One of the most important events in the history of bitcoin has taken place, with a nation making bitcoin legal tender.
Last Week In Bitcoin is a series discussing the events of the previous week that occurred in the Bitcoin industry, covering all the important news and analysis.
Summary Of The Week
It’s been a whirlwind week in bitcoin as El Salvador officially started accepting bitcoin as legal tender, giving citizens $30 worth of bitcoin each and paving the way for further adoption around the globe. Global behemoths like McDonald’s and Starbucks started accepting bitcoin in the country, who knows maybe they’ll start doing the same elsewhere in the near future.
Of course, all was not well this week, despite it being what can only be considered a historic week for bitcoin. On the same day El Salvadorans queued to receive their bitcoin and start using it across the country, bitcoin saw a dramatic tumble which many consider a coordinated effort to undermine the currency. Here’s what happened this week in bitcoin:
A Historically Bullish Week
On Monday, bitcoin started off what many hoped would be a bullish week by breaching $51,000 for the first time since May 14, 2021, in the run up to El Salvador officially accepting bitcoin as legal tender. Nayib Bukele, El Salvador’s president, announced on Monday that the country had purchased its first 200 BTC, it would acquire an additional 200 BTC early on Tuesday.
Interestingly, banks and markets across the U.S. were closed on Monday as it was Labor Day, but as we all know; bitcoin never closes.
Tuesday was a whirlwind day for bitcoin. Bill Miller, famed investor, heralded bitcoin as an alternative to investing in gold, saying “we are still early” in reference to investing in bitcoin and its potential value in the not-so-distant future. But that, of course, may have gone unnoticed by many as Tuesday was full of other more “important” news.
El Salvador officially implemented bitcoin as legal tender on Tuesday and started the rollout of its Chivo wallet, ATMs and kiosks across the country. That’s right, an entire country now accepts bitcoin. Local and international businesses across El Salvador started accepting bitcoin payments with fast food giant McDonald’s and global coffee giant Starbucks joining the fray.
Early in the morning, bitcoin breached $52,000, last seen on May 12, 2021, and looked poised for a decent run, but the market had other ideas. By midday, bitcoin tumbled by as much as 17%, briefly dipping down to just under $43,000 before recovering and ending the day a tad below $47,000. The dip was enough incentive for the El Salvadoran government to stack some sats, purchasing an additional 150 BTC, bringing their total holdings to 550 BTC. That’s right, a country HODLs 550 BTC in its treasury.
But Tuesday wasn’t all about El Salvador as NBA legend Stephen Curry and bitcoin exchange, FTX, announced a partnership to “demystify” bitcoin to the average consumer. As the day wound to a close, the head of Standard Chartered’s new bitcoin and crypto research unit, Geoffrey Kendrick, told clients in a note on Tuesday: “As a medium of exchange, bitcoin may become the dominant peer-to-peer payment method for the global unbanked in a future cashless world” and “cyclically, we expect a peak around $100,000 in late 2021 or early 2022.” That’s bullish for a $789 billion firm.
On Wednesday, Union Investments, a $500 billion investment firm based in Germany, stated that they had a bitcoin pilot program under way and they would bring exposure to bitcoin to its clients. Later in the day, Blockstream announced a partnership with Macquarie Group, a $428 billion investment and leading investor in global renewable energy infrastructure, to pilot a bitcoin mining facility and explore alternative carbon-neutral energy sources to power such operations.
Also on Wednesday, Dan Tapiero, CEO of 10T Holdings, said “Bitcoin is going up to $400,000 or $500,000 and potentially more.” The bitcoin bulls continue to grow by the week.
On Thursday, Ukraine made headlines across the world when its parliament passed a law legalizing bitcoin in the country. The bill was first brought up in the fall of 2020 and passed with a total of 276 lawmakers supporting it, and only six against it. Ukrainians are now free to trade and own bitcoin.
Also on Thursday, controversial investment app, Robinhood, added dollar cost averaging (DCA) to its bitcoin derivative product, allowing users to habitually purchase and save bitcoin on the platform. They did, however, make no mention if their service would improve.
During Thursday’s Bitmain’s Digital Mining Conference, Miami mayor and laser eye aficionado, Francis Suarez, concluded his speech by challenging the audience to “go out there and elect the next President of the United States to be a pro Bitcoin president.”
Lastly, on Thursday, Rick Rieder, CIO of BlackRock, said on CNBC’s Squawk Box that he owns bitcoin and that he believes its price could go up “significantly” in the future. In August 2021, BlackRock allocated over $382 million to shares of bitcoin mining giants Marathon Digital Holdings and Riot Blockchain.
Not Without Bumps
This week wasn’t without its bearish news. On Tuesday, as El Salvador’s rollout of bitcoin as legal tender was underway, bitcoin tumbled nearly 17%, briefly hitting $42,900 before recovering and ending the day just below $47,000. Many have speculated that the sudden drop was a coordinated effort by big players to undermine El Salvador’s rollout and dissuade other nations from following the same path.
Although the week started off great, with bitcoin briefly surging above $52,850 on Tuesday, its tumble on Tuesday has yet to see it recover to anywhere near $50,000, having dipped below $45,000 several times this week, most notably on Friday.
Speaking of Friday, Dmitry Peskov, the acting press secretary for Russian President Vladimir Putin, said Friday that Russia has no reason to recognize bitcoin and that he is unconvinced that adopting bitcoin would bring any benefits to the Russian Federation. Not overly bearish but still not positive.
Overall, I remain as bullish as ever. An entire country has made bitcoin legal tender and now HODLs bitcoin in its treasury, which is one for the history books should bitcoin hit analysts’ expectations over the next decade or two — $10 million per bitcoin anyone? Besides El Salvador paving the way for others, Ukraine legalizing bitcoin in the country is a big step forward, legitimizing bitcoin as an asset and encouraging wider adoption.
I remain skeptical as to whether or not this week’s sudden dip was a coordinated effort or just a normal market correction that happened to fall on the same day bitcoin made a massive leap forward. “Buy the rumour, sell the news” has been the mantra for many over the years and appears to be exactly what happened.
With Standard Chartered joining the likes of myself and Bloomberg in predicting a $100,000-plus target for bitcoin in the near future, I find solace in taking a macro outlook on the market, instead of fussing over the last week and what’s to come in the next. Bitcoin still has enormous room for growth and I remain firm in believing a six-figure bitcoin is not that far away.
This week was history in the making, and despite some headwinds, bitcoin is primed for a decent surge as the year comes to an end.
This is a guest post by Dion Guillaume. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.