1. Tesla caught a lucky break in announcing its $1.5 billion bitcoin purchase when it did. The auto giant is reportedly being investigated by Chinese authorities over safety and quality concerns, news that came to light the same day headlines were dominated by Tesla’s treasury, according to CoinDesk markets reporter Muyao Shen.
- Media gadflies, like NYU economics professor Nouriel Roubini, have criticized Tesla and bitcoin. Speaking on CoinDesk TV this morning, “Dr. Doom” raised questions about “market manipulation” – including CEO Elon Musk’s public comments on crypto and that a particular wallet “sucks” – and Tesla’s “failing” business model, which, he says, is now being masked by an asset with “no intrinsic value.”
- Still, it’s an open question as to whether other corporations will follow Tesla, Square and MicroStrategy’s lead in chipping into dollar reserves with bitcoin. JPMorgan thinks the strategy is an anomaly, due to the crypto’s volatility, while CNBC screaming head Jim Cramer said it’s “almost irresponsible” to not have the asset on a corporate balance sheet. Twitter is reportedly considering it.
2. Decentralized finance is heating up. Most notably, Amazon’s AWS Marketplace is offering Origin Protocol’s decentralized e-commerce platform Dshop to software-as-a-service customers (SaaS), as part of its partner network.
- Never mind bitcoin on the balance sheet, a subsidiary of Europe’s biggest telco is taking a stake in DeFi heavyweight Flow Network, a proof-of-stake blockchain, and becoming a data provider to the Chainlink oracle network. (CoinDesk’s Ian Allison reports out what this might say about the future of enterprise blockchain.)
- Meanwhile, a version of Curve Finance’s automated market maker is being built on Polkadot, a proof-of-stake chain that offers an alternative to Ethereum. Separately a piece of digital land sold for a record 888 ETH.
3. A U.S. citizen is suing the Internal Revenue Service, which could have wide implications for all cryptocurrency holders and privacy rights. CoinDesk privacy reporter Ben Powers gives a rundown of James Harper v. Charles P. Rettig, in which the plaintiff argues the IRS had violated Coinbase users’ constitutional rights by sending 10,000 letters warning they may not have paid taxes properly.
- The suit centers around how the government requests and comes into possession of personal data, and whether individuals have lost their right to privacy by dealing with “third parties” like Coinbase. In an increasingly web-mediated world, more and more behavior is based on network technologies – meaning, theoretically, more private information may be subpoenaed by the government.
- Nigerian citizens are rejecting governmental overreach in banning cryptocurrencies by turning to peer-to-peer exchanges. “Decentralized systems are hard to ban,” one user told CoinDesk contributor Alyssa Hertig.
With bitcoin going parabolic and maverick boosters like MicroStrategy CEO Michael Saylor earning ears to the thesis that the dollar is a “melting ice cube,” concerns that the U.S. government could outright ban the cryptocurrency are surfacing.
“If you think the U.S. Treasury and the U.S. government will let this thing get out of hand where literally corporates are starting to replace dollars…” Dan Nathan, founder and principal of Risk Reversal Advisors, said on CNBC yesterday.
Well, as the segment host asked: “What can they do?”
“They can regulate the hell out of it,” the reply went. Indeed, governments across the world are shifting their weight around on crypto. India has floated a ban on “private currencies.” The U.K. recently squashed crypto derivative products and regimes in China and Nigeria have long-standing restrictions on crypto trading.
But whether the U.S. government could interfere with the nascent digital economy is another question. This is the land of the free, after all,…