Electric car manufacturer Tesla and its CEO Elon Musk once again moved the whole crypto market, triggering a sharp selloff, massive liquidations, and prompting speculations about Tesla’s move and reigniting debates about Bitcoin (BTC) mining. (Updated at 12:18 UTC: updates throughout the entire text. Updated at 14:50 with additional comments and the latest market data.)

Elon Musk announced that Tesla suspended vehicle purchases using BTC and is looking at other cryptoassets.

BTC plunged from almost USD 55,000 to USD 47,600, before recovering above USD 51,500 and correcting lower again.

At 14:48 UTC, BTC trades at USD 50,446 and is down by 10% in a day. The 24-hour BTC trading volume surpassed USD 110bn, compared with USD 68bn yesterday. Other coins from the top 10 club have also followed a similar path and are now down by 2%-13% in the past 24 hours, except cardano (ADA), which is up by 5%.

Meanwhile, total liquidations in the crypto derivatives market reached USD 4bn (392,741 traders “were liquidated”) in the past 24 hours, per Bybt.com data. BTC is responsible for USD 2bn, while ETH liquidations reached USD 742m.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transaction especially coal, which was the worst emissions of any fuel,” according to a screenshot, shared by Musk on Twitter.

It added the company still believes cryptocurrency is a good idea and has a promising future, “but this cannot come at great cost to the environment.”

Tesla said it won’t be selling any BTC it holds and intends to use it for transactions “as soon as mining transitions to more sustainable energy.”

However, in April, Musk agreed that BTC “incentivizes renewable energy.”

“We are also looking at other cryptocurrencies that use <1% of Bitcoin's energy/transaction," they concluded. This week, Musk asked his Twitter followers, whether the company should start accepting dogecoin (DOGE). Ben Gagnon, Director of Mining Operations at listed BTC mining company Bitfarms, stressed that, according to data from Cambridge and Digiconimist Bitcoin Electricity consumption index, Bitcoin only represents approximately 0.1% of the global man-made emissions. "And these emissions are largely a result of consuming electricity that would otherwise be lost due to lack of demand or cost-effective energy storage systems," he said in an emailed comment. Tesla started accepting BTC in March this year. Industry players seem unconvinced that Tesla was not aware of the carbon footprint of Bitcoin mining, and speculate that this decision to suspend BTC payments might be related to subsidies Tesla is receiving from the US government. Moreover, just yesterday, Reuters reported that Tesla is seeking to enter the multi-billion dollar US renewable credit market, hoping to profit from the Biden administration’s march toward new zero-emission goals. "It's difficult to understand how this issue was not identified during their initial due diligence process. For me, the timing of the announcement seems arbitrary. This news is not new nor surprising but yet forced the price down 17%. It really demonstrates the vast information asymmetry in this industry and the oversized role Musk has on influencing the price of bitcoin. These issues will consistently catch retail investors out," Luke Sully CEO of Ledgermatic, a crypto treasury technology specialist, told Cryptonews.com. According to him, buying a car with BTC doesn't make much sense and Tesla has not disproved that assumption. Read more: cryptonews

Over the last 40 years, monetary policy has caused interest rates to decline from a high of around 20% down to the zero bound. During the same period, the US dollar (USD) money supply has expanded at a rate never before seen in modern history and asset prices in dollar terms exploded to the upside, all while the US average hourly wage has lagged on an unprecedented scale.

Ironically, the growing wealth gap, caused by lagging wages and rising asset prices, has occurred while the Federal Reserve (Fed) has been targeting a 2% inflation rate and pushing the narrative that inflation is good for the economy, good for economic growth and most of all, good for the average Joe. This makes us wonder why the Federal Reserve, through monetary policy, is adjusting interest rates and setting inflation targets and whether this intervention is really benefiting the economy.

To start, let’s focus on the question: why are we seeing this intervention from the Fed? The US has a total debt to GDP (Gross Domestic Product) ratio of 257%¹. This fragile debt house of cards, which the Federal Reserve has created, has caused them to fear deflation and its effects on the economy. The Federal Reserve is then essentially forced to intervene so that they are not perceived as the ones allowing the economy to collapse. They do this primarily through the lowering of interest rates and through inflation, or in other words, a debasement of the currency through an expansion of the money supply. This intervention leads to an increase in consumption, asset purchases and mal-investment, which in turn leads to an ever-increasing debt burden and therefore an ever greater deflationary headwind on the economy. The cycle then repeats itself with the Fed having to intervene time and time again. The Federal Reserve is stuck in a negative feedback loop which they themselves have created.

What are the side effects of inflation?
First, let’s look at the effects of inflation from the consumer perspective. Let’s imagine for a second that the government suddenly doubled the total supply of dollars in the system. In theory, everything would double in price as the value of the currency would be halved. Now, the producers of a product or service essentially have 3 options:

They could double the price of their product or service to maintain their current margins. The side effect of doing so is that they will most likely drive away customers.

They could maintain the current price. The side effect of doing so is that they will take a hit on their margins and therefore their bottom line.

They could maintain the current price, but reduce the quality of the inputs which make up their product or service. The side effect of doing so would be that they would provide their customers with a lower quality product or service, but maintain their margins.

What tends to happen is that the producer chooses either option 1 or 3 in order to take the path of least resistance and reduce a potential hit to their bottom line. We therefore have this byproduct of inflation whereby the producer now has to either raise the price of the product or service or deceive the consumer by lowering the quality of their product or service. Both of which leads to the consumers losing out.

Second, let’s look at the effects of inflation from an asset perspective. As inflation devalues the currency’s purchasing power, it causes both the price and demand of assets to increase, which in turn artificially increases scarcity. This creates knock-on effects in the form of conflict and social unrest, as disputes arise over ownership of assets. Monopolization then tends to ensue in order for those in power to maintain control due to the increasing scarcity and price of assets. We then have the bigger issue, whereby huge wealth inequality between the holders of these assets and the holders of the currency starts to appear as the currency loses purchasing power. This can be seen in the lagging average hourly wage in relation to assets in the chart below.

What’s worse, is that over the last decade this lagging of wages to asset prices has only increased (as shown in table 1 under the Jan 2010 — Jan 2021 column). This has caused one of the greatest transfers of wealth from the lower class to the upper class in recent history.

To play devil’s advocate, when inflation was initially implemented, the central banks had good intentions. Inflation in the form of monetary expansion, or interest rate adjustment, is a way for the Federal Reserve to attempt to dampen short term volatility by stimulating the economy in times of stress. However, the issue is that volatility is just energy, which as we know from the first law of thermodynamics, cannot be destroyed. Instead, it is just transmuted, and so by trying to prevent/dampen short term pain in the economy, this instead delays the pain and amplifies its future effects. This is why the initial bump in debt, in the form of monetary and fiscal stimulus in times of stress, evolves into this beast of constant debt expansion in order to prevent economic collapse.

Read more: Sebastian Bunney

Cryptocurrency mining is a fundamental element for many popular coins.

For most cryptocurrencies, miners provide a distributed way to validate transactions, secure the network and infuse the market with newly minted coins as a reward. For other cryptocurrencies mining as we know it is slowly becoming a thing of the past or was never even included in the initial design.

“Can you still turn a profit?”
Some cryptocurrencies like Ethereum are beginning the shift away from proof-of-work (traditional mining) to proof-of-stake (staking). This doesn’t mean that mining will completely disappear, but there will be less dependency on huge warehouses of power hungry mining hardware owned by just a handful of individuals. Newer cryptocurrencies, like Algorand, were built from the beginning as pure proof-of-work designs and eschew mining altogether.

In Ethereum, moving to this new way of achieving consensus means that new “validators” would need to provide a significant financial stake in order to serve the network. The idea behind this is that people are less likely to perform malicious actions (like validating a phony transaction) if they risk losing a significant portion of their stake.

Ethereum will soon implement EIP-1559 and fundamentally change the way the blockchain operates. You can read more about proof-of-stake on Coindesk in the article published here.

So if some cryptocurrencies are moving away from proof-of-work, can you still become a miner today and turn a profit? Yes, you can. It’s just not nearly as easy or as simple as it once was. In the early days of mining you could pickup a few GPUs, or order an ASIC miner (which would actually arrive) and start mining with relative ease. Difficulty was lower and although the price of most cryptocurrencies was lower, as we’ve seen recently they were set to skyrocket a short while later.

In this article, we’ll look at some of the most popular cryptocurrencies you can still mine today and just how difficult it is to get started with each one. We’ll also look at some of the barriers to entry occurring right now and a few basic examples of potential profit and achievable hashrates on common hardware.

The Great Hardware Shortage
Before we dive into each cryptocurrency, we’ll need to cover a significant issue taking place right now in the mining community.

There is a massive hardware shortage.
Take a look on Newegg, Amazon or other popular retailers and you’ll find that almost every mid to high-end graphics card is superbly sold out. Retailers are overextended due to the incredible demand and the extreme lack of hardware due to chip shortages, COVID-19 delays and cryptocurrency popularity spikes.

There’s a Computer Chip Shortage, by Ella Alderson, explains in detail just how we got ourselves into such a tight spot with global chip manufacturing and how its a contributing factor to the current situation. The other major element of this shortage is the recent meteoric rise of Bitcoin and other cryptocurrency prices. The skyrocketing value has caused a wave of fresh miners flocking to the digital gold rush and buying up more hardware than ever before.

This lack of hardware is not limited to GPUs either. The shortages extend into a wide array of electronic components. Processors and other microcontrollers for automobiles and household electronics have all been impacted. So purchasing something like an ASIC miner doesn’t mean you’re completely out of the woods.

The bottom line is that this shortage will impact your search for hardware. Significantly. You’ll have to spend a lot more time on wait lists, watching for stock updates or sifting through the absolutely outrageous second-hand market. You may even find yourself paying premium prices for graphics cards that came out over 3 years ago.

My advice is to keep checking retailers, put your name on notify lists and if you can try to visit a few smaller local shops. There are also several Discord groups and live YouTube streams dedicated to providing real-time GPU stock updates across various retailers.

Now that you’re caught up on the madness, let’s look at some popular coins where your mining efforts can be directed.
Please keep in mind that prices and hardware availability are extremely volatile, so be sure to do your own research before making any purchasing or investment decisions. The cost for hardware items has deliberately been left off due to market volatility.

But I thought you said Ethereum was switching to proof-of-stake!? Well, it is, but not for a little while. As of April 2021, Ethereum is still heavily supported by a large network of mining machines that validate transactions, execute Smart Contracts, etc.

The big shift to proof-of-stake likely won’t take place until 2022, so if you want to get started mining Ethereum you absolutely can. Just be aware that significant changes are coming in the long term. You should be prepared to re-purpose any hardware investment to mine another coin or sell on the open market when Ethereum mining begins to taper off. Also remember to stay on top of news and announcements from the Ethereum team for any planned network changes.

You can mine Ethereum primarily on GPUs, but there are a few ASIC miners that have come out recently which are highly competitive (remember to consider power and cooling for these). Below are sample ETH hashrates for popular GPUs and the latest and greatest ASIC miners:
NVIDIA GeForce RTX 3080 (~85 MH/s)
NVIDIA GeForce 1080 Ti (~45 MH/s)
AMD Radeon RX 6800 XT (~59 MH/s)
Innosilicon A10 Pro (~500 MH/s)
Innosilicon A11 Pro (~2000 MH/s)

Ethereum Classic (ETC)
This is the same as Ethereum if they hadn’t rolled back the DAO hack in the summer of 2016. Ethereum Classic is a forked version of Ethereum at the point where the DAO hack occurred. Instead of changing the rules, Ethereum Classic continued on without altering history like Ethereum did. This version aims to keep the blockchain brutally fair and honest and focused on sticking to the original principles of decentralized currency.

Ethereum Classic can be mined with GPUs and some ASICs just like Ethereum, but with one key difference. ETC is never switching to proof-of-stake. That’s right. You’ll be able to mine good old fashioned proof-of-work on Ethereum Classic forever.

Read more: Data Driven Investor

Look after the Satoshi and (the) Bitcoin takes care of itself

Recently, I was running one of my lighthearted “Introduction to Bitcoin” events designed, as the name suggests, to introduce the concept of Bitcoin to people who hadn’t seen or understood it before.

Having now runs hundreds of these events over the last few years and directly reached many thousands of people all over the world, certain re-occurring questions and objections have consistently come up, exactly as you would expect.

Interestingly, however, those questions and objections have actually changed as the industry has evolved.

Yes, there are still (and probably always will be) questions about security, switching back between fiat currency and bitcoin, what backs it, how exactly it works and so on and they are, in fact, the exact same questions we all have when we first discover bitcoin.

They’re designed to find reassurance and credibility in what otherwise appears to be some weird made up internet money that a random person on the internet is telling you is actually a real thing. Honestly.

Over the last few months, a new objection/comment/question (call it what you will) has come to the forefront and is usually expressed in some form along the lines of:
One bitcoin is $58,000? That’s waaaaay too expensive for me!

Often this includes an expletive as well, but the point is just as valid without.

In reality, of course, the same objection was made at $1,000, $10,000, $30,000 and so on, but as the dollar equivalent has risen, so has the relative disbelief of individuals that they now ever have an opportunity to protect their own wealth, let alone generate any.

In short, we’re back to the “that ship has sailed” mantra which, of course, we know to be a cruel illusion of our own creation.

So, at a time when I now genuinely believe it is irresponsible for anyone not to have even the smallest exposure to Bitcoin, how do we solve this problem?
The answer is actually pretty simple.

Don’t buy (a) bitcoin
It’s not unreasonable for someone to look at a $58,000 investment into some magic internet money thing that they’ve just had explained to them and think it might be a risk too far.

It takes a long time to “get” Bitcoin — it’s a big step change from anything we’ve ever had before. Some trepidation is not only healthy, it’s essential.

But what if that investment level could be any dollar amount? Perhaps even just that $20 you were going to spend on a McDonalds this afternoon? Is that possible? Is it worth it?

Just like we have dollars and cents or pounds and pence, a bitcoin can be broken down into fractions, called “Satoshis” in honor of it’s pseudo anonymous creator, Satoshi Nakamoto. They’re affectionately known as “Sats” for short. (The jury is still out on whether the plural remains “Satoshi” or becomes “Satoshis”)

However, there’s not 100 of these in a single bitcoin as we might expect, there are in fact 100,000,000. In other words, you could, theoretically, hold as little as 0.

00000001 bitcoin which, at the time of writing this, would cost you $0.00060. (In reality, numbers this small aren’t practically possible, these are shown simply as a point of demonstration)

Since we know that there will only be 21 million bitcoin available, we also know exactly how many Satoshi will be ever be available for the entire population of the world to use, and that number is expressed thus:
2,100,000,000,000,000

Before the Bitcoin purists correct me in the commentary below, the “real” number of Satoshi is actually slightly smaller at 2,099,999,997,690,000, but I’d argue the quoted number above (pronounced “two quadrillion one hundred trillion”) is close enough to work with.

Suddenly, we have a number that is actually bigger than the population of the world, as apposed to the topline number of 21,000,000 which is less than the population of many single countries.

Suddenly, we have an asset that seems more abundant and seems affordable. And yet it is the same asset, simply presented in a different way.

In fact, that $20 we were going to spend on a McDonald’s earlier would buy you 35,221 Sats at time of writing according to the free online calculator at awebanalysis.com

In other words, when framed in this context, this is an infinitely affordable amount for anyone. But does it really mean anything?
Bitcoin Past
In the past, “bitcoin” — the headline measure — was entirely appropriate because its value was so low that using Satoshi would have been ridiculous.

Read more: OriginalCryptoGuy

When your Uber driver, your hairdresser and your brother in law start pitching some idea, it’s usually time to get out.

Buy the rumor, sell the news as the old adage goes. When the weak hands (you and me) notice a trend, the strong hands are already selling and we end up funding their big pockets.
This has been the case for the stock market, real estate and most forms of speculative investments. Yet, every time a new opportunity arises, we fall for it as if it’s never happened before.
But is this the case for cryptocurrency?
Let’s see.

1. Timing
We all wish we could go back to 2009 and buy a million Bitcoins for a few dollars. Looking back, it seems surreal it has gone from nothing to $60,000 in a matter of a few years.
The market cap for Bitcoin is $1 Trillion now, making it the 10th most valuable asset in the world. Just for reference, Google is worth 1.2T, Apple 2.2 T, and Gold is 10T but it took those a lot longer to get there compared to BTC.
Obviously, we’ve missed the boat…right?
Well, it depends.
Nobody knows the future, but institutional investors are pouring in, retail investors are waking up and with an ever-shrinking supply, it could definitely go much higher.
It could also go to zero, everything is possible. Unlikely, but possible.

2. Supply and demand
Bitcoin supply is capped at 21 million by design, that is the maximum that will ever exist. 18 million are already in circulation, leaving 3 million left to be mined. What happens when there is a limited supply and an infinite demand?
The price will shoot through the roof.
So far only a handful of institutional investors have made a move — Tesla, PayPal, Square, MicroStrategy — but many others are watching closely and getting ready to jump in. When Google, Apple, Amazon, and countless others join the party there won’t be enough coins for everyone.
And that’s only the beginning.
Governments, International conglomerates, hedge funds, pension funds and national estates, they all want in. The squeeze is going to be like nothing we’ve ever witnessed before.

3. Scarcity
Why is a Van Gogh painting so expensive? Two reasons.
1.It’s a masterpiece
2.It’s scarce.
If there was only one diamond in the world, what would its price be? A lot.
One of the strengths of bitcoin compared to other assets is limited supply.
The reason gold has been so valuable and managed to rise for millennia is mainly scarcity. It’s very hard to find, mine, melt, transport and store it. That difficulty limits the supply while the demand grows overtime.
Bitcoin is the same, only better. Scarce, expensive to mine, slow to produce, and impossible to fake. The guy who invented it — Satoshi Nakamoto — was (is) a true genius. Why would you make an inflationary currency like $US when you could make a deflationary one? Beats me.

4. The Blockchain
Limited supply is just one part of the equation. The other part is immutability.
Bitcoin is based on the blockchain protocol by which every transaction is registered in a public ledger that can’t be altered… ever. Not the FBI, not the CIA, not Russia, not China, and not North Korea. Whatever data there is in the blockchain, stays there forever.
A hacker could go into the federal reserve and play havoc (it’s happened) but no one can hack the blockchain. It’s that good. The most reliable way to record transactions ever.
And it’s not used just for finance. Smart contracts, and Decentralized apps (Dapps) are going to revolutionize many industries like notary, property, health, identity proof, supply chain, etc.
When this happens Bitcoin, Ethereum and some Alt-coins will be pushed even higher due to network effects.

5. Network effect
We live in the era of the winner takes it all.
What search engine do you use? Google
What social media platform owns the market? Facebook
Who is the winner in online shopping? Amazon
Think of an electric vehicle. Tesla
In every category there is one clear winner and the rest have to make do with the leftovers.
Now, what category is Bitcoin in?
According to the experts, bitcoin is not a currency but mainly a store of value as in digital gold.
In this category Bitcoin has already overtaken silver and may one day do the same with gold. If it does, the price of bitcoin could reach $1 Million.
There are many other cryptocurrencies but those are in a different category. Ethereum is more like a gigantic computer that facilitates the development of smart contracts and Dapps. Other Alt-coins allow faster and cheaper transactions, with different use cases like betting, gaming, interoperability, banking etc. They are all fighting for a niche. Some will succeed, and many will disappear but none is even trying to compete with Bitcoin at this point, they just can’t.
There are many reasons for this but the main one is the network effect — the first mover always has an unfair advantage, that’s why Apple couldn’t compete with Microsoft in the 80s and why Microsoft can’t compete with Android now. The number 1 spot was already taken.

Read more: Geek Culture

Bears wreak havoc in the crypto market and major coins bleed out in the lower and higher timeframes. Bitcoin (BTC) is on a downtrend with a 9% correction over the past day and 20.9% in the 7-day chart. With a market cap below $1 trillion for the first since February, the price action seems to favor the pessimists.

However, analyst William Clemente has pointed towards the current funding rate for BTC futures across all exchanges. At the time of writing, this metrics stands at 0.03%. As the chart below shows, every time BTC’s futures funding rate reached these levels, the price was able to gain momentum and run hot towards new highs. The analyst said:

Some Silver Lining: Greed has been flushed out of the bitcoin market. These resets in funding rates have been a good gauge of market sentiment. Usually when the market is the most hesitant to go long is the best time to go long in bull markets. We are very close to a bottom.

A high number of leverage positions and its subsequent liquidation during last week is one of the reasons for BTC’s price action. However, in the past months, Bitcoin has been forming a pattern. As Clemente also pointed out, the cryptocurrency trends downwards towards the end of the month only to resume its rally.

Two other metrics indicate possible appreciation in BTC’s price. First, the Spent Output Profit Ratio (SOPR), metric used to measure Bitcoin holders’ profits and losses. Now, as Clemente said and shows in the chart below, the SPOR is approaching its reset mark close to 1.

As the bull market extends and retail investors take action, it becomes more likely for BTC’s SOPR to drop below 1 and offer “great buy opportunities”. Clemente said:

Currently, SOPR is approaching the full reset mark, meaning price has either reached, or is very closing to reaching, the bottom of the current correction.

But perhaps, the most bullish metric is Bitcoin miner’s Net Position Change, a metric used to measure the amount of buying and selling pressure for this sector. Since the start of April, miners have stopped selling their supply and have begun on an accumulation trend. Much different than the 2016 and 2017 bull market, as the analyst said:

Throughout the 2016/2017 bull market, miners consistently sold. This is a key differentiating factor between that cycle and the current one, possibly made possible by newly matured Bitcoin borrowing/lending platforms.

Bitcoin Bears Could Continue Their Assault
On the other hand, trader Bob Loukas claims yesterday’s crypto crash has been the first since March 2020, when the “Black Thursday” took BTC below $4,000. Therefore, he believes something has been broken in the market’s structure ending the rally that took Bitcoin to the current levels.

In the short and medium-term, investors should take gains and rotate their position for maximum profit, according to Loukas. The next phase could be comprised of consolidation and lower levels in May. However, the trader highlighted that everything remains as a possibility and not a prediction, he added the following:

For those worried about an end to the bull market already, I say, VERY MUCH doubt that. This bull market has been coming light a freight train and I’ve yet to see anything close to resembling the type of high (top) you expect before a crash.

Read more: NEWSBTC

Bitcoin fell below $50,000 on Friday. The pioneer cryptocurrency is currently trading at around $49,405 at 11:10 GMT. Within the last 24 hours, the coin lost 8.9%, a massive loss to traders and investors.

However, stock-to-flow models creator, PlanB, has said that he’s relieved that the coin has lost over 22% in just a week. Saying that Bitcoin is still acting “like clockwork” with regards to their price predictions.

“I Am Sort Of Relieved,” Says PlanB
In a tweet on Friday, analyst PlanB noted that the price dip to under $48,000 has sent BTC below it’s target laid out by his stock-to-flow model. Due to this, Bitcoin is no longer “front-running” stock-to-flow.

After the benchmark cryptocurrency traded above its required level, the quant analyst had suggested that the price movement of the coin was becoming inorganic.

“I am sort of relieved btc price is now under s2f model value again,” he wrote in a conversation with “The Bitcoin Standard” author Saifedean Ammous, who called PlanB’s predictions “astonishing.”

“For a moment I thought that people were front running the model and that the supercycle had started. Now we are back to normal .. like clockwork,” PlanB added.

The stock-to-flow and stock-to-flow (S2F) cross-asset (S2FX), variously call for an average BTC/USD price of $100,000 or $288,000 between now and 2024. This is the supercycle being expected.

PlanB said he believed Bitcoin would not stop at $100,000, which it should hit this year.

“Bitcoiners are often too bullish in the bull market, and too bearish in the bear market! I don’t think we supercycle this time either,” podcast host Stephan Livera, responded to Ammous.

Sentiment And Market Indications
Immediately the market dipped below $50k, notorious gold bug and crypto-skeptic, Peter Schiiff, was also quick to comment on the market action, poking fun at Bitcoin proponent Anthony Pompliano. He tweeted:

“Now that Bitcoin is back below $50k I think it’s time for @APompliano to tweet out $1k milestones on the way down the way he did on the way up.”

Read more: NEWSBTC