One week in review:
July 26–31 We've selected the hottest materials of the past week for you to stay up to date with the latest crypto news: | | #1. Amazon plans to accept Bitcoin payments this year, claims insider | | | The crypto community was going wild at the beginning of this week after rumors circulated that Amazon was planning to accept Bitcoin payments. | | | The rumors started after Amazon posted a job opening for a digital currency and blockchain product lead on July 22. Four days later, an anonymous source within Amazon reportedly told London business newspaper City A.M. that the e-commerce giant was planning to start accepting Bitcoin (BTC) payments by the end of 2021. | | | "This isn't just going through the motions to set up cryptocurrency payment solutions at some point in the future — this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work," the source told City A.M., according to a report published on Sunday. | | | Chinese crypto journalist Colin Wu attributed Monday's surging market action, during which Bitcoin gained roughly 15% in less than three hours, to Amazon's rumored plans. | | | How wrong that very self-assured sounding quote from an unnamed source turned out to be after the multinational giant refuted the speculation two days later. | | | "Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true," a spokesperson said. | | #2. Bitcoin struggles at $40K after 'most confusing' Jerome Powell press conference | | | Bitcoin rose above $40,000 on July 29, a day after the Federal Reserve hinted that it was getting closer to winding down its asset purchasing program that has boosted the economic recovery of the United States. | | | The digital gold previously approached $41,000 ahead of the critical Fed update. Unsurprisingly, it started losing upward momentum after the Federal Open Market Committee released its policy statement, followed by a press conference helmed by the Fed's chairman, Jerome Powell. | | | Powell had previously said that the Fed's asset purchases would continue until it sees "substantial further progress" in the U.S. economic recovery. However, for a while, it was unspecified as to what that actually meant, and Powell finally cleared that up after being questioned in a July 28 press conference. | | | Turns out that "substantial further progress" means strong labor numbers and gains towards maximum employment. | | | Maximum employment refers to the highest level of achievable employment that the economy can sustain whilst maintaining a stable inflation rate. Given the rise of inflation and the decline of jobs due to the pandemic, the Fed's maximum employment targets may need further clarification. | | | BTC investors have been closely monitoring how soon the central bank might unwind its $120-billion-per-month bond-buying program, which is in part due to the asset's bull run from $4,000 to $65,000 amongst the Fed's loose monetary policies. | | #3. MicroStrategy pledges to buy more BTC despite paper loss on its holdings of $424.8M in Q2 | | | MicroStrategy pledged to buy more Bitcoin despite reporting impairment losses of $424.8 million in Q2, after it stated that it was "pleased" by the results of its digital asset strategy in its July 29 Q2 report. | | | At a first glance, it appeared that MicroStrategy had lost the plot, as the Q2 report showed that as of June 30, MicroStrategy held an approximate 105,085 BTC with a carrying value of $2.051 billion, at an impairment loss of $689.6 million since acquisition. The average carrying amount per Bitcoin was an estimated $19,518. | | | Earlier this week Elon Musk's Tesla also published a Q2 report which showed a $23 million impairment loss on its Bitcoin holdings. | | | As both firms categorize Bitcoin as an "intangible asset," accounting rules mandate that they must report an impairment loss when the asset's price drops below its cost basis. However, they are not required to report price appreciation in the specified asset until the position is realized through a sale. | | | The digital asset figures were calculated using Generally Accepted Accounting Principles (GAAP) — a collection of commonly accepted accounting rules used for financial reporting. The firm also provided non-GAAP calculations, which in this report exclude the "impact of share-based compensation expense and impairment losses and gains on sale from intangible assets." | | | The non-GAAP figures paint a different picture for MicroStrategy's digital asset holdings, with the BTC cost basis at $2.741 billion but its market value is $3.653 billion, which reflects an average cost per BTC at $26,080 and a market price of $34,763 as of June 30. | | | This may be the reason why MicroStrategy CEO Michael Saylor continues to double down on BTC and pursue the hodl modl. | | #4. Prediction of the week. Ethereum price can hit $14K if the March 2020 chart fractal holds | | | Now that it looks like the cryptomarkets are picking back up, numerous bullish predictions are beginning to resurface. The recent flip in sentiment makes one wonder whether the highly coveted "moon" may once again be in sight. | | | Earlier this week TradingView user "TradingShot" spotted an extremely bullish fractal on the Ethereum chart which indicated that ETH may close 2021 above $14,000. | | | The Ethereum fractal involves three technical indicators: a 50-day simple moving average (SMA), a Fibonacci channel and a relative strength index. | | | Ether closed above its 50-day SMA in July 2021, the first time since the May 2021 bearish buzzkill market correction. As TradingShot pointed out, breaking above the 50-day SMA has historically predicted bull runs. For instance, a run-up above the 50-day SMA in April 2020 took the ETH/USD exchange rate from around $170 to over $500 in September 2020 — in only 137 days. | | | A word of caution, however, based on this author's 20-second analysis: The last time ETH hit all-time highs around the $4,000 to $4,300 price range in mid-May, it stayed there for roughly five days before crashing sharply and forcing the bulls into hibernation. | | #5. FUD of the week. Warren urges Treasury Secretary Yellen to combat rising crypto threats | | | Earlier this week, U.S. Democratic Senator and anti-crypto proponent Elizabeth Warren called on U.S. Treasury Secretary Janet Yellen and other regulators to develop a "comprehensive and coordinated" framework for addressing risks in the cryptocurrency market. | | | "As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment, and our financial system are under growing threats," Warren said in a letter to Yellen. | | | According to Warren, an under-regulated cryptocurrency market poses a significant risk to the little guys, such as hedge funds and banks. What Warren is forgetting, however, is that hedge funds and banks are usually bailed out with taxpayer money in times of financial crises, so they really have nothing to worry about. | | | The senator is renowned for pushing back against cryptic currencies or whatever they are called, and has described assets like Dogecoin as a "fourth-rate alternative to real currency." | | | It appears she hasn't seen enough memes from the DOGE community to be swayed on the value of Dogecoin as of yet. | | #6. FUD of the week: IMF issues veiled warning against El Salvador's Bitcoin Law | | | The International Monetary Fund (IMF) warned this week that the consequences of a country adopting Bitcoin as a national currency "could be dire." | | | The IMF didn't specify which country it was talking about, but one thinks it may be El Salvador — the first nation to adopt Bitcoin as a national currency. | | | According to assertions from IMF marketing department financial counselor and director Tobias Adrian and legal department general counsel and director Rhoda Weeks-Brown, countries adopting cryptocurrencies as national currencies or "granting crypto assets legal tender status" risks domestic prices becoming highly unstable. | | | They also emphasized that the assets could be used contrary to Anti-Money Laundering and financing of terrorism measures, in addition to having issues surrounding macroeconomic stability and the environment. | | | Feel free to explore the most important news with Hodler's Digest: | | | |
