2021.23 - Money
TLDR:
Insane week:
- El Salvador adopted Bitcoin as legal tender
- Taproot was activated.
Bitcoin just acquired new powers while crashing to a new level in the Geopolitical stage, buckle up.
Salvadoreñ@s, platiquemos de Bitcoin!
THE STANCE
My personal opinion on where the ball might be heading.
Bitcoin Is Now Money
Whatever else can be said of him, El Salvador’s president Nayib Bukele proved to be a man of action. He managed to go from announcement to fact in less than a week:
Bitcoin is now an official currency in El Salvador.
Bukele’s amazing speed of implementation suggests he knew that he would either pass this quickly or not at all and, predictably, the IMF immediately made concerned noises
The stage of “Nations adopting and holding Bitcoin” has officially begun, much sooner than most of us expected. Bitcoin has left the harbor and is has entered the open seas. Recent price action has been a taste of the level of conviction it takes to withstand Bitcoin’s G-forces. If you are still here, welcome aboard mate.
There be dragons here for sure, but there’s no place else I’d rather be. And if Taproot’s activation showed anything it’s that while we may bicker, spar and even make our heroes walk the plank every now and then (let’s hope Breedlove doesn’t join that list), we keep moving forward, arms locked and laser eyed.
Nowhere is it written that we will win this battle but this is a battle worth fighting if we are to leave this place better than we found it.
PS. I’ve been called upon to do my part and I’ll be honored to add my grain of sand. Huge gratitude to Miles Suter for the invitation.
Herman@s de El Salvador
Bitcoin no es fácil de entender al principio pero con cinco conversaciones van entender las bases y con un poco de trabajo y paciencia les va a quedar clarísimo. Estoy a sus órdenes.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Wat Mean?
If you are curious about the impact and implications of El Salvador’s adoption of Bitcoin as money, this well written article is well worth 16 minutes:
Volcano Money
By happenstance, the historic vote that made Bitcoin currency in El Salvador was covered live by wunderkind and fan-favorite Nic Carter. What sterted as a Twitterspace to stave off boredom while cooking dinner quickly became a who’s-who in Bitcoin and culminated with president Bukele and his brother chatting live with the Bitcoiners as the bill was debated and passed. Bitcoin aside, it was a low-key ground breaking moment in media coverage.
During their unscripted conversation the question of mining came up and Bukele replied that he had not given much thought to it, but noted they have a lot of geothermal energy from volcanoes, giving instantaneous birth to the wonderful idea of VOLCANO MINING
Not only does Volcano mining make for some awesome memes I’ve ever seen in Bitcoin, it will deal a strong blow to energy FUDsters who have been coming at Bitcoin from all sides lately.
Locking Taproot
It won’t activate until November, but Taproot is now almost a done deal. The majority of miners have signaled that they are ready, willing and able to mine Taproot transactions starting November. They need to keep their word and we —the people who run full Bitcoin nodes— need to upgrade our version of the Bitcoin software so that our nodes will recognize these transactions and blocks as valid.
If you are running a Bitcoin node please upgrade it right away.
The upgrade is quite a big deal from a couple of different perspectives:
The functionality that it will enable will expand Bitcoin’s use cases significantly and give birth to Bitcoin-based DeFi and better privacy
The upgrade “lock-in” process itself went smoothly, and happened relatively quicky without significant contention —this in sharp contrast to the previous (USAF) soft fork.
Both of the above send a clear signal that Bitcoin —despite the slower pace of change— has a vibrant development, an engaged user base and mostly supportive miners, all of which are able to work together to execute effective governance.
Ben Carman gives a good summary in the article below:
Fiebre de Bitcoin
Several politicians of various rankings in Latin America eagerly jumped on the train of demonstrating support for Bitcoin. It’s far to early to tell if they have any real conviction about it but it was encouraging to see.
No solo Latin America…
Nigerian Princes
In some ways, Nigeria’s case is the antithesis of El Salvador. A few months ago, the government of Nigeria decided to ban Bitcoin. The youth of the country decided to use it anyway and built a parallel financial system using Bitcoin, resisting the governments vigorous attempt to stop them, at significant personal risk. Remittances were a visible example of their success.
NFL player turned Bitcoin advocate Russel O’Kung (of Nigerian descent) penned a powerful letter to the president, encouraging him to take decisive action around adopting a Bitcoin Standard
All that is required is a vision for a new future and an allocation of its own national resources to pursue a Bitcoin standard.
—Russel O’Kung
The youth of Nigeria has adopted Bitcoin as their currency, let’s hope their government respects their decision.
Tonga Enters The Chat
As all of this was going down, Lord Fusitua of Tonga started engaging prominent Bitcoiners and it seems they have genuine interest in moving forward
Just like Michael Saylor’s Microstrategy, Our country Tonga is also sitting on a $700 million melting ice cube and #Bitcoin fixes this.
— Lord Fusitua
It’s hard to overstate how big it would be if a second nation were to adopt Bitcoin quickly, especially if that nation were not hostile towards the USA.
Once El Salvador’s move becomes a movement, the momentum will be hard to stop.
India Nods
It seems the recent India FUD might have been overblown after all…
Based Union
A recent proposal for a 3-year ban on Bitcoin mining in the state of NY was shut down by the International Brotherhood of Electrical Workers
Texas: Custodian Banks
The Texas Department of Banking has determined that its affiliate banks may now offer Bitcoin custody services to their customers.
Oversubscribed
Microstrategy planned to raise an additional $400M to buy more Bitcoin, after getting bids for $1.6 Billion, they settled on $500M
They should start buying early this week. If we go by past experience, the price of Bitcoin should not be significantly affected by these purchases, but I’d still front-run them if I could.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Warren About Bitcoin
One of the latest videos to make the rounds was this awfully misleading piece by Elizabeth Warren in which she misrepresents the reality of Bitcoin’s energy consumption while praising the privacy-killing, chinese-inspired CBDCs (Central Bank Digital Currencies)
And if you’re not yet up to speed on the reality of Bitcoin’s energy usage, there’s a lot of great material out there and here’s a chart for you to consider:
BTC VS IMF
Seems the IMF was not amused by El Salvador’s mad dash at monetary freedom and said it created “risks”. Max Keiser put forth a proposal to create “Volcano Bonds” which would allow Bitcoiners to support El Salvador if the IMF threatens them. This is going to get very interesting…
Dutch Ban?
A high-level Dutch bureaucrat dislikes crypto and —making the common, beginner mistake of conflating Bitcoin with “crypto”— proposed an ill-informed total ban on all cryptoassets. I suspect this will be a nothingburger.
China Ban
It’s kind of finally happening. China is not banning mining outright, but some regions have and others are imposing strict guidelines with compliance inspections coming by the end of this month.
Hashrate Drop
All of this is causing many miners to migrate out of the region, the impact on hashrate was visible, dropping aprox 20%
The crackdown on miners in China is a stress test for Bitcoin that will ultimately yield sweet fruits. Mining will become more geographically dispersed which is good. Miners will be moving out of a region where coal-generated power is cheap because of subsidies. I fully expect Bitcoin to come out of this stronger.
Binance On The Spot
This past month has been rough for Binance, one of the world’s largest crypto exhanges. This may be a taste of what’s to come with the new US crypto regulations.
One of its Indian subsidiaries is also in the crosshairs:
If you have any coins on Binance (or any exchange really) this would be a good time to move the to your own wallet. Why expose yourself to counterparty risk?
Wily WEF
I was initially flabbergasted. Out of all possible entities, the WEF —of Great Reset infamy— published a glowing article on cryptocurrencies.
I thought I was taking crazy pills, until the other shoe dropped. Of course they weren’t talking about Bitcoin, rather they wanted to direct your attention to these other fascinating projects…
Here’s a hot tip for you, if the same organization that is pushing the slogan “You’ll own nothing and you’ll be happy” recommends a shitcoin, altcoin maybe don’t buy it.
Inside Pennsylvania
Bitcoin is in the Whitehouse. It was revealed that at least one of Biden’s top advisor is a Bitcoin Hodler.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
Surely Temporary
US inflation numbers came out lower than what most americans experienced but higher than talking heads expected
PRICE DISCOVERY
This is the section where I talk about price with an updated weekly price chart. If this is your first time here, there’s a “how to interpret” guide below the chart.
Swimming Towards Air
Price seems to be slowly making its way to the surface. With all the bullish news it should get back on the board again soon.
But these are not normal times.
Lockdowns are coming to an end, summer is now ON and people are away from their keyboards and rediscovering other humans. So who knows how long this sideways action may last.
But I’ll make one forecast: These are the days you’ll look back at ten years from now, and whisper to yourself “I should have bought more”.
How to interpret the Bitcoin Surfing chart:
Think of Bitcoin's price-action as a kite-surfer:
Bitcoin uses its board to stay above water and wants to catch some air.
When it catches air, it tends to keep rising but if it rises too fast (it's feet no longer touch the board) it can stumble.
If it falls off the board, it tends to keep falling until it regains its footing (may need to touch water or sand for that).
Water and sand arrest the fall and help it push itself back up.
If it goes up so much that it gets close to (or into) the Stratosphere, it will probably crash down all the way into the sand and may need to tap the bedrock level before pushing up again.
Dip Fishing
I don’t want to jinx it, but it seems we’ve trawled the bottom on this one. Whatever your “full allocation” plan is for Bitcoin, it should be in place by now.
Another good one from BTC Charts (PS. means HODL or BUY)
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