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Illustration by Elias Stein
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Cryptocurrencies have had a bad week. They were linked to reports of money laundering, hacking, tax evasion and accelerating climate change. Bitcoin fans hope to fade away in the past as the industry goes mainstream.
The price of Bitcoin fell 13% during the week, to $ 50,800. The cryptocurrency was worth less than $ 1,000 billion on Friday, which it first surpassed in February. Biggest catalyst: Tesla CEO Elon Musk saying the electric vehicle maker will no longer accept Bitcoin as a payment method for its cars due to its effect on the environment. Mining Bitcoin with high-powered chips consumes more electricity in a year than Sweden uses, an analysis notes. Tesla still holds Bitcoin, but has sold some. And Square has said it won’t add more anytime soon, after losing money on its holdings.
Crypto grabbed the headlines for other reasons as well. Bloomberg reported that the Department of Justice and the Internal Revenue Service are investigating money laundering and tax evasion on Binance, the world’s largest crypto exchange. Binance said it has systems to weed out bad actors like money launderers. Reports have also indicated that the hackers behind the cyber attack on Colonial Pipeline demanded crypto as the ransom received $ 5 million. At the Securities and Exchange Commission, a staff statement warned mutual funds to take precautions if they plan to buy Bitcoin futures and mentioned exchange-traded funds in a way that has led some experts to predict that an American Bitcoin ETF would be delayed.
Yet after a very bad week, the market value of cryptos hit $ 2.4 trillion, up more than 100% for the year. Crypto may seem doomed to failure, but it’s not dead.
Inflation nervousness last week
Dogecoin fell below 50 cents after Teslas Elon Musk called it unrest on Saturday Night Live. Musk then rocked Bitcoin by suspending its use to buy Tesla cars, for environmental reasons. The Nasdaq Composite fell on Monday, led by chip stocks, followed by Dow Industrials on Tuesday, as inflation fears increased. The 4.2% increase in consumer prices in April did not help, but investors took courage in stagnant retail sales and stocks rebounded. Over the week, the Dow Jones fell 1.1% to 34,382.13; the S&P 500 lost 1.4% to 4,173.85; and the Nasdaq was down 2.3% to 13,429.98.
The jobs equation
Job vacancies rose 24% in April to 8.1 million, but some seven million went unfilled and jobless claims continued to decline. On the Covid front, the Food and Drug Administration has approved the Pfizer vaccine for 12 to 15 year olds, which will allow camps and schools to reopen and parents to move beyond child care. Federal officials said those fully vaccinated did not need masks, even indoors.
Pipeline to DarkSide
A ransomware attack shut down a pipeline between Texas and the East Coast during the week, sparking panic shopping at gas stations. The FBI traced the attack to an Eastern European cybergang known as DarkSide, which in turn blamed obscure partners, saying it only wanted to make money, not create problems for society. The owner of the pipeline, Colonial Pipeline, paid a ransom of $ 5 million and began restarting operations mid-week.
Cheney booted
House Republicans ousted Wyoming Representative Liz Cheney from the No.3 leadership position for criticizing former President Trumps for claiming he won the election, which led to the Uprising of the Capitol. New York Rep. Elise Stefanik replaced her. Separately, the Capitol Inspector General of Police said threats against members of Congress had increased 107% since 2020.
Aging China
China’s population has grown slightly over the past decade, but the share of its population over 60 has increased more. The data suggests that China’s long-awaited aging population is coming faster.
Annals of negotiation
The blank check boom may be fading, but some companies still want to gamble. Plant technology company Benson Hill will go public in a special purpose acquisition merger at a valuation of $ 1.4 billion. Mortgage lender Better merges with SPAC in $ 7 billion deal; SoftBank is an investor. Wynn Resorts’ online gaming unit, Wynn Interactive, is partnering with a PSPC in a $ 3.2 billion deal. And Vice Media is hoping for a PSPC merger at a valuation of nearly $ 3 billion, lower than the $ 5.7 billion in its last round. Vice shareholders TPG, Walt Disney, A&E Network Group and Raine Group plan to stay. billion … Private equity firms Knighthead Capital and Certares have taken control of bankrupt Hertz Global. Shareholders will receive up to $ 8 per share.
Write to Avi Salzman at [email protected]
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