOGE fortuned crumble over the last few weeks, from an $8.2 billion high before the cryptocurrency’s price started dropping.

The whale’s address, as Markets Insider reports, owns nearly 37 billion DOGE, which in early May were worth over $24 billion when each token was trading at an all-time high above $0.70. Interest for the cryptocurrency peaked shortly after Tesla CEO Elon Musk – a vocal Dogecoin proponent – hosted “Saturday Night Live” and admitted the cryptocurrency “is a hustle.”

The value of Dogecoin has since then dropped along with the rest of the cryptocurrency space. Each DOGE is now trading at around $0.186 as demand has been steadily dropping, while around 5 billion DOGE are mined every year and enter the market.

DOGEUSDT Chart via TradingView

The mysterious Dogecoin whale has notably not sold a significant portion of its holdings when DOGE surged to surpass $0.70 per coin, and has in fact been consistently adding more coins in small increments. Most of these increments appear to be in “meme” amounts of 4.40 DOGE or 6.9 DOGE.

The figures are small which could also mean external addresses are trying to send dust to the whale address in a bid to identify who owns it if they move the funds over time. The strategy is known as a dusting attack and could compromise the whale’s pseudonymity by linking addresses it owns.

Some have speculated the whale address belongs to a cryptocurrency exchange such as Robinhood. Despite the high DOGE concentration in a single address, many still see utility in the cryptocurrency as a payment method, with several businesses including the NBA’s Dallas Mavericks and the MLB’s Oakland Athletics accepting dogecoin payments.

Elon Musk has called for improvements to the cryptocurrency as a payment method, something that Cardano creator Charles Hoskin said could help DOGE have real-world use and become “an interesting cryptocurrency.”

DISCLAIMER
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT
Featured image via Unsplash

Chinese Bitcoin Mining Company Delivers Mining Machines to Kazakhstan

Chinese Bitcoin Mining Company Delivers Mining Machines to Kazakhstan

Major Chinese bitcoin mining company BIT Mining Limited said that it completed the delivery of the first batch of mining machines to Kazakhstan, with other batches following later. The move follows a series of crackdowns on bitcoin mining activities by the Chinese government. 

BIT Sends Mining Machines to Kazakhstan 

BIT made the announcement via a press release on Monday (June 21, 2021). According to the bitcoin mining company, 320 mining machines were delivered in the first batch, and having a theoretical total computing power of 18.2 PH/s, which will begin operation before the end of June.

 Two other batches with a combined total of 2,6000 mining machines are expected to get to Kazakhstan before the beginning of July. There are also plans by BIT to transport the last of its mining machines abroad, in line with the company’s “overseas deployment strategy.”

As reported by BTCManager back in September 2020, the Kazakhstan government was considering investing over $700 million in the cryptocurrency mining sector. The government also stated that there were 13 mining farms operating in the country, with additional four mining farms under construction. 

Later in May 2021, BIT Mining announced that it entered an agreement with two companies to invest over $9 million for the construction of the Kazakhstan Data Mining Center. 

Commenting on BIT’s move, the company’s CEO, Xianfeng Yang, said:

Following our investments in cryptocurrency mining data centers in Texas and Kazakhstan, we are accelerating our overseas development for alternative high-quality mining resources. We believe our vision and early-mover advantage will enable us to be agile in responding to the globally evolving regulatory environment, which will ultimately contribute to our long-term growth.”

China’s Clampdown on Bitcoin Mining 

The latest development comes after Ganzi Changhe Hydropower Consumption Service, and indirectly held subsidiary of BIT, received a notice from the State Grid Sichuan Ganzi Electric Power on June 19, that it would suspend power supply. The Ganzi Changhe Data Center subsequently suspended activities as a result of the notice. 

While China controls a large share of the global bitcoin hash rate, the country has been carrying out a crackdown on bitcoin mining activities in the country. In May, the Chinese government called for a ban on BTC mining. 

Chinese regions like Xinjiang, Mongolia, Qinggai, have issued notices asking bitcoin miners to shut down operations. Earlier in June, Yunnan said that it was investigating individuals and companies who illegally use electricity for their mining activities. Also, the Yunnan Energy Bureau said that it would close down mining activities that could affect electricity supply. 

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Central Bank Of Portugal Approves Licenses For Crypto Exchange

In another win for the adoption of blockchain technology and cryptocurrencies, the Central Bank of Portugal (Banco de Portugal) has officially announced that they will begin approving licenses for crypto exchanges to operate within the country. Two have already been granted.

This is the first time that crypto asset exchanges are able to operate within the country since a new law on blockchain technology was passed earlier this year.

Criptoloja and Mind the Coin are currently the only virtual assets service providers officially licensed and listed on the bank’s website. However many more are sure to follow suit. The decision has been a long time coming as Criptoloja initially attempted to register in Sept 2020.

From the Central Band of Portugal’s official announcement, with these licenses, Criptoloja and Mind the Coin are now able to:

  • exchange services between virtual assets and fiat currencies or between one or more forms of virtual assets;
  • transfer services of virtual assets;
  • safekeeping and/or administration of virtual assets or instruments that enable the control, ownership, storage or transfer of such assets, including private encrypted keys.

The people of Portugal can now be certain that their crypto assets are transferred and can be kept securely on these open exchanges. Having a license issued from a central bank shows Portugal’s confidence in crypto assets and the continued adoption of the technology.

Related Reading | Factors Stack In Favor Of Bullish Bitcoin Fractal, Despite Latest Plunge

Countries Around The World Warming Up To Cryptocurrencies?

Portugal is just one of many countries in Europe allowing cryptocurrencies to be traded within its borders. Just last month Malta Financial Services Authority (MSFA) issued Xcoins, a major cryptocurrency exchange, a Class 3 Virtual Financial Asset License. This is the second license that the MFSA has given out with the first being Crypto.com.

Not only are countries in Europe quickly moving to adopt both blockchain and crypto technology, but El Salvador was also recently the first country to adopt bitcoin as legal tender. Many other South American countries have been quick to also jump on the growing crypto revolution. See our related reading below for a run down of the recent adoption movement in South America.

Related Reading | South American Countries Are Interested In Adopting Bitcoin: Who Will Be Next?

Only time will tell what countries will wake up and join to the blockchain revolution next. But as more an more countries jump on the blockchain train, others will be sure to follow suit or quickly get left behind. Blockchain technology is still very young so as more applications that the blockchain has become available, more countries will allow exchanges to operate within their borders so as to let their citizens reap the benefits of decentralized networks.

Featured Photo by Pedro Santos on Unsplash

Salvadoran Representative Introduces Lawsuit Against the Bitcoin Tender Law for Being Unconstitutional

Salvadoran Representative Introduces Lawsuit Against the Bitcoin Tender Law for Being Unconstitutional

Jaime Guevara, a Salvadoran representative, presented a lawsuit against the recently approved bitcoin tender law today. Guevara alleges the law is unconstitutional and brings a series of changes that will cause problems for Salvadorans. Some people suspect Bukele’s regime is behind the representative’s demand due to its inability to applying this novel law.

Salvadoran Representative Jaime Guevara Introduces Demand Against Bitcoin Law

Jaime Guevara, a Salvadoran opposition representant, introduced a demand to deem the recently approved bitcoin tender law as unconstitutional. Óscar Artero, a co-signer of the lawsuit, agrees with this interpretation and expects the court to repeal the law. According to him, the bitcoin law doesn’t have a legal base to stand on. Artero declared to local media that:

The bitcoin law is to loot people’s pockets, it is tax-exempt, they want to force us to trade.

The representative introduced this lawsuit before the presentation of the regulation that derives from the approbation of the law. Consequently, no one currently knows the fine print of the implementation of the exchanging systems.

According to a poll made by Camarasal, eight out of ten citizens would not receive payments in bitcoin. Therefore, for most Salvadorans, the bitcoin tender law is a source of concern these days. However, it is unlikely that the Supreme Court would revoke the law because Nayib Bukele appointed these judges after ousting the old ones last May. This was considered by some in the international community as a coup.

For Guevara, this will be a test of how independent from the government these judges are. The representative stated:

“We are going to put this chamber to the test to see what response they are going to give to the public.”

An Inside Job

According to other experts, this might be an inside job to free Bukele from the responsibilities of actually implementing this law. This is what Salvador Anaya, a Salvadoran lawyer, thinks. Anaya stated the government is clueless about how to implement this law, and they would be using Guevara and the new judges to save face.

But Guevara denied these claims, stating he has nothing to do with New Idea, the ruling party. He stressed:

It is widely rumored that this servant represents the interests of Nayib Bukele or the majority bank of New Ideas. At no time, categorically, are we representing the interests of this sector, we are simply representing the people.

What do you think about the lawsuit against the Bitcoin Law approved in el Salvador? Tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Institutional exchange launches crypto debit card

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The First Pro Sports League In North America To Pay Athletes In BTC Is Here

Canada might not be known for crypto, or for basketball, but recent news could be changing that. The Canadian Elite Basketball League (CEBL) is becoming the first professional sports league in North America to adopt bitcoin as a method of payment for player salaries.

The move is part of a league partnership with Canadian crypto platform Bitbuy, who will process the transactions.

Just In Time For Tipoff

The CEBL is on the cusp of tipping off it’s third season this week. The timing makes the recent press release an exciting season launch for Canadian basketball fans.

“Innovation and delivering a new basketball experience have been a driving force behind our creation of one of the world’s most widely recognized pro basketball leagues,” said CEBL Commissioner and CEO Mike Morreale. “Some of the best players outside the NBA, and some with NBA experience, have joined our league because we make player-first decisions. Our partnership with Bitbuy speaks to our commitment to players, and also to our forward-thinking approach to how we go about our business. We appreciate Bitbuy’s investment in helping us further grow Canada’s official national pro basketball league”, Morreale added.

Related Reading | Esports Organization TSM Teams With Crypto Exchange FTX For Historic Deal

Beyond The CEBL: What It Means

Bitbuy serves over 300,000 Canadian users and will look to leverage this partnership to build upon that user base. As part of the press release, CEBL guard Kimbal Mackenzie stated that he would be one of the first to opt-in. Mackenzie said that “the opportunity to be paid in bitcoin is something I’m incredibly excited about. I believe cryptocurrency is the future”.

The partnership was spurred by player’s vocal support to league management. It also comes on the heels of extensive team, league, and player engagement globally in crypto. Notable NFL athletes such as Russell Okung, and NBA teams like the Golden State Warriors and Milwaukee Bucks have been making headlines with crypto engagement.

Bitcoin is still garnering major league attraction. | Source: BTC-USD on TradingView.com

Related Reading | Fintech Firm Mercuryo Locks In Esports Partnership

BitBuy & CEBL: The Execution

League players will be allowed an option to ‘opt-in’ to a portion of their salary to be paid in bitcoin. BitBuy will then work with the league to convert CAD to BTC, and deliver the payments to player wallets. BitBuy will also be signing on as a league sponsor.

“We’re proud to support homegrown Canadian sports, and to partner with the league on this first to market initiative. We think this represents a significant shift in how athletes are thinking about compensation, and we’re excited to help the CEBL’s players protect their long-term wealth by getting paid in bitcoin”, said BitBuy Marketing VP Charlie Aikenhead.

Adoption in sport continues to be a major area of growth in crypto. While esports continues to be a hot topic for crypto partners, traditional stick and ball sport continues to see established partners come to life as well.

Featured image from Pixabay, Charts from TradingView.com

Mike Novogratz on Bitcoin: ‘Less Happy’ Now Than When $BTC Was Above $60K, but ‘Not Nervous’

On Tuesday (June 22), the day that the Bitcoin price briefly fell below the psychologically-important $30K level, billionaire investor Mike Novogratz explained why his long-term bullishness on Bitcoin is justified.

Former hedge fund manager Novogratz is the Founder and CEO of Galaxy Digital, “a diversified financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sector.”

Novogratz’s comments about Bitcoin were made during an interview with Joe Kernen on CNBC’s “Squawk Box” at a time when Bitcoin was trading around the $30,000 level

Novogratz had this to say about Bitcoin’s recent price action:

We had China really be much more forceful in their idea to ban cryptocurrency. That’s created a retail deleveraging, a run on the banks if you would with retail accounts. A lot of crypto happens in Asia, a lot of it is Chinese focused… We’re seeing big liquidations. So, it’s hard to call a bottom.

$30,000 — we’ll see if it holds on the day. We might plunge below it for a while and close above it. If it’s really breached, $25,000 is the next big level of support. Listen, I’m less happy than I was at $60,000, but I’m not nervous.

We continue to see talent come into this space. I was with some of the big pension funds in America. They’re getting close to making their first investments in Bitcoin. And so I think we’re gonna see really a shift away from Asia and more to the developed world…

As for the concern over future regulatory actions against Bitcoin in the Europe or U.S., he said:

The answer really is no. We vote for our politicians. Our politicians would be very very leery to do something like China.

And when Kernen asked him if there was a chance of Bitcoin’s price falling much more than 50% from its 2021 high, Novogratz replied:

The ecosystem is so much more mature. The amount of players that are moving in are so much more mature. Every single bank is working on their own crypto project, how they can get Bitcoin to their wealth clients, and I think a lot of clients that didn’t buy it the first time will see this as an opportunity to buy it and get involved.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.