1. Tesla invested $1.5 billion of its cash reserves in bitcoin, according to a U.S. Securities and Exchange Commission annual report. The popular auto manufacturer said bitcoin offers âmore flexibility to further diversify and maximize returns on our cash.â The company had more than $19 billion in cash and cash equivalents at the end of 2020.
Elon Musk, Tesla CEO and worldâs richest man, is a late convert to bitcoin, having said recently, âI do at this point think bitcoin is a good thing.â He follows other corporate executives in embracing the hard-capped cryptocurrency amid an unprecedented period of a loose monetary policy during the coronavirus pandemic.
2. Ether futures have launched on the Chicago Mercantile Exchange (CME), one of the worldâs most active commodities exchanges. The opening price of a CME ether futures product was $1,669.75, about $70 over spot at the time.
3. Binance has temporarily suspended deposits in Nigerian naira â the countryâs currency â in response to a Friday letter from Nigeriaâs central bank instructing local banks to identify and close all accounts tied to cryptocurrency platforms or operations.
âIn retrospect, it was inevitable.â
Perhaps to Elon Muskâs chagrin, the former acting head of the U.S. Comptroller of the Currency, Brian Brooks, thinks the latest corporate treasury to buy into bitcoin is a bigger story than just one maverick founder and an electric car manufacturer.
âFor people who are invested in bitcoin itâs exciting news,â said Brooks, who left the OCC last month. âFor people who are looking at the rest of the world itâs actually a little bit scary news.â
Speaking on CoinDesk TVâs inaugural broadcast, the former regulator put the recent trend of U.S. corporations investing a portion of their cash holdings in bitcoin within an inflationary context.
âBitcoin is a more stable source of value over the long haul, potentially,â Brooks said. He noted the U.S. money supply has risen 25% since the start of the pandemic and could be up 40% compared with a year ago if stimulus efforts go through.
âThatâs crazy, right?â Brooks said.
Tesla piling over $1 billion into bitcoin is a massive story. Given the Musk acolytes, those who believe the worldâs richest man is ushering humanity into its next phase of techno-evolution, the auto companyâs bitcoin buy could have a bigger effect on the âOverton windowâ than just Square and MicroStrategy.
Itâs still an open question whether cash is really being debased. For years, fears of inflation have mostly missed the mark â as has the Federal Reserveâs target for a 2% inflation target.
Still, Brooks sees the value in cryptographically secured currencies like bitcoin. âMy thesis is that there is a thing about decentralization, it is both a freer technology and it is also a more sound money strategy than central bank-governed money printing approaches, which is what weâve done historically,â he said.
While this view may sound extreme, Brooks doesnât think heâs alone among regulators. He noted that Michael Barr, who could take Brooksâ former role at the banking regulator, shares a âsimilar thesis.â Itâs not a partisan issue, either. There are those wielding power on both sides of the aisle who believe cryptocurrencies and blockchain could play a major role in the future of finance.
In short, for Brooks, it comes down to a divide between who is a âtech adopter,â or an innovator, and those who arenât.
âCrypto and fintech and banking are all converging here, and blockchain is the infrastructure of the future. So weâll all be talking about this for a long time to come I expect,â Brooks said.
