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El Salvador Becomes the World's First Country to Adopt Bitcoin as Legal Tender | Fed (Kind Of) Buys Crypto Bonds
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El Salvador Becomes the World's First Country to Adopt Bitcoin as Legal Tender | Fed (Kind Of) Buys Crypto Bonds

Top stories and news you should know in the bitcoin, crypto, and decentralized markets

Jack Hermes
Jun 11, 2021
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El Salvador Becomes the World's First Country to Adopt Bitcoin as Legal Tender | Fed (Kind Of) Buys Crypto Bonds
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Nayib Bukele’s “#NewProfilePic” with Laser Eyes from his Twitter on June 5, 2021

High Level

  • This Wednesday, June 9th, the legislative assembly of El Salvador made history for formally adopting bitcoin as legal tender

  • With 62 votes in favor, nearly three-fourths of the legislature, this new law holds potential to elevate El Salvador into one of the world’s most important financial centers


Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
Welcome to the future 🇸🇻 #Bitcoin
Image

June 5th 2021

8,259 Retweets32,591 Likes

Drilling Down Deeper

At around 1 AM Central Time on June 9th, the Salvadoran President Nayib Bukele tweeted, “History!”

Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
The Land of the Free 🇸🇻

June 7th 2021

2,690 Retweets23,198 Likes

How It Started…
On the morning of June 5th, the last day of the Bitcoin 2021 conference in Miami, there was a special announcement that Jack Mallers would surprise the audience with a special message dubbed, “One Small Step for Bitcoin, One Giant Leap for Man Kind.” The attendees as well as audience around the world waited and watched eagerly for the young entrepreneur and developer from Chicago, Illinois to take the stage and make one of the biggest announcements in Bitcoin’s history. Maller’s presentation did not disappoint, and by the end of his speech he had everyone in tears almost as he introduced the president of El Salvador for his grand plan of making bitcoin legal tender and finished by walking off the stage to embrace both of his parents with a hug. It was a beautiful moment.

Twitter avatar for @DocumentingBTCDocumenting Bitcoin 📄 @DocumentingBTC
The world may seem dark. But there is a small, orange spark of hope if you look closely enough. That's all it takes to start a fire. El Salvador 🇸🇻 and #Bitcoin
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June 7th 2021

2,269 Retweets11,863 Likes

A Spark of Hope…
By Sunday, the president of the Republic of The Savior had the taken the crypto and financial news headlines by storm. That next night, he took to Twitter talking about their move into bitcoin that spilled over into the early hours of the next morning. Bukele spoke about the recently announced Bitcoin Law in the hour leading up to its vote as well as plans around bitcoin mining and expanding infrastructure and stimulating development around the country’s source of geothermal energy (here’s the recording). Speaking of how using cheap, clean, renewable energy that the country loses in large amounts to oversupply or through transporting it to cities, using it instead for bitcoin mining positions El Salvador as an ideal location for operations from both an environmental and regulatory stance.

Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
I’ve just sent the #BitcoinLaw to Congress 🇸🇻
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Image
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June 9th 2021

3,876 Retweets13,848 Likes

Bitcoin Bill to the Future
By Tuesday, it was clear that in El Salvador there would be no capital gains tax for Bitcoin in the articles of the bill since it will be recognized as a legal currency. The Bitcoin Bill proposal was simple, short, and sweet. The Bitcoin Law was sent to Congress by their president around 9PM Central Time on June 8th, and it was approved at 1:05AM Central Time in the Salvadoran Congress by a supermajority of 62 out of 84 votes. Over a span of four days in El Salvador, it became the bitcoin capitol of the world beginning with Nayib Bukele announcing BTC adoption, a simple three-page bill that he sent to Congress, the government votes to approve the bill, and then President Bukele joining Twitter to speak candidly about the entire situation. On Nic Carter’s Twitter Spaces, Bukele welcomed the idea of bitcoin mining via excess volcanic geothermal energy!

Twitter avatar for @AsambleaSVAsamblea Legislativa @AsambleaSV
Con 62 votos, el pleno legislativo aprueba la #LeyBitcoin con la que El Salvador adopta el #Bitcoin como moneda de circulación legal. ¡#LaNuevaAsamblea sigue haciendo historia!
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June 9th 2021

3,138 Retweets11,242 Likes

Volcano Money > Oil Money
Upon its passage, El Salvador’s Congress broke into applause after the bill was signed into law by the president to officially pass it. This move by El Salvador will be powerful in bringing economic and financial benefits to the nation, not to mention, makes it one of the most ambitious countries in adopting bitcoin as legal tender while embracing clean mining, the Lightning Network, and Maller’s Strike app for payments and remittances. Amazingly, these major developments came after recent aspersions against bitcoin by ESG fan-boys and fan-girls claiming ignorantly that bitcoin mining would consume too much energy while also using too many dirty sources in the process. There could not have been better timing for this news proving why bitcoin works for the billions, not billionaires, and proving how it can be mined using carbon neutral or even negative methods!

Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋 This is going to evolve fast! 🇸🇻
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June 9th 2021

18,182 Retweets72,086 Likes

How It’s Going…
The news of El Salvador’s decision only got better over time. It was especially rich seeing the Reuters headline saying, “IMF sees legal, economic issues with El Salvador’s bitcoin move.” That led many in the bitcoin and traditional financial communities wondering, “Risk to who?” The only plausible risk that popped into mind for many of us was that if El Salvador follows through on its prospects in adding bitcoin to their national reserves, it could mean that if the price of bitcoin went parabolic that they may be able to pay off the loans made to them by the IMF. While the IMF can issue their own SDR’s (special drawing rights) that are tied to a basket of fiat currencies that they can always just be inflated and printed more of, the truth is they cannot compete that against a fixed and sound money like bitcoin unless they too started to recognize it as legal tender and joined in on the movement.

Bitcoin is run by rules, not rulers. Without them, we would live with the animals.

Read More Here

TL;DR — Loan sharks at the IMF couldn’t believe that a sovereign nation could pass their own laws to enact bitcoin as legal tender, and after historically loaning unpayable loans to a nations around the world they’re figuring out that El Salvador may be able to service its debt owed to the fund and achieve freedom from central banks and fiat money for the citizens and country’s well-being. They’re worried about it inspiring other countries in their position following suit. We are witnessing the evolution of our fiscal and monetary systems in real-time.

Twitter avatar for @CNBCTechCheckTechCheck @CNBCTechCheck
"Bitcoin is engineered to solve this exact problem and so this is the most logical step forward for El Salvador and for humanity," says @ln_strike CEO and fierce #Bitcoin defender @jackmallers on El Salvador accepting the cryptocurrency as legal tender.
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June 9th 2021

292 Retweets1,356 Likes

News You Should Know

Twitter avatar for @BitcoinMagazineBitcoin Magazine @BitcoinMagazine
Bloomberg analyst: "Bitcoin has transitioned to a global digital-reserve asset."
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June 8th 2021

289 Retweets1,433 Likes

Bitcoin - Potential Savior vs. Unlimited Fiat (Bloomberg Analyst)

In the June 2021 edition of the Bloomberg Crypto Outlook, it asks “Bitcoin $20,000 or $100,000?” before stating, “Crypto Trend Is Upward.” The quote below says it all when it comes to their feeling for the future of bitcoin, and it questions if the current crypto bull market has been discounted because of the focus on Bitcoin’s energy consumption despite it highlighting the robustness of the world’s largest decentralized network as well as its ability to incentivize the use of more renewable energy sources. While discussing the competition between Bitcoin and Ethereum in the report it says, “Adoption is in the very early days, yet its the key and Bitcoin appears to have won the race, as evidenced by Tesla allocating a portion of its equity wealth to the digital asset.”

Read More Here

“Bitcoin is more likely to resume appreciating toward $100,000 resistance rather than sustaining below $20,000.”

— Mike McGlone, BI Senior Commodity Strategist, Bloomberg Crypto Outlook (June 2021 Edition)

Fed (Kind Of) Buys Crypto Bonds

Thanks to MicroStrategy Inc., best known as the biggest corporate advocate for Bitcoin, and its offering this week of $500M in junk bonds solely for the purpose of buying more bitcoin (on top of their roughly $1B worth of convertible notes they issued months earlier to fund its bitcoin purchases for its balance sheet) the Fed now indirectly holds bitcoin. As the junk bonks saw incredible demand, MicroStrategy was able to up the initial $400M to $500M then up to $1.6B after counting all of the orders from a large number of hedge funds among other bidders. The Fed holds both State Street’s SPDR Bloomberg Barclays High Yield Bond exchange-traded fund (JNK) and BlackRock’s iShares Broad USD High Yield Corporate Bond ETF (USHY), which both hold allocations to MicroStrategy’s 2028 secured notes with a yield of 6.125%. Interestingly, this headline was released on the same day that the Fed’s balance sheet and the S&P 500 index both reached new all-time-highs…

Read More Here

RECAP: Bitcoin 2021 Miami | June 4th & 5th

The largest bitcoin event in history was held in Miami, Florida last week that left many people talking about its announcements, events, and surprises well after it concluded. People from the bitcoin community came from all the globe to hear and see leaders in the space discuss the asset and network that’s been changing the world. It was filled with insights for newbies as well as seasoned veterans featuring speakers like Ron Paul, Senator Cynthia Lummis, Michael Saylor, Jack Dorsey, Lyn Alden, Sam Bankman-Fried, Robert Breedlove, Nic Carter, Hailey Lennon, Caitlin Long, Anthony Pompliano, Nathan Yusko, Preston Pysh, Marty Bent, Alex Gladstein, Jack Mallers, and many more…

Bitcoin 2021 Livestream - Day 1

Bitcoin 2021 Livestream - Day 2


Pictures Say 1,000 Words, Memes Say 10,000

Twitter avatar for @systemic_blisssystemic bliss® @systemic_bliss
Michael Jordan Dunk GIF by NBA

Michael Saylor @michael_saylor

#Bitcoin incentivizes renewable energy @elonmusk. 🫒 https://t.co/V0n70Hs3vC

June 9th 2021

Twitter avatar for @systemic_blisssystemic bliss® @systemic_bliss
How it be…
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June 11th 2021


Positive Vibes Only

Twitter avatar for @bitcoinmom₿rooke @bitcoinmom
#Bitcoin
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June 6th 2021

244 Retweets3,412 Likes
Twitter avatar for @Eric_BIGfundEric Weiss @Eric_BIGfund
Just a casual chat with President @nayibbukele and 17k people & about El Salvador’s 🇸🇻 plans to make #bitcoin legal tender in the country. “Suddenly” has arrived.
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June 9th 2021

10 Retweets119 Likes

Thought Provoking Tweets

Twitter avatar for @LukewearechangeLuke Rudkowski @Lukewearechange
There’s free Venezuelan Boliviars in a dumpster at the bitcoin conference -#bitcoin
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June 4th 2021

1,127 Retweets4,347 Likes
Twitter avatar for @GRDecterGenevieve Roch-Decter, CFA @GRDecter
The Fed: "There is no inflation" Me: "Hold my breakfast"
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June 4th 2021

68 Retweets343 Likes
Twitter avatar for @DocumentingBTCDocumenting Bitcoin 📄 @DocumentingBTC
This local El Salvador 🇸🇻 newspaper headline announcing #Bitcoin is legal tender, was just embedded into the 686,604th block of the chain. It will now remain there until the end of time.
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June 7th 2021

518 Retweets2,828 Likes
Twitter avatar for @DocumentingBTCDocumenting Bitcoin 📄 @DocumentingBTC
#Bitcoin support in Latin America: 🇪🇨 Ecuador- @JuliusEC 🇲🇽 Mexico- @eduardomurat, @IndiraKempis 🇵🇦 Panama- @gabrielsilva8_7 🇦🇷 Argentina- @fsancheznqn 🇵🇾 Paraguay- @carlitosrejala 🇧🇷 Brazil- @gilson__marques, ,@FabioOstermann 🇸🇻 El Salvador- @nayibbukele 🇨🇴 Colombia- @JCastroS

June 8th 2021

1,401 Retweets5,201 Likes
Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋 This is going to evolve fast! 🇸🇻
Image

June 9th 2021

18,146 Retweets71,984 Likes
Twitter avatar for @udiWertheimerUdi Wertheimer @udiWertheimer
bitcoiners meeting in el salvador after dying in mysterious boat accidents
Batman Dark GIF

June 9th 2021

450 Retweets3,565 Likes
Twitter avatar for @DocumentingBTCDocumenting Bitcoin 📄 @DocumentingBTC
"#Bitcoin is a technical solution to give 8 billion people property rights" - @michael_saylor on Fox News
Image

June 10th 2021

1,999 Retweets9,885 Likes
Twitter avatar for @systemic_blisssystemic bliss® @systemic_bliss
#BTC is upsetting the loan sharks… https://t.co/JE8eNbvjyg

*Walter Bloomberg @DeItaone

IMF STATEMENT COMES AHEAD OF MEETING BETWEEN FUND AND SALVADORAN PRESIDENT BUKELE LATER ON THURSDAY ADOPTION OF BITCOIN AS LEGAL TENDER RAISES A NUMBER OF MACROECONOMIC, FINANCIAL AND LEGAL ISSUES SAYS IMF ABOUT MOVE BY EL SALVADOR

June 10th 2021

Twitter avatar for @cryptograffiticriptografiti @cryptograffiti
The IMF & World Bank are directly responsible for many of the current hardships faced by LATAM countries. This animation explains why #Bitcoin
Image

June 10th 2021

1,036 Retweets2,345 Likes
Twitter avatar for @OkcoinOkcoin @Okcoin
No shade, Google, but @MicroStrategy CEO @michael_saylor did his homework on energy usage vs asset value before coming to #Bitcoin2021. And #Bitcoin outperforms...by a lot.
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June 11th 2021

405 Retweets1,696 Likes
Twitter avatar for @jackjack @jack
"…useless complicated math problems…" @SenWarren if you believe #bitcoin doesn't ultimately shift power from banks & corporations (the ones you fight!) back to the people globally…you're right…useless. If instead you want to help us decentralize that power…math is critical.

Elizabeth Warren @SenWarren

Bitcoin requires so much computing activity that it eats up more energy than entire countries. One of the easiest and least disruptive things we can do to fight the #ClimateCrisis is to crack down on environmentally wasteful cryptocurrencies. https://t.co/derGr1bjuq

June 11th 2021

2,018 Retweets9,791 Likes

Tweets Moving the Markets

Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
Our engineers just informed me that they dug a new well, that will provide approximately 95MW of 100% clean, 0 emissions geothermal energy from our volcanos 🌋 Starting to design a full #Bitcoin mining hub around it. What you see coming out of the well is pure water vapor 🇸🇻
Image

June 9th 2021

10,107 Retweets42,369 Likes
Twitter avatar for @DocumentingBTCDocumenting Bitcoin 📄 @DocumentingBTC
1.4 billion people are waiting. #IndiaWantsBitcoin
Image

June 10th 2021

1,897 Retweets9,206 Likes
Twitter avatar for @WarrenDavidsonWarren Davidson @WarrenDavidson
Authoritarians want to use the financial system as a means of control rather than means of exchange and store of value. To #DefendFreedom we must defend #SoundMoney. And don’t buy this dishonest BS on energy; #bitcoin is actually growing investment in renewable energy globally. https://t.co/V18IABLIAw

Elizabeth Warren @SenWarren

Bitcoin requires so much computing activity that it eats up more energy than entire countries. One of the easiest and least disruptive things we can do to fight the #ClimateCrisis is to crack down on environmentally wasteful cryptocurrencies. https://t.co/derGr1bjuq

June 10th 2021

1,605 Retweets7,194 Likes
Twitter avatar for @nayibbukeleNayib Bukele 🇸🇻 @nayibbukele
It will.

Reuters @Reuters

Does money grow on volcanoes? El Salvador explores bitcoin mining https://t.co/RnbyQARgqj https://t.co/ATjBJ0Ffvm

June 10th 2021

3,328 Retweets23,476 Likes
Twitter avatar for @CL207CL @CL207
lol are JPM strategists larps ? im pretty sure if you longed bitcoin every time bitcoin was in backwardation and taken profits after bounce, you would've retried, its how I did it, I literally don't use any other indicators nor draw lines on a chart
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June 10th 2021

77 Retweets814 Likes

Other Investment News

  • Bitcoin Put in Highest Risk Category in Bank Capital Plan — Bloomberg

  • Basel Committee Consults on Prudential Treatment of Cryptoasset Exposures — Bank of International Settlements

  • Bitcoin Miami 2021: Square’s Jack Dorsey, Elon Musk-bashing and an Emphasis on ‘Liberty’ — Fox Business

  • Bitcoin, Other Crypto Assets Targeted for Stiff Banking Regulation — WSJ

  • Cryptocurrency wins votes of confidence from Gov. Abbott, Texas Department of Banking — The Dallas Morning News

  • El Salvador President’s Bitcoin Push Casts Shadow Over IMF Efforts — Reuters

  • FBI Likely Exploited Sloppy Password Storage to Seize Colonial Pipeline Bitcoin Ransom — CNBC

  • The Fed Probably Just Got a Piece of Those Bitcoin Junk Bonds — Bloomberg

  • Former US President Says Bitcoin ‘Just Seems Like a Scam’ — The Block

  • Goldman Sachs Backs $28M Funding Round for Blockdaemon — CoinTelegraph

  • Hut 8 Mining Announces Approval to List Shares on NASDAQ — Hut 8

  • India to Reportedly Ditch Bitcoin Ban Agenda in Favor of Asset Classification — CoinTelegraph

  • Interactive Brokers Will Offer Crypto Trading by the End of the Summer — CNBC

  • Jack Dorsey on Bitcoin: ‘I Don’t Think There Is Anything More Important in My Lifetime to Work On’ — CNBC

  • Ken Moelis Is Looking Into the Crypto Space, Compares It to 1848 Gold Rush — CoinDesk

  • Kraken to No Longer Offer Margin Trading for US Investors Who Don’t Meet ‘Certain’ Requirements — CoinDesk

  • MicroStrategy Announces Proposed Private Offering of $400 Million of Senior Secured Notes — MicroStrategy

  • MicroStrategy Announces Pricing of Offering of Senior Secured Notes — MicroStrategy

  • Millennials Are Officially Getting Too Old to Build Wealth — ZeroHedge

  • One Bank Goes Apocalyptic: Inflation Is About To Explode "Leaving Global Economies Sitting On A Time Bomb" — ZeroHedge

  • Some Bitcoin Miners in Xinjiang Have Been Ordered to Shut Down — The Block

  • State Street Stands Up New Crypto Unit as It Eyes Potential Custody, DeFi Products — CoinMarketCap

  • Square and Blockstream to Build Solar-Powered Bitcoin Mine in the U.S. — BTC Times

  • Square Launches $5M Bitcoin Fund to Promote Crypto Inclusion — Decrypt

  • Square Seeks Community Input on Bitcoin Hardware Wallet — BTC Times

  • Texas State Regulator Greenlights Banks to Custody Crypto — CoinDesk

  • Top White House Tech Critic Tim Wu Holds More Than $1M in Bitcoin — Politico

  • Unchained Capital Announces $25m Series A Led by NYDIG and Stone Ridge Holdings Group — NYDIG

  • US Recovers Bitcoin Paid to Colonial Pipeline Hackers — Decrypt

  • VanEck Taps Gemini as Custodian for their Bitcoin ETF — SEC


Additional Reading

  • BITCOIN’S MONETARY SUPERIORITY IS GUARANTEED BY PHYSICS by Bitcoin Magazine

  • THIRST TRAP by Arthur Hayes

  • UNFUCKWITHABLE MONEY by BitMEX Research

  • WORK IS TIMELESS, STAKE IS NOT by Hugo Nguyen


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DISCLAIMER
An investment in any asset or strategy involves a high degree of risk and there is always the possibility of loss, including the loss of principal. Nothing written above may be considered as an offer or solicitation to purchase or sell securities or other services. The trading and investing ideas and strategies discussed above are not recommendations to buy or sell any security and are not intended to provide any investment advice and/or recommendations of any kind, but are made available solely for educational and informational purposes. Before acting on information from above, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Data sources are from publicly available outlets and news. Figures may have changed or incorrect, please do your own research.
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