In this weekly crypto review, the top headlines in the crypto news are discussed. The macro factors that influenced the crypto market are examined, including the news that the Federal Reserve will be raising interest rates, and declining oil prices. Tesla’s sale of 75% of its BTC holdings is also covered, along with Ethereum updates and Ripple co-founder Jed McCaleb finishing selling his XRP allocation. The Securities and Exchange Commission labeling nine cryptocurrencies as securities is mentioned, as well as the bankruptcy filing of crypto platform Celsius. The content also touches on countries clamping down on crypto and a look at last week’s top-performing cryptocurrencies.
Welcome to the Coin Bureau Weekly Crypto Review! Here are this week’s top headlines in the crypto news:
Macro Factors Moving Crypto
The macro trends that caused last week’s pump and the ones that could cause this week’s dump.
Everything You Need to Know: Tesla Sells its BTC
The famous electric car company offloads 75 percent of its BTC holdings. Here’s why it sold and why other publicly traded companies could soon follow suit.
Vitalik Buterin lays out his vision of Ethereum at the Eth CC conference as the merge approaches. Here are the three cryptocurrencies that need to be on your radar.
XRP Sales End
Ripple co-founder Jed McCaleb finally finishes selling his initial allocation. How much did he make and what does it mean for XRP?
SEC versus Cryptocurrency
Crypto’s most infamous regulator labels nine cryptocurrencies as securities as part of its investigation into insider trading at Coinbase. Which cryptos are the SEC targeting?
Celsius in Court
After filing for bankruptcy, the crypto platform begins the process of repaying its creditors. When could users get their crypto back?
Countries Clamp Down on Crypto
India’s central bank pushes for a crypto ban and the Bank of Central African States calls on its member countries to roll out CBDCs. Is this the beginning of a bigger trend?
A Closer Look at Last Week’s Top Performing Cryptos
And where they’re headed next. All this and more in just a moment.
Good morning, afternoon, or evening! Thank you for tuning in. My name is Guy and what you’re about to see is educational content, not financial advice. You can find any topics you’re looking for using the timestamps in the video timeline. And now, for today’s top stories.
Macro Factors Moving Crypto
Last week, we saw the crypto market rally by almost 20%. This begs the obvious question of what caused the rally, and the easiest way to find the answer is to look at the stock market. As you can see, the S&P 500 rallied along with crypto. This suggests that what moved the crypto market was a macro factor rather than a crypto-specific one.
As far as I can tell, this small rally was caused by the news that the Federal Reserve will be raising interest rates by 75 basis points or 0.75 percent during its next press conference later this week. For context, some investors were expecting the Fed to raise interest rates by a full one percent in response to the inflation figures for June, which came in the previous week at 9.1 percent, much higher than many expected. As such, the news that the Fed confirmed that it will be raising interest rates by just 0.75 at its upcoming press conference was welcomed by investors, and the markets responded in kind.
Another macro factor that seems to have moved the markets was the news that oil prices are on the decline, at least in the United States. Given that this is where most investors are based, it gave an extra boost to the markets.
Looking ahead, the macro factors that investors are watching this week will be company earnings, the Fed’s press conference that I just mentioned, and the gross domestic product (GDP) figures for the United States for the second quarter of this year. If you watched our video about how low the crypto market could go, you’ll know that crypto has a very high correlation with tech stocks, and it looks like tech companies are starting to struggle in what may be a perfect storm for the crypto market.
Microsoft, Google, Meta, Apple, and Amazon will all be releasing their earnings for Q2 this week, and if these earnings come in below expectations, the crypto market could take a huge hit. It’s a similar story with the Fed’s press conference, which will take place this Wednesday. If the Fed suddenly decides to raise rates by one percent rather than the 0.75 percent it recently confirmed, the crypto market could crash. Finally, there’s the GDP figures, which will be released on Thursday. If GDP comes in negative, then it will confirm that the U.S. economy is in a recession. Now, it’s not clear how the crypto market could respond to this, as a recession could see the Fed reverse course on interest rates depending on its severity. You can learn more about the upcoming recession and how it could affect the crypto market using the link in the description.
Besides these macro factors, there were a few crypto-specific factors that moved the market last week. The one that everyone’s talking about is the revelation that Tesla sold 75 percent of its BTC holdings, which, of course, caused crypto to dip. As most of you will know, Tesla famously revealed that it had bought $1.5 billion worth of BTC early last year, an announcement which eventually led to the massive crypto rally we saw in the months that followed. Some of you might also recall that Tesla sold 10 percent of its BTC holdings shortly afterwards to “prove liquidity.” In plain English, the company wanted to prove to shareholders that it could sell off a large amount of BTC at a moment’s notice if required, at least according to Tesla CEO Elon Musk.
Even with this 10 percent sale, when the crypto market hit its peak in November last year, Tesla’s BTC holdings were worth well over $2 billion, nearly double the dollar value of what the company had initially invested. After Tesla’s recent sale, however, the company now holds just $218 million of “digital currency,” a figure which apparently includes an unspecified amount of Dogecoins (DOGE).
If you’re wondering exactly how much BTC Tesla sold, the answer seems to be close to $1 billion worth. If you’re wondering how Tesla was able to sell such a large amount of BTC, the answer is over-the-counter or OTC trades, basically trades that take place directly between people, not on exchanges. This is why it’s unlikely that Tesla’s BTC sales had any direct effect on BTC’s price. Not only that, but the sale likely happened some time ago, so whatever direct effects Tesla’s BTC sales did have on its price have already come and gone. The reaction to the news by the crypto market after the fact is irrelevant. What is relevant, however, is the reason why Tesla sold so much of its BTC and what it plans to do going forward.
Well, in an earnings call, Elon explained that Tesla sold its BTC because of the constant supply chain disruptions the company is experiencing, notably from China, whose zero-covid policy continues to put the country into lockdown. This confirmed my suspicion that Tesla was forced to sell some of its BTC stash. Case in point, Elon emphasized that this sale should not be interpreted as a change in the company’s stance on crypto and that Tesla is open to buying back all that BTC in the future, likely when all the macro headwinds the company is facing start to calm down.
Unfortunately, there was no news from Elon about when Tesla will begin accepting BTC as payment, something he said the company would do once most BTC was being mined with renewable energy. Well, in case you missed the memo, around 60 percent of BTC is now being mined with renewables. So, where are you at, Elon? Jokes aside, there are a couple of publicly traded companies that could follow Tesla’s lead if this week’s tech earnings confirm the sector is getting squeezed. If you watched our video about the publicly traded companies that are buying BTC, you’ll know that MicroStrategy and Square are two other tech companies…
(Note: The script provided is a summary of the YouTube video and has been modified to fit into an article format. The headings have been added based on the different sections of the script.)