Bitcoin price slipped below $33,000, Elon Musk criticised the premier cryptocurrency, Vitalik Buterin described the market as a bubble, and the crypto community celebrated Bitcoin Pizza Day and other events from the past week.
Bitcoin price fell below $33,000. Crypto market capitalisation shrank to $1.4 trillion
The price of the first cryptocurrency at the moment was trading below $33,000. At the time of writing, Bitcoin was trading at around $33,280.
17 May the total Bitcoin network hash rate fell by 20%. The cause was power outages in Sichuan province, China, due to low rainfall and a shortage of coal.
16 May authorities in the province temporarily limited electricity supplies to large consumers. The rollback of measures is possible after demand and supply normalise.
In their actions, officials also aim to achieve carbon neutrality. China plans to peak CO2 emissions by 2030 and completely eliminate them in the following 30 years. These targets are set out in the five-year development plan approved in March this year.
On 18 May journalist Colin Wu reported that three associations under the People’s Bank of China issued a joint notice prohibiting companies from supporting crypto-related businesses.
Under the document cited by Wu, signed by the China Banking Association, the Internet Finance Association and the Clearing and Payment Association, they advised citizens to refrain from investing in digital assets and reminded that such operations are not protected by law.
The measure is aimed at reducing the risks of cryptocurrency speculation. Companies were asked to cease any activities related to digital assets and sever ties with relevant players. Internet platforms were prohibited from displaying related advertising.
MicroStrategy head Michael Saylor emphasised that he is not selling digital gold amid the panic.
I’m not selling. https://t.co/bhpdCuSy4D
— Michael Saylor (@michael_saylor) May 19, 2021
20 May the US Treasury announced a new Biden administration proposal to tighten tax compliance — to require Bitcoin exchanges to report transactions over $10,000.
Authorities say digital assets are a ‘serious problem’. They facilitate illicit activity, including tax evasion. The new measures are expected to take effect in 2023.
21 May vice-premier of the State Council Liu He, while speaking at a meeting of the Committee on Financial Stability and Development, said that Chinese authorities plan to take measures regarding cryptocurrency mining and Bitcoin trading.
According to him, to protect the financial system, tougher supervision is needed. The official urged regulators to support real‑economy development, and to ‘decisively’ prevent and control financial risks.
He said that it is necessary to ‘fight Bitcoin mining and trading, and prevent the transfer of individual risks into the social sphere’.
On 23 May Ethereum price fell below $2000. The market capitalisation of the cryptocurrency fell to $221 billion.
At the time of writing, the top-10 cryptocurrencies look as follows:
Musk criticised Bitcoin. Crypto community accused him of manipulation
The cryptocurrency community lashed out at Musk after his statements about Bitcoin and meme cryptocurrency Dogecoin (DOGE).
On 16 May, the host of the digital‑gold podcast Peter McCormack posted a thread assessing the impact of the Tesla founder’s tweets on the market. He added that Musk’s statements harm the ecosystem of the leading cryptocurrency.
In response, the businessman noted that ‘such unpleasant threads’ give him the urge to place everything on Doge. He also reminded that he founded PayPal and understands how money works.
The first cryptocurrency was described by Musk as ‘very centralised’ and dependent on mining companies. As an example he cited a recent incident in Chinese mines that triggered a temporary drop in hashrate.
Users dissatisfied with Musk’s tweets created a new token Fuck Elon Tweet (FUCKELON) on the Binance Smart Chain to demonstrate their contempt.
A user, Allen Farrington, also started a Change.org petition titled ‘Elon Musk should sell his Bitcoin’.
Later, the Tesla chief entered into debates on the scalability and energy consumption of digital gold. According to Musk, decentralised finance is important, but the priority now is to address the network’s scalability.
The entrepreneur noted that energy consumption in Bitcoin mining exceeds that of some countries. He proposed that the ten largest mining companies publish audited reports on the share of renewable energy in their operations.
Musk added that energy consumption in the Dogecoin network should ideally be reduced to 0.1 kWh, calculated as ‘the total energy used by the system divided by the maximum transaction processing rate’.
Earlier, the entrepreneur said that he ‘has not sold and will not sell any DOGE’.
In response to questions about the negative reaction from the community to his tweets, Musk wrote that in the ongoing battle between fiat and crypto he supports digital assets.
The true battle is between fiat & crypto. On balance, I support the latter.
— Elon Musk (@elonmusk) May 22, 2021
Vitalik Buterin talks about a market bubble and doubts Bitcoin dominance
Ethereum co‑founder Vitalik Buterin said Bitcoin needs to build a technological base to improve energy efficiency, otherwise digital gold “risks falling behind”.
In his view, there is a possibility that the first and second cryptocurrencies by market capitalisation could swap places. Buterin noted that Ethereum is moving to a more eco‑friendly Proof‑of‑Stake consensus algorithm, which will substantially reduce energy consumption.
He supported environmental concerns about Bitcoin and described the apparent “significant negative impact”.
The situation in the digital‑asset markets, Buterin characterised as a bubble. He noted that it is hard to predict when it will burst.
«So far we have had at least three major cryptocurrency bubbles. Quite often the trigger for a bubble to burst is an event that shows the technology is not yet ready», he added.
Buterin also acknowledged that the crypto industry is ‘vulnerable’ to external provocations, notably Musk’s tweets. However, he believes an ‘immune system’ will develop over time.
«His Twitter is something the industry has faced literally in the past year. I think it’s reasonable to expect a bit of madness. But I truly believe markets will learn. Elon won’t have influence forever», he added.
Buterin also sent 90% of his remaining Shiba Inu (SHIB) tokens to an inaccessible address, thereby burning 410 trillion SHIB worth more than $6.5 billion.
He explained that he did not intend to hold SHIB in his wallet for security reasons. To avoid speculation in future movements, the Ethereum co‑founder decided to dispose of the coins.
Bill Miller calls the Bitcoin slide a mere blip, while Cathie Wood predicts a rise to $500,000
The famed American investor Bill Miller saw no reason for alarm at Bitcoin’s present decline.
«If I liked it at high prices, I’ll like it even more at low prices. I don’t think we should comment on normal price fluctuations of assets», he said.
Miller described the current 50% drop from the all‑time high as a mere blip. He reminded that the March 2020 decline was more ‘historic’.
Cathie Wood, founder of ARK Investment Management, said Bitcoin could rise to $500,000.
MicroStrategy invested $10 million in Bitcoin
The Nasdaq-listed company MicroStrategy bought a further 229 BTC for $10 million. Saylor said the average purchase price was about $43,663.
As of May 23, 2021, MicroStrategy owns 92,079 BTC worth more than $4 billion. Their average purchase price was $24,450.
Billionaire David Rubenstein rules out Bitcoin’s disappearance
Carlyle Group co‑founder David Rubenstein stated that cryptocurrencies will remain part of the financial landscape for many years. The billionaire noted that he personally invests in companies linked to digital assets.
According to him, cryptocurrencies are not a passing fad that will disappear. Rubenstein added that Bitcoin has its ups and downs. He advised against investing in digital assets for those not prepared for large swings.
Regardless of whether one believes Bitcoin is right, interest in an alternative to the current financial system is evident, the billionaire stressed.
He also questioned whether governments can stop digital assets from becoming what investors want.
BlockFi accidentally credited clients with more than 700 BTC and asked them to return it
The crypto lending platform BlockFi accidentally credited clients’ accounts with large sums of Bitcoin and demanded the return of the cryptocurrency.
The issue stems from a promotion that paid out in Gemini Dollar (GUSD). By mistake some clients were credited with Bitcoin rewards. One reportedly received more than 700 BTC (~$23 million at the time of writing).
Now the company is asking users to return the credits, offering monetary compensation for the inconvenience. If refused, BlockFi threatens legal action.
Investors confused Ethereum with the stock of a furniture maker
Since the start of 2021, Ethan Allen’s shares have risen 50% due to investor inattention. They confused the ticker ETH with Ethereum (ETH) — the second-largest cryptocurrency by market cap.
The 1932‑founded American furniture retailer Ethan Allen’s trades on the New York Stock Exchange. In 2021, ETH shares rose from $20.34 in January to $31.99 in May.
Stocktwits founder Rishi Khanna says the rise was driven by calls to ‘Buy ETH’, after which investors bought Ethan Allen’s shares instead of Ethereum.
Mike Novogratz forecasts Ethereum to reach $5,000
Galaxy Digital founder Mike Novogratz forecasted Ethereum to rise to $5,000. He said this is driven by payments apps and stablecoins, decentralised finance and non-fungible tokens (NFT).
Novogratz also said his portfolio is 85% in crypto. He urged investors to be cautious and advised taking some profits to buy a house, a car or, at least, a new cool jacket.
Mark Cuban questions Cardano
Billionaire Mark Cuban doubted the practical application of Cardano and discussed the cryptocurrency with IOHK chief Charles Hoskinson.
Hoskinson spoke of five million Ethiopian students, thousands of Cardano-based assets, the ecosystem of decentralised applications, preparations for the launch of smart contracts and a huge community.
Cubans welcomed Cardano’s successes but suggested revisiting the discussion once the platform stops prevaricating and starts serving users.
Hoskinson noted that the team rebuilt the entire smart‑contract model for security and scalability. He said this took four years.
Fox and the creator of ‘Rick and Morty’ release the first blockchain‑based cartoon
Fox announced the release of a new animated series, “Krapopolis”, from Rick and Morty creator Dan Harmon, using blockchain technology for promotion.
The project will mark Fox’s debut in the NFT market. Fox will create Blockchain Creative Labs and launch a platform to sell digital goods, ‘from NFTs with unique characters and background images to tokens to engage and reward fans’.
Fox representatives expect the platform to help brands maintain direct links with fans and enthusiasts via NFTs.
Among other news from the growing segment:
- Dynamo Kyiv will begin selling NFT tickets for matches.
- Russian designers and artists will present their works as NFTs on the Binance marketplace.
- A member of the Black Eyed Peas will release music videos as NFTs.
Crypto community celebrated Bitcoin Pizza Day
Every year on May 22 the crypto community marks Bitcoin Pizza Day. The occasion stems from the notable event in 2010 when programmer Laszlo Hanyecz bought two pizzas for 10,000 BTC. At the time of writing, they would be worth about $330 million.
In 2021, the community marked Bitcoin Pizza Day for the 11th time. ForkLog collected greetings and promotions for the occasion.
To mark Bitcoin Pizza Day, the Dutch Domino’s Pizza franchise management offered staff to receive their salary in the leading cryptocurrency. Immensus Holdings operates 16 Domino’s restaurants in the Netherlands, employing more than 1,000 people.
ForkLog also wrote:
- Arcane Research: the market has entered a phase of extreme fear.
- Coinbase, MicroStrategy and Galaxy Digital fell on Bitcoin’s crash.
- Opinion: whales took advantage of the correction to buy Bitcoin.
- Research: the Bitcoin network consumes less energy than the banking sector.
- The top ten mining pools backed Taproot upgrade in the Bitcoin network.
- In Guggenheim Partners they called cryptocurrencies a bubble amid the market crash.
- JPMorgan: institutions may shift capital from Bitcoin to gold.
- In Forbes they valued losses of crypto billionaires from the market drop.
- Trader turned $5,000 into $135,000 on Ethereum scalping.
- The final phase of Polkadot’s mainnet launch has begun.
- Media: Goldman Sachs in a new report recognised cryptocurrencies as an asset class.
What to read and watch next
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