Warren Buffett Is Wrong to Say that Bitcoin Does Not Produce Anything

Alexander Salazar
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Warren Buffett Is Wrong to Say that Bitcoin Does Not Produce Anything

Buffett recently said he would not invest in Bitcoin, alleging that it does not produce any tangible goods. However, the cryptocurrency allows sending remittances, exchanging money, paying for products and services, and achieving returns.

American value investor Warren Buffett once again lashed out at Bitcoin as a valuable financial asset. He commented that the pioneering cryptocurrency did not produce anything, in contrast to a farm or real estate.

Buffett said he would not buy Bitcoin (BTC) even at bargain prices but that he would invest in estate and productive land. The financial expert claimed that he would not accept all the existing bitcoins for USD 25. He stated that he would not know what to do with them except sell them to someone else.

He explained that a real estate department would produce homes while a farm would grow food. However, he scoffed that people considered some assets magical and stated that anyone could launch a cryptocurrency. He even suggested that he could create a BuffettCoin, which would still be useless anyway.

The main reason for Buffett to criticize Bitcoin is that he considers it produces no tangible goods nor gives concrete financial returns. He remarked that an asset only has value when people can use it to have something they need. As he held a one US dollar bill, he highlighted that the US government does not have to replace its legal currency.

Buffett and Munger Consider Bitcoin Is the Least Recommend Asset

Another renowned American investor, Charlie Munger, expressed his opinion about the pioneering cryptocurrency. He advised that people should not invest in Bitcoin when they have their retirement account, as many advisors might think.

In 2021, BTC had a market capitalization higher than 47 of the 48 companies in which Warren Buffett participated. Strikingly, the capitalization of BTC now exceeds that of Berkshire Hathaway, which the financial specialist runs.

Munger, the vice president of the Berkshire Hathaway firm, has referred to Bitcoin as rat poison on several occasions since early 2013.

Likewise, Buffett maintains the same opinion as in his previous statements on the alleged usefulness of Bitcoin. In 2020, he also stated that people could do nothing with that cryptocurrency but sell it.

Bitcoin Is an Asset that Has Many Productive Angles

The logic of Warren Buffett and Charlie Munger cannot apply to an asset like Bitcoin. That cryptocurrency and its technology do not work as a company or commodity that produces returns.

However, angles emerge and consolidate, allowing owning Bitcoin as a viable investment asset class as it grows.

For example, millions of users adopt its technology leading to the birth of companies that offer international remittance and exchange services. That increases the demand for the crypto asset and helps build a Bitcoin-based industry.

A growing number of countries are adopting Bitcoin as a legal tender, a payment method, or a permitted asset. In addition to the well-known case of El Salvador, those nations include Panama, Cuba, and the Central African Republic.

Bitcoin mining is an industry closely related to the production and distribution of energy. That turns its processing power (hash rate) into an asset that allows for making financial decisions and achieving returns.

Another point for Bitcoin is a speculative approach, as the cryptocurrency has steadily appreciated since its inception. In that regard, analysts consider that the cryptocurrency created by Satoshi Nakamoto could start a new bullish rally from now.

By Alexander Salazar

The Swiss National Bank Objects to Keeping Reserves in Bitcoin

Alexander Salazar
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The Swiss National Bank Objects to Keeping Reserves in Bitcoin

Jordan said that the SNB does not plan to keep reserves in Bitcoin as it does not comply with their provisions. However, Switzerland occupied 5th place among the friendliest destinations for cryptocurrencies in the first quarter of 2022.

Thomas Jordan from the Swiss National Bank (SNB) recently said they oppose buying and holding Bitcoin as a reserve currency. The Swiss economist and banking supervisor is the chairman of the governing board of the financial institution.

Jordan is also a member of the Bank for International Settlements (BIS) and chair of the Central Bank Counterfeit Deterrence Group.

The economist pointed out that the Swiss National Bank does not plan to keep reserves in Bitcoin. The financial agency does not consider the pioneering cryptocurrency a reserve currency as it does not comply with their provisions.

A recent annual report indicates the reserves of the SNB until December 31st amounted to just over USD 1.03 trillion. The funds of the bank are in US dollars (39%), euros (37%), yen (8%), and pounds sterling (6%).

The SNB May Buy Bitcoin in the Future

International news agency Reuters recently reported that the SNB does not consider Bitcoin a good option as a reserve currency. Its chairman, Thomas Jordan, stated that the financial institution is not interested in Bitcoin but might invest in it at some point.

Jordan commented that buying Bitcoin is not a problem, as they could do it directly or through investment products based on it. He explained that they could fix the technical and operational conditions when they believe they must have Bitcoin on their balance sheet.

Curiously, Jordan also said that they currently do not believe that Bitcoin meets the requirements for foreign exchange reserves.

Despite the statements by Jordan, Switzerland is still one of the friendliest destinations for cryptocurrencies. It occupies 5th place in the ranking for the first quarter of 2022, according to crypto exchange aggregator Coincub.

Some Reasons for the SNB Not to Invest in Bitcoin

The Swiss National Bank has stated that they do not invest in companies that harm the environment through their carbon emissions.

However, Nora Scheel from the group Campax highlighted that the financial institution invests billions in the fossil fuel industry every year. The lawyer believes that, in that way, they generate almost as much CO2 as the entire of Switzerland.

Jordan said that the SNB has over USD 937 billion in foreign currency investments. He also explained that they had reduced their investment in energy and fossil fuel companies from 10% to around 3%.

He argued that they could not sell all their shares, as somebody else could buy them. He expressed that the idea was to transform the economy by producing lower levels of CO2 emissions.

The chairman of the SNB said that they should do it in a systematic and orderly manner. He noted that they are experiencing a problem with energy supply, with rising prices that affect people with low incomes.

Bitcoin plays a crucial role in the economy, which the governments of various countries do not overlook. However, many regulators still see the cryptocurrency as a threat to the environment despite studies showing that other industries emit more CO2.

By Alexander Salazar

The Conflict between Russia and Ukraine Leads Binance to Block the Accounts of Kremlin Officials

Alexander Salazar
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The global head of sanctions at Binance said they continually check for sanctioned individuals to avoid regulatory action against them. Binance restricts its services to Russians having over USD 10,885 worth of crypto assets and assigns them withdrawal-only status.

Given that the conflict between Ukraine and Russia has not yet ended, Binance decided to take measures. Specifically, the online exchange blocked the accounts of relatives of Kremlin officials.

That is just one more move by a long list of organizations to force Russia to withdraw from Ukraine. The blocking of Binance accounts includes all those people somehow related to the ruling regime in the Kremlin.

How Binance Carries Out the Blocking of Russian Accounts

The cryptocurrency exchange has closed several accounts of people with family ties to top Kremlin officials in the last few months. The financial news agency Bloomberg released the details about those affected by that measure.

Binance blocked Polina Kovaleva, the stepdaughter of Russian Foreign Minister Sergei Lavrov, and Elizaveta Peskova, the daughter of Dmitry Peskov, the spokesman of Vladimir Putin.

When Peskova tried to use the exchange through a third-party brokerage, they closed her account. Then the US Treasury Department sanctioned her for her ties to Kremlin elites and her alleged contribution to the war against Ukraine.

After that, Peskova expressed her anger against the Western sanctions, saying they were unfair. She said she was surprised by the sanction as she was young and had nothing to do with the situation.

Another blocked person is Kirill Malofeev, the son of Konstantin Malofeev, a Russian tycoon accused of financing Russian separatists in Crimea.

Chagri Poyraz, global head of sanctions at Binance, stated that they continually check for people related to sanctioned individuals. He said they seek to detect and avoid financial crime before any regulatory or legal action occurs against them.

Other Restrictions and Controversies of the Cryptocurrency Exchange

In late April, Binance announced that it was restricting its services to Russian people having over USD 10,885 worth of crypto assets. For that reason, the exchange assigned them withdrawal-only status and blocked them from accepting deposits or engaging in trading activities.

Those concerned about Russians using cryptocurrencies to circumvent sanctions have applauded Binance for those actions. However, others believing that such restrictions may be too harsh have criticized the exchange.

Binance has received accusations for allegedly forming close ties with the financial intelligence unit of Russia. However, they have clarified that they are only complying with the international sanctions imposed by the United States and the European Union.

Reuters recently stated Binance had provided data about their users to opposition leader Alexei Navalny, but the exchange denied the claims. Russia pressured those platforms operating in the territory due to the development of a regulatory framework, but the talks ended when the invasion of Ukraine started.

The conflict between Russia and Ukraine has affected the price of cryptocurrencies and stocks worldwide. It has even led exchanges like Binance to sanction the people related to Kremlin officials by blocking their accounts.

By Alexander Salazar

Bitcoin’s “Bear Market” May Push Its Price to $25,000, Trader Says

Audy Castañeda
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Bitcoin’s “Bear Market” May Push Its Price to $25,000, Trader Says

It could still go either way for Bitcoin price action, but one analyst believes that Bitcoin is already outperforming stocks.

Bitcoin (BTC) may continue its “bear market”, says a trader amid hopes a US dollar reversal could soon improve BTC price action.

In his latest YouTube update on May 2, Cointelegraph contributor Michaël van de Poppe argued that the current rise in USD would not last long.

Bitcoin is still under pressure as both stocks and cryptocurrencies grapple with the reality of a major policy change from the US Federal Reserve.

Dollar Force Reversal “Close”

The Fed, due this week, intends to end the era of “free money” since the March 2020 COVID crisis for the last time, and risky assets should be the first to suffer.

The COVID crash saw the previous spike in the US Dollar Index (DXY), which then declined as Bitcoin pushed crypto markets to new highs.

That inverse correlation has since changed once again, and now, with DXY at twenty-year highs, cryptocurrencies are on the receiving end of the pain.

However, Van de Poppe notes that compared to previous DXY bull runs, Bitcoin has lost considerably less in USD terms. In 2014, for example, the BTC/USD pair lost more than 80%, while the drawdown from its all-time highs in November 2022 so far has only peaked at 55%.

“Right now, we’re seeing this implied strength, and I think the dollar is entering a period where that move is running out,” he said, adding that a reversal was “close.”

Nonetheless, Van de Poppe said that the “Bitcoin bear market could continue,” and if so, downside targets now extend beyond $30,000 to $25,000.

“Massive Speculative Excesses”

As for the long-term view, mainstream analysts continued to favor Bitcoin’s enduring strength after a period of future pain.

Speaking to Wall of All Streets podcast host Scott Melker on May 2, Mike McGlone, chief commodity strategist at Bloomberg Intelligence, said that a reset for crypto and traditional markets alike was “already happening.”

“This is a receding tide of massive speculative excesses across markets, cryptocurrencies were a great leading indicator and now we are turning the tide and it is a question of how far,” he explained.

“This week, the Fed will raise 50 basis points for the first time in years; I could go back and check, but I haven’t seen that in a long time.”

As before, McGlone, however, predicted that Bitcoin would ultimately benefit from the next turmoil.

“I think that will be part of the trigger that will take out the rest of the excesses in the market, especially stocks, and then Bitcoin will come out ahead, and it is already happening,” he added.

His prediction last January was that, “markets eventually pull back and we have a 10-20% correction in the stock market. All correlations are one, which is how it usually works. bitcoin is better off for it.”

The BTC/USD pair was trading at $38,900, according to data from Cointelegraph Markets Pro and TradingView.

By Audy Castaneda

Wikimedia will no Longer Receive Donations of Digital Assets

Jenson Nunez
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Wikimedia will no Longer Receive Donations of Digital Assets

The final announcement follows a Wikimedia community vote in which 71% voted in favor of a proposal to stop accepting cryptocurrencies.

The Wikimedia Foundation, the nonprofit organization that manages Wikipedia and other wikis, has decided to stop receiving donations in digital assets after a three-month discussion in which the environmental impact of Bitcoin was the most significant subject.

The resolution arrived due to a community vote on a proposal for the creation led by the developer and collaborator Molly White. They discussed that receiving donations in assets such as Bitcoin, Bitcoin Cash, and Ether represents a supportive stance on digital currencies.

These currencies are “inherently predatory” as investments and do not follow the foundation’s commitment to work toward environmental sustainability.

The Wikimedia Foundation decided to stop receiving donations in cryptocurrencies. The resolution happened due to a community request that WMF no longer accepts donations made in crypto, stemming from a three-month-long debate.

The proposal eliminates new accounts and users that did not meet its registration procedure; fewer than 400 users voted, 232 to 94, or 71.17%, supported no longer receiving digital assets.

It is worth considering that this decision is not final. Wikimedia has left the door open to the possibility of resuming crypto acceptance, saying it will continue to study the current panorama.

The Arguments that Support this Decision

White argued that Wikipedia risked harming its reputation by receiving donations in digital assets due to the decision earlier in the year by Mozilla, its nonprofit peer, to stop accepting donations in digital assets.

Wikimedia received Bitcoin, Bitcoin Cash, and Ether through BitPay. White highlighted Bitcoin and Ether’s need for vast amounts of energy while noting that other “greener” currencies exist, though they get less used.

Miners employing vast amounts of computing power to consolidate transactions via Proof of Work, PoW, received hard critics for damaging the environment. However, these miners have been looking for more friendly energy sources for their mining activities. However, the criticism still strikes over the miners; the CEO of Tesla, Elon Musk, also backed down on Bitcoin payments last year, highlighting the same reasons.

Ethereum has been working hard to consolidate a transition to a “Proof of Stake” model for ensuring transactions, which uses less energy, though the switch has faced various delays.

Responses to the Decision

Many tweeters responded to Molly White’s tweet, expressing their negative stance on the measure. For his part, tweeter Danny Scott, CEO of the CoinCorner exchange, ironically, wrote congratulating on getting out of the most inclusive monetary system ever and sustaining that everyone always comes back to Bitcoin.

Others, on the other hand, considered the decision a positive move. For example, Twitter user David, who works to help the homeless, highlighted that their nonprofit organization stopped receiving the currency quickly after considering the moral implications of playing a vital role in the crypto environment.

By: Jenson Nuñez

The Price of Cryptocurrencies and Stocks Drops Sharply before the Start of May

Alexander Salazar
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The Price of Cryptocurrencies and Stocks Drops Sharply before the Start of May

The uncertainty about the Federal Reserve and the conflict between Russia and Ukraine led to high average outflows. Analyst Lyn Aden said that the bearish sentiment in the cryptocurrency and stock market has also caused gold and platinum to drop.

A sharp drop in prices during the beginning of the weekend affected the cryptocurrency and stock market. As various countries were preparing to celebrate the Labor Day holiday, investors wondered where the crypto market might head next in the coming days.

It is hard to predict what will happen, given the volatility in the cryptocurrency market. However, Bitcoin saw losses of over 15%, the worst April in its history, according to data analytics platform Coinglass.

April Is the Worst Month for the Crypto Industry

Flagship tokens largely faltered in April, making it a tough month for cryptocurrencies. Data from CryptoCompare indicates that the price of BTC dropped by 16.3%, and the value of ETH fell by around 14.4%. The uncertainty about the Federal Reserve and the conflict between Russia and Ukraine has affected the digital asset market the most.

A recent report from CryptoCompare establishes that the highest average outflows of 2022 occurred in April. The outflow trend of crypto investment products indicated a significant negative sentiment in the market that might extend until May.

The largest one-week outflow since mid-January, occurring at the end of the first week, was around USD 134 million. The April average weekly outflows stood at USD 79.5 million, mainly from Bitcoin products, suggesting continued pessimism.

The Price of Ethereum Seems to Be on a Roller Coaster

The movement of the price of ETH seems to be like a roller coaster that cannot decide between going uphill or downhill. The latest Bankless report indicates that the Ether revenue went from USD 1.6 billion to USD 2.4 billion, increasing by 46% in the first quarter of 2022.

The study further stated that staked ETH went from USD 5.2 million to USD 10.9 million, an increase of 111%. The bullish report aligns with what many advocates have claimed about the cryptocurrency.

The Debate over the Drop of the Cryptocurrency and Stock Market

Several commentators, experts, and analysts have debated the current bearish sentiment toward the cryptocurrency and stock market. Economist Lyn Aden summarized that they have highlighted that gold, platinum, and Chinese stocks had also dropped.

While the S&P 500 decreased by 3.6% and the Nasdaq 100 index declined by 4.5%, the Hang Seng index gained 4% overall.

On-chain analyst Willy Woo commented that investors already see BTC as a store of value, but it will take time for the price to reflect it. While analyzing the BTC supply shock indicator a few days ago, he tweeted that the pioneering cryptocurrency seems undervalued.

The Price of Bitcoin Is far from Hitting the Bottom

Glassnode analysts claim that the exit of institutional investors from futures markets exacerbates the weakness of BTC. However, on-chain data suggests that Bitcoin is in an early bottoming process.

A recent report by on-chain intelligence firm Glassnode indicates that  Bitcoin derivatives now represent the dominant venue for price discovery. The futures trading volume currently represents multiples of spot market volume.

Meanwhile, the price of Bitcoin and the leading altcoins continues to show decreasing variations over the last few days. These range from -3% for BTC, ETH, and above -5% for LUNA, SOL, and ADA.

By Alexander Salazar

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