Business analytics firm MicroStrategy, which owns more bitcoin than any other corporation in the world, posted its biggest loss ever Thursday as a result of the cryptocurrency's massive crash last quarter, but the company's longtime CEO Michael Saylor said the company will continuing buying more of the volatile asset amid strong support from institutional investors.

Longtime CEO Michael Saylor said MicroStrategy intends to continue buying more bitcoin despite its ... [+] GETTY IMAGES

KEY FACTS

In an after-market release Thursday, Virginia-based MicroStrategy reported a second-quarter loss of $299.3 million, compared to a $3 million profit in last year's second quarter, on approximately $125 million in sales, up 13.4% from a year earlier.

Fueling its overall losses, the company disclosed a $424.8 million impairment loss due to the declining value of its bitcoin holdings in the quarter, during which the cryptocurrency's prices plummeted 40%. 

The impairment loss reflects a decline in bitcoin’s carrying value, but it can effectively be recouped if prices recover—not out of the question given the coin’s volatility and past resurgence.

In a statement alongside earnings, Saylor touted the company's successful debt offering in June, after which the firm purchased an additional 13,005 bitcoins for $489 million in cash.

As of June 30, MicroStrategy owns about 105,085 bitcoins, worth nearly $4.2 billion based on Thursday prices of about $39,760.

SURPRISING FACT 

Last month, MicroStrategy raised a greater-than-expected $500 million through the sale of bonds in order to acquire more of the world's largest cryptocurrency. In a sign of massive interest from institutional investors, the company received more than $1.5 billion in orders for the offering, which was announced while bitcoin prices were at a one-month low of about $33,400.

CRUCIAL QUOTE 

“We continue to be pleased by the results of the implementation of our digital asset strategy," Saylor said Thursday, noting the company's latest capital raise and adding: "Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”

KEY BACKGROUND

Given its outsized crypto investment, MicroStrategy's stock tends to ride bitcoin's incredibly volatile price wave. Shares have plunged more than 50% since February, when bitcoin sank after Tesla CEO Elon Musk, a vocal crypto supporter who's fueled volatility in the space this year, said prices seemed “a little high.

” The cryptocurrency is down about 30% over the same period, but like MicroStrategy, whose stock has skyrocketed 410%, its prices have surged 260% over the past year.

MicroStrategy's second-quarter loss is its greatest since the dot-com era in 2000, when the data-mining company posted a third-quarter loss of $168 million. That year, the stock soared nearly 2,500% before plunging more than 95% when the broader market crashed.

TANGENT

MicroStrategy owns more bitcoin than any publicly traded company, but in its namesake bitcoin fund, investment manager Grayscale owns 654,885 tokens—worth more than $26 billion on Thursday.



Jonathan Ponciano

I'm a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism… Read More

A report from City A.M. alleged that an anonymous insider at Amazon had news that it would start to accept Bitcoin and other cryptocurrencies by the end of the year. This rumor quickly spread across news sites and social media.

Amazon has since denied the rumors via an email statement to Bloomberg.  Amazon denied the report from City A.M., according to Zero Hedge.

It added that it has no plans to launch a crypto by 2022 and will not accept Bitcoin this year but that it will continue to explore cryptocurrencies and blockchain. 

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon," said the Amazon spokesperson.

City A.M.'s source said that Amazon had a fully-fledged plan to allow crypto payments and that it would be an integral part of the company going forward. 

"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," said the source. 

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The source even said that this project had come down from Jeff Bezos himself.“It begins with Bitcoin – this is the key first stage of this crypto project, and the directive is coming from the very top… Jeff Bezos himself.

”The Amazon insider said that the company was looking to add far more than just Bitcoin and that they have been working on this since 2019. “Ethereum, Cardano and Bitcoin Cash will be next in line before they bring about eight of the most popular cryptocurrencies online. 

It won’t take long because the plans are already there, and they have been working on them since 2019. This entire project is pretty much ready to roll.

”The source also added that Amazon is looking to develop its own native token after all the big cryptos are integrated. “When all these crypto ducks are lined up, there’s another twist to push things even further into Amazon’s favor – a native token," explained the source. 

Amazon starting to accept Bitcoin and even going as far as to make its own token lit the crypto community on fire and Bitcoin pumped nearly 11% on the day, only to drop back down after it denied the rumors.

This is the second time Amazon has been in the news for cryptocurrency in the last week.

The company caused a stir last week after it published a new job listing for a digital currency and blockchain product lead that would "own the vision and strategy for Amazon’s Digital Currency and Blockchain strategy and product roadmap.

"While Amazon has apparently denied the reports from the City A.M. insider, the company's new job listing shows that it does have some level of interest in cryptocurrency or blockchain. This story is developing.

Bitcoin is again trading below $30,000 as another cryptocurrency company runs into regulatory trouble—the latest headwind to hit the digital-asset market.

New Jersey’s Bureau of Securities issued a cease-and-desist order against BlockFi, a crypto trading and lending company, demanding that it stop offering interest-bearing accounts and cease taking new customers in New Jersey, as of Thursday.

BlockFi has been funding its trading and lending businesses, in part, “through the sale of unregistered securities in violation of the Securities Law,” the state’s attorney general, Andrew Bruck, said in a release.

“No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market.” BlockFi CEO Zac Prince said in a tweet that its accounts “are lawful and appropriate for crypto market participants.

” He added that a BlockFi interest-bearing account isn’t a security. BlockFi remains fully operational for existing clients in New Jersey, he added.

“We will continue to engage with all relevant authorities to protect our clients’ interests and ensure that our products remain available,” he said.

The state’s order targets BlockFi’s high-yielding crypto accounts. Investors can buy a currency such as Bitcoin and deposit it in a BlockFi account where it earns interest, paid monthly in crypto, well above yields on traditional bank or brokerage deposits.

BlockFi pools the deposits to fund its lending operations and proprietary trading.

BlockFi is now paying 4% on up to 0.25% of one Bitcoin (BTC), worth about $7,500 at recent prices of $29,875 for the token.

Other tokens offer higher yields: USD Coin (USDC) pays 7.5% while MakerDao (DAI) is at 8%.

BlockFi has raised at least $14.7 billion worldwide through these accounts, according to the release, but the company may be in violation of state securities law.

BlockFi’s accounts aren’t registered as securities or bank accounts under state law, nor are they exempt from regulation, New Jersey’s officials said. While BlockFi says it is a regulated entity, it hasn’t disclosed that its accounts aren’t registered, violating state disclosure rules, according to the state’s order.

Unlike bank or brokerage accounts, which are insured for up to $250,000 by the Federal Deposit Insurance Corp., or for up to $500,000 by the Securities Investor Protection Corp., crypto- accounts may have no such protections.

 BlockFi isn’t offering its accounts to New York state residents and those in other states, New Jersey’s officials pointed out, “presumably because of the laws in those jurisdictions.

”The broader thrust is that regulators may be homing in on such high-yielding crypto accounts and the broader sphere of decentralized finance, or DeFi, platforms.

Those networks are proliferating across the financial and tech sectors.

DeFi uses blockchain technology to create platforms and applications for digital tokens and transactions. It is a rapidly expanding field, including exchanges, stablecoins, and lending platforms like BlockFi. Scores of new digital tokens are popping up on DeFi networks.

But regulatory supervision is a gray area. In New Jersey, the state now appears to view the high-yielding crypto accounts as securities, which could subject them to additional regulations and disclosure rules.

Many companies are now building DeFi platforms, aiming to get into crypto-lending, trading, and other services. 

Square (ticker: SQ) CEO Jack Dorsey tweeted last week that the company plans to build out a DeFi network, “to create non-custodial, permission-less, and decentralized financial service.

”Grayscale Investments, one of the largest digital asset managers with $31 billion under management, launched a DeFi fund on July 14. The fund, available to high-net-worth investors with a $50,000 minimum investment, consists of a pool of digital tokens running on various DeFi networks.

Its largest holding is a token called Uniswap, at 50% of the fund, followed by Compound, MakerDao, and Synthetix Network.

Early investors may not be pleased. The fund is charging a 2.5% annual management fee, and It is down 9.2% since launching last week.

Write to Daren Fonda at [email protected]

In 2005, Banksy acquired a piece of Israel’s West Bank Barrier and used it for a “treasure hunt.” The first person to find the rock and email him with the secret word he wrote on it—”Spike”—would get to keep the work.

The piece, titled Spike, was found in Palestine and has since traded hands a few times. Now, it is heading to auction—not as a physical object but as an NFT.Valuart, a new NFT platform, launched with the auction of Spike on July 22. Bidding will continue until July 30 online.

Notably, the elusive street artist artist is not involved in the minting or sale of the work. Instead, the Italian opera singer Vittorio Grigolo, who owns Spike and cofounded Valuart, was the one who worked with the platform to create the NFT.

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The NFT features a CGI rendering of Spike slowly spinning in the long light of a sunset. It appears to twirl over mountains and water as Grigolo sings the Puccini aria “E lucevan le stelle.

” The buyer of the NFT will also receive certain extra perks, including a trip for the buyer and guest to see the physical Spike in Switzerland, as well as a dinner with Grigolo and his other Valuart cofounders, Etan Genini and Michele Fiscalini.

At time of publication, the highest bid was 1.5 Ethereum, or around $3,500—a disappointing start for an NFT related to work by such a well-known artist. But Genini is hopeful that bids will roll in later on.

“It seems that they’re waiting right to the last hour in order to start bidding,” Genini told ARTnews.Some have raised legal concerns about the Spike NFT.

Copyright lawyer Jeff Gluck of CXIP Labs claimed that Banksy might have grounds to sue because he wasn’t involved.

“If Banksy has not given his permission for this NFT, then it could appear to be unauthorized and illegitimate,” Gluck said in a statement.

“The rights to create an NFT of an artwork are held by the creator, the copyright holder—not the person who possesses the artwork.”Genini claimed that Valuart “did not copy” the work because the platform “re-elaborated on property we own.

” He added, “We are not taking the piece of art making a digital copy. We digitized the property we own and the NFT is an installation as a CGI video production that we’ve worked with artists to create.

”Banksy, whose true identity remains unknown, tends to comment on his work on social media. Thus far, he has not posted about the Valuart sale.

Fifty percent of the realized price will be donated to different charities that help those who have endured violent conflicts. The first charity to receive donations will be Doctors Without Borders, which operates in Palestinian territories.

Spike was not the first time Banksy addressed the Israeli-Palestinian conflict. He has been working in the region for nearly 20 years now, having painted a mural in occupied Palestinian territories in 2003.

In 2011, Banksy encouraged graffiti artists from around the world to tag the West Bank Barrier, telling the Independent in 2011, “If you like dancing you go on holiday to Ibiza, if you like walls you go to Palestine.” In 2015, he made a fake promotional video for Palestinian tourism, citing the lovely views and showing rubble.

Text reading “The locals love it so much they never leave (because they’re not allowed to)” was interspersed with images of graffiti that Banksy placed around Bethlehem.

And in 2017, he founded the Walled Off Hotel (complete with a gift shop!) near the West Bank Barrier, which was billed as having “the worst view in the world.”

A US probe into Tether is homing in on whether executives behind the digital token committed bank fraud, a potential criminal case that would have broad implications for the cryptocurrency market.

Tether’s pivotal role in the crypto ecosystem is now well known because the token is widely used to trade Bitcoin. But the Justice Department investigation is focused on conduct that occurred years ago, when Tether was in its more nascent stages.

Specifically, federal prosecutors are scrutinising whether Tether concealed from banks that transactions were linked to crypto, said three people with direct knowledge of the matter who asked not to be named because the probe is confidential.


Criminal charges would mark one of the most significant developments in the US government’s crackdown on virtual currencies. That’s because Tether is by far the most popular stablecoin — tokens designed to be immune to wild price swings, making them ideal for buying and selling more volatile coins.


The token’s importance to the market is clear: Tethers in circulation are worth about $62 billion and they underpin more than half of all Bitcoin trades.

“Tether routinely has open dialogue with law enforcement agencies, including the DOJ, as part of our commitment to cooperation and transparency,” the company said in a statement.

Its corporate structure consists of a tangled web of entities based in the British Virgin Islands and Hong Kong.

The Justice Department declined to comment.Federal prosecutors have been circling Tether since at least 2018. In recent months, they sent letters to individuals alerting them that they’re targets of the investigation, one of the people said.

The notices signal that a decision on whether to bring a case could be made soon, with senior Justice Department officials ultimately determining whether charges are warranted.

The probe is reaching a tipping point as stablecoins attract intense scrutiny from regulators.

The US Treasury Department and Federal Reserve are among agencies concerned that the tokens could threaten financial stability, and are obscuring transactions tied to money laundering and other misconduct because they allow criminals to make payments without going through the regulated banking system.

Treasury Secretary Janet Yellen said last week that watchdogs must “act quickly” in considering new rules for stablecoins.



A hallmark of Tether is that its creators have said each token is backed by one US dollar, either through actual money or holdings that include commercial paper, corporate bonds and precious metals.

That has triggered concerns that if lots of traders sold stable coins all at once, there could be a run on assets backstopping the tokens. Fitch Ratings has warned that such a scenario could destabilise short-term credit markets.

Tether was first issued in 2014 as a solution to a problem plaguing the crypto market: banks didn’t want to open accounts for virtual-currency exchanges because they feared touching funds tied to drug trafficking, cyberattacks and terrorism.

By accepting Tether, exchanges could give traders a way to park their balances without being exposed to Bitcoin’s price gyrations. And funds could be transferred instantaneously from exchange to exchange.

But Tether’s corporate side still needed banks to hold its money and process customer transactions. One early relationship that soured was with Wells Fargo & Co. In 2017, the Tether Ltd. affiliate and Bitfinex — a crypto exchange with common owners and executives — sued Wells Fargo for blocking wire transfers that had been sought through Taiwanese banks.

In the lawsuit, Tether Ltd. and Bitfinex said Wells Fargo knew, or should have known, that the transactions were being used to obtain US dollars so clients could purchase digital tokens. The companies dropped the case shortly after filing it.

Wells Fargo declined to comment.In the course of its years-long investigation, the Justice Department has examined whether traders used Tether tokens to illegally drive up Bitcoin during an epic rally for cryptocurrencies in 2017.

While it’s unclear whether Tether the company was a target of that earlier review, the current focus on bank fraud suggests prosecutors may have moved on from pursuing a case tied to market manipulation.

Tether has already drawn the ire of regulators.

In February, Bitfinex and several Tether affiliates agreed to pay $18.5 million to settle claims from New York Attorney General Letitia James that the firms hid losses and lied that each token was supported by one US dollar.

The companies had no access to banking in 2017, making it impossible that they had reserves backing the tokens, James said.

The firms settled without admitting or denying the allegations.

© 2021 Bloomberg

Man Group CEO Luke Ellis compared crypto to tulip bulbs, saying it has “no inherent worth whatsoever.”

• Ellis described crypto as "a pure trading instrument" in an interview with the Financial Times published Monday.
• "There is no inherent worth in it whatsoever. It's a tulip bulb," he said, recycling the oft-used comparison of crypto to the Dutch "tulipmania" market bubble in the 17th century.
• Man Group, the world's largest publicly listed hedge fund company, does however trade crypto, using quantitative analysis to sniff out price anomalies that can prove profitable.
• "We like to be long and short depending on what the models say is likely to happen to the market and we will trade it long and short just as happily and in as big a size as market liquidity lets you trade," Ellis said.
• Ellis has previously called bitcoin (BTC, +9.37%) a trading instrument rather than a long-term asset allocation.
• "We trade around it and try and to provide some liquidity into the market," he told CNBC in March.

Binance is set to stop its crypto margin trading involving sterling, the euro and Australian dollar, as the world’s large cryptocurrency exchange seeks to stave off a widespread regulatory backlash against some of its services.

• Starting Aug. 10, Binance Margin will suspend borrowing for its GBP, EUR and AUD pairs and major cryptocurrencies including bitcoin (BTC, +9.63%), ether (ETH, +4.86%) and Binance coin, an announcement Monday said.
• Binance will conduct automatic settlement, cancel pending orders and delist all affected pairs by Aug. 12.
• The announcement comes only hours after CEO Changpeng Zhao tweeted that Binance was reducing the maximum leverage users can use to trade futures contracts from 100x to 20x, following the lead of fellow exchange FTX.
• Binance has been the target of a string of warnings and denouncements from financial regulators the world over in recent weeks, including those of the U.K., Japan, Italy and Thailand.
• Less than a fortnight ago, the exchange said it was ending support for its stock market token offering that had drawn consternation from several financial watchdogs.

Global health experts have condemned Boris Johnson’s lifting of most Covid-19 legal restrictions in England on Monday as “a threat to the world”, as daily case numbers in the UK rose to more than 50,000.


 The UK now has the third highest number of cases of any country in the world — only Indonesia and Brazil have more — and some scientists fear it could become a breeding ground for new Covid variants.


 Ministers have warned that daily cases could soon hit 100,000 and have in recent days shown growing signs of nerves as July 19 — described by tabloid newspapers as “Freedom Day” — approaches.


 Health secretary Sajid Javid declared this month that there was “no going back”, but now ministers admit restrictions may have to be reintroduced as they brace themselves for a huge spike in cases.


 “Of course if we get into a situation where it’s unacceptable and we do need to put back further restrictions then that of course is something the government will look at,” Lucy Frazer, solicitor-general, told Sky News.


 As the UK reported 51,870 cases — the highest figure since January 15 — global scientists at an “emergency international summit” urged the Johnson government to “urgently reconsider its proposed actions”.


 The online event, organised by UK scientists opposed to ending the restrictions, attracted current and former government advisers from New Zealand, Italy, Israel, South Africa, Australia and Taiwan.


 They signed a declaration saying Johnson’s decision would have “a profoundly damaging impact in England” and added:

“The UK is one of the world’s leading travel hubs — any variant that becomes dominant there is likely to spread to the rest of the world.

”

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Stephen Duckett, former secretary of Australia’s health department, said:

“There is no reputable public health adviser of any kind who would recommend opening up at a time when the virus is spreading rapidly.

”

British officials say Johnson will not retreat at the last minute. Nightclubs will reopen on July 19, limits on social gatherings will end and people will no longer be legally required to wear masks in crowded places.


 Chris Whitty, chief medical officer, has argued that it is better for England to suffer a Covid wave in the summer — when health systems are under less pressure and schools are off — than in the winter.


 Johnson, who has been under intense pressure from Tory MPs to end Covid restrictions, also believes that the country’s “defensive wall” will be reinforced over the summer as more people are vaccinated and infected people — particularly the young — develop antibodies.


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But in recent days the government’s once bullish tone has evaporated. Where ministers once boasted about throwing away their masks, Johnson is now urging people to exercise “extreme caution”.


 Some fear the Covid “wave” that Whitty is prepared to see wash over England over the summer could become a tsunami, despite the fact that the link between cases and hospitalisations has been severely weakened.

Whitty said on Thursday, referring to individual hospitals:

“I don’t think we should underestimate the fact that we could get into trouble again surprisingly fast.”

Grant Shapps, transport secretary, said he “wanted” Sadiq Khan, London mayor, to require mask-wearing on public transport in the capital, even though the government has scrapped the legal requirement to do so.


 Meanwhile Covid certificates, which only weeks ago were being dismissed by ministers as unnecessary, are now being recommended for use at nightclubs and other venues.


 Bosses complain that they are being confronted with difficult legal issues over what to expect from customers and staff, as Johnson shifts responsibility for fighting Covid to the businesses and individuals.


 Meanwhile companies and public services are being disrupted as hundreds of thousands of staff are “pinged” by the NHS Covid-19 app and told to self-isolate after coming into contact with someone with the virus.

 The prime minister is now caught in a political vice, with Tory MPs and rightwing newspapers urging him to strike out for “freedom”, while public opinion wants him to be far more cautious.


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Mark Harper, chair of the lockdown-sceptic Covid Recovery Group, said Whitty was right to say that the country had to learn to live with the virus and that it was right to trust the public “to balance the risks of life”.


 He criticised the chaotic government messaging of the past week, suggesting it smacked of the description by Dominic Cummings, Johnson’s former adviser, of a prime minister veering unpredictably on policy issues.


 “The government must govern in a way that avoids giving credence to the ‘shopping trolley’ critiques of the PM’s former senior adviser,” Harper told the Financial Times.


 Meanwhile senior Tories admit that opinion polling on Johnson’s policy is “very bad”, highlighting the political risk to the prime minister if it starts to unravel.


 An Ipsos Mori poll this week found that four in 10 adults supported compulsory face masks in public indefinitely, while a third of workers were “uncomfortable” about returning to the office. A quarter thought nightclubs should never reopen.

Bitcoin and crypto trading has undoubtedly affected many negatively. From a psychological perspective, it’s easy to predict the volatility of this field can lead someone into a storm of stress and anxiety.

Just the fact that this industry operates 24 hours a day will encourage dysfunctional behaviors such as compulsive price checking, losing sleep or obsessive thoughts about the market.

Even the most sophisticated investors are not prepared for the intense fluctuations in crypto, and so it’s no surprise this industry has now claimed its piece of the pie in mental health disorders.

Patty Fiore is a psychotherapist at Next Step Counseling who specializes in Cognitive Behavioral Therapy and EMDR to treat trauma, depression and anxiety.

As a psychotherapist, I’m treating clients who are suffering from anxiety regardless of the position of their trades. Whether their portfolio is up or down, they are stressed over what decision to make next.

When the crypto market is up and investors experience a sudden increase in wealth, celebratory drug and alcohol abuse often follows. When the price of bitcoin and other crypto currencies drop, investors experience anxiety, major depression, PTSD and panic attacks.

Clinically speaking, some of these clients are traumatized and their mental health disorders are affecting their overall physical health. 

One can easily draw parallels between crypto trading and compulsive gambling. The constant ups and downs of the market create euphoric highs of winning and depressive downs of losing. 

Just like a synthetic drug, chasing the high is the goal. In a quest to make more money, one often falls into compulsive buying and selling and then finds it impossible to recover from the losses.

The inability to stop trading in a down market affects one’s stress level, self esteem, overall confidence and financial security. 

Just as cigarette packages warn smokers about the hazards of smoking, crypto exchange companies owe it to their users to alert investors of the psychological dangers of compulsive gambling.

Read more: Addicted to Crypto?

Sadly, there are very few who seek help or therapy as a tool to manage their investing-induced anxiety. In the worst scenarios this could be deadly. Alex Kearns, a 20-year old Robinhood user, took his life after mistakenly believing he lost a $730,000 risky bet.

The emotional roller coaster of trading is not for everyone and platforms such as Robinhood have not taken enough precautions to vet their users’ financial experience.

Whether you are trading stocks or crypto, it’s imperative to learn how to handle the emotional stress that automatically comes with the market. Mental health professionals can facilitate a safe space to create appropriate boundaries and build healthy coping mechanisms. 

Like any industry, psychotherapists also need to evolve to understand quickly evolving industries like tech and crypto, and to encourage clients to bring those issues to their sessions.

Therapists who understand these dynamic industries are more equipped to conceptualize their clients’ needs and process their feelings and decisions in a more efficient manner. 

Read more: 15 Ways to Stay Sane While Trading CryptoSeeking professional help should not only be normalized but encouraged – by Fortune 500 companies and crypto startups alike.

Today’s professionals spend more time at work than they do at home, and going to a therapist is the best place to process work frustrations. Addressing interpersonal disagreements will help strengthen co-worker bonds, increase work satisfaction and productivity. 

If you are having thoughts of suicide, the following organizations can help:

In the U.S., call the National Suicide Prevention Lifeline at 1-800-273-8255 or text TALK to 741741. You can also visit SpeakingOfSuicide.com/resources for more information.

In Britain, call Papyrus at +44 800 068 4141, or text Young Minds to 85258. A list of additional resources on is found at Mind.org.

McAfee’s extradition to the US on tax charges had been approved hours earlier.

The antivirus software entrepreneur John McAfee has been found dead in his cell in Spain, hours after the country’s highest court approved his extradition to the United States, where he was wanted on tax-related criminal charges that carry a prison sentence of up to 30 years.

Catalan’s regional police force, the Mossos d’Esquadra, confirmed a report in El País that McAfee, 75, had been found dead in the Brians 2 prison near Barcelona, late on Wednesday.In a statement, the Catalan justice department said that prison officers and medics had tried to save the life of a 75-year-old man but had been unsuccessful.

After attempts to save him failed, he was pronounced dead.“Judicial staff have been dispatched to the prison and are investigating the causes of death,” the statement said, adding: “Everything points to death by suicide.”McAfee’s lawyer on Wednesday told the Reuters news agency that McAfee had apparently hanged himself in his prison cell.

Tax offenses

McAfee, the creator of the McAfee virus software , was arrested last October at Barcelona’s international airport as he was about to board a flight to Istanbul. At that time, a judge ordered that McAfee should be held in jail while awaiting the outcome of a hearing on extradition.

The arrest of the entrepreneur came a day after authorities had made public a US indictment stemming from his tax offense. 

Tennessee prosecutors had charged McAfee with evading taxes after failing to report income made from promoting cryptocurrencies while he did consultancy work, as well as income from speaking engagements and selling the rights to his life story for a documentary.

On Wednesday, Spain’s highest court had approved McAfee’s extradition to the United States, although the decision could be appealed and his final extradition would have had to be approved by the Spanish cabinet.

“The court agrees to grant the extradition of John David McAfee as requested by the American judicial authorities for the crimes referred to in the tax offense indictments for years 2016 to 2018,” read the 16-page ruling.

The ruling also made clear that the US charges referred to the three fiscal years from 2016 to 2018.In a hearing held via videolink earlier this month, McAfee had argued that the charges against him were politically motivated and said he would spend the rest of his life in prison if he was returned to the US.

Erratic behavior

Since making a fortune with his eponymous antivirus software in the 1980s that still bears his name, McAfee had engaged in increasingly erratic behavior, most recently as a self-styled cryptocurrency guru claiming to make $2,000 a day.In recent years, his personal life had drawn as much interest as his professional achievements.

He became the subject of frenzied media scrutiny following the unsolved 2012 murder of a neighbour in Belize. McAfee said he knew nothing about the murder, but was worried he may have been the attacker’s intended target.

When the police found him living with a 17-year-old girl and discovered a large arsenal of weapons in his home in the Central American country, McAfee disappeared on a month-long flight that drew breathless media coverage.

The dead neighbour’s family later filed a wrongful death suit against McAfee and last year a court in Florida found against him, ordering him to pay the family more than $25m.

In 2015, McAfee was arrested in the US for driving under the influence and possession of a gun while under the influence.In July 2019, he was released from detention in the Dominican Republic after he and five others were suspected of travelling on a yacht carrying high-calibre weapons, ammunition and military-style gear, officials in the Caribbean island said at the time.

In March, he was charged in a Manhattan federal court over a pump and dump scheme involving cryptocurrencies he was promoting to his large social media following.In a tweet on 16 June, he said the US authorities believed he had “hidden crypto. I wish I did,” he said.“My remaining assets are all seized.

My friends evaporated through fear of association. I have nothing. Yet, I regret nothing.”

• In the US, the National Suicide Prevention Lifeline is at 800-273-8255 and online chat is also available. You can also text HOME to 741741 to connect with a crisis text line counselor. In the UK and Ireland, Samaritans can be contacted on 116 123 or email [email protected] or [email protected]. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at www.befrienders.org

While the short-term market outlook for many NFT projects look uncertain, and multiple new releases struggle to gain traction, one gardening-themed drop may have set some records by selling 8,888 nonfungible tokens (NFTs) in just under an hour.

Nonfungible token studio Zenft released a line of 8,888 unique bonzai NFT plants that quickly sold out on Tuesday, with the studio selling each digital tree for 0.08 Ether (ETH), or roughly $220 at the time of publication.

The bonsais have augmented reality/virtual reality functionality, and their 3D design is a step up from previous pixelated, 2D projects. The studio celebrated the nearly $2,000,000 sale with a tweet:

The success is somewhat of a surprise, given that NFTs remain mired in a slump following explosive growth earlier this year. New drops like Crypteriors struggle to sell out completely, making the one-hour mark a particular feat.However, some collectors suspect that the success may be due in part to clever marketing.

“I like the way they look but it feels like people are trying to recreate what happened with the Bored Apes money printing machine,” said one prominent collector who spoke to Cointelegraph on the condition of anonymity. “Been feeling a little exhausted seeing the space devolve into celeb pump and dump.

”Bored Ape Yacht Club, another recent success amid the market dip, managed to attract a fervent community in part on the back of outreach to prominent investors and collectors in the NFT space — and as one collector put it, where whales go, smaller collectors, or “plankton,” follow (sometimes to their detriment).

In an interview with Cointelegraph, “8ncient Gardener,” one of the three Zenft “gardeners” (or developers), said that marketing played a role — 8ncient “took painstaking care around crafting our giveaways,” in particular — but ultimately, the quality of the art is what made the bonsais such a hit. “I think our art speaks for itself quite honestly.

And everyone can unify around a bonsai. We had Apes, Punks, Voxo, Sandbox, Camels — all these NFT factions all rallying around bonsai,” he said. “In a world of pixel art we made gorgeous 3D bonsai.”

The on-chain evidence is somewhat mixed. There are currently 1,736 different holders of the nearly 9,000 bonsais, with over 22% of the supply concentrated in two NFT whale addresses.

From there, there’s a steep drop-off, however, with a broad range of addresses holding smaller quantities of the bonsais.While it’s impossible to tell the exact source of the success, Zenft “Grove Councilor” “Justsomebonzai” argued that the digital trees are ultimately spreading joy:

“People genuinely like Bonsai, they're beautiful IRL and they're beautiful as an NFT.”

The regulator has suggested that a dedicated market regulator would offer some protection against fraud and manipulation.

DeFi and crypto lending may pose issues for investors, SEC Chair Gary Gensler said.

Decentralized finance (DeFi) could pose fresh challenges for U.S. investors, Securities and Exchange Commission (SEC) Chair Gary Gensler said Wednesday.

The cryptocurrency sector poses various risks to investors in the markets and challenges to the securities regulator, Gensler said in prepared testimony before the House Appropriations Committee. He pointed to volatility in the market and novel products as some examples of these issues.

“Crypto lending platforms and so-called decentralized finance (‘DeFi’) platforms raise a number of challenges for investors and the SEC staff trying to protect them,” Gensler said.

SEC Chairman Gensler: SEC Should Be ‘Ready to Bring Cases’ Involving Crypto

U.S. Securities and Exchange Commission (SEC) chief Gary Gensler said Thursday federal financial regulators should “be ready to bring cases” against bad actors in crypto and other emerging technologies. “The Hash” team weighs in.
 The crypto market had an overall market capitalization of $1.6 trillion on Monday after losing over one-third of its value in under two weeks, he said. While bitcoin (BTC, +1.51%) grabs most headlines, he noted that more than 80 tokens have a $1 billion market cap, while more than 1,500 had a market cap of over $1 million.

Gensler previously told the House Financial Services Committee that stronger regulation around crypto exchanges could help protect investors. In particular, he suggested a dedicated market regulator for the crypto markets would provide some protection around fraud and manipulation, two concerns the SEC has often cited in rejecting bitcoin exchange-traded fund (ETF) applications.The regulator repeated the concern on Wednesday.

“Tokens currently on the market that are securities may be offered, sold, and traded in non-compliance with the federal securities laws. Furthermore, none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC.

Altogether, this has led to substantially less investor protection than in our traditional securities markets, and to correspondingly greater opportunities for fraud and manipulation,” he said.

Read more: BlockFi Botches Promo With Outsized Bitcoin Reward Payments

Even the crypto market’s current volatility is suspect, Gensler seemed to say.“In recent weeks, the reported trading volume has ranged from $130 billion to $330 billion per day.

These figures, however, are not audited or reported to regulatory authorities, as the tokens are traded on unregistered crypto exchanges. That is just one of many regulatory gaps in these crypto asset markets,” Gensler said.

He also indicated that the SEC would be willing to bring enforcement actions against parties that don’t comply with federal securities laws.

The regulatory agency has already brought 75 such actions, and “has been consistent” in how it describes its approach, he said. He said the SEC “should be ready” to bring further actions in a speech to the Financial Industry Regulatory Authority last week.

• Traders taking excessive risk in the bitcoin market being forced to sell when the price goes down were the bigger culprits for last week’s 30% drop in bitcoin prices, according to analysts.
• Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com, a cryptocurrency futures trading platform.
• “Selling begets more selling until you come to an equilibrium on leverage in the system,” says JMP’s Devin Ryan.

Slow Ventures’ Jill Carlson on fears surrounding bitcoin mining councilBitcoin’s aggressive moves are being driven by much more than the next China crackdown or Elon Musk headline.

Traders taking excessive risk in the unregulated cryptocurrency market being forced to sell when prices go down were in large part responsible for last week’s 30% drop in prices and outages for major exchanges, according to analysts.

A burgeoning bitcoin lending market is also adding to the volatility.The price of cryptocurrencies tanked last week, with bitcoin losing roughly a third of its value in a matter of hours. Bitcoin popped to nearly $40,000 on Monday but is still down about 33% from its high.



When traders use margin, they essentially borrow from their brokerage firm to take a bigger position in bitcoin. If prices go down, they have to pay the brokerage firm back in what’s known as a “margin call.

” As part of that, there’s often a set price that triggers selling in order to make sure traders can pay the exchange back.Brian Kelly, CEO of BKCM, pointed to firms in Asia such as BitMEX allowing 100-to-1 leverage for cryptocurrency trades.

Robinhood does not allow traders to use margin for cryptocurrency, and Coinbase only allows it for professional traders.
Bitcoin bull says the volatility could lead to a big breakout

“You get this crowd factor — everybody’s liquidation price tends to be somewhat near everyone else’s-- when you hit that, all of these automatic sell orders come in, and the price just cascades down,” Kelly, told CNBC.Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com. This mass exodus wiped out about 800,000 crypto accounts.

“Selling begets more selling until you come to an equilibrium on leverage in the system,” said JMP analyst Devin Ryan. That selling begins to “compound” as leveraged positions are liquidated, because they can’t meet those margin requirements, he said.

“Leverage in the crypto markets — particularly on the retail side — has been a big theme that accentuates the volatility,” Ryan added.As the crypto market expands, Ryan said he expects leverage to become less of an influence, especially as more institutional capital comes in.Investors, both retail and institutional, have poured into bitcoin and other digital assets in 2021.

The world’s largest cryptocurrency exchange — Coinbase — said trading volume in the first quarter of the year was $335 billion, of which approximately $120 billion was retail and $215 billion was institutional.

Trading volumes totaled about $30 billion in the first quarter of 2020.Mark Cuban weighed in on the leverage aspect for ether, the world’s second largest cryptocurrency, on
Twitter last week.

“De-Levered Markets get crushed. Doesn’t matter what the asset is. Stocks. Crypto. Debt. Houses. They bring forced liquidations and lower prices. But crypto has the same problem that [high-frequency traders] bring to stocks, front-running is legal, as gas fees introduce latency that can be gamed,” Cuban said in a tweet last week.

Lending

The other behind-the-scenes cause for selling may have come from the growing bitcoin lending market.Crypto companies such as BlockFi and Celsius allow bitcoin holders to store their crypto with the firm, in exchange for an interest rate of between 6% and 8%. On the back end, those firms lend bitcoin out to hedge funds and other professional traders.

They also allow people to use their bitcoin holdings as collateral for loans.For example, if someone took out a $1 million loan backed by bitcoin and the price drops by 30%, they may owe 30% more to the lender.

″As you hit a certain collateral level, firms will automatically sell your bitcoin and send the collateral to the lender,” BKCM’s Brian Kelly said. “This adds to the massive cascade effect -- there was so much volume that most of the exchanges broke.”

Regulation

The fact that bitcoin is not regulated by a central bank is part of what makes it so valuable to its investors.But that lack of a central authority, and increased adoption has put a target on its back from some in Washington. The Treasury Department announced Thursday it will require any transfer worth $10,000 or more in crypto to be reported to the Internal Revenue Service.

“The market does not have the same backstops that other more traditional markets do,” said Ryan. “In some ways the crypto markets are cleaner and they’re not being influenced by a buyer of last resort.

”Still, Ryan said regulation can be viewed as validation of the crypto market, and could be a positive for the digital asset.

“The crypto markets are still in their early days relative to other asset classes and so they’re going through a maturation phase where they are scaling and adoption in increasing, its still relatively nascent,” he said. “Volatility is a feature here just as the market develops,” Ryan said.

Bitcoin plunged below $39,000 for the first time in more than three months Wednesday after China said cryptocurrencies would not be allowed in transactions and warned investors against speculative trading in them, despite the country powering most of the world's mining.

The comments sent the unit diving more than 10 percent and dealt it another blow soon after being battered by comments from tycoon Elon Musk and his Tesla car company.

Trading in cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to stop people from shifting cash overseas. The country had been home to around 90 percent of the global trade in the sector.

And in a statement, three state-backed industry associations said "cryptocurrency prices have skyrocketed and plummeted, and cryptocurrency trading speculation activities have rebounded".

The price fluctuations "seriously violate people's asset safety and disrupt normal economic and financial order", said the statement, which was posted to social media by the People's Bank of China.

The notice warned consumers against wild speculation, adding that the "losses caused by investment transactions are borne by the consumers themselves", since Chinese law offers no protection to them.

It reiterated that providing cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers.

Linghao Bao, analyst at Trivium China, said despite the ban Chinese investors can still find ways to buy cryptocurrencies through illegal vendors."There will always be a way to circumvent regulations," he said.

"The point of this order is to tell financial institutions to up their game to detect these crypto-related transactions.

"Bitcoin tumbled Wednesday from $45,600 to $38,570, its lowest since early February, and well off the record high of $64,870 seen last month. It later edged back above $40,000 but analysts have warned it could test as low as $30,000.

"This is the latest chapter of China tightening the noose around crypto," Antoni Trenchev, managing partner and co-founder of London-based crypto lender Nexo, said.- 'Here to stay' -Adam Reynolds, of Saxo Markets, added that avoiding use of cryptocurrency, which can be transferred out of the country, is "essential to maintaining capital controls" in China.

Bitcoin has had a torrid few days. It took a heavy hit at the start of the week after Musk appeared to suggest Tesla was planning to sell its huge holdings of the unit. And that came days after the electric car giant said it would halt using it in transactions because of environmental concerns.

"Elon Musk started the ball rolling," Germany-based crypto analyst Timo Emden told AFP. "It will take some time for them to recover from this shock."Mining cryptocurrency is a hugely energy-intensive process requiring large amounts of electricity in giant data centres.

China, which powers nearly 80 percent of the global cryptocurrency trade, relies on a particularly polluting type of coal, lignite, to power some of its mining.

"If bitcoin was a country, it would use around the same amount of electricity a year to mine as Switzerland does in total," Deutsche Bank analysts said in a note.

However, some Chinese enthusiasts remained unfazed."This has happened before and it happens every year... Crypto is here to stay," said trader and ex-tech industry worker Zeng Jiajun.

The Hong Kong Bitcoin Association tweeted, "It is customary for the People's Bank of China to ban bitcoin at least once in a bull cycle.

"China is in the midst of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players -- including Alibaba and Tencent -- have been hit with big fines after being found guilty of monopolistic practices.

The central bank has also sought to promote its own heavily regulated digital yuan, which it is testing across the country in pilot schemes.-- Bloomberg News contributed to this story --

Bitcoin fell sharply on Tuesday, continuing a major sell-off that began a week ago.The digital currency fell over 13% to hit an intraday low of $38,585.86 at around 12:54 a.m. ET, according to CoinDesk data. It was the lowest level since Feb. 9, the last time it dropped below $40,000.

As of 4:30 a.m. ET, bitcoin was trading above $40,000 again, but still down by about 12%.

Negative news over the past week has dampened sentiment for bitcoin.On May 12, Tesla CEO Elon Musk said the electric carmaker had suspended vehicle purchases using bitcoin, citing environmental concerns over the so-called computational “mining” process.

This is where high-powered computers are used to solve complex mathematical puzzles to enable transactions using bitcoin.Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.

The announcement to suspend bitcoin payment came just three months after Tesla revealed that it bought $1.5 billion worth of bitcoin, and would start accepting bitcoin in exchange for its products.

Early this week, the Tesla CEO suggested the company may have sold its bitcoin holdings but later clarified that it has “not sold any Bitcoin.

”Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency.

China’s hard line on digital currencies is not new. In 2017, authorities shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way for companies in the space to raise money through issuing new digital tokens.

Traders in China once accounted for a huge share of the bitcoin market but after the crackdown, their influence was reduced significantly. Chinese cryptocurrency operations have moved abroad.

Bitcoin is still up 40% year-to-date and more than 300% in the last 12 months.Other cryptocurrencies also plunged. Ether, the digital currency that powers the Ethereum blockchain, was down nearly 16% at $2,960.29 at 4:30 a.m. ET.

Dogecoin, a cryptocurrency that started as a joke and has been talked up by Musk, fell 16% to $0.4189.Around $270 billion had been wiped off the entire value of the cryptocurrency market in 24 hours as of 4:30 a.m. ET.

Close to a bottom for bitcoin?

Bitcoin is off by about 38% from its all-time high of $64,829.14 which was hit in mid-April.Vijay Ayyar, head of business development at cryptocurrency exchange Luno, said that a 30% to 40% pullback is “normal” during bitcoin bull markets.

“So this is very much expected after we topped out at 64K ($64,000),” he said.

Ayyar pointed to a roughly 35% correction in January as well as similar falls during the huge run-up in bitcoin’s price in 2017.“We are definitely close to a bottom” around $38,000 to $40,000, he said.

Galaxy Digital CEO Novogratz on bitcoin, crypto and ESG concernsBitcoin bull Mike Novogratz told CNBC on Tuesday that he sees $40,000 as a buying level for the digital currency.

The investor, who runs cryptocurrency financial services and investment management Galaxy Digital, said he expects bitcoin to consolidate in a trading range between $40,000 to $55,000.

“Then we’ll have another leg up. And I say that not just by guessing. We see institutions moving in, and it takes them a while,” Novogratz said.

Crypto platform Coinbase Global COIN, -6.40% is set to issue highly anticipated quarterly results Thursday after the close of regular trading.

Although, there aren’t expected to be a ton of surprises from the digital-asset company—it offered an early glimpse of its results before its mid-April listing on Nasdaq Inc. NDAQ, -0.86% —strategists are looking for more insights on how it manages fees and grows as competition increases in the nascent crypto space that seems in the midst of a boom.

“While Coinbase has been able to rely on its first mover advantage and brand familiarity so far, margins will continue to compress from competition with both ‘CeFi’ brokerages like BlockFi and ‘DeFi’ alternatives like Uniswap,” wrote Matthew Wheeler, global head of market research at Forex.com, referring to traditional centralized financial, or CeFi, and decentralized financial, DeFi, platforms.

Back in early April, Coinbase estimated that its first-quarter profit surged, exceeding its entire performance for 2020, on the back of rabid appetite for the No. 1 and 2 crypto in the world, bitcoin BTCUSD, -7.01% and Ether ETHUSD, -1.79%.

“Bulls are hopeful that these halcyon, high profit margin days can continue for a bit longer, so any signs that profit margins are already falling could lead to a selloff in the stock,” Wheeler wrote.Investors expect Coinbase to report earnings per share of $3.07 on revenue of $1.814 billion, according to a consensus of analysts estimates polled by FactSet, as of May 12.Coinbase shares are down over 30% from its intraday peak of $429.54 on its debut on April 14.

The company’s stock is down by about 16% from its closing price on its first day of trading on the Nasdaq, bringing its market value to $57.3 billion.Part of Coinbase’s recent slump has been blamed on the threat of increased competition from the likes of traditional banks and other crypto exchanges offering similar services.

CNBC reported earlier this week that Goldman Sachs GS, -1.53% was seeing activity pick up in a newly created cryptocurrency unit. This comes as Morgan Stanley MS, -1.46% has said that it intends to offer crypto services to its wealthy clients, and other firms appear ready to follow suit.

David Trainer, CEO of New Constructs, an investment research firm, speculated that Coinbase could see its shares fall by 65% from current levels due to new entrants.

“Coinbase is not likely to fulfill the profit expectations baked into the stock’s current valuation of $58 billion due to rising competition in the cryptocurrency trading space, which should reduce the company’s market share and pricing power,” the analysts wrote in a reported dated Tuesday.

MoffettNathanson analyst Lisa Ellis, who maintains a price target for Coinbase at $600, told MarketWatch that Coinbase bears will be looking for any signs that so-called price compression will eat into the exchange and trading platform’s revenues.

“It’s extremely easy to be negative on Coinbase,” she said. However, she said it was likely too early to think that competition would hurt the company’s business soon.

She said lackluster user growth, however, could deliver a bigger hit to sentiment in the company’s stock, at least in the near term.Last month, Coinbase said it had 56 million verified users on its platform, including 6.1 “monthly transacting users,” or MTUs.

Ellis said that the 6.1 million figure relates more to Coinbase’s professional clientele but the MTUs could be damped by PayPal and other venues also offering basic crypto-trading services to average folk.

Oppenheimer’s Owen Lau initiated coverage of Coinbase on Tuesday at outperform, the equivalent of a buy recommendation, and set a price target at $434, based on his view that the company is an “enabler of crypto innovation.

”BTIG analysts Mark Palmer and Andrew Harte, reaffirmed their “buy” rating for Coinbase and held their price target at $500. The BTIG analysts say that Coinbase pessimists have been too narrowly focused on the “company’s retail trading commissions” and not focused enough on the potential for Coinbase to serve institutional investors and hedge funds.

Indeed, back in February, Coinbase’s institutional trading wing handled electric vehicle-maker Tesla’s TSLA, -4.42% $1.5 billion bitcoin investment, according to a report by The Block.

The Block also noted that Coinbase has a number of corporate clients that use its platform for crypto purchases, a growing phenomenon as bitcoin prices strengthen.However, bitcoin values have stalled after hitting a recent record at $64,829.14, with the No. 1 crypto down by about $10,000 since that peak.

Meanwhile, Ether prices were trading above $4,100 and had recently touched a record at $4,382.73, as the crypto known for its smart-contract protocols, gains more traction on the back of growing DeFi platforms and nonfungible tokens, or NFTs, which use Ethereum’s blockchain as a platform.

Growing appetite for dogecoin DOGEUSD, -5.91% has reportedly fueled transaction volume in crypto brokerages but Coinbase doesn’t offer doge on its platform.

Still, investors might looked to see how the company has performed in the face of increased volatility in alternatives to bitcoin, known also as altcoins.

Dogecoin prices have been unwinding steadily since hitting a peak on Saturday near 75 cents, but are still up over 9,500% so far in 2021. Dogecoin was trading hands, at last check, at 44 cents. Bitcoin prices are up 88% so far this year, but down 4% over the past 24 hours. Ether has gained 462% in the year to date.

By comparison, traditional assets are seeing far more muted returns this year. Gold prices GC00, -0.09% were down nearly 4% in 2021 thus far. The Dow Jones Industrial Average DJIA, -1.99% was up 10.5%, the S&P 500 index SPX, -2.14% was up 8.8% so far this year and the Nasdaq Composite Index COMP, -2.67% has gained 1.7% over the same period.Shares of Coinbase were nearly 5% lower on Wednesday afternoon.

A Goldman Sachs managing director has left the investment bank after reportedly making millions investing in cryptocurrency dogecoin DOGEUSD, -6.90%.

A spokesman for Goldman GS, -1.53% confirmed Aziz McMahon, a managing director and head of emerging market sales based in London, has left the investment bank where he has worked for 14 years. But the spokesman told MarketWatch he had no knowledge of the investment in dogecoin.

Read: Biggest risk for crypto? ‘Its own success,’ says founder of world’s largest hedge fund Ray Dalio The Guardian newspaper reported 

McMahon made the money investing on his own personal account and wasn’t involved in trading cryptocurrencies for Goldman Sachs. While not much is known about the amount McMahon reportedly made, the newspaper cites unnamed sources claiming it was a “substantial sum.

”It is thought McMahon, who says he studied at Trinity College Dublin on LinkedIn, may be starting a hedge fund, according to efinancialcareers, which was first to report the story.McMahon has been contacted for comment.

Read: Dogecoin price flops as Elon Musk hosts ‘Saturday Night Live’Dogecoin is a cryptocurrency, like bitcoin BTCUSD, -7.18%, but it was started as a joke and named after a dog meme.

It fell by up to 35% at one point over the weekend after a highly anticipated appearance by crypto fan Elon Musk, the Tesla TSLA, -4.42% chief executive, on the “Saturday Night Live” television show.

• When asked about the rising value of cryptocurrencies, Bank of England Governor Andrew Bailey said: “They have no intrinsic value.”
• “I’m going to say this very bluntly again,” he added. “Buy them only if you’re prepared to lose all your money.”
• The prices of digital currencies from bitcoin to dogecoin have climbed wildly this year.

In this article

• BTC.CM=-6,212.37 (-10.96%)

Bank of England Governor Andrew Bailey.

Simon Dawson | Bloomberg via Getty Images

LONDON — Cryptocurrencies “have no intrinsic value” and people who invest in them should be prepared to lose all their money, Bank of England Governor Andrew Bailey said.Digital currencies like bitcoin, ether and even dogecoin have been on a tear this year, reminding some investors of the 2017 crypto bubble in which bitcoin blasted toward $20,000, only to sink as low as $3,122 a year later.

Asked at a press conference Thursday about the rising value of cryptocurrencies, Bailey said: “They have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.”

“I’m going to say this very bluntly again,” he added. “Buy them only if you’re prepared to lose all your money.”Bailey’s comments echoed a similar warning from the U.K.’s Financial Conduct Authority.“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the financial services watchdog said in January.“If consumers invest in these types of product, they should be prepared to lose all their money.”

Bailey, who was formerly the chief executive of the FCA, has long been a skeptic of crypto. In 2017, he warned: “If you want to invest in bitcoin, be prepared to lose all your money.”

Bitcoin is up over 90% this year, thanks in part to rising interest from institutional investors and corporate buyers such as Tesla. The electric car firm bought $1.5 billion worth of bitcoin earlier this year, and the value of its holdings have since risen to nearly $2.5 billion.

Proponents of bitcoin see it as a store of value akin to gold because of its scarce supply — only 21 million bitcoins can ever be minted — arguing that the cryptocurrency can act as a hedge against inflation as central banks around the world print money to relieve coronavirus-battered economies.

However, skeptics view bitcoin as a market bubble waiting to burst. Michael Hartnett, chief investment strategist at Bank of America Securities, said bitcoin’s rally looks like the “mother of all bubbles,” while Alvine Capital’s Stephen Isaacs said there are “no fundamentals with this product, period.”

BOE’s Bailey: UK economy will have ‘bounce back,’ then return to balanceAlternative digital currencies have made even larger gains than bitcoin. Ether, the native token of the Ethereum blockchain, has seen returns of more than 360% year to date, while meme-inspired crypto dogecoin is up a whopping 12,500%.

Analysts have attributed dogecoin’s rise to tweets from celebrities like Tesla’s Elon Musk and Mark Cuban, as well as retail investors buying the token on the free-trading app Robinhood.

David Kimberley, an analyst at U.K. investing app Freetrade, described the dogecoin rally as “a classic example of greater fool theory at play,” referring to the practice of selling overvalued assets to investors who are willing to pay a higher price.

At the same time, central banks are considering whether to issue their own digital currencies. Last month, the Bank of England launched a joint taskforce with the Treasury aimed at exploring central bank digital currencies, or CBDCs.

 Such a currency would exist alongside cash and bank deposits rather than replacing them, the bank said.

Tesla CEO Elon Musk said Wednesday on Twitter that Tesla has “suspended vehicle purchases using bitcoin,” out of concern over “rapidly increasing use of fossil fuels for bitcoin mining.

”The price of bitcoin dropped about 5% in the first minutes after Musk’s announcement.

In an SEC filing in February, Tesla revealed that it bought $1.5 billion worth of bitcoin and it may invest in more of bitcoin or other crypto currencies in the future.

At that time, the company said it would start accepting bitcoin as a payment method for its products.Support for cryptocurrency from Tesla contributed to the prices of cryptocurrencies, including bitcoin and dogecoin, skyrocketing in recent months.

Here was Musk’s full announcement:

“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Mainstream investors and some corporate buyers including Tesla, Square, Metromile and Nexon have flocked to bitcoin, viewing the digital currency as a potential inflation hedge while central banks print money to relieve coronavirus-distressed economies.

SpaceX accepts Dogecoin as payment for DOGE-1 moon missionMajor Wall Street banks like Goldman Sachs and Morgan Stanley have also sought to provide their wealthy clients with bitcoin exposure.But some investors, like Softbank founder Masayoshi Son, still aren’t buying in to the crypto craze.

“There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble. Honestly speaking, I don’t know,” Son said at a recent earnings conference.

While Tesla said it would not accept bitcoin for vehicle purchases on Wednesday, Musk specified that Tesla plans to hold rather than sell the bitcoin it already has, and would be looking into other cryptocurrencies that require less energy for transactions.During the first quarter of 2021, Tesla bought $1.5 billion worth of “digital assets,” then sold $272 million worth.

According to a financial filing from Tesla on April 26, profits from bitcoin sales specifically allowed the company to notch a $101 million “positive impact” toward profitability.

Musk has been a very public fan of bitcoin and dogecoin, tweeting and joking about these with his millions of Twitter followers over the past year.This past weekend, the Tesla chief made his hosting debut on “Saturday Night Live” and devoted part of his opening monologue and one sketch to talking up dogecoin.

 Instead of helping drive up the price of the meme-inspired token, dogecoin actually tanked 30% over the course of the hour that Musk was hosting SNL.

During a frenzied sell-off at that time, the popular trading platform Robinhood experienced an outage in its crypto trading.

Following Musk’s announcement on Thursday, Dallas Mavericks owner Mark Cuban said that the team will continue to accept bitcoin and other crpytocurrencies because “we know that replacing Gold as a store of value will help the environment.”

Bitcoin price drops by $2,000, Tesla shares decline about 1% in after-hours trading following announcement on Musk’s Twitter account

Tesla Inc. will halt sales of cars using bitcoin due to the effects on the environment that cryptocurrency mining can have, Chief Executive Elon Musk said Wednesday, and prices of Tesla shares and the cryptocurrency dropped immediately after.

“Tesla has suspended vehicle purchases using bitcoin,” Musk posted on Twitter.

“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” he continued.

Musk did say that Tesla would not sell any of the bitcoin owned by Tesla currently, and would use it again “as soon as mining transitions to more sustainable energy.

” In the meantime, he said Tesla will look at other cyrptocurrencies that use less energy to mine.

Bitcoin prices BTCUSD, -8.24% fell by roughly $2,000 after the tweet, from about $54,700 to roughly $52,600. Tesla shares TSLA, -4.42% declined about 1% in after-hours trading.

Tesla purchased $1.5 billion worth of the cryptocurrency in early February, after Musk signaled his interest in bitcoin on his Twitter account. Soon after, Tesla officially told the SEC that Musk had a new title of “Technoking” and Chief Financial Officer Zach Kirkhorn would henceforth be known as Tesla’s “Master of Coin.

”See also: Why did Tesla buy bitcoin?When Tesla reported first-quarter earnings last month, executives revealed that Tesla had sold about 10% of its bitcoin holdings for a profit of more than $100 million. Musk and Kirkhorn said the sale was just a test of the market’s liquidity and said they did not plan to sell more.

For more: Tesla turns a profit on bitcoin sale, but its ‘Technoking’ and ‘Master of Coin’ say it won’t become a habit

The University of Cambridge’s Centre for Alternative Finance reported not long after the Tesla purchase that the news had caused a severe spike in the amount of electricity used to mine bitcoin.

While it is an estimate, the group at the time estimated that bitcoin was using as much energy an on annualized basis as countries like Argentina and the Netherlands, about 121.9 terawatt hours.

As of Wednesday afternoon, that estimate had grown to 147.8 terawatt hours, similar to the annual energy usage of Malaysia or Sweden, according to the Centre for Alternative Finance.

The majority of bitcoin is mined in China, with Xinjiang a major center for mining that is also fueled largely by coal, according to previous reports.

EBay EBAY, -1.64% users can now buy digital tokens on the e-commerce giant’s platform.

Senior Vice President of eBay Jordan Sweetnam announced in a blog post Tuesday the company will now permit sales of non-fungible tokens, or NFTs, from approved eBay sellers, with plans to expand the pool of sellers in the future.

“In the coming months, eBay will add new capabilities that bring blockchain-driven collectibles to our platform,” Sweetnam said. 

See also: Here’s where Jeff Bezos’s superyacht ranks among the world’s most expensive boats

Prior to today, selling on eBay was limited to physical items, with some exceptions.

“All listings on eBay must offer either a physical item or a service for sale,” according to the site’s policy.An NFT is a verifiable digital asset vouchsafed by blockchain technology.

NFTs are not exchangeable like currencies, as each is unique and can’t be replicated.

NFTs use blockchain, the technology ledger backing cryptocurrencies like bitcoin BTCUSD, -0.81%  and ethereum ETHUSD, -0.12%,  which are databases of linked information to record ownership or transactions of a product.

See also: Golden State Warriors become first pro sports team to release its own NFTs

NFTs have exploded in popularity of late, spearheaded by the support of celebrity business figures such as Mark Cuban and Gary Vaynerchuk.

In the past few months, people have spent hundreds of millions of dollars in totality on these digital assets, such as the “Disaster Girl” meme, NBA Top Shot and digital art like one from the artist known as Beeple, which sold for $70 million.

A bill seeking to “pause” crypto mining for three years in New York was referred to the state's Environmental Conservation committee on May 3.

Crypto miners in New York may be subject to a forced three-year hiatus if the latest environmentally-focused bill passes in the state senate.

The New York Senate Bill 6486 was proposed by Democrat senator Kevin S. Parker, the Chairman of Committee on Energy and Telecommunications, and co-sponsored by fellow Democrat senator Rachel May, the Chair of Committee on Aging, Chair of Legislative Commission on Rural Resources.

The bill is yet to receive widespread backing from other senators, however the Democrats do control the lower house and senate.

The bill seeks to “establish a moratorium on the operation of cryptocurrency mining centers,” to slow the environmental impacts of fossil-fuel-backed crypto mining in particular.It also aims to enforce stricter regulations for mining centers, such as the requirement to undergo an environmental impact review, which would prevent crypto mining if the facility does not comply with New York’s climate change targets.

The Bill was referred to the Environmental Conservation Committee on May 3 and claims to be acting in accordance with New York’s “Climate Leadership and Community Protection Act,” with that bill stating that:

“A single cryptocurrency transaction uses the same amount of energy that an average American household uses in one month, with an estimated level of global energy usage equivalent to that of the country of Swede.”

“It is reasonable to believe the associated greenhouse gas emissions will irreparably harm compliance with the Climate Leadership and Community Protection Act in contravention of state law. ” the bill adds.

The Climate Leadership and Community Protection Act was passed in 2019 and set targets such as 70% renewable energy by 2030, 100% zero-emission electricity by 2040, and 22 million tons of carbon reduction through energy efficiency and electrification.

Crypto mining is already a hot topic in New York, such as the proposed expansion of Greenbridge’s gas-fired Bitcoin plant on Seneca Lake. The plant reportedly has plans to power up to 27,000 computers that will run 24/7 to mine Bitcoin.

The Environmental Group Seneca Lake Guardian are outraged with the proposal, and stated in a call to action published on Feb. 1 that: “Cuomo can’t lead on climate change, and support Bitcoin expansion on Seneca.

”Speaking in response to the Greenbridge’s potential crypto mining operations, Yvonne Taylor, Vice President of the Environmental Group Seneca Lake Guardian, noted that:

“We’re talking about burning more fossil fuels to make fake money in the middle of climate change, which we view as insane.”

There are moves around the world to regulate crypto mining in light of carbon targets, and especially in China which accounts for an estimated 65% of the world’s Bitcoin hashing power.

On April 27 Beijing sent an “emergency notice” to conduct checks on data centers involved in crypto mining, with the CCP reportedly moving to impose stricter supervision on crypto mining in the nation, amid concerns of failing to meet China’s climate change-focused “five-year plan.”

For anyone who still thinks Dogecoin is a joke, there are some 90 billion reasons that say it’s not.That’s how much the digital token is nearly worth in dollar terms after jumping again in Wednesday trading. Useless or not, the coin has been swept up in the crypto mania that’s gripped markets awash in central bank largesse.

KEEP READINGFor the ruined, Turkey’s crypto crackdown comes too lateWho let the Doge out? Crypto frenzy crashes Robinhood appSotheby’s links up with Coinbase to accept crypto for BanksyMove over Bitcoin, Ether tops $3,000

It’s the latest milestone in a year of speculative excesses for a market Nouriel Roubini once described as “the mother of all bubbles”.

While in the past, trillions of dollars in stimulus by governments and central banks might have triggered a rush into gold for the inflation-wary and risky stocks for the intrepid, a deluge of cash this time round is flooding into the nascent crypto market.

Few illustrate this better than Dogecoin, a so-called memecoin that’s become the destination for a horde of day traders egged on by Internet buzz and a self-propelling buying frenzy.

A potential trigger for the latest leg up: Tesla Inc. co-founder and crypto fan Elon Musk is appearing on Saturday Night Live this weekend, spurring speculation he may talk up Dogecoin again on the comedy show.

“When you think about the full spirit of what this crypto revolution is, there’s something pure in what Dogecoin has done,” Mike Novogratz, founder of Galaxy Digital Holdings, said on CNBC.

“I worry that once the enthusiasm rolls out, there are no developers, there’s no institutions coming in. But it’s got the moniker of the people’s coin right now and it’d be very dangerous to be short.

”The overnight gain took Dogecoin’s one-week advance to 118% and its value to $87 billion in Wednesday trading, according to CoinMarketCap.com data, eclipsing the largest exchange-traded gold fund and even stocks like Fedex Corp. and Snap Inc. A year ago, the asset was worth just $315 million.

It’s all the more remarkable given that other retail favorites from bullish stock options to Cathie Wood’s tech fund have all seen activity dip from the highs earlier this year.

Now, cryptomania might even be hurting gold, according to some analysts. The precious metal has suffered outflows in recent months even as a deluge of stimulus cash drove the value of the world’s crypto market to a $2 trillion record.

“At some point, something is just real,” said Sam Bankman-Fried, the Hong Kong-based chief executive officer of the FTX crypto exchange.

“If Dogecoin is stupid and valueless, it shouldn’t be worth $90 billion. How about gold or Bitcoin or euros? Our collective imagination has given them value, and now we just think about them having value.

”Dogecoin, started in 2013 as a joke based on the Shiba Inu breed of dog, may become so accepted by the mainstream it might evolve into a payment option at retailers, Bankman-Fried said.

At Blockfolio, a firm owned by FTX that helps users manage their crypto portfolios, trading volumes are spiking with Dogecoin’s every gain, a sign it’s become essential to the whole ecosystem.

Dogecoin buying got so fevered Tuesday, Robinhood’s trading app briefly crashed. Other so-called altcoins surged, with Dash spiking 11% over a 24-hour period through the New York morning on Wednesday and Ethereum Classic rising 25%.

While it’s difficult to assign firm reasons to Dogecoin’s ascent, a few factors have fueled the gains. On April 20, a day normally associated with pot, some users got #DogeDay trending to push up the price. Celebrities from Musk to the Dallas Mavericks’ billionaire owner Mark Cuban also jumped on the bandwagon.

The Gemini crypto exchange backed by the Winklevoss twins announced Tuesday it will soon enable trading of the coin.

“As the economy reopens, a lot of these Covid-related movements in various assets will experience some volatility,” said Tony Bedikian, head of global markets at Citizens Bank.

“But I think they are going to become a permanent part of the currency markets as central banks have continued to print money at astronomical levels.”(Adds context throughout and comments from Novogratz, Bedikian)

–With assistance from Yakob Peterseil, Vildana Hajric, Claire Ballentine and Anchalee Worrachate.

Dogecoin, the cryptocurrency that began as a joke when it launched in 2013, is now worth more than General Motors (GM), the American carmaker founded in 1908, based on market cap value.

On Wednesday, Dogecoin's market cap value—the total market value of the circulating supply of a cryptocurrency—hit a reported $87.1 billion, according to CoinMarketCap.

The meme cryptocurrency's market cap value was higher than that of GM, which was recorded to be around $80.3 billion on the New York Stock Exchange (NYSE)/Nasdaq at the time of reporting.

Dogecoin (listed as DOGE on the cryptocurrency market) was priced at around $0.66, marking around a 53 percent rise in the last 24 hours. The price reached as high as just over $0.69 at one point in the same time period, according to CoinMarketCap.

NEWSWEEK NEWSLETTER SIGN-UP >The graphic below, produced by Statista, shows the price changes of selected cryptocurrencies in 2021.



STATISTAREAD MORE

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Its 24-hour trading volume was at over $52.3 billion on Wednesday, marking a 271 percent increase in the same timeframe, according to CoinMarketCap.NEWSWEEK SUBSCRIPTION OFFERS >


Dogecoin's latest market cap value was also more than double that of Twitter. The social media platform's market cap was listed at around $43.4 billion on NYSE at the time of reporting.

The joke cryptocurrency ranked 138th in a list of top assets by market cap on AssetDash, a leaderboard for assets. GM ranked 155 and Twitter ranked 290.

The price of dogecoin has seen a series of surges in recent months, including in mid-April.

The cryptocurrency hit a new all-time high, as the value of a single dogecoin surpassed 20 cents for the first time on April 15.Its value soared from late January, rising by more than 800 percent at one point.

The price flattened out from mid-February and climbed on a sharp incline from early April, according to data from CoinMarketCap.Its price surge has been helped by social media buzz, with nods from public figures such as Tesla CEO Elon Musk and several celebrities, as well as more recently from Slim Jim, the American snack brand.


Dogecoin's price hike on April 15 reportedly came after a shout-out from the CEO of Conagra Brands, the parent company of Slim Jim. The meat stick brand has been tweeting about Dogecoin from early March.

The Twitter account of Slim Jim saw a 160 percent increase in followers after it began engaging with Dogecoin content. Its tweet impressions also soared, receiving 35 million impressions in 25 days, according to Conagra CEO Sean Connolly, CoinDesk first reported on April 15.

"We've seen a market uptick in audience interaction, including direct engagement and advocacy from the person that created Dogecoin," Connolly said on an earnings call at the time.

The dogecoin (DOGE) army is not the only one making a killing this year. Miners responsible for generating the Shiba Inu-themed cryptocurrency may also be laughing their way to the bank.

• The daily revenue of dogecoin miners rose to a record high of $3.6 million on April 26, marking a 4,575% rise from the New Year's day tally of $77,000, blockchain data provided by ByteTree shows.
• Revenue estimates assume miners, who operate predominantly on cash, sell their coins immediately.
• Miners receive newly created coins and transaction processing fees as a reward for mining blocks and processing transactions on the distributed ledger.

Dogecoin daily miner revenueSource: ByteTree

• The price of dogecoin has rallied by 7,000% this year, sending miner revenue skywards.
• The meme-based cryptocurrency reached a record high of 45 cents on April 18 and was last seen changing hands near 32 cents, up nearly 20% rise on a 24-hour basis.
• Data provided by Coin Metrics shows a 60-fold increase in daily transaction fees this year alongside several brief spikes in the number of daily transactions.
• However, transaction fees brought in just $23,200 or 0.64% of the total miner revenue of $3.6 million on April 26.

Dogecoin: Daily transaction fees and transaction countSource: Coin Metrics

• "Transaction fees have risen, but price overwhelms," ByteTree CIO Charlie Morris said.
• "The market has been squeezed higher. I suspect many people who owned it a few years ago have forgotten, leading to tighter supply than perceived," Morris added.
• Some observers fear the ongoing price rally is a bubble that can burst easily as 98 wallets are holding nearly 65% of all coins. Besides, the cryptocurrency is heavily influenced by Tesla and SpaceX CEO Elon Musk’s usually humorous tweets.
• Bitcoin bull and CEO of Galaxy Digital Mike Novogratz recently called dogecoin's rally a sign of speculative retail frenzy.
• However, DOGE's real-world adoption is gaining traction with the Dallas Mavericks basketball team, medical supplier CovCare and several others adopting the cryptocurrency as a payments alternative.

Germany’s Financial Supervisory Authority BaFin has warned investors the cryptocurrency exchange Binance may have violated European securities rules with the launch of its stock tokens.

• In an announcement Wednesday, BaFin said the Binance stock tokens tracking the movement of shares in Tesla, Coinbase and MicroStrategy have been identified as “suspicious” and require a prospectus that wasn't issued prior to trading.
• BaFin said the cryptocurrency exchange has violated the prospectus obligation under Article 3 Paragraph 1 of the European Prospectus Regulation.
• According to BaFin, the violation of the prospectus constitutes an administrative offense and can be punished with a fine of up to €5 million ($6 million) or 3% of Binance’s annual revenue.
• Elsewhere red flags have already been raised by Hong Kong law firms regarding the Binance stock tokens launched earlier this month.
• On April 22, the Financial Times reported that U.K.'s regulator, the Financial Conduct Authority, is “working with the firm [Binance] to understand the product, the regulations that may apply to it and how it is marketed.”
• The stock tokens allow Binance customers to purchase as little as one-hundredth of a regular share using Binance USD (BUSD), a U.S. dollar stablecoin issued by the exchange.
• Binance was contacted for comment, but didn't immediately respond at the time of publication.

Read more: Binance’s Tesla, Coinbase Stock Tokens Under Scrutiny From UK Regulator: Report

Non-fungible tokens, or NFTs, are all the rage. But their popularity may have already peaked. Prices of NFTs, the digital certificates that have taken the art and collectibles world by storm this year, have plunged about 70% from their high point in February.

The average price for an NFT on April 5 was about $1,256 -- down from more than $4.000 in late February, according to market research site NonFungible.com.

Data from The Block, another crypto research firm, shows a similarly large decline for both prices and NFT sales as well.

NFTs have been an investing and pop culture mania for the past few weeks, leading some to wonder if the frenzy is a market bubble fueled by the wealthy and younger traders flush with stimulus money.A JPEG file by the digital artist Beeple recently sold for $69 million at Christie's. NFTs have helped boost the price of sports trading cards. Rock group Kings of Leon released their most recent album as an NFT.





NFTs are suddenly everywhere, but they have some big problems

There was even a recent "Saturday Night Live" skit about NFTs.

And several CNN Business staffers have also wrote about how they've dabbled in the NFT market with the purchase of cartoon cats.

The NFT craze has helped boost the value of ethereum, the cryptocurrency whose blockchain network is used for a large number of NFT transactions. Ethereum prices are up more than 180% so far this year, a surge that exceeds the spike in bitcoin's price (XBT).

 maker Funko (FNKO) and Hall of Fame Resort & Entertainment (which owns an NFL themed village in Canton, Ohio) have also soared thanks to partnerships to develop non-fungible tokens. 

Funko announced last week that it was buying a majority stake in TokenWave, LLC, the developer of the TokenHead app and website that tracks NFTs.

Hall of Fame Resort & Entertainment inked a partnership late last month with marketing firm Dolphin Entertainment (DLPN) to develop football NFTs,
Proponents of NFTs point out that each token is unique and can't be replicated, which creates a scarcity value that is good for both the artists that make them as well as collectors.




NFTs: Fad or future? 2 experts weigh in


Funko CEO Brian Mariotti noted that in the release about the TokenWave deal, saying that the investment in NFTs marries the digital and physical collectibles business.

"The NFT world is all about content," Mariotti said.That may be true, but the sharp, sudden rise in the value of NFTs and more recent pullback is reminding some of other similar historic market bubbles, such as tulip mania in the 1600s, the dot com/tech crash of 2000 and bank stocks and housing prices in 2008.NFTs may be here to stay, but they just may not be worth the staggering sums of money that some people have shelled out for them in the past few weeks.

Even Beeple, aka Michael Joseph Winkelmann, joked with CNN's Julia Chatterley in March that he might be the biggest winner of what could turn out to be an NFT bubble.

• Bitcoin's three-month realized volatility has fallen to 86%, after its rise to above 90% in February.
• While volatility drops for the leading cryptocurrency, institutions could see this as a green light to enter the crypto space.
• Former SEC chairman Jay Clayton warns of new regulations that could come for Bitcoin. 

Institutions have been entering the cryptocurrency space, as Goldman Sachs and Morgan Stanley are two of the latest large banks to join in providing Bitcoin-related products and services to their clients. Researchers from JPMorgan Chase & Co. believe that other institutional investors will follow as Bitcoin’s volatility levels have declined.

Bitcoin funds inflow at the expense of gold

JPMorgan strategists, including Nikolaos Panigirtzoglou, noted a three-month realized volatility for Bitcoin has fallen to 86%, after its rise to above 90% in February. The six-month realized volatility has declined to roughly 73%. As Bitcoin’s volatility levels decrease, institutions could find the leading cryptocurrency more appealing. The strategists explained:

These tentative signs of Bitcoin volatility normalization are encouraging. In our opinion, a potential normalization of Bitcoin volatility from here would likely help to reinvigorate the institutional interest going forward.

Bitcoin’s volatility has long been a primary concern for institutional investors, as the higher volatility an asset has, the more risks are associated with it. The pioneer digital currency’s correlation structure relative to other traditional assets could also boost its popularity. As JPMorgan strategists explained, Bitcoin is a more attractive asset from a diversification point of view. 

The world’s largest cryptocurrency has been less correlated with traditional assets such as stocks and gold, which bolsters arguments that the new asset class could offer portfolio diversification benefits. In the past two quarters, as JPMorgan strategists suggested that $7 billion of inflows into Bitcoin funds have come at the expense of gold, which has seen the $20 billion of outflows from exchange-traded funds that track the precious metal.

If Bitcoin were to match the total private sector investment in gold, the leading digital currency would reach the price of $130,000. 

Bitcoin could be more regulated in the future

While institutions are just starting to offer Bitcoin and crypto-related products, the new asset class could be more regulated in the future.Former US Securities & Exchange Commission (SEC) chairman Jay Clayton expects regulation for cryptocurrencies to come in the future, both directly and indirectly.


Clayton, currently an adviser for One River Asset Management on cryptocurrencies, believes that the regulatory environment around the new asset class would eventually evolve. 


Although Clayton clarified that Bitcoin had not been clarified as a security for a long time, its status does not earn protection from new regulations, which he hinted — could be coming soon. 

The former SEC chairman’s remarks on Bitcoin also shed light on the SEC v. Ripple case, as the regulator filed its $1.3 billion lawsuit against the blockchain company and its executives, Brad Garlinghouse and Chris Larsen, for allegedly selling XRP illegally since 2013. 

In the case, the SEC argued that XRP tokens have characteristics of securities and that the company failed to register them as such. Since both Bitcoin and Ethereum were not considered as securities by the SEC, Ripple relied on this stance for one of its main lines of defense. 

Tesla is not making it attractive to pay for a model S, 3, X or Y in BTC.

This week, CEO Elon Musk announced via Twitter (where else?) that his upstart automaker had begun letting interested buyers pay for their electric vehicles in bitcoin.

It’s part of a corporate push to acquire as much of the original cryptocurrency as possible – or at least that’s how it seems – as the manufacturer has no plans to convert the cryptocurrency to fiat. 

But the idiosyncrasies of crypto make it difficult to take advantage of this option.

For example, according to the company’s Bitcoin Payment Terms and Conditions, bitcoin transactions must be completed within a certain window of time, or else the price in BTC expires and the buyer must ask for a new one. “You have about 30 minutes to make a payment,” a Tesla representative for the northeast region said Thursday.

While that condition is not surprising given bitcoin’s infamous volatility – depending which direction the exchange rate moves, either the car buyer or Tesla could get hosed by a wide swing – it underscores how even in a roaring bull market, crypto still struggles to gain widespread acceptance as a payment method. 

The fault lies with the native complexities of the Bitcoin system, the U.S. tax policy around cryptocurrencies and, in this case, a paucity of information available from Tesla’s customer support team. At least, if you’re a member of the press looking for answers.

No BTC discount

Tesla is notoriously media-shy, after disbanding its PR department late last year. So after calling headquarters in Palo Alto and getting bounced around, and then separately emailing CFO Zach Kirkhorn and the black-hole address for press inquiries, this reporter phoned a number of Tesla retailers based in the northeast and along the West Coast … and learned very little about purchasing a vehicle with bitcoin. 

“It’s very simple. If they ask about purchasing it, we can assist them with making an appointment,” the northeast Tesla representative said, unhelpfully. To be fair, a New Jersey resident who is actually in the market for a vehicle said she called a Tesla branch and got all her questions answered. 

She told CoinDesk that the Paramus-Route 17 gallery accepts bitcoin – though was told flat-out there was no early-adopter’s discount. 

But we were able to glean a few telling insights, including the 30-minute payment window.


A Tesla(Cam Bradford/Unsplash, modified by CoinDesk)

Another is that Tesla will only accept exact amounts and will not reimburse payments sent to an incorrect alphanumeric address. 

In fact, bolded passage punctuate the company’s Bitcoin Payment Terms & Conditions document with warning including:

"IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED.” 

And… 

"YOU MUST EXERCISE CARE WHEN INPUTTING THE BITCOIN ADDRESS INTO THE RECIPIENT FIELD BECAUSE BITCOIN TRANSACTIONS CANNOT BE REVERSED. WE ARE NOT RESPONSIBLE FOR ANY FAILURE TO ACCURATELY INPUT THE ALPHANUMERIC CODE INTO THE RECIPIENT FIELD.”

‘Not quite sure’

That document says nothing about tax liabilities, though this is another consideration for U.S. buyers. Under current policy, a purchase of goods or services made with cryptocurrency is a taxable event – even if it’s just a cup of coffee. 

This means that car buyers must account for potential gains or losses if their bitcoin is worth more or less now than when they first purchased it. 

Finally, there are the deflationary incentives in the Bitcoin ecosystem that may discourage potential buyers from spending their coins on cars, or anything.

A hard cap of 21 million coins, a decreasing rate of issuance and a growing number of buyers create favorable conditions for the price of BTC to rise over the years, all else equal.


A Tesla showroom in Miami.(Joe Raedle/Getty Images)

While Lamborghinis have long been the objet petit a for many Bitcoiners, those that have made the purchase – or any purchase – often come to regret it. In 2013, someone purchased a $103,000 Tesla Model S Performance for 91.4 BTC. Those coins today would be worth $4.7 million.

Asked whether there has been any interest from HODLers since Musk tweeted this week, the Tesla representative said, “Not quite sure if anything sold yet in bitcoin.”

But another employee sounded excited: “I don’t really know that much, and don’t want to take on the liability of speaking to the press, to be frank. It’s great news,” this Tesla representative said.

Ray Dalio, founder of the $150 billion hedge fund Bridgewater Associates, believes bitcoin (BTC, -3.33%) has “proven itself” in the last 10 years but still sees a “good probability” that it will be outlawed by governments.

Speaking to Yahoo Finance’s Andy Serwer on Wednesday, the billionaire investor said it was “very likely under a certain set of circumstances” that bitcoin would be “outlawed” as gold was in the 1930s.

Under the U.S. Gold Reserve Act of 1934, it became illegal for individuals to own gold because, according to Dalio, governments did not want gold to compete with money or credit as a store of value.

“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control,” Dalio added, citing India’s proposed ban on crypto as an example.

Read more: Indian Government Officials Give Mixed Signals Over Planned Crypto Legislation

He added that bitcoin has “proven itself over the last 10 years,” having not been hacked and building a significant following.

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Dalio has previously warned about the possibility of cryptocurrency bans by governments.

On other occasions, he expressed positive sentiment about bitcoin’s role as a diversifier in investment portfolios.

In November, prior to BTC’s staggering run-up to $50,000 and beyond, Dalio said if bitcoin or other cryptos become “material,” governments will “outlaw” it. “They’ll use whatever teeth they have to enforce that,” he said at the time.