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The debut adds another Wall Street name to the busy list of banks and firms with private bitcoin fund offerings on the books. JPMorgan and Morgan Stanley, the two biggest names, both entered crypto through private funds. 

“VanEck Bitcoin Tracker Fund, LP” held one $10 million investment Thursday, according to regulatory documents filed with the U.S. Securities and Exchange Commission. It is custodied by Gemini, charges a 1% fee and is only open to accredited investors and certain offshore accounts, according to offering documents reviewed by CoinDesk. The $10 million appears to be seeded by VanEck and its affiliates, according to one of the documents. 

VanEck is hardly a newcomer to crypto. A specialist firm for mutual funds and ETFs, the New York company has tried (and failed) for many years to launch a bitcoin ETF in the U.S. 

Such a product would be widely available to U.S. investors, as opposed to far more limited private funds, giving mom-and-pop investors exposure to bitcoin without having to hold bitcoin itself. 

VanEck did not immediately return CoinDesk’s calls.

The debut adds another Wall Street name to the busy list of banks and firms with private bitcoin fund offerings on the books. JPMorgan and Morgan Stanley, the two biggest names, both entered crypto through private funds. 

“VanEck Bitcoin Tracker Fund, LP” held one $10 million investment Thursday, according to regulatory documents filed with the U.S. Securities and Exchange Commission. It is custodied by Gemini, charges a 1% fee and is only open to accredited investors and certain offshore accounts, according to offering documents reviewed by CoinDesk. The $10 million appears to be seeded by VanEck and its affiliates, according to one of the documents. 

VanEck is hardly a newcomer to crypto. A specialist firm for mutual funds and ETFs, the New York company has tried (and failed) for many years to launch a bitcoin ETF in the U.S. 

Such a product would be widely available to U.S. investors, as opposed to far more limited private funds, giving mom-and-pop investors exposure to bitcoin without having to hold bitcoin itself. 

VanEck did not immediately return CoinDesk’s calls.

Bitcoin was down 10% Thursday as of press time and going as low as $47,720 around 01:00 UTC (9 p.m. ET). The world’s largest cryptocurrency by market capitalization was below the 10-hour moving average and the 50-day, a bearish signal for market technicians.

One fundamental reason for bitcoin’s drop: Tesla. Bitcoin’s price has been in a very defined range over the past two weeks but the electric car maker’s announcement Wednesday that it would stop accepting BTC because of environmental issues related to bitcoin mining led to immediate selling that spilled into the next day.

“What saddens me is the way the weak hands and recent buyers see Elon Musk as a prophet, powerhouse and decisive figure in bitcoin,” said Henrik Kugelberg, a bitcoin over-the-counter trader. 

Bitcoin’s price has tumbled 17% since Sunday, on track for the worst weekly performance since February. 

“The BTC chart structure is very weak and there is not any significant positive trigger for BTC to move higher,” said Delta Exchange CEO Pankaj Balani.

Some analysts lament Musk’s ability to sway crypto prices, with even dogecoin (DOGE) at his mercy. 

DOGE is down 32% so far this week, after the price failed to pump when the billionaire entrepreneur appeared as host of the long-running comedy show “Saturday Night Live.”  

“If anything, what this is revealing is the sensitivity of the new money in the space,” said Vishal Shah, founder of derivatives exchange Alpha5. “Right now, the drivers are mostly macro, and hence correlation to other assets is back in the cards.”

Tesla’s stock is down 3.1%. Its 2021 performance has been poor, down over 22% so far.

In the bitcoin derivatives market, it appears traders are doing less hedging. A Forbes article Thursday points to traders cashing out short positions on CME as bitcoin fell. 

Data from Skew also suggests a large number of sell liquidations on the futures market occurred during the past 24 hours, maxing at over $400 million in selling around 22:00 UTC (6 p.m. ET) Wednesday.

However, traders may want to start hedging more often because Delta Exchange’s Balani expects choppy waters ahead for crypto. 

“Now there is a clear negative trigger that can lead to a large correction in BTC and altcoins,” he said. “Given a breakdown of crucial support levels in BTC, volatility in BTC and alts is going to be higher.” 

Ether, the second-largest cryptocurrency by market capitalization, was trading around $3,651 as of 21:00 UTC (4:00 p.m. ET), down 10% over the prior 24 hours. The asset is below the 10-hour moving average as well as the 50-day, a bearish signal for market technicians. 

Despite the drop, there is at least one long-term fundamental positive for ether: The use of decentralized finance, or DeFi, on Ethereum. According to data aggregator Dune Analytics, Wednesday was the highest volume day in the past month for decentralized exchanges, or DEXs. Uniswap, as usual, led the way with $3.7 billion in volume.

While the market may be dipping and volatility may crop up, Simon Peters, an analyst at multi-asset investment platform eToro, is focused on the core technologies of crypto and the value they may unlock for a bull case over the long haul. 

“For many crypto assets such as bitcoin and ethereum, the long-term story has not changed,” said Peters. “This emerging asset class continues to revolutionize many aspects of financial services. And while nothing goes up in a straight line, the long-term fundamentals for crypto assets remain as solid as ever.”

Despite a down crypto day, analysts expect altcoins to continue to flourish. 

“Overall, the market is now being driven by alternative assets that are able to innovate faster than bitcoin and ethereum,” said Michael Gord, chief executive officer of quant firm Global Digital Assets. “This provides a massive opportunity for new networks to test and build innovations faster that bring over value away from bitcoin and ethereum.”

Technical analyst Katie Stockton from Fairlead Strategies likes stellar (XLM) and cardano (ADA), while she is bearish on dogecoin. “Note that dogecoin has assumed an unfavorable trajectory relative to bitcoin over the past week, while stellar and cardano have the best short-term relative strength outlooks,” she said.  

Digital assets on the CoinDesk 20 are mostly in the red Thursday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

Equities:

Commodities:

Treasurys:

“Elon Musk saying Tesla is suspending purchases using bitcoin doesn’t shake our thesis that the crypto is in early price discovery days on its way to becoming the global digital reserve asset in a world of accelerating digitalization and electrification,” McGlone wrote Thursday in a new report.

The report follows a 13% drop in the price of bitcoin, the most in a single day in almost four months. The drop was prompted by Musk, Tesla’s CEO, saying late Wednesday the electric-car company was ending its bitcoin-for-cars offer made earlier in the year. That Feb. 8 announcement drove up bitcoin’s price so dramatically – by 19% – that it was lionized by some fans of the cryptocurrency as “Elon’s candle,” in a reference to the resulting pattern on price charts.

Read more: Bloomberg’s McGlone Warns of ‘Predominant Deflationary Forces’

Now, bitcoin analysts are scrambling to adjust their price forecasts and respond to concerns bitcoin’s energy needs contribute to fossil-fuel burning, making it a climate threat at a time when environmental, social and governance concerns are becoming more important to institutional investors.

McGlone is considered a hot hand in cryptocurrency markets because he accurately forecast bitcoin’s price rise to $50,000 last year, at a time when it was trading at just a fraction of that level.

What matters the most, according to McGlone, is the source of the Bitcoin network’s energy.

“The source of electricity is increasing from solar and wind, which are cost effective,” according to the report. “On a global scale, electricity is going renewable.”

Musk’s remarks about the crypto’s electricity consumption are “odd” coming from an automaker whose product is “fed solely by electricity,” the analyst wrote.

McGlone wrote that bitcoin “shows comfort at the whole-number level around $50,000, which was our initial call on a 2021 target resistance value.”

“The rule of money flowing to where it’s treated best looks like an enduring tailwind for bitcoin,” he wrote.

At press time, bitcoin was changing hands around $48,322, down about 10% over the prior 24 hours. The decline left the cryptocurrency’s price up about 67% for the year to date.

You can appreciate fiat’s secondary footprint from any street corner on Earth: 80,000 bank branches and 470,000 ATMs in the U.S. alone, along with forests of skyscrapers that dominate every city on the planet. Then the part we don’t see: Finance and insurance are 8.4% of the gross domestic product in the U.S., only slightly behind manufacturing. That means millions taking the subway or driving to the office – or, the pandemic equivalent, firing up an army of laptops and call centers – to sling paper money under fiat’s harsh fluorescent glow. Visa transactions don’t even come close.

And that’s on the good days. Because, when it comes to fiat, there are a lot of bad days. Fiat money has caused a recession every 5.6 years, to be precise, in the U.S. since the Federal Reserve’s founding, by manipulating the pace of money creation that drives the boom-bust cycle. Beyond the human toll, each recession has brought trillions in wealth destruction, wealth that took an enormous amount of resources and, yes, an enormous amount of carbon to create.

To translate this recession cost into something that can be compared to Bitcoin, I relied on the most mainstream estimates of the carbon cost of a dollar of GDP – about 5,000 BTU (British thermal units), or 1.5 kWh (kilowatt hour), per dollar. Then, using the Federal Reserve’s own estimate of $11 trillion destroyed peak to trough in the 2008 crisis – the very crisis that inspired Satoshi to create Bitcoin – you simply multiply the two. That comes out to 16,500 TWh (terawatt hour) of carbon equivalence destroyed during that single recession. Accounting for the rest of the world, that might triple. Accounting for the other 16 recessions the Fed has given us – with more to come – makes it astronomical.

The modern recession and the boom-bust cycle that drives it is entirely a creation of fiat money. Governments intervene in the allocation of capital, randomly starting and stopping a fire hose of credit that whipsaws the real economy and destroys real lives. Just as the cost of a five-second delay in a footrace can be measured in distance lost, the cost of a recession can be measured by the resources it will take to rebuild lost wealth. Bitcoin, by taking purchasing power out of central banks’ manipulation space, can reduce or even eliminate their ability to cause boom-bust cycles.

Even Bitcoin’s worst critics allege the distributed network consumes no more than 86 TWh per year, of which perhaps 16 TWh might be Americans, with much of that green energy. It would take between 500 and 1,000 years for Bitcoin’s energy use to even approach the 2008 crisis alone. With another recession permanently on the way, over and over again. That 500 to 1,000 years’ worth of energy goes on top of the 8.4% of GDP, the 80,000 bank branches and 470,000 ATMs and those skyscrapers.

These ratios suggest that central banks are vastly more polluting than Bitcoin, indeed more polluting than the worst industrial offender you could imagine. Bitcoin, by implication, is among the most green technologies humanity has ever invented. Indeed, if Bitcoin even slightly reduces central banks’ ability to cause recessions, it could pay back every watt many times over. For example, if Bitcoin reduces the odds or magnitude of central bank recessions by just 2%, Bitcoin would actually save us far more energy than it uses – it would be net carbon negative. 

Of course, collateral damage from fiat doesn’t end at recessions. Inflation, business cycles and money printing lead to economic chaos and human misery, bailouts of politically connected industries and fiat-subsidized wars – with carbon footprints and human costs all their own. Fiat money perverts the natural symbiosis between taxpayer and tax collector, whereby governments do well when we do well, by allowing governments to magic up what they need via the printing press. 

Given we live in a world of irresponsible governments, bankers with senators on speed dial and still-immature altcoins, Bitcoin remains the safest bet for reducing the enormous energy waste and human cost of rebuilding our economy over and over again. 

Skipping the roof on your new house may be green in the moment, but not if you have to rebuild every 5.6 years. If you really do prioritize the environment, help Bitcoin shut down the most polluting industry on Earth: central banking.

Bitcoin’s difficulty adjusted upward 21.53%, setting a new all-time high at 25.05 trillion. This comes after Bitcoin’s hashrate, which is a measure of the combined computing power of Bitcoin’s miners, rose to an all-time high this week, per multiple sources.

About a month ago, coal mining accidents shut down bitcoin miners in Xinjiang, China, clipping roughly 25% of Bitcoin’s hashrate from the network. These miners have come back online recently, leading to the surge in hashrate and, by extension, difficulty. Some of these miners have begun migrating machines to Sichuan for its incipient rainy season, which will supply them with gushes of cheap hydroelectricity.

On the other side of the world, North American pools are growing at a rapid clip and turning on more machines than ever before.

Even as competition escalates to new heights, bitcoin miners are making more than they have in two years, according to Luxor Tehcnology’s hashprice index.

This difficulty adjustment also gives mining pools a fresh start to signal for Bitcoin’s Taproot update, an upgrade which outfits Bitcoin with new signature and scripting schemes that allow for cheaper, more flexible multi-signature transactions, among other things.

Taproot will pave the way for improvements to outstanding technologies like Lightning, multi-signature wallets and Bitcoin-based “smart contracts” like discrete log contracts (DLCs).

Per rules to coordinate the upgrade, at least 90% of mining pools within any given difficulty period must signal their support for the upgrade using a special identifier in the blocks they mine. These periods last 2,016 blocks (or roughly two weeks); miners now have 5 epochs left to signal if they want Taproot to activate in November.

At the end of this difficulty adjustment period, four miners have signaled for the measure, with one signaling against (80% for the upgrade). However, there’s plenty of time for that to change, with 2,011 signaling blocks still to go.

Bitcoin’s difficulty adjusted upward 21.53%, at 25.04 trillion, after dipping to 20.61 trillion in the last adjustment, according to this journalist’s Bitcoin node. This comes after Bitcoin’s hashrate, which is a measure of the combined computing power of Bitcoin’s miners, rose to an all-time high this week, per multiple sources.

Bitcoin’s difficulty is an internal score that begins at 1 (the easiest level) and grows or shrinks exponentially depending on how many miners are competing on the network. Today’s adjustment was the largest in seven years.

“Today’s difficulty increase of 21.53%, the largest percentage increase since 2014, and it’s also the largest absolute increase in history,” Compass Mining CBO Thomas Heller told CoinDesk.

About a month ago, coal mining accidents shut down bitcoin miners in Xinjiang, China, clipping roughly 25% of bitcoin’s hashrate from the network. Heller commented that these miners have come back online recently, leading to the surge in hashrate and, by extension, difficulty. Some of these miners have begun migrating machines to Sichuan for its incipient rainy season, which will supply them with gushes of cheap hydroelectricity.

On the other side of the world, North American pools are growing at a rapid clip and turning on more machines than ever before.

Even as competition escalates to new heights, bitcoin miners are making more than they have in two years, according to Luxor Technology’s hashrate index.

This difficulty adjustment also gives mining pools a fresh start to signal for Bitcoin’s Taproot update, an upgrade that outfits Bitcoin with new signature and scripting schemes that allow for cheaper, more flexible multi-signature transactions, among other things.

Taproot will pave the way for improvements to outstanding technologies like Lightning, multi-signature wallets and Bitcoin-based “smart contracts” like discrete log contracts (DLCs).

Per rules to coordinate the upgrade, at least 90% of mining pools within any given difficulty period must signal their support for the upgrade using a special identifier in the blocks they mine. These periods last 2,016 blocks (or roughly two weeks); miners now have five epochs left to signal if they want Taproot to activate in November.

At the end of this signaling period, Taproot had just about 40% acceptance.

Tesla first announced it was accepting BTC for car payments starting in February. The announcement came in concert with a $1.5 billion investment in bitcoin as a treasury asset.

Musk has since continued his championship of DOGE (-19.97%), the meme currency currently boasting a market cap of $58 billion, according to CoinDesk data.

Cryptocurrency “cannot come at great cost to the environment,” the electric carmaker said in a statement tweeted by Musk. The statement was hedged, but only slightly, with praise for crypto’s “promising future” and a promise to investigate less energy-hungry networks than Bitcoin’s.

Bitcoin, a proof-of-work (PoW) blockchain reliant on energy-intensive mining units, has come under fire from environmental groups as its price has surged to all-time highs. Ethereum, the second-largest cryptocurrency by market cap, also relies on PoW but is in the process of switching to proof-of-stake.

Tesla’s pledge turns up the heat on the race to move bitcoin away from fossil fuels. The company’s decision to accept bitcoin in early 2021 was a watershed moment for corporate bitcoin adoption. Tesla’s turnabout on environmental matters will likely give fuel to the social and even political moment clamoring for change to the world’s largest cryptocurrency.

The sudden freeze of Tesla’s bitcoin payments hands a decisive win to bitcoin’s energy critics. But it does not spell doom for Tesla’s remaining bitcoin investment nor its crypto experiment. “Tesla will not be selling any bitcoin,” the statement read. “We intend to use it for transactions as soon as mining transitions to more sustainable energy.”

No such plans are publicly known. The most reputable report on the matter says nearly 40% of Bitcoin’s energy consumption was carbon-neutral.

Tesla did test the liquidity of the bitcoin market with a $272 million sell announced in its most recent earnings call.

Bitcoin’s price is now down nearly 6% over the past 24 hours, thought it fell about $2,000 after Musk’s tweet.

This is a developing story and will be updated.

Tesla first announced it was accepting BTC for car payments starting in February. The announcement came in concert with a $1.5 billion investment in bitcoin as a treasury asset.

Musk has since continued his championship of DOGE (-12.14%), the meme currency currently boasting a market cap of $58 billion, according to CoinDesk data.

Cryptocurrency “cannot come at great cost to the environment,” the electric carmaker said in a statement tweeted by Musk. The statement was hedged, but only slightly, with praise for crypto’s “promising future” and a promise to investigate less energy-hungry networks than Bitcoin’s.

Bitcoin, a proof-of-work (PoW) blockchain reliant on energy-intensive mining units, has come under fire from environmental groups as its price has surged to all-time highs. Ethereum, the second-largest cryptocurrency by market cap, also relies on PoW but is in the process of switching to proof-of-stake.

Tesla’s pledge turns up the heat on the race to move bitcoin away from fossil fuels. The company’s decision to accept bitcoin in early 2021 was a watershed moment for corporate bitcoin adoption. Tesla’s turnabout on environmental matters will likely give fuel to the social and even political moment clamoring for change to the world’s largest cryptocurrency.

The sudden freeze of Tesla’s bitcoin payments hands a decisive win to bitcoin’s energy critics. But it does not spell doom for Tesla’s remaining bitcoin investment nor its crypto experiment. “Tesla will not be selling any bitcoin,” the statement read. “We intend to use it for transactions as soon as mining transitions to more sustainable energy.”

No such plans are publicly known. The most reputable report on the matter says nearly 40% of Bitcoin’s energy consumption was carbon-neutral.

Tesla did test the liquidity of the bitcoin market with a $272 million sell announced in its most recent earnings call.

Bitcoin’s price is now down nearly 6% over the past 24 hours, thought it fell about $2,000 after Musk’s tweet.

This is a developing story and will be updated.

But one analyst studying patterns in price charts says the cryptocurrency may suffer a deeper pullback before resuming the uptrend. The prediction is based on the MACD histogram’s recent drop below zero (bearish turn) on the weekly price chart. 

“The weekly MACD rollover reflects a loss of intermediate-term momentum that increases risk the recent price range resolves to the downside,” Katie Stockton, founder and managing partner of Fairlead Strategies, told CoinDesk in an email. 

MACD, which is the shortened form of “moving average convergence divergence,” is an indicator widely used to gauge trend strength and trend changes. The indicator’s cross below zero is taken to represent a bearish reversal, while a move into the positive territory signifies bullish trend change. 

Having crossed below zero in mid-April, the histogram is now lowest since April 2018, implying the strongest bearish signal in three years. 

The MACD has been a fairly reliable indicator of intermediate price action in the past. For example, the cryptocurrency charted significant price declines after the MACD crossed bearishly in 2014, November 2018, and August 2019 (represented by vertical lines in the above chart).

Thus, the possibility of a deeper bull market drawdown cannot be ruled out. “We are watching $42,000 as support,” Stockton said. 

Other technical indicators are also pointing to near-term pain. For example, Fairlead’s weekly note published Monday cited an active “sell” signal from the “DeMARK Indicators” as a cause for concern for the bulls along with the MACD’s bearish turn. 

According to Investopedia, DeMark indicators compare the most recent maximum and minimum prices to the previous period’s equivalent price to measure the demand of the underlying asset.

“With the weekly MACD on a ‘sell’ signal and an active ‘sell’ signal from the DeMARK Indicators (mid-April), it will be difficult for resistance in the $62K-$65K area to be surmounted,” Stock said in the weekly note. 

Bitcoin’s bull market has already slowed, with prices stuck largely in the range of $50,000 to $60,000 over the past two months. The retail-led rally to record highs above $64,000 seen ahead of Coinbase’s Nasdaq debut on April 14 was short-lived. 

The cryptocurrency was showing few signs of life on Wednesday despite speculation that Facebook may follow the U.S. electric car maker Tesla’s lead and add the cryptocurrency to its balance sheet. 

“We may see a series of announcements of bitcoin purchases from institutions like Facebook soon,” Ki Young Ju, CEO of the blockchain analytics firm CryptoQuant tweeted. “Institutions have been accumulating bitcoin in the $48,000 to $60,000 range since February.”

Bitcoin was trading near $56,300 at press time, having printed a high of $58,041 early today. Buyers have recently failed to keep gains above $59,000, while the downside has been restricted near $53,000.

The cryptocurrency may pick up a strong bid if the likes of Facebook disclose or announce plans to invest in bitcoin, as anticipated by Ju.

“The fact that bitcoin continues to fail at resistance at $58,000 is not a good sign, and the visuals now hint at a head and shoulders top,” chief technical analyst at Token Metrics, a cryptocurrency research company, said.

A potential drop to $48,000 would mark the completion of the head-and-shoulders pattern. A break below that level would open the doors to $30,000, according to Noble. 

That said, both Stockton and Noble are long-term bulls and expect price dips, if any, to recharge engines for a continued bull run. 

“With bitcoin and ether, we believe that you should not sell the dip,” Noble said. “So, I would focus less on major topping formations and more on horizontal support points to get involved.”

CORRECTION (May 12, 15:54 UTC): A previous version of this article misidentified the source of the final quote. This article has been corrected.