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Bitcoin (BTC), which seemed strangely listless for most of this crazy week, suddenly found energy after Elon Musk, the electric vehicle and private spaceflight entrepreneur, who is also said to be the man the richest in the world, changed their Twitter bio to mention cryptocurrency. (See the screenshot below, in Omkar Godbole’s Bitcoin Watch column.)
The price of bitcoin, the oldest and largest cryptocurrency, jumped 12% to around $ 37,400, about the highest in two weeks. According to Decrypt, the sudden surge in the upside caused the liquidation of some $ 420 million in trader’s positions – a delightful irony given Musk’s very public aversion to short sellers or traders betting on drops in price.
Ether (ETH), the native cryptocurrency of the Ethereum blockchain, was also higher, pushing back to a new record price above $ 1,400.
Dogecoin (DOGE), a digital token with little use beyond the meme-iness of its doggie image, has grown eightfold in the past two days. (Read more about it here and here and in the Market Moves column, below.)
In traditional markets, European stock indices slipped and US equity futures showed a lower opening amid lingering concerns about a squeeze of liquidity in China and volatile speculation by retail traders highlighted by the This week’s GameStop saga.
Market movements
A new narrative unfolds in digital markets that may soon make its way to the marketing departments of the crypto industry: that many individual investors, furious on Wall Street and disheartened by the stock markets after the GameStop episode, could find a redemption by turning to cryptocurrencies.
Crypto twitterati including Alex kruger, Balaji Srinivasan, Erik Vorhees and the Winklevoss twins jumped on the bandwagon on Thursday, hammering home the message that Wall Street serves its own interests before those of customers. And this crypto fixes that.
The opportunistic spirit of the industry is already manifesting itself in the form of pitches and new products. Non-US-based cryptocurrency exchange FTX, famous for last year’s TRUMP tokens, was quick to list GameStop stocks for token futures and spot trading, as Sebastian Sinclair of CoinDesk reported. Bermuda-based Bittrex Global has listed GameStop tokenized stocks (GME) as well as other stocks delisted by the Robinhood retail platform, including AMC Entertainment.
Here’s a quick look at the comment:
- Dead Greenspan, founder of currency and cryptocurrency analysis firm Quantum Economics, told his newsletter subscribers on Thursday: “For many people involved in bitcoin and cryptocurrencies, the answer is very clear. for us, an alternative market has been under construction for the last few years, the decentralized market. It is a place where transparency is imposed by the code and not by men. “
- Paulo ardoino, CTO of cryptocurrency exchange Bitfinex and a spokesperson for stablecoin tether: “As advocates for retail investors rise up against the current structure and practices of financial markets, it is important to note that a much of the work done in the blockchain space has been inspired by these barriers. Removing the barriers faced by normal, everyday workers who build and seek opportunities for wealth growth has always been part of the crypto philosophy. . “
- Nicholas Pelecanos, Sales Manager at NEM, a blockchain company: “The case for cryptocurrencies is only getting stronger. I think we’ll see a new wave of investors heading into bitcoin and other major crypto assets as a result of this debacle . ”
- Camila russo, founder of The Defiant newsletter: “Decentralized finance will win. It’s just better. Freer.”
A big question, of course, is what all of this could mean for cryptocurrency prices. Prices for the dogecoin digital token (DOGE), which is basically just a dog-faced meme, soared in value as rumors circulated that it could be the next to grab buck-the- attention. system (or even just fun-) research) of retail traders.
As CoinDesk’s Kevin Reynolds and Zack Voell reported, the price of dogecoin jumped eightfold on Thursday. The token now has a market cap of around $ 6 billion – for something that’s essentially an elaborate joke. Dogecoin has overtaken bitcoin, which has a market value of almost $ 700 billion, to become the most mentioned cryptocurrency on Twitter.
(For curious DOGE readers, the breed typically associated with dogecoin is the shina inu, which, according to the American Kennel Club website, typically weighs only around 20 pounds, but is “well muscled,” “fiery. “and” good -natured. “Pretty cute too!)
As discussed by First Mover on Thursday, there are already many similarities between loosely regulated crypto markets, whose international reach has put much of the players and activity beyond the reach of usually coordinated authorities, and the all-permissible type, let’s-roll spirit that has invaded Wall Street this week.
But it is the mere existence of an alternative to the traditional financial system that may ultimately prove to be the main selling point of the crypto industry, which can also accurately claim to have the latest technology, d ‘in general.
Mohamed El-Erian, the former Pimco and Harvard fund manager who now serves as chief economic adviser for German financial conglomerate Allianz, wrote this week in a column for Bloomberg Opinion that the GameStop-inspired masses could represent “news. investor force ”which“ raises several interesting questions for market structure and future financial stability. ”
“The dual possibility of large-scale financial volatility and market dysfunction would pose another challenge to an economic recovery,” El-Erian wrote.
This new force of investors could represent the crypto industry’s hottest new lead – for motivated clients.
Bitcoin Watch
Bitcoin witnessed a sudden double-digit spike to 10-day highs on Friday.
The leading cryptocurrency made an offer of nearly $ 32,000 around 8:30 a.m. Coordinated Universal Time (3:30 a.m. in New York) and climbed to $ 37,050, the highest since January 19, according to data from CoinDesk 20. The 15.7% rise occurred in less than 15 minutes and more than reversed the anticipated drop from $ 34,400 to $ 32,000.
While the exact reason for the bullish move is difficult to pinpoint, prices rose after Tesla and SpaceX CEO Elon Musk changed his Twitter Bio to mention cryptocurrency. While the Bitcoin community is very keen on Musk portraying himself as a supporter, he apparently likes to ditch crypto mentions as a tease.
Around the time he changed the bio, Musk also cryptically tweeted: “In retrospect, it was inevitable.”
It is not certain that the rise in bitcoin will continue. Blockchain analysis firm CryptoQuant’s ‘whale rate’, calculated by dividing the top 10 bitcoin entry transactions in one hour by the total forex inflows, has jumped to a high of eight months of 0.88 early Friday, warning of a possible drop in price.
However, “Elon’s tweet trumps all other bearish signals,” Ki-Young Ju, CEO of blockchain analytics firm CryptoQuant tweeted.
Read more: Bitcoin climbs to $ 37K after Elon Musk adds Crypto to Twitter Bio
Token watch
Algorand (ALGO): Algorand Proof of Stake Network Partners with Curv, a Digital Preservation Technology Provider, for ‘Trusted DeFi’ (CoinDesk)
Dogecoin (DOGE): Almost triple coin meme, with now record market cap of $ 2.5 billion, after social media attention (CoinDesk)
Cosmos (ATOM): Cosmos to take the lead in blockchain interoperability with the February release of Stargate (CoinDesk)
Bitcoin (BTC): It’s demand, stupid. Bitcoin supporters confuse ‘rare’ with ‘finished’, writes Frances Coppola in column (Opinion CoinDesk)
What is hot
Coinbase says in web message that it plans to become a publicly traded company via a direct listing (CoinDesk)
Iran tightens grip on crypto miners while seeing them as a potential source of income as international sanctions dry up economy (CoinDesk)
Cathie Wood’s KRG estimates bitcoin could climb to $ 400,000 if cryptocurrency replaced 10% of cash on corporate balance sheets:
Analogues
The latest news on economics and traditional finance
Money climbs as GameStop day traders turn to other assets (WSJ)
Retail traders sue Robinhood over stock restrictions on GameStop, AMC Theaters and Blackberry meme (CoinDesk)
Robinhood says uproar on bank credit lines (Bloomberg)
Private Equity Firm Silver Lake Converts $ 600 Million Of AMC Convertible Bonds Into Stock After Retail Fueled Stock Price Pump (WSJ)
US Congress Schedules Hearings on GameStop Marketplace Pumps (CoinDesk)
American Airlines, Southwest Airlines Post Record 2020 Losses After Coronavirus Travel Slow (WSJ)
Surge in emerging market borrowing – $ 847 billion in 2020, with an additional $ 100 billion in bonds sold so far in January – sparks debt concerns (WSJ)
European Central Bank banking supervisor fears region lenders are not setting enough money aside for loan loss reserves (WSJ)
“Investors have been continually conditioned to buy the downside, whatever the cause. FOMO (fear of missing out) and TINA (there is no alternative to risky assets) have energized this behavior, ”writes Allianz chief economic adviser Mohamed el-Erian (Bloomberg Opinion)
Although the U.S. economy shrank the most last year since 1946, consumers increased their spending on goods faster than before the coronavirus, because “resilient wages, dynamic inventories, low interest rates and stimulus measures have given most households sufficient purchasing power “while the pandemic limited payments for services, the US Department of Commerce (WSJ) reported Thursday:
Tweet of the day
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