Welcome back,
It was an eventful week in the world of crypto, with bitcoin slipping to $58,000, its lowest level in two weeks. Although the popular cryptocurrency recovered and traded above the $60,000 mark for most of the week, questions remain about how sustainable bitcoin’s comeback is.
Here are the top stories that caught our eye.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Bitcoin fell below $60,000 this week
After a spate of factors including approval of a bitcoin ETF helped bitcoin cross $60,000 in recent days, the popular cryptocurrency fell again this week to below the $60,000 mark.
The cryptocurrency traded as low as $58,113 this week, just a week after the cryptocurrency had hit a fresh all-time high of almost $67,000 last week.
This means the cryptocurrency’s honeymoon period could potentially be coming to an end.
Bitcoin was very much the darling of markets at the start of the year before a number of countries such as China announced tougher scrutiny of the sector and even banned cryptocurrency mining in China. Policy U-turns by popular figures such as Tesla’s Elon Musk also kept the cryptocurrency volatile.
But still, bitcoin is up more than 116% since the start of the year.
Tesla may accept bitcoin again
That being said, in another apparent U-turn, Elon Musk doesn’t appear to have completely abandoned crypto payments yet. The company said in its third quarter earnings release this week that it may accept payments using cryptocurrencies for its services and products at some point in the future.
“We may in the future restart the practice of transacting in cryptocurrencies ("digital assets") for our products and services,” Tesla said in the filing.
The comments come as Tesla’s market cap exceeded the $1trn mark this week.
The company also announced that it purchased an aggregate $1.5bn worth of bitcoin in the nine months ending 30 September.
“In addition, during the three months ended March 31, 2021, we accepted bitcoin as a payment for sales of certain of our products in specified regions, subject to applicable laws, and suspended this practice in May 2021,” the filing said.
Musk’s comments, and U-turns are both important for the world of cryptocurrencies, as a number of endorsements, and announcements such as Tesla purchasing $1.5bn worth of bitcoin earlier this year, was a key factor propelling bitcoin and some other cryptocurrencies to record highs.
Crypto markets were badly affected earlier this year when Musk signalled Tesla would not accept bitcoin as payment due to concerns bitcoin mining is bad for the environment
El Salvador purchased $25 million worth of bitcoin
El Salvador added a further 420 bitcoins to its official bitcoin portfolio- worth $25m- the country’s president Nayib Bukele revealed in a Tweet this week.
The latest purchase paves the way for the country’s bitcoin holdings to total 1,120 coins.
The purchase can be seen as an attempt to capitalise on bitcoin's fall to $58,000 this week.
The purchase also follows El Salvador’s purchase of 150 coins in September when the country became the world’s first to officially adopt bitcoin as legal tender.
Back in September, El Salvador’s government started building bitcoin ATMs and created a $150m fund to help facilitate exchange between bitcoin and the US dollar.
The decision to make bitcoin legal tender came from the fact that El Salvador is highly dependent on remittances and the government hoped that making bitcoin the official currency in the country would make it cheaper to send money overseas.
However, the country’s adoption of bitcoin has been marred with chaos and even mass protests.
Here’s what happened in the cryptocurrency market in the last seven days:
- Bitcoin is flat at $61,899.
- Ether is up 9% to $4,382.
- Dogecoin is up 19% to $0.29.
- Cardano is down 6% to $2.
- Solana is up 6% to £200.
Iran set to pilot its central bank digital currency
The Central Bank of Iran is to pilot its own “national cryptocurrency” soon, says Bitcoin.com. The Islamic Republic is “studying potential risks and benefits” and will launch it “once the Money and Credit Council approves it”, said Ali Salehabadi, the governor of the central bank.
-
Spot the Dog: £67bn in underperforming funds revealedAround 137 funds consistently underperformed their benchmark, BestInvest's Spot the Dog report finds. Which funds are in the dog house?
-
What does a BP and Shell merger mean for the UK oil industry?BP’s struggles have made it vulnerable to a takeover. Could it merge with Shell to create a British behemoth?
-
FCA to force “cooling-off period” for new crypto investorsNews Firms will have ensure investors have the appropriate knowledge and experience to invest in crypto as the FCA cracks down on the industry.
-
Coinbase’s USD stablecoin – what is it and why should you use it?Advertisement Feature USD Coin – a stablecoin created by cryptocurrency exchange Coinbase – offers a safer way to invest in and hold cryptocurrency. Here’s what it is and how it works.
-
Gold or bitcoin: what will replace the US dollar?Analysis As Russia and the West move further apart, there’s a growing need for a new global reserve currency. The US dollar could soon be replaced by gold or bitcoin, argues Dominic Frisby.
-
15 ways bitcoin makes the world betterAnalysis What problem does bitcoin solve? How does it make the world better? Dominic Frisby shares his view.
-
The cautionary tale of FTX and the future of bitcoinAnalysis The collapse of FTX has fractured the crypto market, but bitcoin will survive the fallout, argues Dominic Frisby.
-
Paypal, bitcoin, and the weaponisation of moneyNews Recent events have shown how both business and governments can “weaponise” money and shut down dissent. What to do? Buy bitcoin, says Dominic Frisby.
-
Three cryptocurrency funds for the adventurous investorTips The crypto sector is extremely risky, but these three cryptocurrency funds may appeal to adventurous investors who anticipate a rebound, says David Stevenson.
-
Michael Saylor: the tech mystic who bet it all on bitcoinProfiles Michael Saylor, the founder of data analytics company MicroStrategy, has pursued the odd strategy of placing the whole firm on red at the roulette table that is bitcoin. Where will the ball finally land?
