Bitcoin (BTC), which seemed strangely apathetic for most of this wild week, suddenly found energy after Elon Musk, the private electric vehicle and space flight entrepreneur who is also reportedly the richest man in the world, changed his biography on Twitter to mention the cryptocurrency. (See the screenshot below, in the Bitcoin Watch column of Omkar Godbole.)
The price of bitcoin, the oldest and largest cryptocurrency, has risen 12%, to about $ 37,400, around the highest in two weeks. According to Decrypt, the sudden increase caused the liquidation of about $ 420 million in broker positions – a delightful irony, given Musk’s public aversion to short sellers or brokers betting on falling prices.
Ether (ETH), the native cryptocurrency of the Ethereum blockchain, was also higher, again reaching a new higher price above $ 1,400.
Dogecoin (DOGE), a digital token of little use beyond the meme-iness of its dog-faced image, has increased 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 indexes fell and U.S. stock futures pointed to a lower opening amid lingering concerns about a tightening of cash in China and volatile speculation by retail traders highlighted in this week’s GameStop saga.
Market movements
A new narrative is running through digital markets that may soon reach the marketing departments of the crypto industry: that many individual investors, furious with Wall Street and discouraged by the stock markets after the GameStop episode, may find redemption by turning to cryptocurrencies.
Crypto twitterati including Alex Kruger, Balaji Srinivasan, Erik Vorhees and the Winklevoss twins joined the wave on Thursday, hammering the message that Wall Street serves its own interests before those of its customers. And this encryption corrects that.
The opportunistic spirit of the sector is already appearing in the form of pitches and new products. The FTX cryptocurrency exchange outside the United States, famous for last year’s TRUMP tokens, hurried to list GameStop shares for tokenized futures and spot trading, as reported by Sebastian Sinclair of CoinDesk. Bittrex Global, based in Bermuda, listed tokenized shares of GameStop (GME) along with other shares removed from the list by the retail trading platform Robinhood, including AMC Entertainment.
Here is a quick sample of the comment:
- Mati Greenspan, founder of currency and cryptocurrency analytics firm Quantum Economics, told subscribers to his newsletter on Thursday: “For many involved in bitcoin and cryptocurrencies, the answer is very clear. Fortunately for us, an alternative market is under construction. since the last few years, the market has been decentralized. It is a place where transparency is imposed by code and not by men. “
- Paulo ardoino, CTO of Bitfinex cryptocurrency and spokesman for stablecoin tether: “As advocates for retail investors protest against the current structure and practices of financial markets, it is important to note that much of the work being done in the blockchain space has been inspired by these barriers. Removing obstacles for people who work daily, who are building and looking for wealth growth opportunities, has always been part of the crypto ethos. “
- Nicholas Pelecanos, head of trade at NEM, a blockchain company: “The case for cryptocurrencies only gets stronger. I believe we will witness a new wave of investors turning to bitcoin and other important crypto assets as a result of this disaster.”
- Camila Russo, founder of the newsletter The Defiant: “Decentralized finance will win. It’s just better. More free.”
A big question, of course, is what all of this can mean for cryptocurrency prices. The prices of the digital dogecoin token (DOGE), which is basically a dog-faced meme, have risen in value as rumors have emerged that it could be the next to catch the attention of the system bully (or even just fun looking for) retail merchants.
As reported by Kevin Reynolds and Zack Voell of CoinDesk, the price of dogecoin increased eightfold on Thursday. The token now has a market capitalization of around $ 6 billion – for something that is basically an elaborate joke. Dogecoin overtook bitcoin, which has a market cap of nearly $ 700 billion, to become the most mentioned cryptocurrency on Twitter.
(For curious DOGE readers, the breed typically associated with dogecoin is shina inu, which, according to the American Kennel Club website, weighs only about 20 pounds, but is “very muscular”, “witty” and “good” -natural. ”Very cute too!)
As discussed by First Mover on Thursday, there are already many similarities between the loosely regulated crypto markets, whose international reach has placed much of the players and activities beyond the scope of the generally coordinated authorities and the anything goes, let’s get the spirit rolling that invaded Wall Street this week.
But it is the mere existence of an alternative to the traditional financial system that could turn out to be the biggest selling point for the crypto industry, which can also claim to have the latest technology in general terms.
Mohamed El-Erian, the former financial manager of Pimco and Harvard who now serves as the main economic advisor to the German financial conglomerate Allianz, wrote this week in a column for Bloomberg Opinion that the GameStop-inspired masses can represent a “new force of investors “that” raises several interesting issues for the market structure and future financial stability. ”
“The dual possibility of large-scale financial volatility and market dysfunction would represent yet another challenge for the economic recovery,” wrote El-Erian.
This new investor force may represent the crypto industry’s hottest new lead – for motivated customers.
Bitcoin Watch
Bitcoin witnessed a sudden double-digit increase to 10-day highs on Friday.
The highest cryptocurrency bid nearly $ 32,000 around 8:30 am, coordinated universal time (3:30 am in New York) and jumped to $ 37,050, the highest since Jan. 19, according to data from CoinDesk 20. The The 15.7% increase came in less than 15 minutes and more than reversed the initial drop from $ 34,400 to $ 32,000.
Although the exact reason for the bullish move is difficult to define, prices soared after Tesla and SpaceX CEO Elon Musk changed his Twitter biography to mention the cryptocurrency. Although the bitcoin community is eager for Musk to appear as a supporter, he apparently likes to launch cryptographic mentions as a kind of provocation.
At the time when the biography changed, Musk also enigmatically tweeted: “In retrospect, it was inevitable.”
It is unclear whether bitcoin’s rise will continue. The blockchain analyst’s “Exchange Whale Ratio”, calculated by dividing the top 10 bitcoin inbound transactions in one hour by the total exchange entries, jumped to an eight-month high of 0.88 on Friday morning , warning of a possible drop in price.
However, “Elon’s tweet replaces all other bearish signals,” Ki-Young Ju, CEO of blockchain analytics firm CryptoQuant tweeted.
Read more: Bitcoin rises to $ 37,000 after Elon Musk added encryption to Twitter’s biography
Token Watch
Algorand (ALGO): Algorand Proof of Participation Network Partners with Curv, a Provider of Digital Custody Technology, for “Trusted DeFi” (CoinDesk)
Dogecoin (DOGE): Meme currency almost triples, with market capitalization now at a record $ 2.5 billion, after social media attention (CoinDesk)
Cosmos (ATOM): Cosmos set to take the lead in blockchain interoperability with the launch of Stargate in February (CoinDesk)
Bitcoin (BTC): It’s the demand, stupid. Bitcoin supporters confuse “scarce” with “finite”, wrote Frances Coppola in the column (CoinDesk Opinion)
What’s new
Coinbase states in a post on the web that it plans to become a publicly traded company through a direct listing (CoinDesk)
Iran tightens control over crypto miners, while seeing them as a potential source of revenue, as international sanctions damage the economy (CoinDesk)
Cathie Wood’s ARK estimates that bitcoin could rise to $ 400K if the cryptocurrency replaced 10% of the money on corporate balance sheets:
Analogs
The latest news on traditional economics and finance
Silver increases as GameStop day traders switch to other assets (WSJ)
Retail traders sue Robinhood over restrictions on meme stocks GameStop, AMC Theaters and Blackberry (CoinDesk)
Robinhood said to resort to bank credit lines amid the turmoil (Bloomberg)
Private equity firm Silver Lake converts $ 600 million of AMC convertible notes into shares after the retail-fueled stock price bomb (WSJ)
US Congress Plans Hearings on GameStop Market Bombs (CoinDesk)
American Airlines and Southwest Airlines Record Record Losses in 2020 After the Deceleration in Coronavirus-Related Travel (WSJ)
The emerging markets loan boom – $ 847 billion in 2020, with another $ 100 billion in bonds sold so far in January – raises concerns about indebtedness (WSJ)
The head of banking supervision at the European Central Bank fears that creditors in the region may not be reserving enough money for loan loss reserves (WSJ)
“Investors have been continually conditioned to buy the dive, regardless of its cause. FOMO (fear of losing) and TINA (there is no alternative to risky assets) boosted this behavior, ”wrote in the column Mohamed el-Erian, chief economic advisor at Allianz (Bloomberg Opinion)
Although the United States economy has shrunk in the past year since 1946, consumers have increased their spending on goods faster than before the coronavirus hit, as “resilient wages, fluctuating stocks, low interest rates and stimulus gave most families ample purchasing power “during the pandemic limited payments for services, the US Department of Commerce reported on Thursday (WSJ):
Tweet of the day
