Ask Doctor Bitcoin: What do we do about our Elon Problem? [Free, #10]
Elon Musk's "hustle" on new Democrats sees bitcoin pay the price for his companies' subsidies.
Well hello there!
This week.
Man.
What a week.
We’re going to talk a lot about Elon Musk this week, because the third richest guy in the world can’t stop talking about our sector, and it’s causing market turmoil, as well as misaligned scrutiny on the energy consumption component to cryptocurrencies and blockchain.
I will 100% spend a bunch of ink this week expounding on the myriad of ways Elon’s wrongheaded missives should be clarified (and why we should care what he thinks), but I don’t want that to get in the way of talking about some other important developments that were swept under the rug in his wake.
It’s important to go over, in my opinion, because this conversation is being played out everywhere, and where Musk is wrong, and what the implications are of that can be very important to understand.
MoneyGram to accept cash for crypto, disrupting the federated OTC markets.
In this week’s Blockchain Behind The Scenes, we highlight the announcement that MoneyGram will be allowing the purchase of Bitcoin through a partnership with CoinMe. I can’t overstate the impact this development will have on the OTC markets.
If you peruse the pages of LocalBitcoins.com or Paxful.com, you’ll likely note that one of the most common payment methods for traders on those platforms (behind Western Union, CashApp and Zelle) is MoneyGram. The ubiquity of MoneyGram locations makes it very easy for international traders to use the payment network to sell anonymously and cross-border.
CoinMe, for a variety of North American locations now, will supplant this federated network of traders by allowing non-custodial purchase of bitcoin without paying the OTC premium. Those looking to avoid KYC procedures may still opt to try an OTC trading route, but this essentially moves the needle to isolate bad actors and KYC avoiders away from the cheaper, easier route of KYC’d coins via CoinMe, making them a much easier target for law enforcement actions.
The net effect here is likely to be good, overall, for bitcoin, but negative for OTC traders and the overall privacy factor for Bitcoin users at large (because where goes OTC trading also goes on-ramp privacy).
You can learn more about that later on in our newsletter today, but between here and there in the letter, I’d love to shill you on sharing this newsletter with your pals. Send them the link below for them to try a free two-week trial of ADB Weekly!
Blockchain Bulletin
The price of Bitcoin drops after Elon Musk makes U-Turn on it as payment. The market value of Bitcoin dropped suddenly after a tweet from Musk where he claimed that it will be dropped by Tesla as payment for cars, citing environmental concerns.
Ebay to allow the sale of NFTs on its platform. Ebay will open its platform for the sale of non-fungible tokens confirmed Senior Vice President Jordan Sweetnam in the coming months, according to The Hill.
Dogecoin is coming to Coinbase – in two months. During a recent earnings call CEO Brain Armstrong said that a Dogecoin listing will come to Coinbase, but it may take six to eight weeks.
Blockchain Behind the Scenes
MoneyGram will allow the purchase and sale of Bitcoin on its network. MoneyGram will soon allow customers at over 12,000 U.S. retail outlets to buy and sell bitcoins for cash.
Microsoft retiring Azure blockchain service after 6 years. Microsoft is shutting down its Azure Blockchain Service on September 10, 2021 and no new deployments will or member creation is supported.
Blockchain Deep Dive
Elon Musk turned on Bitcoin. Why?
Musk cited his turn of opinion on hinged on the lack of energy efficiency in the tech.
But back in April, he and Twitter’s Jack Dorsey were going back and forth publicly on how Bitcoin incentivizes green energy.
He was provably privvy to a report showing 74.1% of bitcoin is mined using renewable energy.
Some have suggested he’s manipulating price to buy more crypto at bargain rates.
I think it’s more plausible that he’s pandering to new Congressional (and White House) dems to appear to be “greener” than he is.
His businesses thrive on subsidies, and it’s particularly fashionable for the left to suggest “eating the rich.” Bitcoin is relatively cheap for him to throw under the bus to avoid that fate.
Nonetheless, Bitcoin has survived worse than Musk. HODL.
Technical Analysis: Orange Blood in the Streets?
From VirtualBaconDAO’s Dennis Liu
Bitcoin dropped over 30% over the last seven days.
Currently we’re below the 21 weekly exponential moving average (EMA), which typically acts as the long term bull support line.
To be sure the weekly wick is below this line, we’ll need to see how the data shapes up on Thursday. At this point, it could go either way.
This is a crucial week for Bitcoin’s market price.
I don’t think the bull market is finished yet.