It’s been a rough few days for the public image of crypto after Wikipedia announced it wouldn’t accept cryptocurrencies and Warren Buffet declared he “wouldn’t buy all the Bitcoin in the world for $25”, but what does it mean for the Bitcoin price?
Let’s unpack why both these things happened, and why the price of Bitcoin and Co. kind of ignored it – as the crypto world waited for a much more critical event to take place.
Why did Wikipedia stop accepting Crypto?
Wikipedia officially announced it will no longer accept crypto donations, calling it “predatory” and “extremely risky” while also citing environmental concerns.
You can read Wikipedia’s full statement here.
The decision was made internally after discussions among editors and members of the Wikimedia Foundation, the nonprofit that runs the world’s most popular encyclopedia.
In a note, Wikipedia said it “began our direct acceptance of cryptocurrency in 2014 based on requests from our volunteers and donor communities. We are making this decision based on recent feedback from those same communities”.
“Cryptocurrencies are extremely risky investments that have only been gaining popularity among retail investors particularly in recent times, and I do not think we should be endorsing their use in this way. In accepting them, I believe we are mainstreaming the usage of ‘investments’ and technology that are inherently predatory,” the proposal read.
The statement also called out issues of “environmental sustainability, that accepting cryptocurrencies constitutes an implicit endorsement of the issues surrounding cryptocurrencies, and community issues with the risk to the movement’s reputation for accepting cryptocurrencies”.
Mind you, Wiki also said it’ll be “monitoring the issue” and added that everything about crypto is “an evolving matter”, so we could always expect another u-turn in the future.
What did Warren Buffet say about Bitcoin?
Warren Buffet, who in finance circles is known as the ‘Oracle of Omaha’ for his knack for making bulk cash from his stock market investments, is the fifth richest person in the world ($119 billion).
He is the CEO of Berkshire Hathaway and when he talks about investing, it’s a big deal.
“If you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. Maybe it’d be the same people, but it isn’t going to do anything,” Buffett said.
“The apartments are going to produce rental and the farms are going to produce food. And if I’ve got all the bitcoin…” Buffet said before trailing off.
“Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t multiply, it doesn’t produce anything.
“It’s got a magic to it and people have attached magics to lots of things.”
What does this all mean for the Bitcoin price?
Crypto values can be volatile, but prices have been fairly steady for the past few days. There’s a reason for that.
While these things bubbled away, the US Federal Reserve was due to make an interest rates announcement on Wednesday – and that has serious implications.
Pundits were suggesting Bitcoin could nosedive by $10,000 a coin if interest rates rose significantly.
The Federal Reserve did raise short-term interest rates by 0.50% on Wednesday in an effort to calm down inflation pressures that hit the hip pockets of Americans. The cost of living is a major issue right now.
The 0.50% was the biggest interest rate rise in 22 years.
So far, the price of Bitcoin has actually gone up on its 5-day average. It’s just under $40,000 a coin currently.
A month ago it was about $46,000.
Where will the Bitcoin price go next? We’ll be watching that as well as all the other major crypto coins.