13 May, 2021
Tesla Suspends Bitcoin Payments Over Environmental Concerns
Elon Musk announced through a Tweet that Tesla Motors will stop accepting payments in Bitcoin.
On 8 February 2021, the company declared that they are adding $1.5 billion worth of BTC to their balance. Later in March, Musk announced through a Tweet that customers could would not be able to buy Tesla cars with Bitcoin.
“The current consensus mechanism of Bitcoin is energy-intensive and takes a toll on the environment. For this reason,” Musk said. “Tesla is temporarily discontinuing its use as a payment method, but will resume once mining transitions to more sustainable energy sources.” The decision by Musk might ultimately benefit the cryptocurrency as it may influence more Bitcoin mining operations to turn away from fossil fuels. There has also been speculation about Tesla’s more direct involvement in providing its clean energy technology to the sector.
Bitcoin Adoption Keeps Growing During Alt Season
Bitcoin adoption is on the rise even as alternative cryptocurrencies gain market share.
Bitcoin dominance, the ratio of BTC value to the total market cap of all cryptocurrencies, has been the lowest since April 2021. While the decline could suggest that some investors might be distracted by altcoins, including DOGE, SHIB and XLM, the BTC adoption rate is steadily increasing.
Crypto analytics firm Coinmetrics noted that the number of addresses holding small amounts of BTC has increased by 710,000 since Jan 2021. For context, in the entire year of 2020, the addresses holding BTC only increased by 610,000.
DeFi Protocol Token Suffers $24.5M Exploit
Decentralised finance protocol xToken announced that it had experienced an exploit on Wednesday 12 May 2021 in which an attacker used flash loans to steal $24.5 million.
Mudit Gupta, a Blockchain team lead at Polymath, analyzed the theft and concluded that the attacker got away with more $8 million worth of xToken’s SNX cryptocurrency and more than $6 million dollars of the protocol’s BNT tokens. The team has paused mining on all contracts to further investigate.
SEC Crypto Crackdowns Top $1.7 Billion in Penalties
According to a report published by Cornerstone Research, The U.S Securities and Exchange Commission (SEC) has collected over $1.77 billion in penalties to settle 70% of its crypto enforcement actions.
Simona Mola, a researcher at Cornerstone commented, “In the last seven years or so, the SEC has established itself as one of the main regulators policing the cryptocurrency space.”
The commission has initiated more than 70 enforcement actions as well as various subpoenas that involved cryptocurrencies and entities related to them. The most frequent allegations were fraud (52%) and unlisted securities offering (69%). About 37% of the cases handled included a combination of both.
Dogecoin Ripoff SHIB Tanks After Ethereum's Vitalik Buterin Dumps Tokens
Vitalik Buterin, Ethereum’s founder single-handedly shook almost all new DOGE-like alt-coins on 13 May, 2021.
Most prominent among them was SHIB, whose creators had made the mistake of sending more than half of the total token supply to Buterin. In doing so they reasoned that the tokens had been essentially burned and removed from the market, which would subsequently increase demand for them. Buterin instead burned the SHIB holders by selling the tokens.
Vitalik reportedly withdrew over 2 trillion Shiba INU tokens (40+ million) from the Uniswap exchange. He then went on to trade 50 billion Akita Inu tokens and 40 trillion Dogelon Mars (ELON) for 619 ETH. These actions caused the alt-coin market to tumble by almost 90% in an hour.
The Ethereum founder sent 500 of the recently purchased ETH and 10% of the liquidated SHIB tokens to a wallet associated with the Indian Covid Relief Fund, and another 1000 ETH to a Coinbase wallet associated with the Methuselah Foundation, a medical charity for extending human life.
JennyDAO Raises $7M to Acquire and Tokenize NFT Collections
Crypto investment firm Multicoin capital is collaborating with Youtube star Mr.beast to make fractionalized non-fungible token (NFT) investments through JennyDAO, a decentralized autonomous organisation (DAO).
JennyDAO plans to acquire rare NFTs for fractionalization, a process that allows investors to own shares of expensive assets. It has recently raised $7 million and is on the lookout for high-end NFT pieces which are singular by nature and can go for millions of dollars. A distributed spin on high-end NFT ownership, fractionalizing a collection of valuable NFTs can make them more accessible to smaller collectors.
BTC dropped below $50,000 as $2 billion in crypto long positions liquidated
On May 12 2021 Bitcoin dropped below the $50000 price point as $2 billion worth of long positions in crypto futures market were liquidated within an hour.
Data from Coinmarketcap shows that the price started to drop around 22:00, and plunged to $46000, the lowest its been in 3 months. Eventually, the price recovered back to $51000.
According to Bybt, a trading information platform, around $2 billion in long cryptocurrency positions were liquidated in an hour, with $1.2 billion coming from Bitcoin.
Altcoins also suffered significant drops, all the top ten cryptocurrencies by market cap dropped 5% to 17% in value with Dogecoin leading the fall.
Huobi Regroups Investment Arms to Huobi Ventures with $100M
Popular Chinese crypto exchange Huobi has merged its investment arms — Huobi Eco Fund, Huobi Capital and Defi Labs into a single venture called Huobi Ventures that will be spearheaded by its new CFO Zhang Li.
According to the exchange, the new venture fund will allocate $100 million for innovative early-stage blockchain and Defi startups over the next 3 years. The firm is also establishing a $10 million fund that will specifically focus on the NFT ecosystem.
The company has previously invested $69.42 million in blockchain and media projects that produced a return of approximately $215 million on its balance sheet. In April 2021, Huobi Asset Management, a subsidiary of the publicly traded Huobi Tech, introduced its passive bitcoin and ether funds to institutional investors in Hong Kong.