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Bitcoin as legal tender – Crypto weekly update

Published: 10. 06. 2021 · Author: Daniel Mitrovsky

This week, the total market capitalization exceeded 1.32 trillion EUR. Decrease at the 7-day interval is 7.04 %. Bitcoin decreased by 6.33 % during the week to a current value of over 30,300 EUR. Bitcoin dominance is 43 %.

Source: Coinmarketcap

Bitcoin as legal tender

During the last Bitcoin weekend in Miami, Jack Mallers from Stike company announced that El Salvador would be the first country in the world to enact Bitcoin as legal tender. Not a week has passed, and the Bitcoin bill is already officially approved by Congress.

President Nayibo Bukele's bill to recognise Bitcoin as legal tender was approved by Congress this morning. In a Twitter Spaces conversation, president Nayib Bukele said he would sign off on the historic law later tonight or first thing tomorrow.

He said that accepting Bitcoin would be mandatory for all businesses. “They have to take it by law,” he said of merchants in the country. “If you go to Mexico they have to take your pesos. In the case of El Salvador Bitcoin is going to be legal tender just as the US Dollar”.

According to official information, the President will be meeting with the International Monetary Fund on Thursday. The government will also be releasing an official Bitcoin wallet (however, this will not be mandatory).

The government intends to hold $150 million equivalent of Bitcoin in a trust fund in its development bank to assume the risks of merchants. In addition, permanent residency will be available for those who invest 3 BTC in El Salvador. Source

Over 1 % of Bitcoin now lives on Ethereum

The team behind the tokenized version of Bitcoin (so-called WBTC – Wrapped Bitcoin) announced publicly yesterday that their total amount of tokenized version of Bitcoin in circulation exceeded 187,610 WBTC. In practice, this means that more than 1% of Bitcoin currently "lives" on Ethereum.

WBTC was launched in January 2019 as a collaboration between BitGo, Ren, and Kyber. It was one of the first projects to issue ERC-20 tokens that are 1:1 pegged to Bitcoin. For every WBTC that exists on Ethereum, there is a Bitcoin that is held by a custodian, which is Bitgo.

Bitcoin tokenization allows the WBTC to “live” as an ERC-20 token. Tokenized version can be used in various DeFi protocols on Ethereum. WBTC is a popular way to deploy Bitcoin as collateral for taking loans on Aave and can be allocated to a liquidity pool on automated market makers like Uniswap. Source

Microstrategy plans to buy Bitcoin for another $400 million

Microstrategy, which currently owns more than 90,000 BTC, has announced its plans to make another massive bitcoin purchase. However, in this case, Microstrategy wants to finance the planned purchase from external sources – with the help of investors.

The company plans to acquire Bitcoin with the issued debt securities to purchase around 12 000 BTC (at current prices). The debt securities will be able to be purchased by external investors with the promise that the full value of the principal and interest will be paid to the investors in the future.

Many experts consider this step as very risky. Due to the high price volatility of Bitcoin, experts assume that if the BTC price falls by more than 50%, the company could become insolvent in the future. If there was a massive fall in the price of Bitcoin, Microstrategy would probably be forced to liquidate its Bitcoin holdings to avoid insolvency.

Microstrategy defends itself and clarified that it is building up a Bitcoin portfolio as an insurance policy against the continuing devaluation of the world's major currencies. Source

Kusama Parachains starts next week

Polkadot and Kusama creator Gavin Wood has published a tentative schedule for the much-anticipated Kusama parachain slot auctions.

According to this schedule, the first parachain auction slot will open on June 15 at 12:00 pm CEST. If the Kusama Council approves the schedule, then the first-ever parachain slot auction winner could emerge by 11:00 am on June 22 – a week after the opening of the first auction.

After the first five weekly auctions, Wood recommended a pause to evaluate the performance of the network before commencing another batch of five parachain slot auctions based on the aforementioned schedule.

Kusama is a canary network of Polkadot. Individual parachains will be tested on Kusama before they will be officially launched on Polkadot. Source

FBI recover Bitcoins from Colonial Pipeline ransom

Officials with a United States government task force have seized more than $2 million (€1.64 million) in crypto used to pay for ransom following an attack on the Colonial Pipeline system - the largest pipeline system for refined petroleum products in the USA.

Colonial Pipeline Company paid a total of $4.4 million (€ 3.28 million) to Russian hackers called "DarkSide" to access its servers. A warrant filed with the U.S. District Court for the Northern District of California shows that authorities recovered 63.7 BTC, worth roughly $2.3 million (€1.89 million) at the time.

Deputy Attorney General Lisa Monaco confirmed that the ransom transaction was tracked by FBI agents who managed to access the private keys of the hackers. However, at the time of publication, the method used to recover the crypto funds is unclear. Source

NHL team San Jose Sharks to accept crypto payments

Famous NHL’s San Jose Sharks has joined a list of very few sports teams globally that accept cryptocurrencies.

Club president Jonathan Becher announced that the team would accept Bitcoin, Dogecoin and Ethereum. The team will be partnering with crypto payments Bitpay to make the move possible.

The president went on to reveal that crypto payments would only currently be accepted for season tickets, suite leases, and partnerships while noting that “other use cases — including single-game tickets, F&B, and merch — will be evaluated over time".

The NHL team president believes that the blockchain industry could have more impact on sports and entertainment than it already has. Source

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