1H2021 Digital Asset Observations
This report recaps the most impactful headlines from the first half of 2021. We then review year-to-date digital asset performance and analyze on-chain data to get a sense of where we are in the crypto market cycle.
Battle of the Headlines
Bitcoin’s Environmental Impact
In the first half of 2021 crypto reentered the mainstream, frequently intersecting with the zeitgeist’s most controversial characters like Elon Musk as well as new ones like Salvadoran President Nayib Bukele. These intersections dominated headlines which in turn influenced the performance of digital assets.
Elon Musk, who has skirted the line between protagonist and antagonist ever so carefully began the year as the former – having announced the addition of bitcoin to Tesla’s balance sheet and the acceptance of bitcoin for EV purchases. He also went so far as to give the company’s CFO, Zach Kirkhorn, the secondary title of “Master of Coin” for his role in overseeing Tesla’s adoption of Bitcoin. However, this quickly changed when Elon reversed course – selling 10% of Tesla’s bitcoin position and halting bitcoin EV purchases. His reasoning? Environmental concerns around Bitcoin’s energy consumption. Elon would also note their motivation to test market liquidity.
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