Dispatch #35: Rug Pull Week with Elon and Vitalik

6 min read

In this patch of your weekly Dispatch:

  • Tesla abandons Bitcoin sales
  • Vitalik sends “billions” to charity
  • Nexo’s direct USD on-ramp is here

The Big Idea

The Wеek of the Rug Pulls

Congratulations, you’ve officially lived through one of the craziest weeks in crypto history.

As we’ve discussed numerous times, Dogecoin has been on a tear of late. So much so that it generated a legion of imitators – all similarly themed around Shiba Inus. Some of those – notably $SHIB – chose a peculiar token strategy where they sent 50% of the supply to Vitalik in the hope that this would add legitimacy to their projects. They called this “burning” and assumed that Vitalik wouldn’t do anything….Well, this week he did do something. Specifically he sold a huge amount of the crypto and transferred it to charities – wallets associated with the India Covid-Crypto Relief Fund, the Methuselah Foundation, GiveWell, and Gitcoin. Needless to say, the price of numerous so-called dog coins tanked as a result. Why Vitalik isn’t on the front page of the New York Times – we’ve got no clue.

Elon Musk, however, decided that this wasn’t enough controversy for one week. On Wednesday night, he published a note on Twitter explaining Tesla’s decision to stop accepting Bitcoin as a payment method, citing environmental concerns. Interestingly, they’re still keeping their billions of BTC on the balance sheet, but that silver lining hasn’t stopped the price from dropping and the entire Bitcoin Twitter from feeling betrayed.

And even that wasn’t the end of the FUD news…Read on, dear reader, and count yourself lucky to have survived.

The Latest In…


On Thursday, news broke that the US Department of Justice and the Internal Revenue Service were investigating Binance, the world’s largest crypto exchange by volume. Specifically, individuals looking into tax evasion and money laundering have been investigating the company. Importantly, Binance has been accused of no wrongdoing and CEO CZ tweeted that they had been cooperating with the agencies and that it wasn’t something that people should be concerned with.

The Latest In…


Before it got caught in the Muskrat dip, Ethereum was having a hell of a week. The price of ETH punched convincingly up above $4,000. For the first time, Ethereum crossed $500B in market cap – leading many to wonder just how long it might take to flippen Bitcoin. To the extent that the Bitcoin-as-too-bad-for-the-environment narrative sticks and ETH can successfully convert to Proof of Stake, it could be poised to benefit from new institutional attention.

The Latest In…

Nexo’s Sweet Yields

Remember when we kinda leaked the news about our USD integration?

Well, how soon is now? As of today, you can use USD to repay your credit lines, earn 12% on your dollars, and buy crypto on the Nexo Exchange! Curious about the extras? Until June 18, all clients who add USD to their Nexo accounts via bank transfer will receive 12% interest on their dollars regardless of their Loyalty tier. You can also bump up your interest by an extra 2% by opting to Earn in NEXO for a whopping 14% yield. And remember – the value of your USD depreciates year after year. You can keep that record-high inflation in check by earning on your dollar with us.

The Latest In…


SCOOP! According to sources at CoinDesk, three large US hedge funds are setting up cryptocurrency investment funds. The funds – Millennium Management, Point72 Asset Management, and Matrix Capital Management – are some of the biggest in the space. Interestingly, the funds aren’t just looking at BTC or ETH exposure, but are potentially going to be actively engaged in DeFi. That could create some real momentum for the space heading into the summer.

The Latest In…


Lots of little snippets of CBDC news around. First, a Bloomberg report suggests that Chinese citizens haven’t been all that impressed with their digital yuan experiences. Over here in the UK, the Bank of England’s deputy governor has said that a CBDC is likely if they want public currencies to survive threats from private alternatives. Finally, in the US, it looks like we’re getting those MIT/ Boston Fed digital dollar designs in Q3.

The Week’s Most Interesting Data Story

Tether’s First Complete Reserve Attestation

Part of Tether’s settlement with the New York Attorney General requires them to regularly disclose their full holdings in order for citizens and regulators to be sure that they actually have resources backing all USDT out there. In their first report, we learned that 76% is in cash and cash equivalents, with the rest spread around a set of longer dated assets.

Hot Topics

What the Community Is Discussing

If you’re feeling a little frustrated, the comments on Elon’s posts are pretty wonderful.

Or you could get your mining information from, you know, an actual expert.

How much a donation cost.

Our Take

@AntoniNexo This Week

  • Both crypto Twitter and the media rushed to cover the aftermath of Tesla’s decision to suspend Bitcoin payments. Antoni did as Antoni does and tuned in with a differentiation of Musk the “Tesla Technoking” and Musk the individual, as covered by Bloomberg, Fortune, and (quite extensively) – InsideBitcoins: “Sometimes the interests of both personas diverge. Elon Musk the individual might well have a strong conviction on Bitcoin and, SNL aside, an even stronger conviction on Dogecoin. However, his Bitcoin stance is likely irreconcilable with his role as CEO of Tesla, which is a public company and answerable to shareholders and their ESG concerns.” He added that “[t]he community now has to work even harder to push the renewable mining narrative. Bitcoin’s history has taught us that the pathway to universal acceptance isn’t without hurdles – this one will likely prove its biggest.”
  • Taproot – the latest proposed update to Bitcoin’s protocol – is barely getting the attention it deserves. Cointelegraph reached out for comment on what the activation would mean for the network if it goes through: “Bitcoin is far from done. Just the latest step in the protocol’s evolutionary path, the proposed Taproot update is proof of its constant improvement and truly decentralized nature and is the ultimate reminder to investors that Bitcoin is a dynamic store of value in every sense, unlike gold. One of the most anticipated upgrades since the block size upgrade in 2018, Taproot will enhance usability by making transactions cheaper, faster, and easier to deploy, and eventually allow for smart contracts. Taproot also holds significant privacy promises – to make all transactions look the same to everyone but the transacting parties. All these admittedly major improvements pave the way for even wider Bitcoin adoption and continued price appreciation.”

Taking Over the Event World

  • One of the industry’s flagship events is just around the corner — we hope you’ve saved the dates for Coindesk’s Consensus, where Antoni will be joining a stellar speaker line-up on the Crypto Asset Management track to talk corporate treasury management on May 24.
  • With Covid restrictions loosening, it’s time to cross the Atlantic. Bitcoin 2021 in Miami is where we’ll be on June 4-5. Again, Antoni figures as a speaker alongside a slew of crypto narrative-makers, including Senator Cynthia Lummis, Michael Saylor, Jack Dorsey, Tony Hawk, Nick Szabo, and Bryan Brooks.

Stay tuned for more details!

What to Watch for Next Week:

  • Will Tesla sell its Bitcoin or continue to HODL?
  • Will Ethereum pick up institutional interest because of PoS?
  • Will some positive news come to set the cycle back on track?

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