Daily Flash | Global Markets Prepped For Volatility As Sino-US Tensions Heat Up, Meanwhile Bitcoin Maximalist Michael Saylor Steps Down as MicroStrategy CEO

2022-08-03, 03:32

Today's Headline - Michael Saylor steps down as CEO as MicroStrategy takes $918M impairment charge on Bitcoin

MicroStrategy reported quarterly results that were in light of Wall Street estimates on Tuesday, with revenue coming at $122.1 million against expectations for $126 million. Losses in the quarter totaled $918.1 million, with $917.8 million attributable to the company's Bitcoin holdings.

The original cost basis and market value of the firm’s Bitcoin were $3.977 billion and $2.451 billion, respectively, which reflects an average cost per Bitcoin of approximately $30,664 and a market price per Bitcoin of $18,895.02, respectively.

Since first buying Bitcoin during the third quarter of 2020, MicroStrategy has invested over $4 billion into the cryptocurrency. To do that, it has issued corporate debt, convertible bonds, issued stock, and taken out a loan with some of its Bitcoin.

The business software firm also announced that it had named Phuong Le, the company's president, to replace Michael Saylor as its CEO.

Saylor, who had served as MicroStrategy's CEO and chairman of the board since he founded the company in 1989, and took it public in 1998, will continue to serve as chairman of the board and will also take on the new role of executive chairman.

In its Q2 earnings call, Saylor stated,

“I believe that splitting the roles of Chairman and CEO will enable us to better pursue our two corporate strategies of acquiring and holding Bitcoin and growing our enterprise analytics software business. As Executive Chairman I will be able to focus more on our Bitcoin acquisition strategy and related Bitcoin advocacy initiatives, while Phong will be empowered as CEO to manage overall corporate operations.”

Chart of the Day - Bitcoin Activity Grinds Sideways: Glassnode Onchain report

Bitcoin active addresses remain firmly within a well-defined downtrend channel. Note also how the Oct-Nov ATH reached a significantly lower peak than the April 2021 ATH, suggesting a major washout of users had occurred, and demand did not follow through.

With exception of a few activity spikes higher during major capitulation events, the current network activity suggests that there remains little influx of new demand as yet.

As of this writing,
Bitcoin (BTC) is changing hands at around $22,745, down 0.25% in the past 24 hours,
while Ether (ETH) is trading at $1,606, or up 2.17% during the same period.
Major altcoins are showing a mix of gains and losses following global markets’ mixed sentiment surrounding increasing geopolitical tensions, with Cardano (ADA) up by 1.07%, Solana (SOL) -4.18%, Polkadot (DOT) +0.82%, Avalanche (AVAX) +1.07%, and Cosmos (ATOM) +0.29%.

Notable gainers include:
Optimism (OP) at $1.65(+19.84%),
Lido DAO (LDO) at $2.24 (+16.87%),
Ethereum Classic (ETC) at $36.75 (+13.5%).

Notable losers include:
Chiliz (CHZ) at $0.134 (-11.59%),
MediBloc (MED) at $0.0232 (-23.17%),
Wax (WAXP) at $0.112 (-6.48%).

Bitcoin (BTC) saw volatility after the Tuesday Wall Street open amid ongoing market reactions to tensions between the United States and China. BTC slid below $23,000, dropping for a fifth straight day, diminishing hopes embraced as recently as last week that a fresh rally might be on the horizon.

The decline in Bitcoin and other cryptocurrencies mimicked similar movements in global markets. Both the S&P 500 and Nasdaq Composite Index closed in the red, with respective losses of -0.67% and -0.16%. Asian markets had fared worse on the uncertainty, with both the Shanghai Composite Index and Hong Kong's Hang Seng losing around 2.3% on the day.

The visit by Nancy Pelosi, speaker of the U.S. House of Representatives and 2nd in succession to the Presidency, raised concerns about a major incident occurring but appeared to have gone without a hitch. Some traders were fearful that the trip could ratchet up tensions between China and the U.S. and have negative effects on global markets.

Ether, the second-largest cryptocurrency by market cap, showed the last price of $1,630 on Tuesday which is roughly at the same level as the previous last price, indicating more uncertainty may yet to come which may lead to a consolidation phase. Last week, buyers failed to establish a foothold above the 100-day simple moving average, then placed at around $1,750.

According to Joshua Lim, head of derivatives at Genesis Trading,

“The Merge narrative on ETH has been getting a little cloudier. The complications around a proof-of-work fork could create some market dislocations and the geopolitics of Pelosi's Taiwan visit are weighing on price.”

All eyes are now on the tensions between the two largest countries by GDP output as any action by either side may imply further global economic impact, and not just on supply chains.

Influencer of the Day - Vitalik Buterin: Facebook’s Metaverse Attempt Will Misfire

Vitalik Buterin, one of the most popular figures in the crypto community, has become one of the most vocal and has recently been passing commentary on various issues ranging from Plan B’s S2F model to the boom of NFTs.

In one of his latest tweets in response to the view of Dialectic co-founder Dean Eigenmann on the Metaverse,

“The "metaverse" is going to happen but I don't think any of the existing corporate attempts to intentionally create the metaverse are going anywhere.”

In the same thread of tweets, he added,

“My critique is deeper than "Metaverse Wikipedia will beat Metaverse Encyclopedia Britannica". It's that we don't really know the definition of "the metaverse" yet, it's far too early to know what people actually want. So anything Facebook creates now will misfire.”

Presently, Facebook’s parent company Meta leads corporate interest in creating the metaverse after rebranding its whole business around the concept.

Last week, the company reported its first-ever revenue decline, delivering a significant blow given that Facebook’s juggernaut advertising machine fuels its metaverse ambitions.

Buzzes of Yesterday - #AWS Partners with VeChain, #Messari Acquires Dove Metrics

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Aave DAO Votes to Approve the Creation of GHO Stablecoin

Nomad Cross Chain Bridge Drained of Nearly $200M in Exploit

Web3 Foundation passes 400 project grants on Polkadot

Crypto Firm Chiliz Nabs $100M Stake in FC Barcelona's Digital Studio

Amazon Web Services (AWS) Becomes Technology Partner To VeCarbon, Enabling (Inter)National Scale Carbon Management Services

Crypto Intelligence Firm Messari Acquires Web3’s Version of Crunchbase

European Central Bank bets on CBDCs over BTC for cross-border payments

Singaporean financial watchdog to consult public on stablecoin regulation

New York Attorney General Calls for Whistle-blowers Deceived Or Affected By Crypto Crash

Author: Gate.io Researcher Peter L.
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