🚗 Elon's crypto collision

Technoking, or Cryptoking?... Elon Musk tweeted a bombshell on Wednesday: Tesla will no longer accept Bitcoin payment for cars. Then: as much as $365B was wiped from cryptocurrency market value (that loss = Mastercard's entire market cap). Elon is #concerned about Bitcoin's fuel-burning environmental impact (we covered that last month). That's a major reversal from the Technoking's previous stance:

• February: Tesla invested in $1.5B worth of Bitcoin, and started accepting it as payment for cars. Bitcoin soared on the news. Side note: is anyone actually buying Teslas with BTC?
• Wednesday: BTC payments = suspended. Tesla also won’t be selling any of its Bitcoin, but will only transact when “mining transitions to more sustainable energy.”
• Yesterday: Bitcoin, Ethereum, Dogecoin, Ripple, and other cryptocurrencies plunged.

The EV senses a disturbance... Tesla is worried about the rapidly rising use of fossil fuels (like: coal) for Bitcoin mining and transactions. Bitcoin is a sneaky carbon emitter, because powering it requires much more electricity than other cryptos. Bitcoin mining computers verify the legitimacy of blockchain transactions, making quintillions of attempts per second to solve increasingly complex equations (aka: major energy suck).

• Bitcoin alone accounts for 0.5% of global electricity consumption — more than entire countries like Argentina. A single BTC transaction generates the same amount of carbon as ~1M Visa transactions.
• In context: Bitcoin consumes 707 KWh of energy per transaction — that's 11X more than Ethereum, 38X more than Litecoin, and nearly 6,000X more than Doge. That's partly because the systems required to verify BTC transactions are more complex, and less energy-efficient.

Lay down the stats… The pandemic has brought suffering for everyone, hitting small business owners especially hard. On a national scale, 34% of America’s small businesses have closed since January 2020. And Asian American-owned businesses have suffered an outsized impact: according to a recent report from the NY Fed, small firms owned by Asian Americans suffered more than those owned by Black, white, and Hispanic Americans.

• ~90% of small Asian-American firms lost sales last year, a rate higher than for other groups.
• ~60%: By the end of March, sales for Asian American businesses were down by 60% from 2019 — compared to a ~50% drop suffered by others.

Explain it… Only ~9% percent of firms owned by Asian Americans were financially “distressed” in 2019 — compared to 19% of Black-owned firms and 16% of Hispanic owned businesses. Despite starting the pandemic in a stronger financial position, Asian-American businesses suffered a heavier financial toll. A few reasons why...

• Business type: Pandemic-related closures and restrictions were particularly hard on the restaurants, stores, nail salons, spas, and other service industries in which many Asian-owned businesses are concentrated.
• Trouble accessing aid: Language barriers and a lack of banking relationships made it hard for some business owners to access government aid like PPP loans.
• Racism, violence, and prejudiced rhetoric blaming Asians for the coronavirus may also have contributed to business declines. Over the past year, there has been a disturbing uptick in violence and hate crimes against Asian-Americans.
• Geography: Asian populations are concentrated in states like NY, NJ, and CA, and in big urban areas — all of which have taken crushing financial hits.

• Unmasked: The CDC said that people fully vaccinated against Covid-19 don't need to wear masks indoors or outdoors, except in certain cases.
• UnMagical: Disney disappointed on sales and streaming expectations, reporting 104M Disney+ paid subscribers (vs. 109M expected).
• Staycay: Airbnb's sales jumped 5% last quarter as travel picked up. But its algorithm for hosts reportedly made racial disparities worse.
• Flated: Fed governor Christopher Waller said the recent rise in inflation is likely temporary.
• Based: Coinbase's quarterly revenue tripled to $1.8B from the previous quarter, and profit 4X'd as crypto prices skyrocketed.

• Earnings expected from Honda

Authors of this Snacks own: Bitcoin and shares of Disney

ID: 1648862