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Bitcoin plunges, Ethereum suffers, Musk loses billions: Hodler’s Digest, Feb. 21–27

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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.”

Coinbase

“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.”

Bitcoin Archive

“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.”

Square

“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

Sam Bankman-Fried: The crypto whale who wants to give billions away

He’s just 28 years old, but Sam Bankman-Fried has already amassed a $10-billion fortune. But unlike most people in crypto, he’s building up this fortune to give half of it away.

Can’t beat ‘em? Join ‘em: Mastercard and Visa make a case for Bitcoin

Mastercard is set to open the shop doors to crypto as a means of payment in 2021, but it will likely be a challenge for the firm.

Bitcoin price flies solo? Institutional crypto push may be overrated

Bitcoin’s market cap broke the $1-trillion barrier without a final push from institutions — could their influence be overrated?

Source: https://cointelegraph.com/magazine/2021/02/27/bitcoin-plunge-ethereum-suffer-musk-billions-022127

Blockchain

AgeUSD to Launch as First Stablecoin on Cardano Network

Republished by Plato

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Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.

The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.

Do We Need Another Stablecoin?

Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.

AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).

“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”

The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.


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The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.

AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.

Cardano ADA Price Update

As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.

It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/ageusd-to-launch-as-first-stablecoin-on-cardano-network/

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How sustainable is YFI’s current price run?

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The past week saw a lot of growth across the cryptocurrency market, with Bitcoin and Ethereum seeing their values pushed towards new all-time highs. However, it is safe to say that the digital assets market is no longer just about the top two cryptos in the market, with DeFi coins such as YFI registering significant gains on the charts.

Over the past 6 months, YFI has seen its price hike by over 520 percent. Now, while this looks extremely promising for the alt, the truth seems to be in yet another shade of grey. The price hike from over $11k in November 2020 to its press time valuation of $48,415 has been less than straightforward.

Akin to many other altcoins in the market, YFI  too has endured extended periods of the price going back and forth. However, given the current market scenario, how sustainable is YFI’s current price or is history going to repeat itself in the form of yet another short-term price correction?

Interestingly, data provided by Santiment highlighted that despite the bullish nature of the YFI market, there may be a bit of FUD finally creeping into the market as the price continues to remain close to the $50k-level. In such a scenario, what YFI really needs is a strong level of support for the price if bearishness is to soon hit the market.

Source: Santiment

Taking a look at a few of the key fundamentals can provide more clarity on where the price is likely to head in the coming weeks. According to data provided by Santiment, YFI’s supply on exchanges has been stagnant for a while and hasn’t been increasing. While fewer coins in exchanges are normally a good sign of hodling, in the case of YFI, if one were to take a look at past precedents, the price decline began as soon as the supply hit a stalemate.

Source: Santiment

Additionally, the analytics platform also pointed out that the current price rally began with low on-chain activity for the coin. However, over the past few weeks, a trend reversal has emerged, with on-chain activity noting a surge and the price continuing to be inversely relational to it.

With the price inching closer to its ATH, there is always the question of price discovery. YFI seemed to be lacking in this regard, at press time. The coin’s MVRV, as per Santiment’s data, placed it in the danger zone and prime for a new trend reversal, one that can induce a short-term price correction.

Source: Santiment

In the coming days, if the price correction does set in, YFI’s $44k-price level may end up being a key support level for the coin. However, if this level is flipped to resistance in the coming weeks, a lot of the upward momentum and price surge YFI saw over the past few months might be undone.

This, once again, will result in YFI’s price continuing its current trend by which the coin will be subject to strong ‘push and pulls’ at regular intervals.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://eng.ambcrypto.com/how-sustainable-is-yfis-current-price-run

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EOS, Synthetix, Maker Price Analysis: 16 April

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EOS can be expected to find strong support around the $6.8-zone. If Bitcoin stabilizes above the $60.5k-area, altcoins could have a chance of recovery in the coming days. Otherwise, it would be further selling pressure across the market. Synthetix and Maker posted gains over the past few days, but were likely to retrace a significant portion of their value.

EOS

EOS, Synthetix, Maker Price Analysis: 16 April

Source: EOS/USDT on TradingView

EOS was trading within a rising channel, and the past few hours saw the price test the upper boundary of the channel before falling lower.

The mid-point of the channel was ceded to bearish pressure. A region of demand lay just above the $6.8-mark. The confluence with the channel’s lower boundaries could serve as strong support for EOS.

The RSI was back at neutral 50 and would drop lower to signal a shift in momentum to bearish over the next day or two, especially if EOS closes a session under $6.8. This could see EOS fall further to find support at $5.6.

Synthetix [SNX]

EOS, Synthetix, Maker Price Analysis: 16 April

Source: SNX/USDT on TradingView

Synthetix ascended past the $21. 4-level of resistance, but its retest of the same level on the back of strong selling forced the price to drop to $20.7 and could drop further. On the 4-hour, the Supertrend indicator continued to give a buy signal that would only be flipped to sell on a session close under the $19.5-level.

The 20 EMA and 50 EMA (white and yellow respectively) highlighted the bullish momentum behind SNX in recent days, with the price not sinking under these moving averages yet.

The OBV was on an uptrend and suggested that the recent spate of selling was reactionary fear, rather than sustained selling.

Maker [MKR]

EOS, Synthetix, Maker Price Analysis: 16 April

Source: MKR/USDT on TradingView

Two sets of Fibonacci retracement levels were plotted to highlight some levels of importance for MKR. $2,400 is a level that MKR had been stuck under from late February till the past week. The surge past this level in recent days has been rapid, and the price did not stop at many areas to mark it as support or resistance.

As such, the move back down could be almost as rapid, and some of the Fib levels laid out possible areas of support for MKR.

The MACD was correcting lower after the MACD line rose high above the Signal line to indicate overbought market conditions.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://eng.ambcrypto.com/eos-synthetix-maker-price-analysis-16-april

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