Plus: The Netherlands wants to monitor crypto, exchanges are "high risk" in South Korea and more

What you need to know today in crypto and beyond

June 14, 2021

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Today's must-reads

Top Shelf

THE NEXT EL SALVADOR? Tanzania’s president, Sami Suluhu Hassan, urged the Bank of Tanzania to prepare for wider adoption of crypto, according to reports. In a speech Sunday, she said, “My call to the central bank is that you should start working on that development,” referring to crypto.

BACK IN THE GAME: Also Sunday, Elon Musk tweeted that Tesla will start accepting bitcoin as a form of payment provided miners use renewables to power at least 50% of their operations. The price of bitcoin and other cryptocurrencies soared after the tweet. Musk also reiterated that Tesla has “only sold” 10% of its bitcoin holdings “to confirm that BTC could be liquidated easily.”

MONITOR OR BAN? Netherlands Minister of Finance Wopke Hoekstra thinks monitoring crypto would be “more effective” than outright banning it, according to reports. Hoekstra was responding to a statement made by the head of the country’s Bureau for Economic Policy Analysis, Pieter Hasekam, who called for a total crypto ban on Friday.

SOUTH KOREA: Financial regulators in South Korea have instructed banks to treat crypto exchanges as high-risk clients, the Korea Times reported Sunday. The Financial Services Commission will require banks to deny services to clients that don’t comply with ID verification requirements or fail to report suspicious activity.

–Helene Braun

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What others are writing...

Off-Chain Signals

Paul Tudor Jones says to "go all in on the inflation trades" like bitcoin if the U.S. Federal Reserve continues to treat consumer inflation with nonchalance (CNBC)
The Financial Times asks whether CBDCs will be the end of financial privacy. It doesn't look great.
South African financial regulators plan a more proactive approach to crypto following strong retail interest (Cointelegraph)
Thailand’s Securities and Exchange Commission banned trading of gimmicky assets, or assets that have “no clear objectives or substance, and whose prices are dictated by social media trends, or meme-based tokens.” This includes NFTs. (Bangkok Post)

–H.B. & D.K.

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Putting the news in perspective

The Takeaway

2 Tweets Makes a Story: Bloomberg's Bitcoin Miami Report

It may in fact turn out that lots of people got COVID-19 at Bitcoin 2021 (June 4-5 in Miami), but even if they did, the first story that came out on it will still have been ill-advised.

On Thursday night, Bloomberg filed: "Miami Bitcoin Gathering Was a Covid Hot Spot, Attendees Say."

Did they? There's not much in the story that supports that headline.

The story reflected almost no real reporting on what attendees did or didn't say. The entire thesis was supported by the following bits of information:

Two tweets: One by someone who said he came back COVID-positive, one by someone who said he didn't but knew people who did (no evidence that Bloomberg attempted to verify or substantiate claims)
A statement from the conference organizers saying they tried to encourage safety
An account of what attendees were or weren't doing with regard to masking, presumably an attestation by the two reporters cited on the post

I guess the standard here is: Bitcoin is weird and our readers don't really like it, so it doesn't actually matter if we try to get the story right. From Bloomberg's account:

"Bitcoin ... has become a popular and controversial investment, but unlike many normal investments, it has developed a unqiue [sic] culture unto itself marked by a sort of macho, anti[-]authority ethos."

Another line from the Bloomberg post nearly acknowledges that little could be known about infections in Miami so soon:

"It’s [sic] wasn’t clear whether the attendees got the disease at the conference itself or at the gatherings."

Of course, the post hadn't honestly established that many people had gotten COVID-19 there at all. In fact, toward the end the author admits, "It remains difficult to pin outbreaks on specific events – and the Bitcoin event probably won’t be an exception."

The problem with stories like these is that in a competitive environment they put pressure on other news outlets to continue to investigate and poke at a narrative that may create the appearance of a story when there really isn't one. Gizmodo followed with basically the same set of thin facts. CNBC went on to find a couple more tweets.

As the narrative spread like small-town gossip, that pressure reached CoinDesk. Editors here believed the site could not ignore the conversation and had a duty to readers to acknowledge and address it – with appropriate epistemic humility. With extensive contacts within the crypto space, CoinDesk was able to uncover several more testimonies of COVID-19 cases out of Miami but also many testimonies of people who were vaccinated and came back with negative tests.

Since filing that report on Friday, more personal testimonies have come in, mostly of negative tests but also of positive ones. Yes, we have some actual reporting beyond Twitter to our credit, but can we really count it toward a generalizable finding? I still don't think so.

But Bloomberg's post, coming from a major mainstream outlet, encouraged the broader public to come to a conclusion that was poorly supported by the facts as yet available.

The plural of anecdote is not data, but Bloomberg could have at least bothered to gather up a few more anecdotes before hitting “publish.”

–Brady Dale

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