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Wednesday Watch: Pounding on Resistance

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Please share and grow the BitPinas community.

Good morning. It’s the middle of the week. Wait, what? It’s also the middle of December 2020. A little over two weeks left and we bid this year goodbye.

Welcome to Wednesday Watch, part of our new series: BitPinas Daily. We will look at the price of Bitcoin, Ethereum and the major cryptocurrencies. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. 

Market Price as of December 16, 2020:

Bitcoin $19,431 1.1%
Ethereum $589.05 0.6%
XRP $0.469 (-5.8%)
Tether $0.99 0.0%
Litecoin $81.39 -1.1%
SLP $0.034 7.1%

Bitcoin closed December 15, 2020, at $19,431 per BTC. We’re up 0.8% in the last 7 days and 171% since the year began. This is also 2.0% below the previous all-time high of $19,832 on December 1, 2020.

Bitcoin’s market capitalization stands today at $360,907,329,145 which is 62.4% of the entire cryptocurrency market. 

Table of Contents.

Philippines: #CryptoPH

Last Bloomcast episode

Bloomcast is a weekly show on Facebook Live about Bitcoin, DeFi, crypto and everything else Axie. Hosted by BloomX’s Luis Buenaventura, it’s a staple in crypto Philippines and a must-watch. They invite local crypto enthusiasts and crypto company owners, crypto and fintech professionals, blockchain gamers, people you might have read here on BitPinas or on Twitter. You should be on Twitter.

Yesterday was its last show for the year. Prizes were given away. Not just Bitcoin, but a full Axie team so the winner could start their play-to-earn journey. Yield Guild Games’ Gabby Dizon was also there to discuss his new startup. We briefly wrote about it here. Otherwise, check an introductory article about Yield Guild here.

Watch Bloomcast’s final 2020 episode here.

Bitcoin

More billion-dollar firms buying Bitcoin

First, there was MicroStrategy, then there was Square. PayPal soon followed. Days ago, a 169-year old insurance firm MassMutual put $100 million in Bitcoin. It’s a tiny drop out of its $235 billion war chest, but the move could influence other older institutions to consider Bitcoin.

And so today,  we’ve read that London-based asset manager, Ruffer Investment announced that it allocated 2.5% of one of its funds to Bitcoin. This company manages $20.3 billion in assets, so 2.5% of that is also a drip. Still, it speaks volumes when it comes to the increasing interest of traditional financial institutions into Bitcoin. (Decrypt)

Stablecoins

Stablecoin issuers “must come out of the shadows”

A stablecoin is a cryptocurrency whose value is pegged to another instrument. In the case of Tether (USDT), its value is “tethered” to the U.S. dollar, so $1 is USDT 1. Stablecoins are a hot topic. With Central Banks very likely to issue their own “central bank digital currency” in the future, what will be the use of stablecoins? If it competes with sovereign currencies, won’t the government stop them from proliferating?

Those are questions still without answers right now. The G20 was firm: “no so-called ‘global stablecoins’ should commence operation until all relevant legal, regulatory and oversight requirements are addressed.

The Office of the Comptroller of the Currency (OCC), which is the U.S. banking regulator said in a recent paper that fintech banks and stablecoin issuers are “encouraged to reach their full potential by coming out of the shadows and joining the chartered banking system.” (Decrypt

Locally, the BSP did approve UnionBank’s PHX stablecoin, only used within the bank’s system. Check out our interview with UB’s Arvie de Vera here.

What Else is Happening?

  • Mt. Gox Creditors’ Wait Nearly Over as Trustee Announces Draft Rehabilitation Plan (Coindesk)
  • China is testing its digital currency in Suzhou. Here’s an early look at the user experience (The Block)
  • DeFi’s new rally (Cointelegraph)
  • JPMorgan Says MassMutual’s Bitcoin Foray Signals Widening Demand (Bloomberg)

This article is first published on BitPinas: Wednesday Watch: Pounding on Resistance

Please share and grow the BitPinas community.

Source: https://bitpinas.com/news/wednesday-watch-pounding-on-resistance/

Blockchain

Tesla Reports $23 Million Impairment From Its Bitcoin Holdings

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Tesla, Elon Musk’s electric car manufacturer, released its quarterly earnings results, reporting more than $1 billion in profits for the first time since its launch.

It’s not all fun and games, though. To the delight of Elon’s crypto Twitter fans-turned-haters, Tesla’s investment in Bitcoin made it $23 million in losses after the markets crashed during the second quarter of 2021.

Oddly enough, the only mention of bitcoin appears in the “profitability” section of the report, mentioning the loss.

“Positive impacts were partially offset by growth in operating expenses including increased SBC, Model S/X ram (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.”

Tesla Lost $23 Million… But Did It?

The $23 million loss might seem digestible considering Tesla invested about $1.5 Billion in Bitcoin. An almost 50% drop from its ATH could certainly trigger concern among investors, especially those who fear for a continuation of the downtrend that could accelerate upon Bitcoin’s drop below $30K.

However, this stat may be due more to the exploitation of a legal loophole than to an actual monetary loss.


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According to the US norms, accountants must record the value of their cryptocurrency investments at the time they are procured. If cryptocurrencies go up in price, nothing happens as long as the company hodl. The business only has to record the transaction in case of a sale. However, when prices go down, the company must record the decrease in its investment as an impairment charge.

Therefore, even though sales gains may be recorded, the tax incidence may be softened by the declines during the time the company hodled its tokens.This is due to the classification of cryptos as an “indefinite-lived intangible asset.”

In short, Elon haters probably don’t have much to celebrate, as it’s really all about a technicality… Although on second thought, $22 million seems like spare change for the world’s wealthiest man.

The Musk Effect

Tesla’s Bitcoin purchase was crucial to the Bitcoin price history.

After a brief exchange of tweets between Elon Musk and MicroStrategy CEO Michael Saylor, Tesla announced a massive purchase that put it on the podium of publicly traded companies with the most significant Bitcoin holdings.

As a result, the price of bitcoin skyrocketed at a frenetic pace, reaching an ATH in April 2021. At that point, Tesla had made more money with Bitcoin than it did with its entire car production.

However, another Tesla decision contributed almost decisively to killing this trend, driving bitcoin to its most significant decline since late 2017. The company’s announcement to stop taking payments in Bitcoin because of its environmental implications caused a panic in the markets that ended with a nearly 50% drop as the days passed.

However, recently Elon Musk acknowledged that Tesla could accept Bitcoin again if the network becomes environmentally friendly enough. After an online conference with the CEO of Twitter and a dose of optimistic rumors related to the possibility of Amazon accepting Bitcoin, cryptocurrencies had a significant rally today.

It seems that the “Musk Effect” is still alive after all.

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Source: https://cryptopotato.com/tesla-reports-23-million-usd-impairment-q2-2021/

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Blockchain

Tesla Reports $23 Million Impairment From Its Bitcoin Holdings

Published

on

Tesla, Elon Musk’s electric car manufacturer, released its quarterly earnings results, reporting more than $1 billion in profits for the first time since its launch.

It’s not all fun and games, though. To the delight of Elon’s crypto Twitter fans-turned-haters, Tesla’s investment in Bitcoin made it $23 million in losses after the markets crashed during the second quarter of 2021.

Oddly enough, the only mention of bitcoin appears in the “profitability” section of the report, mentioning the loss.

“Positive impacts were partially offset by growth in operating expenses including increased SBC, Model S/X ram (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.”

Tesla Lost $23 Million… But Did It?

The $23 million loss might seem digestible considering Tesla invested about $1.5 Billion in Bitcoin. An almost 50% drop from its ATH could certainly trigger concern among investors, especially those who fear for a continuation of the downtrend that could accelerate upon Bitcoin’s drop below $30K.

However, this stat may be due more to the exploitation of a legal loophole than to an actual monetary loss.


ADVERTISEMENT

According to the US norms, accountants must record the value of their cryptocurrency investments at the time they are procured. If cryptocurrencies go up in price, nothing happens as long as the company hodl. The business only has to record the transaction in case of a sale. However, when prices go down, the company must record the decrease in its investment as an impairment charge.

Therefore, even though sales gains may be recorded, the tax incidence may be softened by the declines during the time the company hodled its tokens.This is due to the classification of cryptos as an “indefinite-lived intangible asset.”

In short, Elon haters probably don’t have much to celebrate, as it’s really all about a technicality… Although on second thought, $22 million seems like spare change for the world’s wealthiest man.

The Musk Effect

Tesla’s Bitcoin purchase was crucial to the Bitcoin price history.

After a brief exchange of tweets between Elon Musk and MicroStrategy CEO Michael Saylor, Tesla announced a massive purchase that put it on the podium of publicly traded companies with the most significant Bitcoin holdings.

As a result, the price of bitcoin skyrocketed at a frenetic pace, reaching an ATH in April 2021. At that point, Tesla had made more money with Bitcoin than it did with its entire car production.

However, another Tesla decision contributed almost decisively to killing this trend, driving bitcoin to its most significant decline since late 2017. The company’s announcement to stop taking payments in Bitcoin because of its environmental implications caused a panic in the markets that ended with a nearly 50% drop as the days passed.

However, recently Elon Musk acknowledged that Tesla could accept Bitcoin again if the network becomes environmentally friendly enough. After an online conference with the CEO of Twitter and a dose of optimistic rumors related to the possibility of Amazon accepting Bitcoin, cryptocurrencies had a significant rally today.

It seems that the “Musk Effect” is still alive after all.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

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Source: https://cryptopotato.com/tesla-reports-23-million-usd-impairment-q2-2021/

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Blockchain

Goldman Sachs Files for “DeFi” ETF to Track Tech Giants

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The banking giant filed an application with the U.S. Securities and Exchange Commission (SEC) on July 26 for a DeFi ETF that would offer exposure to public companies.

According to the filing, the proposed fund called the “Goldman Sachs Innovate DeFi and Blockchain Equity ETF”, seeks to provide investment results that closely correspond to the performance of the Solactive DeFi and Blockchain Index from the German indices provider.

The details were thin on the ground but the fund will invest at least 80% of its assets into securities, stocks, and fintech firms featured in the index.

DeFi Fund Without The DeFi

It appears that Goldman may be a little confused over the definition of “DeFi”. A closer look at the Solactive Index reveals that it is largely comprised of U.S. tech giants and international telecoms companies.

Of the top twenty components in its July 23 report, not one of them could be described as a DeFi or blockchain project or organization. The top three were Nokia, Facebook, and Google’s Alphabet.


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Also in the list of stocks tracked were payments giants Visa, Mastercard, and PayPal, tech giants Microsoft, IBM, and Intel, and Chinese e-commerce and telecoms monopolies Baidu, Alibaba, and Tencent.

Hardly what anyone would describe as “decentralized finance”.

It is not the first time Goldman Sachs has got its wires twisted over the crypto industry.

Confusion Reigns at Goldman

In a June 14 report, titled “Digital Assets: Beauty Is Not in the Eye of the Beholder”, the bank concluded that Bitcoin is not “a long-term store of value or an investable asset class”.

They contradicted a May 21 report titled “Crypto: A New Asset Class?” which was largely positive about them with the global head of digital assets at Goldman, saying “Bitcoin is now considered an investable asset”.

Earlier this month, analysts at the investment bank outlined their reasoning behind the claim that Ethereum will eventually become a better store of value than Bitcoin. It also reported that 45% of the ultra-rich are interested in crypto.

In April, Goldman added Bitcoin to its year-to-date returns report, and in March, the bank filed for a Bitcoin ETF with the SEC according to crypto custody firm New York Digital Investment Group (NYDIG).

Now it seems that Goldman has equated DeFi with the likes of Facebook, Google, and Microsoft!

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Source: https://cryptopotato.com/goldman-sachs-files-for-defi-etf-to-track-tech-giants/

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