Bitcoin passes the “Musk test” and prepares for Taproot
Bitcoin continues to be feverish. Ilon Musk tweets apparently either cause bitcoin to rise and fall, or coincide successfully with such fluctuations in the key digital asset. Whatever the case may be: the entrepreneur and founder of Tesla does not yet intend to order the sale of the remaining bitcoins on the car company’s balance sheet (approximately $1.35 billion of the $1.5 billion purchase price, given the sale of some such digital assets in the market to, as the organization said in a statement, “test the liquidity properties of bitcoin”).
That said, bitcoin has yet to significantly recover from its May 18 drop to $42,000 on May 17. On May 18, it trades at $43.6 thousand after having risen to $64.2 thousand in mid-April. The fall in bitcoin prices has once again caused a wave of criticism of the digital asset. Thus, economist Peter Schiff, known for being a supporter of investment in gold and a bitcoin critic, said about the failure of the corporate strategy of MicroStrategy, promoted by the head of the organization Michael Saylor.
As you know, Saylor is committed to buying bitcoins from that organization’s balance sheet, essentially at whatever price the market has for the asset. The most recent purchase was made at a price of $55,387,000. Given the current level of bitcoin price, as well as the funds invested in this purchase ($15 million), the company is currently losing $3.15 million on this investment. However, if we take the fact that the average price of all bitcoins bought by MicroStrategy (91.85 thousand BTC) is $24.403 thousand, then the organization, whose shares are traded on Nasdaq under the ticker MSTR, is in a significant plus.
But Schiff points to only one month’s worth of dynamics, believing that since bitcoin has fallen 34% in that period, which is about 17 years of average statistical inflation in the United States, Saylor’s bet on bitcoin as an asset that hedges against inflation is wrong. However, Schiff himself has previously stressed that the real rate of inflation in the U.S. differs from what Washington declares. And there is another curious fact: Peter Schiff’s son, unlike his father, invests in bitcoins.
Be that as it may, bitcoin is obviously an investment in the long run. This once again shows that there is now a consensus among most bitcoin miners (the top 10 mining pools have said “yes”) to implement a significant upgrade (Taproot) to the cryptocurrency’s blockchain operation. The decision itself must be finalized by August 14 for Taproot to be implemented in November of this year, bringing the bitcoin blockchain to a faster focus.
