In our last article, we analyzed the prospects of BTC and wrote that in long-term movement, expectations are almost bullish. This week Bitcoin is on the rise again, pushing over the $40,000 mark for the first time since late May.

The latest news is mostly positive for crypto:
+ BTC adopted as national currency (by El Salvador). A world first!
+ Elon Musk has changed his mind. And maybe Tesla will accept BTC again.
+ Institutional players are loyal to cryptocurrency. Microstrategy plans to have 5% of its portfolio in BTC.
– Indonesia’s central bank will prohibit the use of cryptocurrencies as a payment tool.

So, let’s deep dive into the crypto market news and charts analysis.

BTC and El Salvador: is it an honor to be a legal tender of a country in anarchy?
El Salvador became the first country to make bitcoin a legal tender alongside the dollar. El Salvador’s government also announced a plan to use volcanic thermal energy for BTC mining. Sounds surreal, but it’s true.

The Crypto community is excited about this news! Google searches for “El Salvador” reached an all-time high (ATH) following the announcement.

 

Nayib Bukele stated that the government would give citizenship to individuals who invest bitcoin in the country’s economy. To be honest, I doubt There will be a large number of applicants.

El Salvador isn’t a rich country. For comparison, BTC capitalisation is 20 times more than the GDP of El Salvador (in 2020 GDP it was 24.61 billion US dollars).

The criminal situation in the country is dangerous. El Salvador’s homicide rate is among the world’s highest. Gangs exercise territorial control over specific neighbourhoods and extort residents throughout the country. Approximately 60,000 gang members operate in at least 247 of the country’s 262 municipalities, according to media sources.

In conclusion, I think it’s hard to call the news of BTC adoption in such a country as El Salvador, 100% positive. It’s a milestone, but the question remains whether the designation of bitcoin as legal tender by a country with high-level corruption and criminality has mechanical implications for its treatment in much larger economies under tax law, banking and financial regulations, and other areas.

What about crypto adoption in other countries?
The president of Tanzania Samia Suluhu Hassan told the East African nation’s financial chiefs to prepare for the wider adoption of cryptocurrency around the world while in the US, the Texas Department of Banking issued a notice last week confirming that state-chartered banks could hold Bitcoin.

But it doesn’t mean that all governments have started to be more friendly toward cryptocurrencies. Indonesia’s central bank will prohibit the use of cryptocurrencies as a payment tool. But, at the same time, the country is preparing to launch the CBDC.

Elon Musk and his Twitter tweets. Yes, again.
The main source for the latest push in BTC is Elon Musk (sometimes I call him “Chief of the Crypto Central bank”. Jokingly, of course.) But Elon’s impact on the crypto-community is huge!

The Tesla boss suggested that Tesla could start using the digital currency as payment once more if 50% of the energy for its mining would be ‘green’. Seems like the idea with El Salvador’s volcanoes has at least one follower, a quite important one. And that just a month after ruling it out, because of the allegedly unsustainable energy usage involved in mining.

After the previous announcement, BTC’s price jumped. Then, when Musk tweeted that bitcoin wouldn’t be accepted and Tesla cited environmental concerns, the price dropped significantly.

Another strange thing: Elon Musk sent his previous important tweets about BTC payments and the energy usage involved in mining on the 13th of May and then his new announcement exactly 1 month later – on the 13th of June. Looks like a content strategy. We’re waiting for July.

Institutional players are loyal to cryptocurrency.
In our last article, we showed that short-term investors had sold off their BTC holdings during the recent crash. But some long-term holders have since doubled down. Such is the case with MicroStrategy.

In an official statement on Monday, MicroStrategy disclosed that it has completed the sales of secured notes due in 2028, raising approximately $488 million, all of which the business intelligence company will use to acquire more Bitcoin.

The company further plans to allocate another $1 billion in the primary cryptocurrency after a new stock offering.

If it’s not clear from all the complicated words, this is the workflow:
Raise the capital (sell the stocks).
Buy BTC.07
Simple and brilliant idea! If you’re an IT giant.

However, just as a reminder, self-trading on borrowing or debt is a dangerous strategy. The same as walking through the night-time streets of El Salvador, flaunting your new Rolex.

Institutional investors were keen on the MicroStrategy offer. The company reportedly received more than $1.5 billion in orders, while its shares surged by over 15% following the announcement. This suggests investors are still bullish on the future of Bitcoin despite the recent market correction.

What about the BTC price?
At the moment of writing, Bitcoin is at $39,271, recovering and breaking out of its recent trading range, having collapsed from a record peak of almost $65,000 in April.

BTC/USD price chart.

Source: TradingView

If we have a look at the smaller time frame, we can see that the price is still inside the range. However, after potentially breaching the nearest resistant level at $40-41,000 per BTC, the next target will be at $50,000

BTC/USD price chart.

Source: TradingView

 

If you like this article and want to get more, please, share it on your social media.

Thanks for your support!
Olga Prokhorova
Chief Educational Officer
VRM trade

 

Disclaimer:
All investment strategies and investments involve the risk of loss. 
Nothing contained in this article should be construed as investment 
advice. Any reference to an investment's past or potential 
performance is not, and should not be construed as a recommendation 
or as a guarantee of any specific outcome or profit.