June 2021: Musk Tweets and China’s Warning

July 08, 2021

Volatility returned and digital assets were significantly down for the month. Two macro level events affected the market this past month, led by the news Tesla, Inc. ("Tesla") would suspend vehicle purchases using Bitcoin ("BTC"). Keep in mind, this news comes only three months after Tesla announced it bought 1.5 billion worth of BTC. Chinese banking and payment-related organizations then issued a statement warning financial institutions to not transact with digital-asset related businesses.

While neither event affects the core benefits of digital assets or the long-term thesis for investing in this space, it clearly demonstrates how significant price movements can take place over any given month. As I noted in last month's newsletter, volatility in the market will be present for some time. Richard Sparrow, our Chief Investment Officer, believes the month's events are not indicative of a bear market. In fact, the entire CkSum team believes this gives investors a prime opportunity to enter the market at a discounted price. Investors that are interested in capitalizing on this opportunity, or may want to discuss further, are encouraged to contact us at your convenience.

Both the Tesla and Chinese decisions seem to be driven by a concern that digital asset mining has a sustainability problem. This coupled with the ESG buzzword has led the sustainability topic to lead the news cycle this month. We believe the chatter around this topic is missing the mark significantly and the CkSum team is putting together an ESG article that will shed further insight. Stay tuned...

James Dougal, CEO