Editor's Note: Bad Takes Everywhere as Bitcoiners Mock Pound
Connor Sephton writes...
Monday was a gruesome day for the U.K. economy. In the blink of an eye, the British pound sank to a record low against the U.S. dollar.
Most of us are old enough to remember when £1 would get you $2. But at one point yesterday, sterling was on the brink of parity with the greenback after languishing at $1.03.
The GBP/USD charts are pretty frightening — they look like a cliff. And as the pound plummeted, the bad takes on Twitter took off.
"British pound now more volatile than Bitcoin," Eric Voorhees wrote.
Nope. The pound has lost 21% of its value against the dollar over the past year. Bitcoin, we hear you ask? Down 51%.
Even on a narrower timeframe, BTC's daily price fluctuations are far more erratic and dramatic than the pound — even on a bad day.
Over to Bitcoiner and crypto influencer Layah Heilpern now. She tweeted:
"The Bank of England spent the last year criticizing Bitcoin and El Salvador. I recommended BOE focus on their own problems at home… Nearly a year later UK bond prices collapse as the pound crashes to all time lows!"
This bad take is in a league of its own. What's the suggestion here — that the pound crashed because the Bank of England was too fixated on what El Salvador was doing? Come on.
There are a multitude of factors behind the pound's dive — and some of them are completely outside the Bank of England's control. For one, the U.K. government recently unveiled plans to introduce the biggest package of tax cuts in 50 years. A cap on bankers' bonuses is going to be scrapped, and the highest 45% rate of income tax is being abolished. This took the markets by surprise, amid fears it'll cause a surge in borrowing and exacerbate inflation. The Bank will probably have to drive up interest rates in reply — faster and more steeply than previously thought.
And let's not forget that other fiat currencies around the world have also suffered as the U.S. dollar continues to strengthen — fueled by the Fed's aggressive rate hikes. While the pound has fared worse, the euro, yen, Canadian dollar and Chinese renminbi are all crumbling against the greenback too.
Another currency that's struggled to contend with a robust dollar? Bitcoin.
Bitcoin staged an impressive rally on Tuesday — surging from $19,000 to highs of $20,338. The world's biggest cryptocurrency had risen by 8% in 24 hours at one point, with other major cryptocurrencies also firmly in the green. It's also a divergence from the stock markets, with the FTSE 100, S&P 500 and Nasdaq all flat. Bitcoin has had an extremely close correlation to equities for most of this year, but indicators suggest the strong bond is beginning to weaken. This might be a sign that the final few casual investors left in the market have departed, leaving only those with "diamond hands" remaining. In other developments, British investors have been left reeling after the pound sank to an all-time low against the U.S. dollar on Monday.
FTX has won a "highly competitive auction" for Voyager Digital's assets. The crypto exchange bid a total of $1.42 billion for the bankrupt lender's assets. Voyager's $650 million claim against Three Arrows Capital is excluded from this deal. A committee of unsecured creditors were said to be in favor of FTX's bid, which could ensure that affected customers begin to access their frozen funds sooner rather than later. The deal is set to be presented to a bankruptcy court in New York on Oct. 19. This marks a rather stunning reversal of fortunes for FTX. Back in July, Voyager rejected a takeover proposal from Sam Bankman-Fried's company. The offer was dismissed as "a low-ball bid dressed up as a white knight rescue."
Do Kwon has broken his silence after an Interpol red notice was issued. It means law enforcement agencies around the world are now being asked to locate and arrest the embattled founder of Terraform Labs. He's facing charges in South Korea related to the collapse of LUNA and UST, which wiped an estimated $60 billion from the crypto market. Kwon's latest tweets might rub Interpol up the wrong way — as he's declared he is making "zero effort" to hide his whereabouts. He says he's regularly going on walks and to the shopping mall, as well as writing code in his living room. "No way none of CT hasn't run into me the past couple weeks," he tweeted. Nonetheless, he hasn't been confident enough to disclose where in the world he currently is.
Owners of blue-chip NFTs can now customize Mastercard debit cards with avatars they verifiably own. The credit card giant has entered into a partnership with hi, which describes itself as a crypto and fiat financial app. It means the owners of CryptoPunks, Moonbirds and Bored Apes will be able to have their beloved character emblazoned on the plastic that's in their pocket. As ever, the devil is in the detail. In total, hi has six different membership tiers — and NFT debit cards are only available to Gold, Platinum and Diamond members. This involves staking 100,000 HI tokens — and at the time of writing, that would involve locking up about $5,000. To begin with, hi cards are available across Europe. Only a limited number of NFT collections are supported.
The Bitcoin Mining Council recently claimed that 59% of Bitcoin's energy use comes from sustainable sources. But according to a new report, that's wildly inaccurate. The Cambridge Centre for Alternative Finance claims the real figure's closer to 37.6%. However, researchers also took aim at claims that BTC's carbon footprint is comparable to major economies. Its data suggests Bitcoin is responsible for 0.1% of global greenhouse gas emissions — equal to Nepal or the Central African Republic. Alexander Neumueller, who leads the Cambridge Bitcoin Electricity Consumption Index, said: "Observing the arguments of both sides, some claims seem far-fetched and based on oversimplifications, while others are based on scant information."