'Bitcoin Fixes This' ... Really? 👀
NYC exchange glitches, Bitcoiners roast Berkshire Hathaway. How can decentralisation help traditional markets? Roaring Kitty back on Reddit, $300M position on GameStop. Bitcoin moves $25B in a day.
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Bitcoin believers had a field day at Warren Buffett's expense this week.
In 2018, Warren Buffett called Bitcoin “rat poison squared.”
Why? Too speculative and volatile.
But is it this volatile?👇
So what exactly happened?
Berkshire Hathaway's Class A shares (BRK.A) nosedived from $621,000 per share to $185 (99%) in a blink, triggering a trading halt.
Thankfully, it turned out to be a mere NYSE hiccup, affecting other stocks like Bank of Montreal (BMO) too.
Once the issue was resolved, trading resumed, and BRK.A even ended the day slightly positive.
In layman terms: Buffett gets a taste of his own medicine.
The short-lived plunge also sparked jokes about the fleeting chance to buy into Buffett's company for pennies on the dollar.
This whole thing highlights a critical issue – reliance on a single source of information can be disastrous.
The episode reignited the age-old debate between Bitcoin's volatility and the potential unreliability of traditional markets.
Bitcoin supporters, like Edward Snowden, highlighted Bitcoin's 24/7 operation as a clear advantage over an exchange-dependent stock like BRK.A.
Chainlink's Sergey Nazarov argues that Chainlink's decentralised oracle network offers a potential remedy.
Unlike traditional systems, oracle networks gather data from multiple sources and use consensus mechanisms to verify its accuracy.
This reduces the risk of errors and manipulation.
"Decentralised oracle networks, which were invented by Chainlink, can mitigate these risks by providing accurate, tamper-proof data. These networks aggregate data from various sources and use consensus mechanisms to validate information, ensuring data integrity and preventing erroneous trades and price manipulations.”
The best part of this mishap?
In 2018, Buffet also said: “If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”
Since then, BRK.A is up 114%, while Bitcoin is up around 600%.
Roaring Kitty Is Soaring
Retail investor darling Keith Gill, better known by his online alias "Roaring Kitty," reappeared on Reddit after a three-year hiatus.
Not a normal comeback though.
Gill's Reddit post revealed a massive GME position exceeding $180 million, including call options and directly owned shares.
The GameStop (GME) stock skyrocketed over 80% in pre-market trading.
He made his X comeback a couple of weeks back.
GameStop went in a tizzy.
Read: Is The Dumb Money Back? 💸
On June 3, Memecoins inspired by GME and Roaring Kitty, like GME, ROAR, and KITTY, also experienced a wild surge: 315%, 660%, and 476%, respectively.
Short sellers feel the heat
Remember those betting against GME? They're not having a good time.
According to data provider S3 Partners, short sellers are facing losses of roughly $1.4 billion just in the last month. Looks like the "wrecking" continues for them.
Billionaire Gill?
The GME stock surge led to speculation that Roaring Kitty, could become the first billionaire from his GME holdings.
Gill reportedly holds a position exceeding $300 million in the company.
The Kobeissi Letter, a financial newsletter, predicts Gill could reach billionaire status this week if the stock's rally continues.
ETrade ban?
This sudden surge in interest has ETrade, owned by Morgan Stanley, worried about potential manipulation. ETrade is considering banning Roaring Kitty, but they're wary of his loyal following.
Kicking him off the platform could trigger an exodus of meme stock enthusiasts.
Block That Quote 🎙️
Jim Cramer, host of CNBC's Mad Money.
“Nothing illegal if you buy calls and shows them”
Keith Gill's massive investment in GME, a mix of shares and short calls, has social media buzzing.
The question on everyone's mind: Could the SEC come knocking?
That’s when Jim Cramer weighed in, highlighting the legality of Gill's disclosed call options.
Big bet, big scrutiny
While no formal investigation is underway, Gill's past regulatory entanglement with MassMutual (fined $4 million for loose oversight during the GameStop saga) keeps the possibility alive.
However, Cramer warned against unsubstantiated claims or market manipulation tactics that could trigger SEC scrutiny.
Has Roaring Kitty taken down Buffett?
In The Numbers 🔢
$25 billion
Bitcoin movement in a single day on May 28th.
With that, Bitcoin just hit a new yearly high for transaction value. That's despite the number of transactions being fairly average compared to recent days.
Why the big spike in value?
This jump can be attributed to the surge in Bitcoin's price, hovering around $69,374 on that day. While the number of transactions (around 367,000) wasn't the highest, the higher price per BTC pushed the total value significantly.
$2 billion
Digital asset Investment inflow in May.
This marks the fourth consecutive week of positive inflows for crypto investment products.
This pushes the year-to-date figure past $15 billion.
US leads the charge $130 million inflows last week.
Bitcoin maintains dominance: Bitcoin-based funds attracted $148 million globally, while short Bitcoin products saw outflows of $3.5 million.
US Bitcoin ETFs see big inflows: Witnessed a combined $170.9 million in net inflows last week. BlackRock's IBIT took the top spot with $297.8 million, surpassing Grayscale's GBTC.
Ethereum-based products saw their second week of inflows, totalling $33.5 million.
Tax Settlement For the Crypto Bull
Michael Saylor, the outspoken Bitcoin advocate and founder of MicroStrategy, has settled a tax evasion lawsuit with the District of Columbia for $40 million.
This marks the largest income tax fraud settlement in D.C.'s history.
The Accusation?
The DC Attorney General accused Saylor, a resident of the district for at least 10 years, of failing to pay income taxes there.
Local officials believe MicroStrategy assisted Saylor in dodging over $25 million in taxes.
The lawsuit, filed in August 2022, forced Saylor to resign as MicroStrategy's CEO, a position he held for 33 years.
He transitioned to the role of Executive Chairman and remains actively involved in the company's Bitcoin strategy.
MicroStrategy continues to be a major buyer, recently acquiring 12,000 BTC through a debt offering.
The company now holds a massive 214,400 BTC, purchased at an average price of $35,000 each.
Dapper Labs settles NBA Top Shot Moments lawsuit for $4 million
After a legal battle that's lasted almost three years, Dapper Labs has settled a class-action lawsuit for $4 million. Investors accused them of selling NFTs that functioned like unregistered securities.
The Surfer 🏄
Coinbase has donated $25 million to Fairshake, a political action committee (PAC) aimed at defeating "anti-crypto candidates" in the 2024 election. Fairshake has raised a total of $160 million, with contributions from Coinbase, Ripple, and Andreessen Horowitz.
Australia is launching its first spot Bitcoin ETF that holds the asset directly. The Monochrome Bitcoin ETF (IBTC) will begin trading on the Cboe Australia exchange on June 4. This is the first ETF to be approved under the new crypto asset licensing category in Australia.
Mo Shaikh, CEO of Aptos Labs, has been named to the CFTC's digital assets subcommittee. The subcommittee advises the CFTC on rulemaking that affects international trade and business.
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