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Cryptocurrency update: Bitcoin wobbles on China concerns
Bitcoin starts the week in the red thanks to stock market woes and a potential tightening of regulatory oversight.
China and regulation fears rock Bitcoin
As Bitcoin becomes ever more prevalent, the influence of non-crypto markets on futures contracts is becoming larger.
As of Monday 20th September, Bitcoin had dropped roughly 5% on the day, thanks to a fall in S&P 500 futures triggered by the China Evergrande Group situation.
Property giant Evergrande fell 10% in Hong Kong during Asian trading this morning, causing globe-spanning stock market ripples. As the S&P 500 fell 1%, Germany’s Dax had also fallen 2%.
The fallout from this is investors looking to mitigate risks across their portfolios. As cryptocurrencies exhibit high volatility, Bitcoin and other tokens may be on the chopping block.
Anticipation of an October or November stimulus taper from this week’s Fed meetings has also strengthened the greenback, making the BTC/USD pairing a little weaker, hence the price drop.
Additionally, further scrutiny is being paid to stablecoins. Stablecoins are crypto tokens backed by the USD. The most prominent of these is Tether. This is meant to cut out much of the volatility we see in the most popular coins, but regulators aren’t so sure.
There are rumblings that further regulation is going to hit stablecoins, which promises big changes for the crypto market as a whole. Some observers believe they may be a threat to the US’ entire crypto situation. A formal review into stablecoins by the Financial Stability Oversight Council could be on the way.
The total market capitalization of all stablecoins has reached $115 billion, growing over ten times over the past 12 months.
Essentially, it will be a rocky week for cryptocurrencies. Right now, all of the major tokens are in the red.
AMC to accept crypto payments
Every so often, you get an overlap of two great internet sensations. Now, the worlds of crypto and memestocks are colliding as AMC Entertainment Holdings announces its plans to accept Bitcoin and crypto tokens as payment.
AMC is the meme stock de jour; one of the stocks exceptionally popular with a new breed of traders. The likes of GameStop have already seen their prices somewhat artificially pumped by a younger generation of traders and investors in an attempt to rattle the old guard.
We know cryptocurrencies are also a favourite of new, younger investors. It seems only right that these two paths should cross.
AMC CEO Adam Aron has been fairly clever here. By aligning AMC with the crypto market, he’s continuing to appeal to the types of investors and traders already interested in the meme stock.
Additionally, the crypto sector may help create further revenue streams for the cinema chain. One idea that Aron allegedly loves is tapping into the non-fungible tokens (NFT) sector. This burgeoning digital asset market has picked up steam massively across 2021, and AMC’s entry point could be to offer its own NFTs in the form of commemorative movie tickets users can buy and keep.
It’s a shrewd move from AMC no doubt – but is banking on NFTs help alleviate the company’s potential future woes around declining cinema attendance?
Litecoin activity outstrips Dogecoin and Bitcoin Cash
Move over Doge: crypto users have a new best friend.
According to Litecoin Foundation Director Jay Milla, the number of active addresses on the Litecoin network has overtaken the number using Dogecoin and Bitcoin Cash.
The growth of wallet activity has overtaken many other large-cap tokens, as Milla recently tweeted:
Let's clear this up now: Litecoin activity has been on a the rise for well over a year! Our goal is adoption and the metrics are clear.. Charting $LTC active addresses shows who's who. #Chikundinner #Litecoin #LitecoinFAM #Evidence pic.twitter.com/LHcqHg9Vem
— Jay Milla (@MillaLiraj) September 18, 2021
At 450,000, active Litecoin addresses is over double that of Cardano’s 214,000. Bitcoin Cash’s network user numbers clock in at 101,000. Surprisingly, Dogecoin’s only totals 60,890.
Active addresses are used to monitor and rate on-chain network activity across the crypto market. Analysts use it to sport patterns across the wider sector. It is not necessarily an indicator of the number of traders or investors buying a particular cryptocurrency.
Litecoin recently took a hit thanks to some fake news. It was reported that Walmart had agreed to partner with Litecoin to accept the token as payment. This is false. No such partnership exists.
According to Litecoin, the confusion was caused by an employee tweeting the partnership announcement without authorisation. Walmart has subsequently confirmed it has not partnered with the Litecoin foundation.
Cryptocurrency update: BTC breaks $43,000 level
Bitcoin made strides this weekend before settling over $43,000, yet the upcoming US Infrastructure Bill may put the brakes on further momentum.
Bitcoin makes weekend gains but could face further derailment
Bitcoin’s torrid month could be over as prices shot above $45,000 on the weekend.
The token reached a 3-month high on Saturday, reaching $45,300. Things have cooled a little since then, with BTC dropping back to $43,788 at the time of writing.
This is good news for Bitcoin traders. The token has struggled to keep a hold of gains over the past 3 months, sinking as low as $29,000 on some weeks. Could we be about to see a major breakout for the world’s most popular cryptocurrency?
According to Datamish research, the weekend’s price action was guided by a short squeeze when 126 BTC positions were liquidated on Friday. Bullish traders are helping keep the coin afloat, as it pushes towards the $45,000 200-moving day average.
It’s interesting because last week concerns over tax provisions within the proposed US infrastructure bill had caused a bit of market uncertainty. However, institutional activity from the likes of Grayscale is picking up again. That’s put more confidence back into the BTC market.
Amendments to the bill put forward by Democratic senators would exclude crypto miners involved in transaction validation on distributed ledgers, as well as firms selling private key hardware or software wallets, from tax reporting provisions.
It seems these proposals were enough to instil upward momentum back into Bitcoin.
But as ever there’s a twist in the tale: it’s been announced that the version of the Infrastructure Bill that will be voted on in the US Senate tomorrow will be the original bill without these key amendments. BTC Bulls are not happy with Biden right now.
We’ll have to see how the market reacts to the vote’s outcome tomorrow to gauge price action, but the BTC breakout could now be in jeopardy.
Brazilian BTC ETF promises a greener future
Much has been made of crypto mining’s environmental impact this year. Tesla u-turned on its pledge to accept Bitcoin as payment after citing environmental concerns earlier in the year, for example.
A new ETF launched in Brazil promises carbon neutrality in the hopes of inspiring industry-wide change.
BITH11 from alternative investment fund Hashdex Asset Management is claiming to be Brazil’s first green crypto ETF.
Carbon credits are the keys to the fund’s eco-friendly credentials. To offset the carbon produced in the mining process, Hashdex says it plans to spend big on carbon credits through a partnership with Germany’s Crypto Carbon Ratings Institute (CCRI).
The CCRI will produce annual reports estimating the level of energy consumed and the amount of carbon generated through the ETF’s Bitcoin mining activities. 0.15% of the ETF’s liquid assets will be pumped into carbon credit acquisitions, as well as investment in green technologies, every year, according to Hashdex.
This is not the first Bitcoin fund Hasdex has launched this year. Its first, HASH11, was launched on the B3 Brazilian Stock Exchange earlier in the year and has so far gained 33% since going live.
Dogecoin to soar by the end of the year?
Dogecoin, the novelty token-turned serious asset, could rally massively by the end of the year, according to industry observers polled by price comparison website Finder.
The coin’s “pump and dump” cycle could help inspire price action across 2021 after Dogecoin recently found a $0.20 floor. The industry now believes Dogecoin will end the year at $0.42 – a 60% rise against current prices.
Don’t get too excited, however. Of the 42 industry insiders surveyed by Finder, 80% of them agreed Dogecoin is in a bubble. And bubbles almost always burst. While the majority of respondents posit strong price action this year, 55% think it will collapse in 2021 too. 42% say it will happen next year, while only 3% forecast a bursting dogecoin-shaped bubble in 2023.
“Dogecoin seems largely dependent on Elon Musk’s erratic tweets,” said John Hawkins, senior lecturer at the University of Canberra. When surveyed, Hawkins predicted dogecoin will be worth 15 cents by the end of 2021 and will be completely worthless by 2030.
Cryptocurrency update: China’s hard-line crypto stance gets harder
Crypto took a battering over the weekend as China stepped up its anti-mining squeeze. With Bitcoin gains wiped out, how will the market react?
China crypto crackdown continues
Chinese authorities continue to hammer domestic Bitcoin miners.
HashCow and BTC.TOP are the two latest miners to suspend or scale back operations after Beijing stepped up its anti-mining sentiment. Exchange Huobi said on Monday it will no longer be accepting new users from mainland China. The exchange will now be focussing on overseas customers.
This is seismic for the world of crypto mining as China accounts for 70% of global token supply.
It’s thought part of the reason for the move against miners is partly driven by environmental concerns. The two provinces where the bulk of Chinese mining takes place – Inner Mongolia Autonomous Region (IMAR) and the Xinjiang Uygur Autonomous Region (XUAR) – draw energy from coal-fired power stations. With China pledging to slash greenhouse gas emissions by 2060, it’s doing what it can to clean up its act. At least, that’s how it appears on the surface.
The reality is likely Beijing wanting to exert more control over cryptocurrencies. A statement made on Friday by the State Council said the move would “crackdown on Bitcoin mining and trading behaviour, and resolutely prevent the transmission of individual risks to the social field.” This latest move is a way for China’s government to exert its considerable influence over a new, rapidly evolving economic sector.
As you can expect, the consequences for crypto markets have been massive to say the least. Token prices have plummeted.
Miners, who typically don’t hedge all their minted digital tokens into fiat straight away, are thought to be divesting themselves of their stakes. A broader sell-off is underway, which has caused a freefall in crypto asset prices.
May has not been kind to digital currencies. Rumours of tighter crypto exchange regulations and capital gains tax hike proposals in the US gave investors jitters at the start of the month. Tesla turning its back on BTC payments caused further wobbles. China’s hard-line stance was enough to trigger the freefall.
BTC & ETH start on the long road to recovery
Crypto market bellwether crypto BTC took the heaviest body blows following the China news. BTC is trading just shy of 50% lower than April’s $64,000 all-time high at around $36,500.
At the bottom of the trough, prices had slumped to $31,107. Essentially, all gains made since February have been wiped out. Volatility in digital currency markets is nothing new, but BTC will have a long way to go before it reaches new all-time highs. Recovery, as we can see from the price action above, has started but it remains to be seen just how quickly it can regain traction.
Ether, which had only 17-days ago broken the $4,000 barrier for the first time, fell 17.4%, with its lowest level registered at $1,868.79. Since then, the token, used on the Ethereum blockchain, has climbed back to $2252.50. Even with the price hit, ETH is up over 159% year-to-date.
Musk defends the doge
Dogecoin, the memecoin beloved of Elon Musk and thousands of internet traders, gets support from the enigmatic billionaire.
Musk reiterated his position in response to an investor implying the Tesla CEO has an impressive Dogecoin holding.
Yeah, I haven’t & won’t sell any Doge
— Elon Musk (@elonmusk) May 20, 2021
Elon and his Twitter escapades are very familiar for crypto market investors and observers. Seemingly his every tweet has the power to create major price movements. And, despite all the volatility at hand, and Tesla u-turning on BTC acceptance, Musk is doubling down on crypto, although framing himself as some sort of crypto martyr.
The true battle is between fiat & crypto. On balance, I support the latter.
— Elon Musk (@elonmusk) May 22, 2021
Dogecoin has gained 3.4% as of Monday 24th May following the weekend’s bloodbath.
Cryptocurrency update: ETH soars while Dogecoin spins
Ether starts the week strongly, breaching all-time highs, while Dogecoin chases its tail.
Ether soars to all-time high
It makes for refreshing reading when a cryptocurrency that isn’t Bitcoin makes its own stellar gains.
This week, it’s Ether (ETH), the digital token for the Ethereum blockchain. The token has reached a new all-time high, breaking above $4,000.
While Bitcoin steals the headlines, ETH has actually made more substantial gains across 2021 so far. As of May 10th, 2021, Ether’s year-to-date return was a cool 435% against Bitcoin’s 104%.
Ether’s total market cap is now valued at around $470bn. For context, the stock market valuation of JPMorgan Chase, the US’ largest bank, floats around $488bn.
Behind the ETH drive is intensified worldwide interest in Decentralised Finance (DeFi). DeFi is functions around trading, lending, and other financial processes, that seek to match those of traditional banking and financial firms, executed via blockchain technology.
The Ethereum blockchain serves as the foundation for the DeFi world, as well as being a basis for non-fungible tokens, one of cryptocurrencies hottest trends. Transactions undertaken on the Ethereum blockchain are charged in a small amount of Ether, giving the token a practical use.
The more use the Ethereum blockchain gets from DeFi developers then the higher ETH prices will climb, in theory, and that’s what we’re currently seeing.
Elon Musk sets Dogecoin’s tail wagging
Shiba Inus are known to be bold, strong-willed, quirky, and confident. It’s a dog breed likes to do things differently; one that doesn’t always do what its owners want.
While very cute, and with massive meme-potential as the internet has clearly shown, there’s no telling what a Shiba will do from one minute to the next.
Those characteristics that make fuzzy, feisty Shibas a bit of a handful apply neatly to Dogecoin, the once joke currency that runs to the beat of its own drum. Choosing the Shiba Inu as the token’s mascot is looking more appropriate every day.
Dogecoin had an exceptionally eventful weekend after notorious tweeter and Dogecoin meme supporter Elon musk sent the token spinning.
Firstly, on Saturday 8th May when hosting Saturday Night Live, Musk triggered a Dogecoin sell off after calling the currency a “hustle” during his opening monologue. The currency’s value subsequently tumbled.
But come Monday 10th, Musk was giving Dogecoin a bone again. This time, the billionaire meme machine said his SpaceX firm would be accepting payment via Dogecoin from a Canadian firm Geometric Energy Corp, to send a satellite to the moon.
Yes, Musk and Co. are planning to literally send Dogecoin to the moon. The DOGE-1 satellite mission is said to be launching in Q1 2022.
“This mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce,” SpaceX Vice President of Commercial Sales Tom Ochinero said in a press release. “We’re excited to launch DOGE-1 to the Moon!”
According to GSC, the rocket’s payload will “obtain lunar-spatial intelligence from sensors and cameras on-board using communications and computational systems”.
Does anyone else think this is getting out of hand now? Thanks to the power of Musk’s tweets, Dogecoin has gained an almost unbelievable 11,000% year-to-date. Perhaps it’s not the Shiba Inus that need putting on a leash but Musk himself.
After all, real currency from real pepole is being pumped into Dogecoin at the whims of a figure who clearly sees it all as a bit of a joke. Of course, the token did start life as a novelty, but its huge gains, and the spotlight afforded by Musk and his ilk, is turning it into something serious. Let’s hope no one gets bitten.
BoE’s Bailey gives stark crypto warning
“I’m going to say this very bluntly again: buy crypto only if you’re prepared to lose all your money.”
Harsh words from Bank of England Governor Andrew Bailey, speaking at the Bank’s Thursday May 6th press conference.
When asked for his opinion on crypto, Bailey said: “They have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.”
Bailey’s words echo those of the UK’s Financial Conduct Authority. In January, the FCA said: “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.”
Cryptocurrency trading is currently not available in the UK for retail customers.
It will be interesting to see if Bailey’s thoughts have any actual effect on token prices.
Institutional support for cryptos as a whole as been up this year, mirroring crypto gains. Visa and Mastercard are upping their crypto offering; Tesla is dabbling with crypto trading alongside its core EV business; Banks like Deutsche Bank are exploring more crypto services.
Bailey’s comments do represent the fact that full support amongst financial circles for digital currencies has yet to be realised. They also reinforce the fact that volatility is never far away from cryptos. Massive price increases have been paired against violent crashes. Losses are a very real possibility – something all crypto traders should keep in mind.
Cryptocurrency Update: To the moon for dogecoin, more high profile BTC support and ether primed for rally?
The power of memes reasserts itself as Dogecoin soars this week, while Bitcoin enjoys further high-profile backing, and ether could be about to reach new heights after enjoying record highs.
The little Doge who could
We all know memes are currency on the internet, but its when memes and crypto intersect that we can really see their value.
The price of memecoin Dogecoin, a crypto that started as a joke, soared 55% on Sunday, recording new all-time highs as celebrities got in on the act. Previously, Elon Musk has tweeted about the token, sending Dogecoin on a 44% rally last week, and now Kiss frontman Gene Simmons and Snoop Dogg are stoking the memery by tweeting in support of the crypto. Snoop Dogg, for example, has become Snoop Doge.
So … it’s finally come to this … pic.twitter.com/Gf0Rg2QOaF
— Elon Musk (@elonmusk) February 7, 2021
Year-to-date, Dogecoin is up 1,380%. It now has a market cap of $10.8bn, meaning it has overtaken tokens like Litecoin and Bitcoin Cash to be the world’s seventh most valuable crypto in terms of market capitalisation.
Is Dogecoin even legitimate? There are real numbers being traded for real money, but the whole thing does feel like a joke that’s getting a bit out of hand. Dogecoin has also been a target for the Reddit crowd, which is partly responsible for its massive recent rally, coupled with celebs hopping aboard the memewagon.
It’s one to watch, but the fact it all started as a joke may suggest the whole Dogecoin rally is smothered in irony and is not a legit play for investors. On the other hand, the fact so many big names, especially the world’s richest man, may have turned the irony into legitimacy. It’s certainly an interesting situation. Just how far will Dogecoin go?
Twitter boss opens Bitcoin node
Lending further institutional support for BTC, Twitter boss and online payment platform Square CEO Jack Dorsey has opened a Bitcoin node.
Nodes are software that help validate transactions and blocks on the Bitcoin blockchain. On Friday, Dorsey tweeted the below, showing his new node in action:
— jack (@jack) February 5, 2021
This basically means Dorsey will now have a hand in processing Bitcoin transactions and recording transaction data in the blockchain blocks. Nodes are essential in keeping Bitcoins going.
Dorsey has long been a supporter of digital currencies and BTC in particular. For instance, his Square payment software accepts payments in Bitcoin, and even has Square Crypto – a team dedicated entirely to Bitcoin development.
Twitter even launched a branded hashtag for Bitcoin last year. If you put #bitcoin into a tweet, then the cryptos now iconic logo will be produced.
Bitcoin prices have started what looks like another rally. At the time of writing BTC futures were trading above $39,000. Are new record highs on the way? It’s possible if more big players like Jack Dorsey give further backing the world’s most popular crypto.
Ether hits new all-time highs – poised for further growth?
Ether reached above $1,790 last week, new record highs, ahead of ether’s launch on the Chicago Mercantile Exchange.
Ether futures will be available to trade on the CME once trading opens later today. Ether is now trading at around the $1,600 level, but the fact it is now available on the CME may cause prices to shoot up to around $2,000.
Investors are also eagerly awaiting the release of Ethereum 2.0, the parent blockchain network for the ether token. Ethereum 2.0 may be more secure and fast, thus able to handle more transactions, and see further use of ether tokens.
Ether is the second-largest currency in the world by market cap, behind only Bitcoin.
Cryptocurrency update: Visa introduces crypto trading, Elon Musk backs Bitcoin, and memes, memes, memes
In this week’s crypto update, Visa announces plans to integrate crypto into its network, meme traders send Dogecoin sky high before bringing it back down to Earth, and Elon Musk weighs in on the crypto debate.
Visa to add crypto trading to its network
According to comments made in its latest earnings call, Visa will soon add cryptocurrency trading to its network.
CEO Alfred Kelly has said Visa’s “global presence, its partnership approach as well as its trusted brand” makes it well placed to help make cryptocurrencies more safe.” Kelly also added how Visa’s move can make cryptos more applicable and useful for payments.
So, what will this look like in practice? Visa will split its crypto offering into two segments: cryptocurrencies and digital currencies.
When asked about assets held in the cryptocurrency segment, Kelly said they will be viewed “as digital gold.” According to Kelly, such currencies are “predominantly held as assets that are not used as a form of payment in a significant way at this point.”
Kelly said Visa will be working with wallets and exchanges to use their Visa credentials to acquire cryptocurrencies or to cash out onto a Visa credential to make a fiat purchase at payment points where Visa is accepted.
On the digital currencies front, Kelly said this segment would be made up of “fiat-backed digital currencies including stablecoins and central bank digital currencies.” Stablecoins are tokens whose value is tied to an asset like gold or fiat currency.
Musk backs Bitcoin, prices up, but effect doesn’t last long
Bitcoin’s been on another rollercoaster recently all thanks to the world’s richest man Elon Musk.
Last week, the Tesla CEO changed his Twitter profile to read simply “#bitcoin#”, following that up by tweeting “it was inevitable”. Ably showing the power of social media, or at least the influence of a tech-savvy billionaire, BTC soared, reaching over $38,000 for the first time since January’s major price spikes.
Cooler heads once again dropped the price back down to the $33,000 level. At the time of writing, BTC futures were trading at around $34,400.
Musk looks like he is strengthening his support for the most popular crypto on the market.
“I think bitcoin is really on the verge of getting broad acceptance by sort of the conventional finance people,” said Musk on Sunday 31st January during a Clubhouse chat session. “I don’t have a strong opinion on other cryptocurrencies.”
Will the Musk effect help Bitcoin in future? It probably depends on how many more pro-BTC statements Musk makes, but just from the price movements we’ve seen from a simple Twitter bio update, anything Elon Musk says related to the crypto could cause big upward movements.
Dogecoin: sending a meme to the moon?
With Redditors over on /r/Wallstreetbets deciding to take on the entire global trading system, their cryptocurrency trading cousins on the lesser known /r/Satoshistreetbets subreddit are doing their best to bump Dogecoin.
Dogecoin, originally started as a joke based on the Doge meme (basically a shiba inu dog with a funny face), is being pumped up by Reddit speculators. Its price action has gone wild in the past couple of days, soaring 420% on Friday January 29th, at one point gaining 1000%.
It’s essentially the product of an /r/Wallstreets copycat, backed by added meme power, itself a huge social currency on the internet. Even Elon Musk, who else, is getting on the act.
“The most entertaining/ironic outcome is the most likely, and the most entertaining outcome would be that $DOGE coin become the currency of the future,” Musk told Clubhouse.
Despite this, Dogecoin has now crashed as meme-based traders use it as a pump and dump and turn their attention to other tokens.
At the time of writing, XRP is surging, with investors pulling money out of doge and into Ripple’s crypto currency. Prices are up more than 100% in the last 48 hourson XRP, so maybe it’s not the power of memes dragging prices higher, more organised trading blocs pumping money into different cryptos.
XRP capitalisation is now around $28bn following the surge. That means it has now climbed back to the fourth most valuable cryptocurrency on the market today by market cap.
But, as we’ve seen from other historic and current spike-then-crash crypto cycles, nothing is certain in the world of cryptocurrencies. Volatility is an ever-present reality. Will XRP be trading as high this time next week? Will /r/Satoshistreetbets grow bored of sending XRP to the moon and look elsewhere? Anything can happen in the world of cryptos right now.