Week of May 31, 2022

Beyond the price: How bitcoin is driving financial inclusion around the globe

Biden requests meeting with Fed chair Powell and Treasury Secretary Yellen on inflation.

Market Commentary 💬 




Last week I had the opportunity to participate in the Oslo Freedom Forum hosted by the Human Rights Foundation to talk about Bitcoin. I met some amazing people from all over the world - and it was surreal to listen to their stories about how they used bitcoin to solve problems when faced with adversity. 

Roya Mahboob from Afghanistan spoke about how she was teaching women in Afghanistan how to use Bitcoin so that they could receive and send funds independently. Women are not currently allowed to open a bank account in Afghanistan without the consent and permission of their husbands. She sees bitcoin as “a tool to bypass physical and social barriers” that helps empower women in Afghanistan.

Lyudmyla Kozlovska from Ukraine spoke about how she used bitcoin and cryptocurrency to receive donations instantly, where bank transfers would take 2 weeks to clear. These donations were very time sensitive, and thanks to bitcoin and crypto, she was able to purchase and deliver aid to thousands of Ukrainians, including bullet proof vests and helmets. Imagine what would have happened if these donations took weeks instead of seconds to arrive.

I shared our story on how my family was able to use the bitcoin we mined and the knowledge that we gained from doing so to establish ourselves in new countries building bitcoin businesses. And how now, we use bitcoin as an equalizer, and are able to lend dollars to clients from all over the world at the same rates and quality of service, without discriminating on their nationality, gender, race or religion. This was not possible until bitcoin.

One of the highlights of the trip was joining a delegation of 12 bitcoiners that visited the Norwegian parliament to talk about bitcoin’s utility from a global perspective, and to discuss its environmental implications. 

It was an incredibly inspiring experience and it really drove home the true impact that bitcoin is having on the global fight for freedom and financial inclusion. 

To the many bitcoiners around the world, bitcoin is about solving very real problems - financial inclusion and equal access to credit. The price and volatility are afterthoughts. I strongly recommend visiting the Oslo Freedom Forum’s YouTube page, where you can catch the entire conference content for free.

Checking in on other news, this week the SEC rejected another spot bitcoin ETF application, this time it was One River Asset Management’s Carbon Neutral Bitcoin Spot ETF.

The news sent units of the GBTC Bitcoin Trust into a new record discount relative to the value of the bitcoin that the fund holds. This reflects that investors are not holding their breath for the SEC to allow the GBTC to convert to a spot bitcoin ETF any time soon. 

Interestingly, we have started to see a pickup in short activity around bitcoin, as reflected by the short interest on Bitfinex. 

As we see from the yellow boxes on the chart, over the last 2 years, when the market has reached turning points, we have seen short interest start rising and ultimately get squeezed as the price moved higher. 

The current $30,000 level has been a tough battleground for bitcoin and - counterintuitively, the growing short interest at these levels is a signal that the market  may be reaching a turning point. However, while bitcoin fundamentals look great, macro conditions remain pretty bleak, and investors should be cautious to get too upbeat without much changing. After all, “Relief Rallies” got their name for a reason. Keep in mind that bitcoin’s correlation with equity markets is near all-time highs.

S&P 500

Markets continue to be on edge thanks to the Fed’s aggressive stance. The next Fed meeting is scheduled for June 14-15th, and many are already anticipating another 50 bps hike.

As we have seen since November, when the Fed first announced its plans to start tightening monetary policy and increasing interest rates, the markets have reacted quite drastically. 

Many observers note that, rather than predicting “what level” the S&P or the Nasdaq can get to, it is best to just wait until the Fed changes its tune on interest rates. As in, once the Fed signals that it’s done raising, then it’s time to get back into the markets. 

With that in mind, investors are paying close attention to the indicators that the Fed follows closely. Seeing that the primary target seems to be inflation, the inflation data for May - due next week, should be in the spotlight as we head into the June meeting.

Markets have sold off aggressively for 7 consecutive weeks - we are seeing some green for the first time in 2 months this week. However, keep in mind that the Fed has not yet signalled that it plans to reverse course - so investors should proceed with caution. 


Soaring bond yields helped the U.S. dollar grind almost 3% higher over the last 2 months. As we know, this has put pressure on gold prices and most other commodities that are priced in U.S. dollars. 

Gold continues to be stuck below $1,900/oz. To continue moving higher, the real return of U.S. dollars needs to become weaker. That means, inflation needs to rise faster than bond yields. This is the exact opposite of what the Fed is trying to do - so gold could remain under pressure in the weeks and months to come.


It was another wild week in the world of DeFi. 

The Ethereum beacon chain - or it’s “Proof-of-Stake” test network, suffered a “Re-org” attack, meaning that the blockchain was briefly split into 2 competing blockchains. The issue lasted only 7 blocks, however, it caused havoc on some DeFi protocols leading to over $237 million in liquidations. 

While many experts pointed out that this re-org attack should have no impact on the planned “merge” into proof-of-stake, others argue that this event will warrant further research and could be used as a reason to further delay the plan.

Additionally, there were also issues on the Solana network, leading to the blockchain to “lose track of time” momentarily. 

While the issue was brought under control and had no major impact on network performance, it did cause a reduction in the staking rewards for some. 

Lastly, the attempts to resurface the Luna project have already started causing a new wave of issues. 

Some protocols have reported issues on reading the value of the tokens, which have led to misrepresenting the value of the collateral, therefore allowing users to borrow more than what they should be able to from the protocol. This is how the Mirror protocol is currently being drained. 

These types of events show that every system has its vulnerabilities, and when systems become interdependent, so do the vulnerabilities.


On the mining side of things, the network's difficulty continued making new  all-time highs, and it is now considerably above (~20%) its China-mining-ban peak. However, one thing we’d like to highlight is that certain private & public mining companies finance their operations by taking BTC and/or ASIC collateralized loans, so as more miners join the network with price trailing near yearly lows, while cost of capital and energy prices continue to rise, some leveraged miners may be forced to shut down some of their operations if we see further price weakness; which could bring more downward pressure for Bitcoin and crypto markets.

The image above reflects some of the most popular ASIC miners on the market, and the maximum price per KWh that miners could pay in order to run profitable operations. For instance, on average, miners with energy costs above 15 cents USD/KWh will be forced to shut down, unless prices recover over the short term. When it comes to mining Bitcoin at scale, securing lower energy prices is key to run sustainable operations for the long term.

What's Ahead

The week ahead is light in terms of economic data, with only the S&P Case Schiller Index providing an update on the U.S. real estate market after the first rate hike. The market will likely cheer a number below last month’s 19.8% year-over-year increase. 

We also get a new look at the U.S. unemployment rate, which continues to look even better - projected to go from 3.6% in March to 3.5% in April.

We hope you enjoyed reading and as always, we wrap up with a summary of the upcoming economic data and earnings reports for the week:


9.00 AM EST - S&P Case Shiller Home Price Index

12:00 PM EST - President Biden meets with Janet Yellen and Jerome Powell to talk about inflation. 


8.30 AM EST -U.S. Unemployment rate

It's a big week coming up, and as always, we'll keep you posted on any relevant news throughout the week right here and from our Twitter account.


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About the author

Mauricio Di Bartolomeo

Mauricio is the co-founder and Chief Strategy Officer of Ledn.io. He grew up in Venezuela where he and his family learned about Bitcoin. Now based in Canada, Mauricio holds HBA and MBA degrees from the Richard Ivey School of Business in London, Ontario in Canada.