Bitcoin (BTC) hit a new high over the weekend in the latest episode of its spectacular 2021 bull run — what’s next for hodlers?
As the largest cryptocurrency approaches $60,000, Cointelegraph takes a look at the factors to consider when forecasting this week’s price action.
Investor eyes stock market “reset”
Equities showed no signs of flipping their endless upside on Monday, as buyers continued to pour in to the market.
Despite warnings that a bubble may already be about to burst, markets built on all-time highs as anticipation of an economic recovery worldwide stoked enthusiasm.
In the United States, it was hope surrounding President Joe Biden’s $1.9 trillion coronavirus stimulus package that was still providing the basis for growth. Last week, Treasury Secretary Janet Yellen suggested that the mechanism for the money, which would include a third round of stimulus checks worth $1,400, would be finalized by Congress within the next few weeks.
“Everybody is playing out the outlook for better economic growth, the outlook for more fiscal stimulus,” Adrian Zuercher, head of global asset allocation at UBS Wealth Management, told Bloomberg.
“It’s normal that nominal yields are trending higher, equities are also trading high, and also commodities based on a better economic outlook.”
While Bitcoin has exploded in line with stocks since the crash of March 2020, not everyone was so optimistic.
In fresh comments on Monday, investor and hedge fund manager Michael J. Burry delivered an onerous forecast for the global economy, claiming that a major correction in equity markets was due.
“People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned,” he tweeted.
Speaking to CNBC, Ark Invest founder, CIO and CEO Cathie Wood added that a “valuation reset” would likely be the result of a continued sharp increase in rates.
With no specific timeframe in mind, the risk was clearly being felt for this March to repeat last March, something which ultimately allowed both Bitcoin and Ether (ETH) to outperform.
Dollar strength doom
Any short-term continuation for Bitcoin, meanwhile, could be tempered by middling behavior of the U.S. dollar currency index (DXY), which bounced off lows in recent days.
Traditionally, a recovery in DXY spells downward pressure for BTC/USD, and the index spent most of February falling.
As Cointelegraph reported, long-term forecasts still see the dollar weakening overall in time, thanks in no small part to the huge expansion of the money supply by the Federal Reserve.
“There’s a lot more downside for the dollar, and our longer-term perspective is for dollar weakness, not for dollar strength,” Standard Chartered research lead Steve Englander told Reuters at the start of February.
An accompanying poll revealed that only 13% of participants panned for a USD increase in three months’ time, with the vast majority expecting a loss or stagnation in value.
“A lot of the exceptionalism of the dollar has to do with its scarcity,” Englander added.
“The prospect now is that there will be no scarcity of dollars and in fact there will be an abundance as far as the eye can see.”
Inflows carry whale sell-off warning
For Bitcoin, signs of a possible pullback came in the form of a spike in exchange inflows on Monday.
As noted by on-chain monitoring resource CryptoQuant, institutional-focused Gemini saw giant aggregated inflows of 28,004 BTC ($1.63 billion), suggesting that a major investor plans to either sell or have funds ready for sale should prices drop.
“Be careful downside risk from whale dumping,” CryptoQuant added in comments to Telegram subscribers.
Last week, Cointelegraph reported that stablecoin balances on exchanges had hit all-time highs, something which accompanied BTC/USD reaching a new record of its own — $58,312 on Bitstamp. This was while the so-called Coinbase premium — the difference in price between Coinbase and Binance — was negative.
For CryptoQuant CEO Ki Young Ju, the nature of the gains was cause for concern despite the resulting euphoria.
“One thing that makes me uncomfortable about this $BTC surge is a negative Coinbase premium,” he tweeted.
“Buying power seems not to come from US institutional investors, but stablecoin whales and retail investors. Not a healthy bull without USD spot inflows.”
Altcoins could soon step up
Should Bitcoin retrace, expectations are that altcoins could once again move into the spotlight this week.
The weekend produced mixed results for major cap tokens, with some gains while others stagnated. On Monday, Bitcoin’s uncertain behavior came as the largest altcoin Ether had already lost 2% in 24 hours after hitting $2,000 for the first time.
Polkadot (DOT), Cardano (ADA) and Chainlink (LINK) were also negative on the day, while XRP put in a surprise move to climb 14% to near $0.60.
“Money is flowing into #Bitcoin right now,” popular trader Rekt Capital told Twitter followers last week.
“But given how Altcoins are in the very early stages of their macro Bull Market – rest assured… Altcoins will be back.”
Bitcoin’s market cap increased slightly on Monday to 61.4%.
Peter Schiff and Bitcoin: “If he buys, I’m out”
It may be time for Bitcoin bulls to get out while they can — because one of the cryptocurrency’s biggest critics might buy a large amount.
In a decidedly cryptic tweet over the weekend, gold bug Peter Schiff queried at what point he should look to sell any BTC he might purchase.
“If I were to actually buy some #Bitcoin, how would I know when to sell? If your answer is to never sell, then what is the point of buying in the first place?” he asked.
“I can’t exchange it, as merchants don’t take it. I need to sell it first, either myself or using an intermediary like Bitpay. But I’m not talking about small amounts. When do I sell to take profits or cut my losses?”
Schiff has dabbled in Bitcoin before, complaining about losing his wallet password, but has made a name for himself by shaming its economic basis and promoting gold as the only option to avoid fiat money inflation.
Interest in hodling therefore, real or not, put the wind up the trading community, who viewed it as a classic sign of a bull market getting out of control.
“Slowly then all at once. If he buys, I’m out,” cryptocurrency trader Scott Melker responded.
As Cointelegraph reported last year, Bitcoin hitting $50,000 might indeed be the event that “triggers” Schiff to invest.
Dogecoin hasn’t always been a ‘fun meme coin’
Dogecoin (DOGE) might look like a fun meme coin, particularly as its price has absolutely skyrocketed in 2021.
But behind the innocent Shiba Inu dog cartoon are some horrific stories. Those buying the cryptocurrency due to shilling and jokes from Tesla and SpaceX CEO Elon Musk, most likely have no idea of DOGE’s early days.
The early days
Introduced by software engineers Billy Markus and Jackson Palmer in December 2013, Dogecoin’s protocol followed Luckycoin and Litecoin (LTC) proof-of-work algorithm using Scrypt technology.
It all started back on Christmas day, 2013, when Dogewallet announced that its webpage had been compromised, causing users to send funds to the hacker’s address. The $12,000 worth of users’ coins lost was fully reimbursed by Dogecoin Foundation Board Member Ben Doernberg, which included community-funded donations.
How many times have you heard about altcoins or startups focusing on social network micropayments using cryptocurrency? Inspired by the Bitcointip project, which had been going on for over a year, the Dogetipbot service was launched, enabling automatic DOGE tipping on Reddit, Twitch and Twitter.
Unfortunately, Dogetipbot’s creator cashed out the entire stash in 2015, which later led to the service’s bankruptcy in May 2017.
Much sponsorships, such exit scams
Adding to Dogecoin’s unorthodox origins, there’s the “Wolong” tale, an active pseudonym on IRC and Reddit trading groups back then. By taking advantage of the Jamaican’s bobsled team sponsorship announcement, this trader supposedly coordinated whales to pump DOGE by 600% in Jan. 2014.
A well-documented piece attributed to this person circulates on the web, describing every move behind those coordinated pump efforts. More interestingly, the mentioned public and private discussion groups are eerily similar to the recent r/SatoshiBets actions behind the more recent 2021’s Dogecoin 980% pump.
Lastly, in October 2014, the Moolah altcoin exchange announced it was shutting down and filing for bankruptcy protection, marking another strong price correction as seen in the chart above.
Among the investors who were victimized are Dan Wasyluk and his colleagues, losing a total of 750 BTC. Back then, not so many exchanges listed DOGE. Thus, Moolah did provide some vital infrastructure to the online community at the time.
To sum up, Moolah’s founder “Alex Green,” managed the campaign for a NASCAR driver sponsorship, in addition to financing numerous Dogecoin meetups and Twitter promotions.
Eventually, people found out that “Alex Green” was an alias used by Ryan Kennedy, who was sentenced to 11 years jail time for multiple crimes, including rape.
Despite its early dark days that were filled with pump and dump exit scams, however, Dogecoin appears to have found its niche in the cryptocurrency space and with a strong online community. Its Reddit subforum, for instance, has over one million subscribers today.
Therefore, Dogecoin’s volatile beginnings will likely be forgotten. Nevertheless, DOGE certainly has a long history of people using it to pump and dump their bags way before Elon Musk likely even knew about his favorite meme-inspired cryptocurrency.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
3 reasons why Reef Finance, Bridge Mutual and Morpheus Network are rallying
As new institutional and retail investors enter the cryptocurrency space on a daily basis, large-cap top performers like Bitcoin (BTC) and Ether (ETH) attract the lion’s share of investor’s attention as they are the well-known ‘secure’ blockchain projects.
Once these new investors get a taste of the mainstay cryptocurrencies and how to navigate the volatile markets, their attention soon turns to smaller cap coins as they search for the up-and-coming projects that could be the next big thing.
Currently, CoinMarketCap shows that there are 8,475 tokens and more are added daily. This makes it difficult to keep up with the latest developments and find solid projects with real-world potential.
With that in mind, here are some interesting projects that have been gaining strength over the past few weeks.
Morpheus Network (MRPH) is a blockchain platform focused on logistics and supply chain optimization through the use of its SaaS middleware platform which is integrated with emerging technologies.
Supply chain managers are able to use the platform to create a digital representation of their network as information collected is transformed into actionable data, with all steps in the supply chain being notarized on the Morpheus blockchain.
MRPH was trading at a price of $0.412 on Jan.15 before an influx of trading activity lifted the token more than 920% to a high of $4.44 on Feb.8.
The rapid rise in price was due in part to the fresh attention the project received from several well-known YouTube influencers and recent verifiable MRPH partnerships, such as China’s Qingdao Maple Leaf International Trading Co. and the possibility of a partnership with Coca-Cola in Latin America.
Speculations aside, the Morpheus platform currently has more than 100 integrations with industry-leading service providers including DHL, FedEx, SWIFT, Oracle, and Salesforce. With significant real-world partnerships and the attention of cryptocurrency influencers, MRPH has strong fundamentals and is likely to gain more attention from investors.
Bridge Mutual (BMI) is a more recent arrival to the decentralized insurance space but it has quickly garnered the attention of investors.
The insurance platform offers coverage for stablecoins, centralized exchanges and smart contracts. It also allows users to provide insurance coverage, determine insurance payouts, and recie compensated for taking part in the ecosystem.
BMI’s initial decentralized exchange offering (IDO) was conducted on Jan. 30 with a token price of $0.125 and it was first listed on Uniswap for $1.03. Since listing, BMI has rallied by 540% to a high of $5.46 on Feb. 3. Currently, BMI trades at $3.24 following the downturn in the market that began on Feb. 21.
Decentralized insurance has thus far been dominated by Nexus Mutual (NXM), but BMI’s arrival offers a fresh challenger to a field with growing demand due to the risky nature of investing in DeFi platforms.
Reef (REEF) is a Polkadot-based DeFi platform that aims to offer cross-chain trading powered by a yield engine and smart liquidity aggregator that enables automation of the exchange process.
One issue Reef developers hope to provide a solution for is high gas fees on the Ethereum blockchain that are currently making DeFi unusable for many community participants. The team also hopes to help connect liquidity pools from separate networks, avoiding the need for multiple accounts which can be difficult to keep track of.
Work on the project began in the second half of 2020 with the completion of its IDO on Sep.30. Following its listing on Binance and Uniswap in late December of 2020, REEF price bottomed out at $0.0067 on Jan.13 and has since increased more than 750% to a high of $0.054 on Feb.11.
DeFi remains one of the hottest growth areas in the cryptocurrency sector and Reef is well-positioned to capitalize on its continued growth. As the Polkadot ecosystem grows its user base and provides solutions that provide relief from high Ethereum transaction costs, cross-chain functionality projects like Reef stand ready to benefit as decentralized finance goes mainstream.
Bitcoin plunges, Ethereum suffers, Musk loses billions
Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
Increasing stock market volatility drags Bitcoin and altcoin prices lower
Bitcoin has had an exceptionally trying week, and it doesn’t bode well for March — a month that’s traditionally bearish for the world’s biggest cryptocurrency.
After hitting record highs of $58,300 last Sunday, Bitcoin suffered a dramatic reversal of fortunes — crashing to $46,000 on Tuesday. Elon Musk might not have helped matters… in the run-up to the correction, he had tweeted that BTC and ETH seemed high.
Analysts and investors alike breathed a sigh of relief on Wednesday when Bitcoin managed to retake $50,000 — with some proclaiming that the asset had undergone a “healthy correction.” But this narrative proved shaky when BTC plunged yet again on Friday to lows of $44,454.84.
All of this comes amid a backdrop of unease in the traditional markets, and this week’s price activity suggests BTC faces an uphill struggle if it’s going to appreciate further. Generally, analysts are looking for $50,000 to become an established support before expecting any bullish continuation.
MicroStrategy purchases another $1 billion worth of Bitcoin, now owns 90,000 BTC
A flurry of good news throughout the week may have prevented things from going bad to worse for Bitcoin. Early in the week, two institutions announced they were doubling down on their BTC buy-ins.
MicroStrategy purchased an additional 19,452 coins, with CEO Michael Saylor declaring that his company has no intention of slowing down. It came after Square announced it had purchased 3,318 BTC for $170 million — following on from a $50-million spending spree in October 2020.
Bitfinex and Tether also announced that they had reached a settlement with the New York attorney general, linked to ongoing allegations that Tether misrepresented the degree to which USDT stablecoins were backed by fiat collateral. Under the terms of the deal, both companies will have to pay $18.5 million in damages, report on their reserves periodically, and stop serving customers in the state.
On Friday, JPMorgan helped to cheer up the markets by telling clients that allocating 1% of a portfolio to Bitcoin would serve as a hedge against fluctuations in stocks, bonds and commodities.
Cardano is now a top-three cryptocurrency as ADA price soars 27% in 24 hours
Moving beyond Bitcoin, there’s been a lot of movement in the altcoin markets.
Last week, Binance Coin had stolen the show with a stunning triple-digit surge that helped it become the world’s No. 3 cryptocurrency. Fast forward to this week, and it’s now been overtaken by Cardano’s ADA.
A fresh wave of optimism and buying volume on Friday pushed its price to a new all-time high, and momentum for the project has been building throughout February. Open interest for ADA futures also rose to $580 million, surpassing Litecoin to become the third-largest derivatives market.
Despite NFTs entering into a bull market — with a report suggesting that they’ll explode in popularity even more as 2021 continues — it’s definitely been a week to forget for Ether. After touching new all-time highs of $2,000 last weekend, ETH has tumbled by more than 26% this week… taking it below $1,500 at times.
All of this comes as an exodus from the Ethereum blockchain continues, with 1inch becoming the latest DeFi project to expand to Binance Smart Chain.
Musk no longer world’s richest man after Tesla and Bitcoin slump
As the old saying goes: “The sun don’t shine on the same dog’s ass every day.”
The sun was certainly shining on Elon Musk when the week began. One analyst had suggested that Tesla had made $1 billion in profit since making its Bitcoin investment. That’s more than the profit generated by selling electric vehicles (what it’s known for) across the whole of 2020.
Alas, that was before the carnage seen on the crypto markets. To make matters worse, Tesla’s share price has dropped by more than 20% from the highs of $890 seen on Jan. 26. These joint factors prompted Musk to lose his crown as the world’s richest man. Some analysts wasted little time in attributing TSLA’s crash to its association with Bitcoin.
But there’s another threat on the horizon, with reports suggesting that the U.S. Securities and Exchange Commission could investigate Musk’s alleged impact on BTC and DOGE through his many, many tweets.
The billionaire made a concerted effort to shrug off these concerns, suggesting he would even welcome such a probe.
Coinbase has held Bitcoin on its balance sheets since 2012
We’ve been learning a lot more about Coinbase this week as it gears up to launch on the stock market. One particular hipster-ish announcement came when the exchange declared that it’s held Bitcoin and other cryptos on its balance sheet for nine years.
Coinbase sought to package this announcement as a paean to other corporations that might be considering a similar move — touting itself as an authority in advising institutions about how to deal with their own prospective investments.
In other news, the company submitted its S-1 report to the Securities and Exchange Commission this week. The filing revealed that the exchange generated revenues of $1.1 billion in 2020 — 96% of which came from transaction fees. Net income in 2020 came in at $327 million… a stark contrast to the $46 million loss seen the year before.
Winners and Losers
At the end of the week, Bitcoin is at $46,609.99, Ether at $1,470.17 and XRP at $0.43. The total market cap is at $1,429,222,267,885.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Fantom, Pundi X and Cardano. The top three altcoin losers of the week are Dodo, Horizen and Venus.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“As gas price stays too high, we see a lot of projects, tokens and users coming to BSC, and this is the right moment for 1inch to expand to other blockchains.”
Sergey Kunz, 1inch co-founder
“Since our founding in 2012, Coinbase has held bitcoin and other crypto assets on our balance sheet — and we plan to maintain an investment in crypto assets as we believe strongly in the long-term potential of the cryptoeconomy.”
“Incredible scale for a technology that critics claimed couldn’t scale.”
Ryan Watkins, Messari researcher
“It’s very rare to see pre-GPU era bitcoins move, it only happened dozens of times in the past few years. And no, it’s probably not Satoshi.”
Antoine Le Calvez
“The company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, can serve as a dependable store of value.”
Michael Saylor, MicroStrategy CEO
“[I’m] very positive on Bitcoin, very happy to see a healthy correction here.”
Cathie Wood, Ark Investment Management founder
“We are now sitting on 2.35x the previous cycle ATH OF 20k. WE ARE JUST GETTING STARTED.”
“Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future.”
“I think you can expect that we’ll have a billion people storing their value — in essence, a savings account — on a mobile device within five years, and they’re going to want to use something like Bitcoin.”
Michael Saylor, MicroStrategy CEO
“We’ve experienced 2018 & 2019. This is nothing.”
Michaël van de Poppe, Cointelegraph Markets analyst
“I do think people get drawn into these manias who may not have as much money to spare. So, I’m not bullish on Bitcoin, and my general thought would be: If you have less money than Elon, you should probably watch out.”
Bill Gates, Microsoft founder
“But we’re now to the point where ETH 1.0 — oh, we need ETH 2.0 so soon, come on, Vitalik, get it going, man — ETH 1.0, most regular users are priced out of using the majority of applications on Ethereum.”
Lark Davis, crypto influencer
“I lost most of my life savings and haven’t received a response from a human. I’d think they would refund or they would lose all their customers. I’m sick to my stomach but will join the lawsuit with plenty of proof(screenshots) if not refunded.”
u/dtk6802, Reddit user
“In our view, many institutional investors are entering with a buy-and-hold mentality given their understanding of Bitcoin as digital gold.”
Martin Gaspar, CrossTower research analyst
“I think Tesla is going to double down on its Bitcoin investment.”
Dan Ives, Wedbush analyst
Prediction of the Week
1 billion people will store life savings on their phone in Bitcoin by 2026 — MicroStrategy CEO
We love an outlandish prediction here at Hodler’s Digest… and Michael Saylor certainly delivered the goods this week.
The MicroStrategy CEO declared that Bitcoin will be the savings method of choice for a staggering 1 billion people in just five years’ time. That’s despite the fact that just 21 million BTC exist… and his company already owns 90,000 of it.
Saylor’s comments came after U.S. Treasury Secretary Janet Yellen launched her latest attack on Bitcoin, describing it as “inefficient.”
In a confident interview with CNBC, he declared that Bitcoin “is the dominant digital monetary network,” adding: “I think you can expect that we’ll have a billion people storing their value — in essence, a savings account — on a mobile device within five years, and they’re going to want to use something like Bitcoin.”
FUD of the Week
Bill Gates warns Bitcoin buyers: If you have less money than Elon Musk, watch out
Microsoft founder Bill Gates had a big warning for Bitcoin buyers this week.
Speaking to Bloomberg, he warned: “Elon has tons of money, and he’s very sophisticated so, you know, I don’t worry that his Bitcoin would randomly go up or down.”
Gates said it would be a mistake for the average investor to blindly follow the mania of optimism surrounding Musk’s market moves, telling those who aren’t billionaires to “watch out.”
Criticizing Bitcoin’s energy consumption, he added: “I do think people get drawn into these manias who may not have as much money to spare. So, I’m not bullish on Bitcoin, and my general thought would be: If you have less money than Elon, you should probably watch out.”
This isn’t to say that Gates thinks digital currencies are a bad thing. He just believes that they should be transparent, reversible and (essentially) centralized.
Whale who sold Bitcoin before 2020 crash cashed out $156 million before this week’s 20% dip
As you’d expect, a post-mortem is now fully underway after this week’s carnage in the crypto markets.
Curiously, data from Santiment suggests that the initial crash may have been linked to a huge transaction that took place after Sunday’s all-time high of $58,300. The transfer of 2,700 BTC — worth $156 million at the time — was the second-biggest transaction of 2021.
It’s possible that this whale cashing out contributed to unbearable selling pressure in the market, which snowballed into the largest one-hour candle in Bitcoin’s history. If enough alarm bells weren’t ringing, this self-same wallet also dumped 2,000 BTC just before last March’s infamous flash crash.
Crypto influencer warns Ethereum fees will drive users away
A prominent crypto influencer has warned that Ethereum’s competitors will continue to siphon away users should Eth2 fail to launch soon amid ever-increasing gas fees.
Lark Davis said Ethereum’s skyrocketing fees has meant that only “rich investors” can afford to use the network, prompting smaller users to switch to competitors like Binance Smart Chain.
Describing the current gas fee prices as “totally loco,” Davis urged Ethereum developers to expedite the launch of Eth2 in response to the skyrocketing to prevent a further exodus of users to cheaper alternatives.He added: “We’re now to the point where ETH 1.0 — oh, we need ETH 2.0 so soon, come on, Vitalik, get it going, man — ETH 1.0, most regular users are priced out of using the majority of applications on Ethereum. […] A transaction on Uniswap costs $50 on average these days, and that is just crazy.”
Best Cointelegraph Features
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