Elon Musk on SNL, DOGE, and BTC | MicroStrategy Acquires Additional $15M in Bitcoin
Top stories and news you should know in the bitcoin, crypto, and decentralized markets
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High Level
Last weekend on NBC’s late-night sketch comedy show, Saturday Night Live or known as SNL for short, Elon Musk hosted despite some controversy
He left many wondering how he may represent bitcoin and the crypto community, especially given his proclivity for being eccentric, as one of the largest proponents for renewable energy and recent emphasis on dogecoin
Digging Down Deeper
“You either die a hero, or you live long enough to see yourself become the villain.”
— Harvey Dent, The Dark Knight
Elon Musk lately is walking a very thin between genius and maniac, but what’s new?
Background
The man behind SpaceX and Tesla as well as The Boring Company, Neuralink, and OpenAI with high hopes of revolutionizing transportation both on Earth and in aerospace has been enjoying the spotlight lately. Making news over the past year for many things including his coronavirus and vaccine stances, Elon also has been featured on TMZ telling the paparazzi that dogecoin could be the future of cryptocurrency while laughing at the fact that it does not have a limited or hard-capped supply like bitcoin. He did note to the media and would-be viewers that investing their life savings into cryptocurrency is unwise earlier this year on February 8th, the same day that Tesla announced that it bought $1.5B in bitcoin and is planning to accept it as a payment.
Fast forward a couple months, bitcoin and crypto assets are hitting all-time-highs and making headlines almost daily for new entrants, price swings, and their role in the future of finance. Even the most irrational of them all, dogecoin, was skyrocketing from $0.02 at the end January to more than $0.40 ahead of April 20, 2021 when many speculators believed it would reach $0.69 (NICE!) in order for the prophecy of its #DogeDay to come true. The creator of the meme-based cryptocurrency DOGE, Jackson Palmer (now working at Adobe) stepped away years ago from crypto in general after calling the community “toxic” as well as “white male dominated” and criticized the industry as being full of “buzzword-filled business ideas.”
Palmer’s intention was merely to create a fork of litecoin (a fork of bitcoin) that had none of its features of being decentralized, disinflationary, or hard capped. He did this as a joke to draw positive attention to bitcoin’s features, educate those who are interested about them, and encourage innovations within BTC’s technology by making it more accessible and appealing to new users. Many new “investors” seeing the price rise could not help themselves as social media feeds became chalk full of “analysts” giving their price predictions and call SNL as a catalyst for the pump to $1, and as they usually do fell victim to the fear of missing out batched together with a unit-bias against bitcoin’s price that is orders of magnitude greater so people opt for the dog coin because they can own more of them instead of a fraction of a BTC. Its illogical and amounts to be the equivalent of choosing 10,000 pennies worth about $100 instead of a single 1/10th ounce gold coin worth hundreds of dollars.
Saturday Night Live
Once SNL began to air dogecoin was topping over 70 cents, Elon Musk while hosting the show naturally opened the with a traditional monologue where he was making jokes about how people often misunderstand what he says and what he actually means. Opening up to that point further, Elon proudly admitted that he was the first host of the show with Aspergers syndrome before stating his beliefs in a renewable energy future and that humanity must become a multi-planetary, space-faring civilization. Joking that, “Now if I just posted that on Twitter, then I’d be fine.” Only to joke further about other historical tweets of his such as the one below:
Closing his monologue with his mom, in accordance with Mother’s Day, Maye Musk joked that she hoped that her gift wasn’t dogecoin to which Elon replied, “It is. Sure is!” Appearing again later on during the show at the Weekend Update, he played a character named Lloyd Ostertag who’s a financial expert on cryptocurrency there to explain the sudden boom in the industry. In character donning a bow tie while wearing a blazer with spectacles on his face, Elon asked that he be referred to as “The Doge Father” before elaborating on cryptocurrencies saying, “They are a type of digital money, but instead of being controlled by a central government they are decentralized using blockchain technology. And lately prices have been soaring for bitcoin, ethereum, and especially dogecoin.”
Michael Che asked him what dogecoin was and heard this response, “Well, it actually started as a joke based on an internet meme, but now its taken off in a very real way… It was created in 2013 and has a circulating supply of 117 billion coins of which 113 billion have already been mined.” Ignoring the fact that made no sense about there being more DOGE circulating than was mined, when asked again to compare the US dollar to dogecoin in terms of how real it is Elon as the Ostertag character said it was “about as real as the dollar.” Che’s co-host of the segment Colin Jost explaining that he had read a lot about it and wanted to diversify his portfolio asked again what dogecoin was and to be met with this response, “Well, it’s the future of currency. It’s an unstoppable financial vehicle that is going to takeover the world.”
Boiling it down to another asset that can be traded for conventional money, Michael Che called it “a hustle.” Elon’s character then gave into the Weekend Update host agreeing, “Yeah, its a hustle.” Lloyd Ostertag ended the segment by exclaiming, “To the moooooon!” In the real-time and in the real-world, the bitcoin market at the time was ticking up while the dogecoin market saw a viscous sell-off that has since gone as low as 35 cents before bouncing back some on the news that SpaceX will launch “DOGE-1 Mission to the Moon” funded by dogecoin in 2022.
Bitcoin
Elon Musk’s appearance on SNL was well received with the 3rd highest ratings behind the leading shows hosted by Chris Rock and Dave Chappelle. In his own typical fashion, he left the his audience with a different view of the world and thinking about his performance as well as parsing over his every word looking for something insightful or profound. The bitcoin community found Elon Musk hosting as a positive with him bringing light to the cryptocurrency as a whole, but many were left very disappointed that he continued to speak about blockchain and dogecoin over bitcoin.
After listening to him speak in a Clubhouse room about bitcoin and dogecoin before the announcement of his company’s major investment in BTC, Elon Musk said he must choose his words very carefully as to not move the markets. This was before the boom in the bitcoin and crypto markets, and now that he is one of the most culturally relevant faces of bitcoin with skin in the game it almost seems that he does not care so much anymore about moving markets. In fact, he seems quite amused with it and likes being “The Doge Father” as well as stroking his ego as the great hero that is taking it to the moon, literally.
The problem with dogecoin, besides the fact that it is a joke lacking any good fundamentals is how massively centralized its distribution is when looking at the network’s wallets. At the time of this writing, the top wallet holds 36,711,939,192 DOGE that accounts to be worth about $15B and makes up 28.35% of its total supply. It’s basically impossible to do this with the USD without an audit from the Federal Reserve, but as Elon joked DOGE is practically no less real than it perhaps because he wanted to point out the silliness of them both as well as the nature of money in general.
Conclusion
According to BitInfoChart’s Top 100 Richest Bitcoin Addresses, the wallet with the largest balance of BTC holds 235,427 or about $12B and 1.26% of its total supply. Bitcoin flies in the face of all currencies, conventional or crypto, as the most successful and secure decentralized financial vehicle in history. Hopefully in a roundabout way of saying things, that was the message that Elon Musk was trying to convey in the sketch.
That was the hope of many until they received a notification from Elon Musk via Twitter when he tweeted the above question with a poll that received nearly 4 million responses and resulted in 78.2% of people calling for company’s support of the meme inspired cryptocurrency. Following the news, the price of DOGE increased by 10%. Then, Elon Musk really began to turn up the noise by tweeting the explanation of his electric vehicle company’s current relationship with Bitcoin below:
Bitcoin opened the day above $56,000 only to see markets move on Elon’s tweet and wipe away over $7,000 off BTC’s price to close the day just above $49,500, down 12.77%. The key takeaway from his tweet is that Tesla will NOT sell any bitcoin, it is just exploring other cryptocurrencies while waiting until mining transitions to more sustainable energy sources. The next day he added another tweet to the thread regarding the recent spike in energy consumption used for bitcoin over the last quarter with a chart from University of Cambridge’s Judge Business School’s Centre for Alternative Finance showing the trend seen below:
It has come to the surprise of many wondering if Elon Musk did his homework about energy consumption before his company bought $1.5B worth of BTC, and if not then why is he also looking at other cryptocurrencies such as Ethereum or Dogecoin that are not that differentiated from bitcoin at the moment as both operate on Proof-of-Work (PoW) algorithms that cost resources including computing power and energy in the form of electricity to mine. In a study from October 2020, the University of Cambridge in its 3rd Global Cryptoasset Benchmarking Study over the hotly debated topic that found 76% of cryptocurrency miners use energy from renewable sources as part of their energy mix. Also, the same study concluded that number increased from 60% for bitcoin from 2018 and the total energy consumed by PoW cryptocurrencies including Bitcoin Cash, Ether, Doge and others comes in at 39% from renewable energy sources that’s up from 28% in 2018.
The mining of bitcoin is greener than other industries because it is significantly cheaper to mine with renewable energy sources, rather than traditional, just think about using hydropower instead of coal for mining (looking at you, APAC). Elon is loving all the attention and might be trolling us or trying to push prices down, he does know Tesla’s battery mining process and SpaceX’s rockets are worse polluters than bitcoin right? We may need to have Michael Saylor, an MIT graduate with dual degrees in aeronautics and astronautics, sit down and explain to “The Doge Father” his misguidedness coming from a real bitcoin advocate, genius, and role model.
Elon needs to figure out that DOGE is also Proof-of-Work and only uses less energy because it is far less decentralized with a much lower hashrate, therefore it suffers from much lower security. He’s a marketer, and bitcoin became a trillion dollar brand without one. In the meantime, hopefully all the bitcoiner’s canceling their orders from Tesla in protest will send a message to Elon Musk to be more thoughtful about his tweets.
He is doing people a disservice by pointing them to DOGE and not BTC.
TL;DR “Bitcoin incentivizes renewable energy.” Miners want to do so shrewdly, which means using renewable energy sources to optimize for their costs. Bitcoin empowers its miners to find and seek out the cheapest as well as most efficient energy sources to use. Over time it will increasingly become more renewable and greener than its competition.
Square Crypto @sqcrypto
If bitcoin needs anything, it’s more white papers. In this one, @Square and @ARKInvest team up to argue for bitcoin as a key driver of renewable energy’s future: https://t.co/UmayxNtCFJ Hate reading? Here’s the nutshell version:
FURTHER READING ON BITCOIN’S ENERGY CONSUMPTION & ENVIRONMENTAL IMPACT
Comparing Bitcoin’s Environmental Impact by Haas McCook
“Although the comparisons are not like for like, and with only Bitcoin having a 100% defined scope for this exercise, we can that, at a minimum, Bitcoin consumes/emits less than half of what the gold mining industry does, and less than one fifth of what Bank branches and ATMs do.”
Solar + Battery + Bitcoin Mining by Brett Winton, Yassine Elmandjra & Sam Korus
“Critics also assert that the computation required to secure Bitcoin, even if necessary, is environmentally damaging and ruining the planet. We believe that the opposite is true: a world with bitcoin is a world that, at equilibrium, generates more electricity from renewable carbon-free sources.”
On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question by Amanda Fabiano & Galaxy Digital Mining
“There is no denying that the Bitcoin network consumes a substantial amount of energy, but this energy consumption is what makes it so robust and secure. Given Bitcoin’s transparency, it is easy to estimate Bitcoin’s energy usage. This results in frequent criticism of Bitcoin, but these critiques are rarely levied against other traditional industries.”
News You Should Know
Gary Gensler’s Regulatory Clarity Sounds Awfully Familiar
The new SEC Chair, Gary Gensler, has been on the job for three weeks and already reveals some inclination of what increased regulatory clarity may look like for bitcoin and crypto in the future. Adding that he believes the crypto asset market could benefit from greater investor protection, Gensler placed the duty on Congress to take action in making a regulatory framework for the exchanges trading crypto assets. He stated, “Right now there’s not a market regulator around these exchanges, and thus there’s really no protection against fraud or manipulation.”
MicroStrategy Acquires Additional $15M in Bitcoin
Following the news of Elon Musk’s tweet, Michael Saylor took to Twtitter to make his own announcement about his company’s decision to buy more BTC. It is notable because the average price per bitcoin is much higher than where the market was at the time of the tweet, so they likely bought before the dip. It’s making everyone curious if they have been buying more at these lower prices…
Stanley Druckenmiller Says the Fed Is Endangering the Dollar’s Global Reserve Status
Saying that the Fed’s policies have gone on for too long, investing magnate Stanely Druckenmiller who is CEO of Duquesne Family Office told CNBC that the central bank’s insistence on holding interest rates down and buying trillions in bonds even though markets are thriving and the economy is booming is a long-term risk. He explained that the policies and heavy debts and deficits will threaten the dollar’s status as the world reserve currency. He said, “The problem has been clearly identified; it is Jerome Powell and the rest of the world’s central bankers. There is a lack of trust.” Druckenmiller may know a thing or two about currencies given that he was the the lead portfolio manager for George Soro’s Quantum Fund who saw massive profits betting against the British pound in 1992 and basically broke the BoE…
Market Dashboard
TOTAL CRYPTO ASSET MARKET CAPITALIZATION = $2.327T
Bitcoin Dominance = 40.6%
Ethereum Dominance = 19.9%
(over 9,800 cryptocurrencies)
BITCOIN (BTC)
Last Close = $49,716 (as of May 13, 2021)
Market Capitalization = $930B
YTD Performance = +69.1%
ETHEREUM (ETH)
Last Close = $3,715 (as of May 13, 2021)
Market Capitalization = $430B
YTD Performance = +409.9%
*NEW ALL-TIME-HIGH @ $4,362 on May 12, 2021!
Bitcoin is holding up well despite the liquidations and headlines that have been pushing its price momentum downwards to bounce off its monthly Bollinger Band and two year long-term mean. Ethereum has been crushing expectations as more institutions see it as the market leader in smart contracts, and ETH took a quick dive after it appeared that Vitalik might have been dumping his tokens only to realize that he was actually attempting to move illiquid DOGE-inspired tokens to sell and use the proceeds for charity purposes. Crypto assets, in general, have been also making a strong run with many competitors to Ethereum popping up with higher prices and volumes lately such as Cardano and the newly launched Internet Computer (ICP) from Dfinity. DeFi is still in a frenzy with high gas fees plaguing the Ethereum network for smaller users, while the whales are still splashing around in the space and speculating in the NFT market which ones might make it on the auction block at Christie’s or Sotheby’s next. Exchange data is very telling that there’s plenty of weak hands selling right into the strong hands of eager buyers willing to pick up more crypto at opportunistic lower prices, and OTC desks saw a good flow of ADA, ETH, DOT, and ZEC rotating back into BTC this week. Seeing the all the big names and regulators talking about bitcoin and crypto with so much caution all of a sudden is telling that the stakes have never been higher as inflation numbers are flaring while the economy is still very much on the rocks despite increased easing of mandates and more efforts to reopen businesses. It could the last shakeout before another leg up, so do not be surprised if bitcoin cannot break and hold above its major resistance at $51,000 and tries retesting $40,000 should there be anymore spooky news over the weekend. Bitcoin is only getting stronger day-by-day as the players on its team grows bigger and better, so BTC seems poised to keep performing and return to price discovery mode once the market sorts through all the nonsense lately. The Ethereum tribe is also getting larger and looks very close to making a monster news with so many traders hoping it can make a run at “flippening” bitcoin’s market capitalization. If DOGE makes a run over $1, then BTC and ETH may be the butt of the joke as both might be flippened by it. The end of the month could be LIT!
HODL
Pictures Say 1,000 Words, But Memes Say 10,000
Elon Musk @elonmusk
SpaceX launching satellite Doge-1 to the moon next year – Mission paid for in Doge – 1st crypto in space – 1st meme in space To the mooooonnn!! https://t.co/xXfjGZVeUW
Bitcoin just got the GOAT on its team with a new profile picture donning #LaserEyesUntil100K!
Positive Vibes Only
CNBC @CNBC
Cryptocurrencies “have no intrinsic value” and people who invest in them should be prepared to lose all their money, Bank of England Governor Andrew Bailey said. https://t.co/LXK0IZBL5U
Thought Provoking Tweets
Naval @naval
Asset inflation (~) 2 yrs: • Non-tech stocks: 33% • Stocks: 45% • Tech stocks: 75% • Crypto: 10x • Real Estate: 15% • Oil: — • Gold: 40% • Commodities: 25% • Agriculture: 25% National savings being spent. If your portfolio isn’t up 30-50% (taxes), you’ve lost ground.
Zuck’s goats are named Bitcoin and Max, leaving many wondering if he is subliminally trying to tell us that he is a “bitcoin-maxi” or “bitcoin maximalist.”
Other Investment News
46 Million Americans Now Own Bitcoin, as Crypto Goes Mainstream — Newsweek
Bank of England Deputy Governor Says a CBDC Is ‘Probable’ if Public Money is to Survive — The Block
Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths — Bloomberg
Bitcoin Adoption Keeps Growing During Alt Season, Blockchain Data Shows — CoinDesk
Bitcoin ETF Approval Odds Grow Longer After Gensler Critique — Bloomberg
Bitcoin Mining Difficulty Hits New All-Time High After 21.5% Increase — Nasdaq
Bitwise Launches Crypto Company ETF on New York Stock Exchange — Decrypt
BTC Dropped Below $50,000 As $2B in Crypto Long Positions Liquidated — The Block
Facebook-Backed Diem Partners with Silvergate Bank to Issue US Dollar — CoinDesk
Hedge Fund Giants Millenium, Matrix and Point72 Standing Up DeFi Funds: Sources — CoinDesk
Hungary to Cut Tax on Cryptocurrency Earnings by 50% from 2022 — Bloomberg
Inflation Speeds Up in April as Consumer Prices Leap 4.2%, Fastest Since 2008 — CNBC
NYDIG Hires Bridgewater CFO in Drive to Bring Bitcoin to Banks — NewsBTC
Micro Bitcoin Futures Surpass 100,000 Contracts Traded — CME Group
Microsoft to Shutter its Azure Blockchain Service This Autumn — CoinDesk
MoneyGram to Let Cryptocurrency Holders Cash in Their Investments — CNBC
Musk Sends Bitcoin Tumbling With Shock U-Turn on Payments — Bloomberg
Samsung Adds Ledger Wallet Support in Latest Crypto Tie-Up — CoinDesk
Tokyo Assembly Members Seek 0% Bitcoin Tax in the Japanese Capital — BTC Times
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