SpaceX Reduces Its Bitcoin (BTC) Holdings by $373 Million

Audy Castañeda
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SpaceX Reduces Its Bitcoin (BTC) Holdings by $373 Million

SpaceX, led by Elon Musk, reportedly turned a slight profit in the first quarter of 2023 after writing off losses in 2021 and 2022. Uncertainty has arisen over whether SpaceX has sold all of its Bitcoin, having reduced its value by $373 million. Accounting rules dictate that once written, the value of Bitcoin cannot be adjusted upward, even if the price goes up.

SpaceX reportedly reduced the value of its Bitcoin by a total of $373 million and potentially liquidated all of its holdings. The Elon Musk-led firm rebounds from year-on-year losses for 2021 and 2022 and reportedly posts a slight profit in the first quarter of 2023.

In mid-2021, Elon Musk, the CEO of SpaceX and Tesla, announced for the first time that his aerospace company owned some Bitcoin (BTC). The billionaire did not specify the amount, but assured that just as his electric car company kept bitcoins on its balance sheet, SpaceX did too.

On Thursday, a Wall Street Journal report revealed that that investment was valued at $373 million for last year and into 2021. However, SpaceX no longer owns the same portion as the company reduced its stake in the cryptocurrency, according to indicates the report without providing details about the amount of the sale or the date of the transaction.

In the past two years, Tesla has sold $936 million worth of bitcoin, bringing its BTC balance to an estimated $184 million, according to the latest quarterly earnings report published in July 2023.

SpaceX Financial Statements Cast Questions About Its Bitcoin Holdings

The Wall Street Journal report on August 17, which analyzed the company’s financial statements, leaves uncertainty as to whether SpaceX actually sold all of its Bitcoin: “SpaceX wrote down the value of bitcoin it owns to a total of $373 million last year and in 2021 and sold the cryptocurrency.”

The Wall Street Journal report on Bitcoin sales by SpaceX coincided with a notable price crash in the cryptocurrency market. Bitcoin, the largest by market capitalization, plunged more than 10% on Thursday below the $26,000 mark, its worst price in more than 60 days. Other major digital currencies replicated the decline, including Ethereum (ETH), XRP, and Dogecoin (DOGE), which posted losses of up to two figures of a percentage.

However, the Big Four accounting firm Deloitte states that the accounting treatment of Bitcoin generally involves considering it as an “indefinite-lived intangible asset.” It states to book Bitcoin at cost and then make adjustments if the price declines.

Should the value of Bitcoin decline, the company must report a reduction on its books, known as impairment charges. After recording a decrease, the value of the asset on the balance sheet cannot be “written”. This rule applies to any subsequent rise or bounce in the price of Bitcoin.

In Q4 2022, Tesla, led by Musk, revised the value of its Bitcoin holdings down due to a decline from purchase. The company reported $34 million in impairment charges, while its total holdings were assessed at $184 million. Since June 2021, Tesla has consistently reported impairment losses in consecutive quarters.

Bitcoin Is Not Musk’s Favorite Cryptocurrency

While Musk’s company might own substantial stakes in Bitcoin, he often alludes to Dogecoin as his favorite crypto, simply because “he has the best humor and he has dogs.”

Musk made it clear that he did not intend to provide any financial advice: “I am not advising anyone to buy cryptocurrency or bet the farm on Dogecoin or anything like that,” he says.

By Audy Castaneda

Polkadot Present at Crypto Latin Fest

Audy Castañeda
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Polkadot Present at Crypto Latin Fest

One of the most striking forums of this opening day of the Crypto Latin Fest 2023 was focused on the Polkadot blockchain network.

Polkadot is one of the most advanced networks in the cryptocurrency area and it was discussed during this session of the Crypto Latin Fest 2023. After Ethereum, there are numerous Blockchains that offer solutions to real problems in the ecosystem. Among them, the parent network of the DOT token stands out.

The forum dedicated to Polkadot was in charge of Ezio Rojas. As an appetizer, the project representative emphasizes that it is a protocol focused on interoperability within Blockchains.

The main support of the Polkadot network is the Substrate Client, emphasizes Rojas. He adds that the latter is a framework that allows building Blockchains in a similar way to putting Lego pieces together. “Substrate allows you to create a blockchain through different pallets” The latter helps determine the elements to be added to the blockchain being created.

Learning about Polkadot at the Crypto Latin Fest

Polkadot was one of the main protagonists of this first day of the Crypto Latin Fest 2023. Rojas was in charge of offering a clear and detailed vision of that network. As already mentioned, the fundamental part of the ecosystem is that it allows the creation of complete networks from its Substrates.

The expert further explains that the pallets help the creator to add qualities to his blockchain. He comments that all this comes in a ready-made package.

The advantages of this is that it allows “making a blockchain to save costs and that it can be done in a safe, stable and unique way within the ecosystem.” At the beginning of his forum, the expert commented that traditionally there are two ways to make a chain of blocks. The first is through a hard fork, like Litecoin from Bitcoin. However, note that this form inherits many of the limitations of the original string.

The second way is to create it from scratch, which implies having a team of developers and a significant amount of capital to invest. Considering all this, Rojas suggests that Polkadot stand as a third way that comes to solve this dilemma.

The Blockchain Must Evolve Towards an Interoperable System

For Rojas, the nature of Polkadot is focused on interoperability. The specialist affirms that the chain of blocks must evolve from the traditional stage towards one of interoperability. With this, it could become a unique universe of various networks that work harmoniously.

“We believe and understand that the blockchain has to evolve into an interoperable system. It is very difficult to conceptualize that a single blockchain is going to dominate the market. Bitcoin has not, Ethereum has not,” he says. Next, he adds that there are more and more Blockchains that have their spaces within society.

In his opinion, Blockchains are growing and have more space while becoming different from each other. “This variability begins to require us to have interoperable systems, that is, where the Blockchains are not islands, but can communicate with each other,” he commented.

Considering these elements, Rojas confirms that from Polkadot they trust that the future is “multi-chain”. During his words at the Crypto Latin Fest, the expert says that there is no longer a place for monopoly thinking in the world of blockchain. Consequently, those who think that there will be a dominant blockchain, stayed 4 or 5 years behind, he remarked.

By Audy Castaneda

Gary Gensler Touts AI for “Neutral” and Receives Criticism

Leonardo Perez
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Gary Gensler Touts AI for “Neutral” and Receives Criticism

SEC Chairman Gary Gensler’s claim that the SEC is “tech neutral” sparks outrage among the crypto community. Despite Gensler’s promotion of AI, he maintains that enforcement action will persist because “fraud is fraud.” Respondents mocked the SEC chairman, questioning whether he wanted to regulate it and claim that AI is a security.

The chairman of the Securities and Exchange Commission has touted Artificial Intelligence (AI) as the “most transformative technology of our time.” The comments may have merit, but his claims that the SEC is “tech neutral” has caused outrage among the crypto community.

On August 15, SEC Chairman Gary Gensler made a lengthy post on the benefits of AI, comparing the technology to the Internet.

Gensler on AI and Securities Laws

“AI is used in finance for account openings, compliance programs, trading algorithms, sentiment analysis, and more,” Gensler said. He added that, in his opinion, AI will continue to significantly transform science, technology and commerce.

On August 16, Gensler posted on X the following:

“I believe AI is the most transformative tech of our time, on par w/ the internet & mass production of cars. AI is used in finance for acct openings, compliance programs, trading algorithms, sentiment analysis, & more. It’s fueled change with robo-advisers & brokerage apps.”

He further added that:

“I think AI is going to continue significantly transforming science, technology, & commerce. It is important to focus on the challenges of AI. Given that we’re dealing with automation of human intelligence, the gravity of these challenges is real.”

His lyrical escalation continued with a questionable statement that the SEC is “tech neutral.” In addition, he stated that there may be implications for securities laws and his agency.

“We focus on the outcomes, rather than the tool itself. Securities laws, though, may be implicated depending upon how AI tech is used. Within our current authorities, we’re focused on protecting against both the micro & macro challenges of AI.”

He went on to state that the enforcement action will continue even with AI because “fraud is fraud” under securities laws.

The comments regarding that claim of technological neutrality came thick and fast:

“AI is a security,” someone joked, “while others asked if ChatGPT was an unrecorded security.”

“What AI stock do you have, Gary? And why are you giving it to us?” said another respondent.

“Is this seriously a trap for the argument that the SEC is the most appropriate agency to regulate it?” questioned another.

In Other AI and Crypto News

The self-proclaimed “road policeman” has taken matters into their own hands with regard to digital assets and their underlying technology. Cryptocurrencies have yet to be officially classified by Congress, but that hasn’t stopped the SEC from labeling them all as investment securities and contracts.

On August 15, Gensler posted the following on X:

“When communications, product offerings, & pricing can be narrowly targeted, producers are more [sic] able to find each individual’s maximum willingness to pay a price or purchase a product. With such narrowcasting, there is a greater chance to shift consumer welfare to producers.”

Gary Gensler seems to be moving from crypto to AI. Earlier this month, he warned that AI could cause a financial collapse due to opaque decision-making using deep learning. He claimed that companies competing for the best customer returns using algorithms could create instability and volatility in the market.

By Leonardo Pérez

US Democrats Create Group to Work on AI Legislation

Audy Castañeda
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US Democrats Create Group to Work on AI Legislation

The AI ​​working group will develop and promote forward-thinking policies that encourage innovation and protect against potential risks. This working group will focus on understanding the many applications of Artificial Intelligence. Countries like Colombia or the European Union are already working to establish AI legislation.

Democratic members of the United States House of Representatives announced that they will form the first Artificial Intelligence task force. The goal of this initiative is to develop policies to address this technology.

The new working group involves 23 members of the New Democrat Coalition, including Rep. Derek Kilmer (WA-06) as chair, vice chair Rep. Don Beyer (D-Va.).

Several countries around the world are looking for ways to regulate the use of Artificial Intelligence (AI). Now the United States joins the list, after members of the House of Representatives announced the creation of a working group that seeks to develop AI legislation.

A Group to Face the Challenges of AI

According to an official press release, the New Democrats created this group in order to develop and promote sensible, bipartisan policies to address this emerging technology.

“The AI ​​working group will develop and promote forward-thinking policies that encourage innovation and protect against potential risks”

For the chair of the Artificial Intelligence Working Group, Derek Kilmer, as the applications of Artificial Intelligence expand and change, it is important to establish AI legislation. He stated that “Together [@NewDemCoalition members], we’ll focus on understanding AI’s many applications and proposing policies that position our country as a world leader in AI innovation and safety.”

“Artificial intelligence is the next great frontier of technological advancement, with the power to transform much of our lives, from healthcare to commerce to productivity and more. We are already seeing how advances in this emerging technology present great opportunities and challenges with potential disruption to workers, democracy, and national security.”

“As AI’s applications expand and change, it is incumbent on lawmakers to address its unique opportunities and challenges by creating a regulatory framework that both encourages growth while guarding against potential risks.”

Kilmer also assured that this working group will also evaluate its advantages and disadvantages and propose policies that position the United States as a world leader in AI innovation and security.

In April 2023, Joe Biden spoke about the risks posed by Artificial Intelligence. The president proposed that AI systems incorporate security measures from the beginning, and not add them over time. In this way, Biden considers that the safety of citizens could be further protected.

Other Countries Seeking AI Legislation

It was recently learned that the Colombian Senate presented a bill that seeks to establish public policy guidelines for the development, use and implementation of Artificial Intelligence in the country. The document also suggests creating a commission to endorse projects linked to these technologies.

According to the project, Artificial Intelligence will be understood as computer programs that perform operations comparable to those performed by the human mind. This includes learning or logical reasoning.

On the other hand, the UN made a special request in June for countries to regulate Artificial Intelligence. In the same month, the European Parliament approved a project following this request.

In Latin America, Argentina established a series of “Recommendations for a Reliable Artificial Intelligence”. The proposal seeks to establish clear rules so that the benefits of technological advances are taken advantage of by all sectors.

By Audy Castaneda

US SEC Extends Bitcoin ETF Approval Decision Until 2024

Audy Castañeda
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US SEC Extends Bitcoin ETF Approval Decision Until 2024

Market experts have assigned a roughly 65% ​​probability that spot Bitcoin ETFs will be approved by the SEC.

The United States Securities and Exchange Commission (SEC), a key regulatory authority in the field of cryptocurrencies, is moving towards the possible approval of a spot cryptocurrency exchange-traded fund (ETF). After years of applications, the recent listing of BlackRock’s application for a Bitcoin ETF has garnered new investor attention.

The SEC has announced an extension of the many pending Bitcoin exchange-traded fund approval decisions through 2024. This move highlights the SEC’s commitment to thoroughly assessing the potential risks and rewards of an ETF. of Bitcoin, considering its potential impact on both. the crypto market and traditional financial systems.

Regulatory Hurdles Around BTC ETF Approvals

One of the main reasons behind the SEC’s cautious stance on spot Bitcoin ETFs is the complex and rapidly changing nature of the crypto market in the US. Regulatory actions taken against major players such as Coinbase Global Inc. (NASDAQ: COIN), Binance, and Ripple Labs Inc. highlight the need for a cautious approach that protects investors and the integrity of the financial system.

One of the challenges facing the approval of spot cryptocurrency ETFs lies in the unique nature of these investment vehicles. ETFs linked to Bitcoin futures offer exposure to the asset without direct ownership, while spot BTC ETFs involve holding the actual asset within a fund.

The SEC’s reluctance to approve a spot Bitcoin ETF may be due to the nature of the investment vehicle. While ETFs linked to Bitcoin futures have been accepted since October 2021, a spot Bitcoin ETF carries a different level of risk due to its direct investment nature.

A futures-linked ETF allows investors to gain exposure to Bitcoin price movements without owning the actual asset. In contrast, a spot Bitcoin ETF would imply that the fund held Bitcoin, raising concerns about custody, security, and market manipulation.

The journey to get a Bitcoin ETF approved by the US SEC has been a long one. Reflecting on the past, Cameron and Tyler Winklevoss were the first to try to list their Bitcoin Trust as a stock product in July 2013, but the SEC rejected their request.

At the time, cryptocurrencies were in their early stages and the regulatory landscape was characterized by uncertainty. Remarkably, market pundits have now assigned a roughly 65% ​​chance that spot Bitcoin ETFs will be approved by the SEC.

Firms Await SEC Bitcoin ETF Decision

A wide range of well-known asset management firms have expressed interest in launching spot Bitcoin ETFs. These firms, including BlackRock Inc. (NYSE: BLK), ARK Invest, Bitwise Asset Management, VanEck, WisdomTree, Invesco, Galaxy Digital, Fidelity and Valkyrie, represent a cross-section of the investment landscape, each bringing their unique perspectives and strategies. and table experience.

Stuart Barton, the founder of Volatility Shares, has offered insight into how the SEC deliberates, suggesting that smaller companies might have an advantage when it comes to getting approval for spot crypto ETFs.

The SEC review process for ETF applications can take up to 240 days, a time frame that has significant implications for companies seeking approval. The decision on the ARK Bitcoin ETF, for example, has been postponed until January 2024 due to this timeline.

For other contenders, decisions may not be issued until March 2024. This extended timeline reflects the SEC’s careful approach and dedication to ensuring thorough evaluations.

By Audy Castaneda

Tom Lee: Bitcoin Will Hit $150,000 If SEC Approves Spot ETF

Audy Castañeda
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Tom Lee: Bitcoin Will Hit $150,000 If SEC Approves Spot ETF

According to Fundstrat analyst Tom Lee, the price of Bitcoin could hit $150,000 if the ETFs receive SEC approval.

According to American investor Tom Lee, the price of Bitcoin could reach up to approximately $150,000 per coin in a short time. However, this would depend on the approval of a spot ETF by the United States Securities and Exchange Commission (SEC).

The forecast of this expert becomes a hope for the community considering the stagnation of the pioneering digital currency. The BTC price sideways state continues to such an extent that volatility is now at all-time lows.

Lee’s considerations agree with those of Bernstein analyst Gautam Chhugani. The latter thinks that if the regulatory agency approves any ETFs, they will occupy 10% of the Bitcoin market capitalization. Furthermore, this will lead to the price of the coin entering a powerful rally, he says.

Bitcoin Price Will Rise Rapidly, According to Lee

Tom Lee’s forecast is not only for a rise in the price of Bitcoin towards a new all-time high (ATH). In addition, he points out that this will happen very quickly. In this sense, it will be key for investors to be attentive in September before the agency’s pronouncement.

The agency recently deferred the Ark Invest Spot ETF again. However, next month is the review of proposals from other financial firms. The SEC is likely to put off those decisions as well, but it should not be overlooked that the pressure on regulators is mounting.

As such, if the Wall Street big boys continue to push for their BTC funds, the SEC will likely have no choice. It is precisely to these circumstances that Lee refers when he states that it is highly probable that the price of the currency will reach new bullish dimensions.

During an interview on CNBC’s Squawk Box on Wednesday, the expert stressed that if everything goes “as expected”, then the price would go to 150K. On the other hand, he said that in case the SEC maintains its negative position, the price was bound to rise as well. In that case, Tom Lee highlighted the bullish role next year’s Bitcoin halving will play.

In that scenario, the analyst believes that the price of the coin will also rise strongly, although it will not exceed $100,000.

An ETF Will Drive Demand to a Level Much Higher than Supply

Under any of the possible scenarios, Tom Lee believes that the price of Bitcoin will break the current state of stagnation. The analyst’s words appear as a sign of hope for investors who are already showing signs of exhaustion. And it is not for less, since the value of BTC has been the same since the end of June.

“If the Bitcoin spot ETF is approved, the demand would be greater than the supply, so I think the settlement price could be above $150,000 or even $180,000,” he remarked.

Currently, the situation in the cryptocurrency market seems to be the worst in recent days. Consequently, the BTC price threatens to lose $29,000 again, down -2.4% in 7 days. Likewise, in the 24-hour range, its value decreases by -1.1%, according to CoinGecko.

This situation extends to almost all major coins, with the exception of Toncoin. Taking Tom Lee’s words for granted, it can be said that the price of Bitcoin is on the verge of a notable rise.

By Audy Castaneda

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