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El Salvador Becomes First Country To Embrace Bitcoin As Legal Tender |
Lawmakers in El Salvador made history last Tuesday when they voted to adopt Bitcoin as a new form of legal tender. Congress approved President Nayib Bukele's proposal to embrace the cryptocurrency, with 62 out of 84 possible votes. The historic announcement garnered praise from leaders of other South American world leaders including Argentina, Paraguay, Brazil, and Panama. Most of which are now frantically trying to organize a plan to make their country the next to adopt favorable cryptocurrency legislation.
The bill passed by El Salvador lawmakers explicitly referred to Bitcoin as a means of circumventing hostile actions taken by Central Banks such as the FED and the ECB. In a tweet shortly before the bill was passed, President Bukele said "It will bring financial inclusion, investment, tourism, innovation and economic development for our country." Bukele also instructed state-owned geothermal electric firm LaGeo to develop a plan to offer bitcoin mining facilities using renewable energy from the country's volcanoes.
In El Salvador, around 70 percent of the population do not use or have access to banking services. This is particularly concerning for El Salvador considering remittances represent roughly 23% of their annual GDP. Using the traditional financial system, sometimes up to 50% of a remittance payment can be taken as fees by the various intermediaries that touch the transaction. In a country where 1/4th of the GDP comes from foreign remittance, the importance of a peer-to-peer monetary network like Bitcoin can not be understated.
What this means for crypto
This may be the biggest news for Bitcoin ever. The adoption of Bitcoin on a national scale has long been the goal of Bitcoiners, but few suspected that day to come so soon. Similar to how Microstrategy's Bitcoin announcement set off a chain reaction of corporations holding Bitcoin on their balance sheet, this announcement will surely lead to a tidal wave of developing nations racing to adopt Bitcoin as a means of payment.
Currency is a game of Power
The dominance of the United States on a global stage has largely stemmed from two factors, their military, and their currency. With most developed nations now setting their sites on central bank digital currencies, it seemed almost inevitable that power would continue to consolidate towards the largest governments in the world. However, announcements like these may change everything. Now that the example has been set for countries to adopt a decentralized and nationless currency, we are less beholden to the powers of our own Central Bank. Decentralization always follows the path of least resistance, and in doing so, it has become the answer for the developing world. The place that needs it the most.
Finally, now that El Salvador has declared Bitcoin as legal tender in their country, other countries must now view it as a foreign currency. This means it will no longer be able to be taxed as an asset, and must instead be thought of as a foreign investment income.
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Warren Buffet Invests $500M In Crypto-Friendly Digital Bank, Nubank |
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Every time a new billionaire buys Bitcoin, we tend to reserve a section in the Newsletter for the newest Billionaire-turned-Bitcoiner. While the most prolific investor of all time has not quite taken the plunge yet, his latest investment was certainly a step in the right direction. Last week, Berkshire Hathaway CEO Warren Buffet finalized a $500M series G investment into the Brazilian, pro-Bitcoin digital bank, Nubank. Nubank says it will offer bitcoin investments following its acquisition of brokerage firm Easynvest which offers the trading of Brazil’s first bitcoin exchange-traded fund (ETF).
Founded in 2013, Nubank says it has 40 million customers, making it the largest digital bank in the world in terms of the number of clients. With the new investments, Nubank has become “the most valuable digital bank in the world and one of the largest financial institutions in Latin America,” the announcement details. Nubank said Tuesday that it plans to use the money raised to fund its international expansion to Mexico and Colombia, launch new products and services, and hire more employees. The post-money valuation of Nubank is estimated at $30 billion.
Is Warren Changing His Mind On Crypto?

For as long as he has been around, Warren Buffet has been a value investor. He finds companies with strong cash flows that he thinks are undervalued and invests big into them. For this reason, Bitcoin doesn't fit nicely into his investment thesis because it is not a company, does not earn cash flow, and does not have a CEO to bet on. However, given the meteoric rise of Bitcoin as a store of value, I don't think it will be long before we see Warren holding a percentage of his funds in Bitcoin as opposed to dollars.
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Ledger Raises a Massive $380M at a $1.5B Valuation |
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Ledger, the cold storage, hardware crypto wallet maker, announced it’s huge $380 million series C at a $1.5B valuation in a press release last Thursday. The round was led by 10T Holdings, a digital assets fund founded by well-known macro investor Dan Tapiero. The round saw participation from both new and old investors, such as Tekne Capital, Uphold Ventures, Felix Capital, Draper Associates, DCG and more. The funding will help Ledger expand it’s product’s offerings, enterprise capabilities and potential international expansion.
In case some of our readers don’t already know, Ledger’s main offering is a hardware wallet that enables users to store and manage their digital assets off-exchange. Since their launch in 2014, the Paris-based company has played a pivotal role in supporting the growth of the crypto asset ecosystem and has exploded alongside it. To-date, Ledger has sold over 3 million hardware wallets, enables 1.5 million people monthly to track and manage their assets using Ledger Live, and secures around 15% of all crypto assets worldwide.
“It’s a $1.5 billion valuation that we’ve reached through this round, but the reality is that our real target is a $100 billion valuation, and the reason why we think it’s going to be a $100 billion valuation is because the market’s going to be really huge,” explains Pascal Gauthier, chairman & CEO of Ledger, to the Block. “Comparing bitcoin to gold is fun, but this market is going to be the whole value in the world going onto blockchain at one point, the whole value in the world being tokenized… Ledger is ideally and uniquely positioned to be that secure gateway to Web3.”
With fresh capital at hand, the company has plans to bring DeFi services to it’s users through ledger live, a gam changer for many who would like to make the switch from online storage. Ledger also looks to nearly double it’s human resources, with hopes to hire an additional 300 employees. Additionally, the company aims to focus on tailoring it’s services to non-English speakers.
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Bitcoin Breaks Above Descending Triangle - Next Test At $41K |
Despite the monumental news coming out of El Salvador recognizing Bitcoin as a form of legal tender, the price has not yet fully reflected the positive momentum. Bitcoin has been consolidating in a descending triangle since May 19th. This tends to be a bearish technical pattern. However, most of the price action within the pattern followed the upper line of resistance until it finally managed to breakout above the descending resistance late Sunday. If we manage to break above this pattern, we are not yet out of the woods. The next major test would be at the 200-day exponential moving average, currently residing just under $41K. If the price breaks down below the descending triangle, it is likely that we would see a pullback to levels around $25K. Hopefully, the news coming from El Salvador, and news of other South American countries following suit will provide enough energy to switch the momentum and help drive Bitcoin back up for a recovery.
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Altcoin Momentum Turns Bearish As Liquidity Shifts to Bitcoin |
Following the weakening rally two weeks prior, altcoin momentum has shifted bearish over the past week. As prices have consolidated across the market, more liquidity is flowing into larger, more stable assets like Bitcoin and stable coins. The last two weeks have highlighted a clear shift in momentum as the previous rally was not able to make a higher relative high. We think it is likely that altcoin dominance will retrace back to the ascending green line of support, and possibly even retest the 100-day EMA.
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El Salvador Becomes First Country to Declare Bitcoin Legal Tender w/ Jack Mallers |
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Is Bitcoin a Trojan Horse for Freedom?
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RIOT Mining CEO Debunks Mainstream Propaganda on BTC Energy Mix
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Aave is an open-source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets. It is the leading DeFi lending application with over $12.5B in value locked on the platform.
AAVE has been one of the top-performing Defi assets last year, but recently had an over 50% drop from all-time highs vs Bitcoin. It has found support at a familiar horizontal line of support and is now setting higher highs and higher lows. This momentum looks likely to continue if the price of Bitcoin continues to rise with it.
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Thorchain is a cross-chain decentralized exchange, allowing users to swap assets without having to wrap them on other blockchains. It uses an automated market maker (AMM) to execute transactions and provides rewards to liquidity providers, similar to the other leading DEX's in the space. In a future where cross-chain compatibility is a must, we can see Thorchain continuing to grow and expand its market share in the DEX niche.
After a 64% retracement from all-time highs vs Bitcoin, RUNE recently bounced off the 200-day EMA and it looks to be starting a new upwards trend.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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