Last Week In Bitcoin is a series discussing the events of the previous week that occurred in the Bitcoin industry, covering all the important news and analysis.
Summary Of The Week
In what should have been a positive week for bitcoin, we saw dips and sideways action. Despite this, El Salvador continues making headlines as the country keeps buying the dip and citizens continue queuing for ‘coin.
As the global economy is left reeling from scandals, rising inflation and an impending economic recession in some of the leading nations, it seems almost inevitable that both large investors and smaller ones will start accumulating bitcoin as a hedge against economic turmoil, which is sure to send the price upwards.
The Bullish News Despite The Dip
Last Friday, U.S. President, Joe Biden said that if the U.S. hits its debt ceiling towards the end of October, the U.S. could enter an economic recession, which would likely trigger investors into piling into bitcoin as the U.S. dollar enters a state of economic turmoil.
This week started on a bullish note when El Salvador’s president, Nayib Bukele, announced on Twitter that the country had bought the dip, purchasing another 150 BTC, bringing their total holdings to 700 BTC. He even offered some “presidential advice” by tweeting, “they can never beat you if you buy the dip.”
Not long after, Bukele stated that the country’s Chivo bitcoin wallet had over 1.6 million users, just two weeks after El Salvador officially adopted bitcoin as legal tender. That means that over 25% of the total population of the Central American nation now use the Chivo wallet. In the days that followed, pictures of people queuing to use some of the 200 bitcoin ATMs installed in El Salvador spread across social media, confirming the nation’s growing appetite for bitcoin, although the rush may have been from those cashing out to USD.
On Tuesday, BTG Pactual, an $80 billion investment bank in Brazil, launched a crypto trading app, becoming the first large financial institution in Brazil to offer customers direct exposure to bitcoin. The bank has a history of precedent setting in Brazil. In April of 2021, BTG Pactual also became the first Brazilian investment bank to launch a bitcoin and crypto fund.
Also on Tuesday, controversial trading app Robinhood announced that they were testing bitcoin withdrawals together with a new digital wallet to cater for increased user demand. No firm date has been set on the official rollout of the feature to their users. Later in the day, mining giant Genesis Digital Assets announced that it had raised $431 million in funding to expand its mining operations in the U.S. and Nordics. The firm raised $125 million in funding just two months before the announcement.
On Wednesday, Dutch football giant PSV announced that it is holding an undisclosed amount of bitcoin on its balance sheet after a sponsorship deal with digital exchange Anycoin saw the team paid in bitcoin. "The possibilities and the future that the world of cryptocurrency offers is very promising," said Frans Janssen, commercial director of PSV. Also on Wednesday, it was revealed that the UAE government would allow tax-exempt bitcoin trading in certain economic zones within its capital, Dubai.
On Thursday, Twitter “broke” the internet when it started rolling out a bitcoin tipping service on the social network in partnership with Strike. Although initially only available to iOS users, the company said in a statement it hopes to roll out the feature to desktop and Android users in the coming weeks.
Also on Thursday, the University of Wyoming confirmed that it is mining bitcoin. This comes after the Wyoming legislature announced in April that it had earmarked $4 million for crypto staking, which would be run by the University of Wyoming.
Finally, as news of the latest Chinese crackdown on cryptocurrency trading emerged, U.S. Senator Pat Toomey said that China’s crackdown on cryptocurrencies such as bitcoin is a “huge economic opportunity for the US.”
Bearish News Contributing To The Dip
Bitcoin has seen its ups and downs over the last week as global markets were left reeling on news of the impending collapse of Evergrande, a $300 billion property giant based in China. Although bitcoin briefly dipped below the $40,000 mark, the price quickly recovered — until Friday, that is.
On Friday, the Chinese government once again cracked down on cryptocurrencies, saying that it is illegal to trade in any cryptocurrencies in the country. This is hardly news since China has shared the same sentiment repeatedly since 2012. The markets reacted negatively, despite news that Twitter was integrating bitcoin tips on the platform.
News of Twitter finally rolling out bitcoin tips in partnership with Strike should have sent bitcoin on a decent run, however the Chinese government couldn’t let an opportunity to spread FUD slide, despite the impending collapse of property giant Evergrande, which accounts for nearly 2% of the country’s GDP.
What was interesting was U.S. President Joe Biden’s remarks last Friday just as the week started drawing to a close. Biden stated that should the U.S. hit its debt ceiling towards the end of next month, the U.S. would enter an economic recession. Who’d have thought continuously printing money during a global pandemic wouldn’t come back to haunt them?
It looks very likely that the U.S. will in fact enter a recession which is likely to incentivise more large institutional investors and public companies to adopt bitcoin as a hedge against economic turmoil. It’s likely to be the catalyst that sends bitcoin on an upward trajectory, entering the low six figure mark, breaching many analysts’ predictions of a $100,000+ bitcoin price.
Despite a whole country adopting bitcoin this year, nearly countless companies adding bitcoin to their balance sheets and billionaire investors praising it every week, bitcoin hasn’t come close to its May highs, let alone the highs we’re expecting in the year ahead. But, just like the 2008 financial crisis inspired Satoshi to invent bitcoin, the growing crises worldwide will likely push bitcoin to great new highs...
This is a guest post by Dion Guillaume. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.