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Business

Tesla’s Bitcoin Strategy Is Working, Annual Report Suggests

Tesla revealed a year ago on February 8th that it had purchased $1.5 billion in bitcoin. The revelation sent the markets into a frenzy, and CEO Elon Musk, whose tweets can cause billion-dollar price fluctuations, became one of crypto’s most powerful personalities.

After a year, it’s worth considering if Tesla’s Bitcoin purchases were beneficial to the company, regardless of its influence on the crypto markets. “Yes,” is the quick reply. Tesla’s 10-K, a detailed annual report that all publicly traded firms are required to file with the Securities and Exchange Commission, was released on Monday.

According to the article, Tesla generated $128 million in profit by selling some of the Bitcoin it purchased early last year, but it also lost $101 million on the position as of December 31. At first glance, this appears to indicate that Tesla’s Bitcoin foray has resulted in a $27 million profit. However, the tale is more complicated than that, because of the peculiar accounting laws that govern crypto assets—in a way that favors Tesla.

All of this obscures the underlying value of a company’s crypto assets, particularly in a year like 2021 when values increased. Fortunately, Tesla states in its 10-K that the fair value of its Bitcoin was approximately $2 billion as of December 31, implying that the company’s Bitcoin position was up roughly $500 million (on top of the $128 million it made by selling some in March).

Here’s a critical paragraph from the report that not only shows the value of Tesla’s Bitcoin holdings, but also suggests the firm is sticking to its new policy of adding non-cash assets (like crypto) to its balance sheet, which was implemented a year ago:

“We continue adapting our investment strategy to meet our liquidity and risk objectives, such as investing in U.S. government and other marketable securities, digital assets and providing product related financing. In the first quarter of 2021, we invested an aggregate $1.50 billion in bitcoin. The fair market value of our bitcoin holdings as of December 31, 2021 was $1.99 billion. We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash.”

That $1.99 billion is based on the value of Bitcoin on December 31, when it was over $46,000, so Tesla’s holdings today would be slightly less given the current $43,000 price—but still much above the original purchase price.

Some Tesla stockholders might prefer Musk to cease dabbling with cryptocurrency and focus on the company’s main business of shipping automobiles. However, from a strictly financial standpoint, the annual report reveals that Tesla’s Bitcoin acquisitions have been a net positive, implying that crypto is likely to be a long-term part of the company’s future.

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Opinions

Is Cryptocurrency a worthy investment?

It is possible to become extremely wealthy overnight by investing in cryptocurrencies. The disadvantage is that you risk losing all of your money. Both are correct, but in what way? Cryptocurrency investments might be dangerous, but they can also be incredibly profitable.

If you want direct exposure to the demand for digital currencies, cryptocurrencies are an excellent investment. Stocks of cryptocurrency-related companies are a safer, but perhaps less rewarding, option.

Examine the benefits and drawbacks of investing in cryptocurrencies.

Are Crypto currencies safe?

Cryptocurrency is not entirely secure, at least not at the moment. Other data, on the other hand, shows that it may be here to stay.

Risks associated with cryptocurrencies

Cryptocurrency exchanges, unlike stock markets, are more vulnerable to hacking and other forms of criminal behavior. Security breaches have resulted in severe losses for investors who have had their digital currency stolen.

When it comes to storing cryptocurrency, it requires greater security than stocks or bonds. Bitcoin (crypto: BTC) and Ethereum (crypto: ETH) may both be bought and traded on cryptocurrency exchanges like Coinbase (NASDAQ: COIN), however due to the risk of hacks and theft, many users prefer not to deposit their crypto assets on exchanges.

Offline “cold storage” methods such as paper or hardware wallets are popular among cryptocurrency users, however cold storage has its own set of issues. The  major concern is that it is difficult to access your cryptocurrency without your private key.

Furthermore, putting money into a crypto project does not guarantee that it will succeed. Cryptocurrency initiatives are intensely competitive, and the sector is littered with fraudulent projects. Only a small number of cryptocurrency projects will succeed in the long run.

Regulators may also take action against cryptocurrencies, especially if countries regard them as a danger rather than an innovation.

Furthermore, bitcoin technology is cutting-edge, raising the risk for investors. It’s still a work in progress, and it hasn’t yet been thoroughly tested in real-world scenarios.

Adoption of Cryptocurrencies

Despite the inherent hazards of cryptos and the blockchain business, they have expanded tremendously over time. Thanks to the development of much-needed financial infrastructure, investors are increasingly able to use institutional-level custody services. Individuals and professionals alike are gradually gaining access to crypto assets.

By establishing crypto futures markets, a number of corporations are becoming direct participants in the cryptocurrency sector. Square (NYSE: SQ) and PayPal (NASDAQ: PYPL), among other financial behemoths, are making it easier to buy and sell cryptocurrencies on their platforms, while others, including Square, have together invested hundreds of millions of dollars in Bitcoin and other digital assets. Tesla (NASDAQ: TSLA) paid $1.5 billion for Bitcoin in early 2021.

Despite the fact that there are still elements that influence the riskiness of cryptocurrencies, the growing acceptance rate indicates that the market is developing. Since some significant companies have invested their money in cryptocurrency, it is growing in popularity among both individual investors and enterprises.

Crypto currencies are good long term investments, but what about short term?

Lofty goals are frequently stated during the introduction of cryptocurrencies like Bitcoin and Ethereum, which will be achieved over time. Although no cryptocurrency initiative is certain to succeed, if it does, early investors could profit handsomely in the long run.

Cryptocurrency projects must obtain widespread adoption in order to be regarded as successful in the long run.

Long Term Investment in Bitcoin

Bitcoin is the most well-known cryptocurrency, benefiting from the network effect, which means that more people want to acquire Bitcoin because it is owned by the majority. Bitcoin is considered “digital gold” by some investors, although it can also be used as a digital currency.

Unlike fiat currencies like the US dollar and the Japanese yen, Bitcoin is thought to have acquired value over time as a result of its fixed supply. When compared to currencies managed by central banks, it is estimated that the supply of Bitcoin will never exceed 21 million coins. As fiat currencies continue to decline, the value of Bitcoin will rise.

Many Bitcoin supporters hope that, in the long run, Bitcoin will be extensively utilized as digital cash, and that it will thus become a truly global currency.

The following are some of the most significant aspects of Bitcoin:

  • The blockchain technology that underpins cryptocurrencies such as bitcoin allows data to be securely sent across the internet via the payment mechanism.
  • Every bitcoin has its own mining process.
  • There are a total of 21 million bitcoins that can be mined.
  • Cryptocurrencies are “decentralized” because they are not governed by centralized bodies like governments or central banks.

Cryptocurrencies: Is it worth investing in them?

Since the price of cryptocurrencies has rarely connected with the value of U.S. stocks, investing in Bitcoin can help diversify your portfolio. Because bitcoin usage is expected to grow in the future, you might want to consider including a small amount of cryptocurrency in your portfolio as part of a diversified investing strategy. When investing in cryptocurrencies, develop an investment hypothesis that explains why you believe the currency will last.

Cryptocurrencies are becoming more popular, but investing in them can be risky. Consider alternate ways to profit from the rise of cryptocurrencies if owning them seems too risky. You may invest in the shares of Coinbase, Square, and PayPal, or you can invest in an exchange like CME Group (NASDAQ: CME), which facilitates crypto futures trading. When compared to investing directly in cryptocurrencies, the upside potential of these companies may be quite limited.

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Opinions

Bitcoin Will Reach $200K in Second Half of 2022, FSInsight Says

In a note titled “Digital Assets in a Post-Cycle World,” FSInsight noted that Bitcoin grew increasingly associated with stocks toward the close of last year and declined when faced with the potential of central bank tightening.

Because of “traditional market capital entering the fold,” Sean Farrell, Head of Digital Asset strategy, wrote in a note that the correlation has gotten more obvious with bitcoin and the entire crypto market now being significantly connected with technology equities.

However, Farrell stated “ bitcoin remains king, and that the cryptocurrency might hit $200,000 in the second part of the year after a rocky start to 2022. According to FSInsight, the Ethereum network has experienced enormous growth due to decentralized finance (DeFi), non-fungible tokens (NFTs), and other Web 3 applications.

The paper claims that Ethereum is undervalued in comparison to cloud platforms, and that ether, the network’s native token, might reach $12,000 by 2022. The paper also expressed confidence about Ethereum’s shift to proof-of-stake in 2022, which, if realized, will likely result in capital inflows regardless of bitcoin’s performance.

At the time of publication, bitcoin was worth $42,750 and ether was worth $3,068.

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Business

World’s Biggest Bitcoin Exchange Binance Investing $200 Million in Forbes.

The world’s largest bitcoin exchange is expanding again, this time targeting Forbes, one of the most well-known publications and digital publishers. Binance has committed to spend $200 million in the century-old business in order to assist it in merging with a SPAC (Special-Purpose Acquisition Company)

Forbes previously announced plans to go public in August 2021 through a business combination with Magnum Opus, with the transaction set to finalize in the first quarter of 2022.

Binance’s strategic investment will be made through the assumption of subscription agreements totaling $200 million in the $400 million private investment in public equity (PIPE) that Forbes announced in conjunction with its plan to go public.

“With Binance assuming existing PIPE commitments, the overall size of the PIPE will remain at $400 million, and Binance’s investment will be according to substantially the same terms as the existing PIPE investors,” the announcement read.

Binance’s chief communications officer Patrick Hillmann and head of Binance Labs Bill Chin will join Forbes’ board of directors as part of the deal.

According to Forbes CEO Mike Federle, Binance’s investment would help the company gain access to “the world’s biggest crypto exchange and one of the world’s most successful blockchain pioneers’ experience, network, and resources.”

“Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets,” he noted.

Changpeng Zhao, the founder and CEO of Binance, emphasized the importance of media support in the crypto business as part of the company’s mission to increase consumer awareness and adoption of cryptocurrency, saying:

“As Web3 and blockchain technologies move forward and the crypto market comes of age, we know that media is an essential element to build widespread consumer understanding and education. We look forward to bolstering Forbes’ digital initiatives, as they evolve into a next-level investment insights platform.”

Binance’s investment in Forbes “would be the first of its sort” in the media industry, according to a spokeswoman, and “Web2 had a dramatic impact on the media sector.” We believe Web3 will play an equally vital role in journalism and publishing in the future.”

So far, Binance appears to have been successful in its aim to spread awareness about cryptocurrency and Bitcoin. Binance purchased CoinMarketCap in April 2020, the most popular cryptocurrency website with 187 million visitors as of August 2021. The website also includes news, updates, and current market leaders in addition to market capitalization figures. In September 2020, CMC Alexandria, the company’s own crypto education webpage, was created.

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Business

Coinbase Adds Shopify CEO to Board of Directors

Tobias Lütke, the CEO of e-commerce, Shopify, will join Coinbase’s Board of Directors, the company announced. Coinbase, CEO Brian Armstrong praised Lütke’s early support for cryptocurrencies in a blog post, suggesting that Ottawa-based Shopify might play a significant strategic role in the coin’s future.


“Shopify sits at the nexus of three important areas that crypto seeks to revolutionize: Finance and payments, web applications, and the internet itself,” wrote Armstrong.


Shopify and Coinbase have a long history of working together. Coinbase Commerce has long been used by the latter to provide cryptocurrency payment choices to the millions of merchants who use its web-shopping service, including Pepsi and Tesla.

The fact that Lütke has been appointed to Coinbase’s board of directors raises the prospect that the business, which just announced that Mastercard will be accepted for NFT payments, is considering additional retail or shopping operations.

“With his guidance, we hope to unlock crypto’s potential to increase economic freedom in the same way Shopify democratized online commerce,” wrote Armstrong.

However, a source close to Coin Base claims that Lütke’s appointment to the board was influenced in part by his solid relationship with Armstrong and their shared views on keeping politics out of their businesses.

“The concepts of decentralized finance and entrepreneurship exemplify the promise of Web3 where opportunity exists for the many, not the few,” he said in a statement.

Shopify’s interest in crypto is also apparent in the company’s decision to join Facebook’s now-defunct stable coin consortium and its recent announcement that it will allow clients like the NBA’s Chicago Bulls to provide NFT sales.

Coinbase’s Board of Directors will likely confirm Lütke’s nomination soon. If he is confirmed, he will be the board’s eighth member, joining Armstrong, Coinbase co-founder, Fred Ehrsam, and notable venture capitalist Marc Andreessen.

Coinbase appointed executives from Cisco and DoorDash to its board of directors in 2020, as the business looked to obtain more governance experience ahead of its IPO.

On February 25, Coinbase, whose stock recently hit an all-time low, is slated to report earnings.

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Business

Solana Wallet Phantom Raises $109 Million, Bringing Valuation to $1.2 Billion

Phantom, a cryptocurrency wallet, has raised $109 million in a Series B round headed by Paradigm, crypto, and Web3-focused investment firm. The project is now valued at $1.2 billion thanks to the new fundraising round.

“It’s amazing to see the expansive growth that has happened in just under a year since our beta launch,” said Brandon Millman, CEO of Phantom, in a prepared statement.

Solana traders can use the Phantom wallet to communicate with non-fungible tokens and decentralized finance (DeFi) protocols (NFTs). Solana’s Phantom is Ethereum’s MetaMask. Loans can be taken out, interest can be earned on tokens, and users can trade with one other.

Phantom enjoys funding, new functionality
Aside from the investment news, the wallet provider also revealed that its app for iOS devices is now available for download. Users may store, send, and receive tokens and NFTs, as well as stake Solana, using the wallet’s iOS app (SOL).

“With the launch of our mobile application, we aim to create the cross-platform entry point for mainstream consumers to interact with blockchain apps,” Millman added. 

Fred Ehrsam, Paradigm’s co-founder and managing partner, is similarly upbeat.

Crypto wallets, he argues, are “on a path to becoming the container for everything in your digital life,” and wallets like Phantom are vital to attracting “billions more people into crypto.”

Chris Kalani, the wallet’s chief product officer, and Co-founder had stated that the wallet had just reached 1.2 million weekly users.

Despite being an Ethereum-focused environment, leaked photos revealed that NFT marketplace OpenSea may soon be adding support for Solana NFTs and Phantom.

“The team has constantly increased the bar for wallet usability since Phantom’s inception in early 2021. “Phantom is Solana’s most popular wallet, and the team is one of the best at leveraging Solana’s unrivaled performance to provide a world-class UX,” stated Raj Gokal, co-founder of Solana.

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Business

Salvadoran president predicts ‘gigantic price increase’ for Bitcoin

Soon after the International Monetary Fund(IMF) pushed his government to revoke Bitcoin’s position as legal cash, Salvadoran President, Nayib Bukele made yet another bullish Bitcoin (BTC) prediction.
Due to its finite supply of only 21 million digital currencies, Bukele predicted on Twitter that Bitcoin will eventually see a “gigantic price spike.”

The president emphasized Bitcoin’s scarcity as an example, stating that the globe has “more than 50 million millionaires,” and that there is insufficient Bitcoin for every one of them to hold at least one BTC.

Bukele’s remarks come after the IMF recommended El Salvador to stop using Bitcoin as legal cash due to concerns about financial stability and consumer safety. The IMF study came after a significant drop in Bitcoin’s price, with BTC losing roughly $10,000 in value between January 20 and January 25.

El Salvador’s Bitcoin reserves have suffered significant dollar-denominated losses as a result of the recent Bitcoin crash. The Salvadoran government made its initial 200-BTC buy on Sept. 6, when BTC was trading about $52,000, as previously reported by Cointelegraph. On Oct. 27, when Bitcoin’s market price was above $58,000, the government purchased 420 BTC. El Salvador also purchased some Bitcoin in November for roughly $54,000 and more BTC in mid-December for $49,000.

BTC is currently trading at $44,038.20.

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Business

OpenSea Refunds $1.8M in Ethereum to Users Who Lost NFTs From ‘Inactive Listing’ Exploit.

OpenSea, one of the major NFT markets, has refunded around $1.8 million to users who were affected by the recent theft on its site, despite rising criticism and protests from the crypto community.

On January 24, 2022, some OpenSea customers had their priceless NFTs sold at rock-bottom prices by hackers who took advantage of a hole in the OpenSea listing procedure to buy them at over 98% off and resell them for much more.

The OpenSea “Bug”

The OpenSea hack was the consequence of a weakness in how the network manages asset listings on its platform, according to a report by blockchain analytics firm Elliptic.

The Ethereum blockchain, which is known for its exorbitant gas fees, is used to power OpenSea. As a result, the NFT marketplace executes most of its tasks off-chain until those transactions need to be transferred to the blockchain for settlement, in order to save money on transactions.

NFT vendors on the platform will have to sign off-chain data confirming the amount they desire to sell their NFTs in order to market an item. The problem emerges, however, when sellers decide to cancel the initial listing by sending a message to the blockchain.

The merchants simply transfer the NFT to another wallet to avoid paying gas fees, rendering the initial offer useless because the NFT is no longer on OpenSea.

When the suppliers transfer the assets back to their OpenSea wallets, things become more problematic, especially if the NFT’s value has increased dramatically over time. This is due to the fact that the first listing was not removed from the blockchain, allowing anyone to purchase the NFT at the initial price, which is exactly what the criminals did.

They allegedly uncovered the OpenSea system’s design weakness and used a bot to scan the network for NFTs with low floor pending orders, which they then purchased.

At least five attackers were identified by Elliptic as being involved in the vulnerability, including user “jpegdegenlove”, who made at least 340 Ether worth over $800,000 at current rates as a result of the exploit.

OpenSea Makes Amends

Following the discovery of the vulnerability, OpenSea introduced a new listing manager to the platform, which allows users to monitor both active and inactive listings and cancel inactive ones with a single click.

The NFT marketplace has also begun contacting and compensating affected users. One of the victims of the attack, Robert Garcia, said that his Mutant Ape NFT was sold for 4.7 Ether (about $11,300) on Sunday.

Garcia stated that he immediately emailed OpenSea following the unintended sale, and claimed he received a response from them on Thursday offering him a refund of 13.8 Ether, which is currently worth more than $35,000 at current pricing.

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NFTs

Out of Africa NFT Collection is paving the way for Fine Artists.

The Out of Africa NFT series defies expectations in a world where the digital economy appears to rule out physical artworks. Starting in February 2022, this project, created by Invictus NFT Lab, will bring the best traditional Southern African artists to the NFT stage!

Out of Africa is, in essence, a link between the physical and digital worlds. Collectors can now join the Fine Art community as well – an area that was previously thought to be exclusive.

Let’s look at how to explore real-life modern art in a digital format, from striking portraits to vivid colors and fresh themes.

Innovative Technology offering artists a new audience

Understanding the NFT collections making headlines around the world requires innovation. NFT artists are beginning to comprehend the durability of projects within the crypto world, from humorous Bored Apes to play-to-earn collections like Love Monsters.

With a unique royalty model made possible by this breakthrough technology, Invictus Capital is integrating the greatest of fine art with blockchain technology to attract more top-rated talent into the scene.

As more wealth is passed down to younger generations who are already familiar with blockchain technology, it will become increasingly crucial for artists to collaborate with NFT galleries and collectors who are leading the charge and forming communities around NFT collections. In a world where many people are at risk of slipping behind when it comes to the use of new technology, it’s critical that artists have platforms and organizations with which they can collaborate to promote their work and learn more about the possibilities that cooperation opens up.

Out of Africa NFT Artworks

Out of Africa is a collection of 118 NFT renderings of actual artworks by the best artists from Southern Africa. Each digital element is associated with the original work of art. As a result, the NFTs act as a proof of ownership for the real-life works of art. Original Artwork NFTs are the name for these digital assets (O-NFTs).

Out of Africa, in a nutshell, is a colorful bridge that connects the physical and digital art worlds. This revolutionary idea demonstrates that, thanks to the power of non-fungible tokens, we can now appreciate artworks in various formats.

The strength of the region’s diversity — not only in culture but also in artistic style — shines through in Robert Slingsby’s use of ancient geometry to celebrate African heritage, Matthew Hindley’s poetic brushstrokes, Janko de Beer’s fantastical sculptures (with the King of Morocco as a notable fan), Blessing Ngobeni’s inspiring story of redemption and his art’s brave socio-political commentary, or Olivié Keck’s pop-culture

The project begins with the distribution of NFT posters to interested parties and concludes in February with an auction of NFT representations of the original, tangible artworks. These NFTs function as a certificate of ownership, with the option of receiving the original artwork.

What is an NFT?

NFTs, or Non Fungible Tokens, are one-of-a-kind products that cannot be replaced. They can refer to anything digital, including images, videos, metaverse land, recorded sounds, and even tweets. The distinction between fungible and non-fungible is a simple example that is frequently used to understand NFTs. Fungible currency is one that can be exchanged for another to produce the same result. A one-of-a-kind piece of digital art, on the other hand, is non-fungible. You’d get something altogether different if you traded it for another piece of art.

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Business

Biggest Crypto Exchange in Africa Sets Sights on U.S. Expansion

Luno, one of Africa’s largest crypto exchange platforms, is attempting to break into the US market. The UK-based exchange company, which was founded in 2013 with the goal of increasing crypto acceptance in developing nations, is now aiming to expand into the world’s largest crypto market by the end of the year.

In an interview, Mauris Reitz, the business’s General Manager (Africa), stated that the company is working hard to overcome the complex legal terrain unique to all fifty states in the US before establishing its presence. The Series B firm, which currently has a strong presence in Nigeria, Singapore, South Africa, Malaysia, Australia, and parts of Connecticut, will attempt to join the list of unicorns in the next few years after gaining large footprints in the US.

It has competed with Binance, the world’s largest crypto exchange platform, for dominance in Africa, and has benefited greatly from Nigerians and South Africans, who accounted for more than 40% of the total two million new customers it obtained in 2021.

Part of Luno’s aim has already been accomplished, with Kenya, Nigeria, and Togo ranking 5th, 6th, and 9th on the top ten list of worldwide crypto adoption. But, first and foremost, much more has to be done to raise crypto awareness across Africa and encourage educated investment, backed by adequate government oversight.

Luno is trying to grow its $10 billion valuations and attract additional credibility, as well as go into ETF trading in Africa and the United States, with the help of big global investors such as Digital Currency Group and Naspers Ltd.

However, ETFs, which are separate instruments designed to monitor and imitate the price of an asset such as Bitcoin without exposing investors to the risk of holding the commodity, have been a source of debate in the United States.

The US Securities and Exchange Commission is still dealing with the demand to enact legislation for the now multi-billion-dollar crypto business, and has slowed its pace to avoid making costly haste mistakes. Part of this decision may be observed in its recent denial of Skybridge and Bitwise ETF proposals, particularly in light of the existing stock market work-week conundrum, which requires ETF trading to cease at the end of the weekday and may not be fit for a 24/7 crypto market.

In South Africa, the situation is similar, and Luno is calmly awaiting the outcome of regulatory initiatives before acting.

Luno’s ability to gain a few percent market share from Coinbase and Binance remains to be seen. To accomplish this, it would have to be strapped on for a longer period of time.