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In our Friday articles, we take a deep dive into the current state of Bitcoin. Every Friday we will continue to publish brief State of Bitcoin newsletters to keep subscribers up to date on news from the Bitcoin industry. For full disclosure, Brandon is a strong believer in Bitcoin and has allocated portions of his portfolios to BTC (HODL baby).
Top stories from the week:
CPI of 8.3% YoY for month of April: Another month of high inflation in the books. Last month was 8.5% YoY for March, so there was a slight decline in the YoY numbers but increasing is still increasing rapidly and if you zoom out there is exponential growth with each passing month as the YoY and MoM inflation stacks on each other, thus rapidly declining the purchasing power of the dollar. The dollar used as a medium of exchange has become rapidly devalued in front of our eyes and it is getting closer to the time where another solution is needed. Bitcoin offers this solution. Bitcoin is a hard money with the ability to transact and avoid inflation as there will be 21 million and only 21 million. In time more countries will adopt BTC as legal tender as El Salvador and the Central African Republic has. Shitcoins will fade and BTC will live on forever.
Shitcoin Rug Pulls: If you’ve been under a rock, Luna and TerraUSD (UST) have been absolutely rug pulled. Luna went from just under $120 to now under $0.01 at the time of this writing. UST which is supposed to track the US Dollar has fallen to as low as $0.27 and has been anything but “stable”. The reason for this rug pull seems to be that Terra the blockchain was shut off and allegedly recently started back up. UST lost its peg to the USD and then 1 million more LUNA was minted at the snap of a finger. This is why it is Bitcoin and Bitcoin only. The decentralized nature of Bitcoin will NEVER allow this to happen. Miners all over the globe would have to simultaneously shut off their miners and nodes AND no one can create more Bitcoin. In other shitcoins there’s manipulation and rug pulls all the time and LUNA is just the most recent. This rug pull may create more Bitcoiners but a ton of money is lost in the process. Educate your friends on why Bitcoin and Bitcoin only to help them avoid more potential rug pulls like this one.
Coinbase (and other exchanges) include bankruptcy risk: Coinbase (and Block) have added a disclaimer of what would happen to your crypto assets in their shareholders letter (see below). CEO of Coinbase Brian Armstrong wrote a Twitter thread explaining that the SEC requires a new disclosure for crypto companies called SAB 121 exclaiming that if a company goes bankrupt your crypto assets on that platform can be seized. This is alarming and another reason to get your Bitcoin off of exchanges. Armstrong mentioned that there is no chance Coinbase goes bankrupt but with the recent stock performance has people worried about the company’s performance going forward. Growth companies have experienced years of easy access to capital and it almost seems like they do not believe investors will let them fail. Let's hope that this is the case as man would get burned and rug pulled if Coinbase has a Mount Goux situation, so get your Bitcoin off of exchanges and into cold storage!
El Salvador buys the dip: Big Balls Bukele does it again. The President of El Salvador announced via his own Twitter account that El Salvador has purchased another 500 Bitcoin with the average purchase price of $30,744. Many bears like to jump at the chance to say Bitcoin is dead, but it seems every dip El Salvador is buying. We live in a time where countries are making Bitcoin legal tender and buying dips, and you think Bitcoin is dead anon? Please. Bukele is doubling and tripling down on Bitcoin and you’ve got to love it.
El Salvador releases plans for Bitcoin City: Four photos were released with the plans for Bitcoin City in El Salvador. The city will be located at the base of the Chonchagua volcano which will be used to mine Bitcoin with its geothermal energy. The city will also have 0% CO2 emissions. The construction of this city will be funded through El Salvador’s Bitcoin bonds that have been delayed due to market conditions and geopolitical factors. The adoption of Bitcoin is allowing El Salvador to create a state of the art city and build infrastructure that would otherwise not be possible in a country like El Salvador.
Argentina’s Central Bank wants to prevent Bitcoin Transactions: The amount of inflation in Argentina has become a popular topic. Inflation in Argentina is over 51.3% during the month of March and does not seem to be slowing down. Argentina cut a $45 billion deal with the IMF to avoid defaulting on their debts and coincidentally the Central Bank of Argentina now is trying to “discourage the use of cryptocurrency”. A country like Argentina could greatly benefit from adopting hard and sound money like Bitcoin, similarly to El Salvador but the people in power in Argentina are siding with the IMF after the bailout. It is disappointing to the see the IMF attacking El Salvador and the Central African Republic after making Bitcoin legal tender and now forcing countries to discourage the use for their people although the people of Argentina would greatly benefit from the adoption of Bitcoin.
Quick word about stacking tax-advantaged sats!
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A quick look on chain:
Current price: $28,389
Market Cap: $539.7B
Spent Output Profit Ratio: 0.98
Current block height: 735236
Mean block interval: 10min. 9sec.
Meme of the Week
What would the BTC community do without memes? Every week on State of Bitcoin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)! This week we’re featuring a meme we came across on the @BitcoinMemelib page:
Video Version!
For our complete rip, check us out on the pod:
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Happy Friday everyone - get after it this weekend!
Brandon
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Brandon Keys and occasionally a guest writer; it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. None of the authors of this article are financial advisors. I encourage all readers to do further research and do your own due diligence before making any investments.