1. Market Wrap: Elon Taketh Away — Bitcoin Continues Fall as Options Traders Pile Into Puts
The crypto car drove to the dump Monday as most blockchain assets fell.
Most cryptocurrencies are down Monday, prompting a flurry of activity in the options markets as traders reposition themselves amid increased volatility.
Bitcoin (BTC) trading around $44,211 as of 21:00 UTC (4 p.m. ET). Losing 2.8% over the previous 24 hours.
Bitcoin’s 24-hour range: $42,269-$46,462
Ether (ETH) trading around $3,376 as of 21:00 UTC (4 p.m. ET). In the red 1% over the previous 24 hours.
Ether’s 24-hour range: $3,142-$3,587
2. As Newbies Panic in Latest Bitcoin Correction, Old Pros Appear to Buy on the Dip
Elon Musk’s tweets spur the latest drop.
Blockchain data shows that the latest bitcoin market correction, which sent the oldest cryptocurrency down by more than 35% from its peak price above $64,000, may have been driven by panic selling from investors who bought during the recent bull market.
“The bitcoin market is in a historically significant correction,” blockchain data analytics firm Glassnode wrote in a post on Monday. “There are strong signals that short-term holders are leading with panic selling.”
At press time, bitcoin (BTC) was changing hands at $42,860.11, down 9.65% in the past 24 hours. The steep price drop came after a series of tweets by Tesla CEO Elon Musk in which he initially failed to deny outright that his electric-car company has sold or could soon sell all of its more than $1 billion holdings of BTC. He later clarified that Tesla had not sold any of the holdings.
3. Musk Learns the Hard Way: Crypto Doesn’t Need a Savior
Crypto doesn’t like or want kings. Elon Musk is finding that out the hard way.
Elon Musk has big plans for dogecoin (DOGE, -2.8%), everybody!
Unfortunately this is an absurd statement on quite a few levels, as we’ll get into.
It’s also Elon at his most Elon, asserting his expertise in crypto just as eagerly as he claimed he would bring world changing innovation to rescue submarines and respirators and public transit — all of which ended in some degree of disappointment.
Musk isn’t alone in this unfortunate habit. Successful tech entrepreneurs, or even just lucky investors, seem particularly vulnerable to what’s known as “The Peter Principle.” The principle was first laid out in 1969 as a corporate management problem, based on the observation that successful workers were often promoted beyond the level of their own abilities. The concept has over time taken on the broader meaning that successful people will expand into new arenas until they hit the limits of their ability and fail, sometimes spectacularly. Silicon Valley leaders, in particular, seem frequently eager to reach beyond what they know and prove that their unique insights apply more broadly. Like Musk, they’re frequently wrong.
Musk, of course, can be forgiven for dabbling, maybe even more than most tech leaders. He is a legitimate business genius, and personally I believe that his creation of Tesla and SpaceX will have benefits to humanity so big that we won’t fully grasp them for generations. His real, history-making successes help explain why Musk’s particular brand of overreach has so often helped his reputation, as when multiple companies were founded to pursue his dubiously practical Hyperloop concept.
But this time, he may have tried to technologically revolutionize the wrong hornet’s nest. His doge-scaling tweet seems to have been the breaking point for crypto long-timers already exhausted by his confusing, contradictory glibness, and they responded in a fusillade of withering scorn.
4. Bitcoin Suffers Biggest Pullback This Year, Drops to 3.5-Month Low Near $42K
One trading firm says it’s now “very cautious of a gap toward $35K level.”
Bitcoin fell to a three-month low on Monday, confirming the biggest price pullback of the current bull run.
The top cryptocurrency printed a low of $42,212 during the Asian hours, a level not seen since Feb. 8, marking a 35% drop from the record high of $64,880 reached on April 14.
The bitcoin (BTC) price has seen four corrections from new price highs so far this year, out of which the latest 35% retreat is the biggest.
Chart analysts had warned of a pullback to $42,000 before a resumption of the broader bull run.
5. Vitalik Buterin Burns $6B in SHIB Tokens, Says He Doesn’t Want the ‘Power’
The amount destroyed equates to almost half of SHIB’s total circulating supply.
Ethereum co-founder Vitalik Buterin has burned 90% of his Shiba Inu coin (SHIB) holdings, an amount worth $6.7 billion.
The trove of more than 410 trillion tokens was sent to a dead blockchain address late on Sunday, taking them out of circulation.
Buterin had been given half of SHIB’s total supply in recent weeks in what appeared to be a marketing stunt.
“I’ve decided to burn 90% of the remaining shiba tokens in my wallet. The remaining 10% will be sent to a (not yet decided) charity with similar values to cryptorelief (preventing large-scale loss of life) but with a more long-term orientation,” he said in a note attached to another transaction at the same time.
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May 18, 2021