1. Market Wrap: The ‘lon Effect’ Blasts Bitcoin to $47K While Ether Moons
Bitcoin’s price is getting closer to Mars thanks to Elon Musk while ether moons to a new record. Investors are pulling BTC out of DeFi, likely to diversify their profits.
Bitcoin (BTC) trading around $44,023 as of 21:00 UTC (4 p.m. ET). Climbing 14.5% over the previous 24 hours.
Bitcoin’s 24-hour range: $38,051-$47,098
BTC well above the 10-hour and the 50-hour moving average on the hourly chart, a bullish signal for market technicians.
2. Bitcoin Tops $47K After Tearing Through $45K, $46K in Tesla-Fueled Rise
In a run reminiscent of bitcoin’s stunning ascent in early January, the price of leading cryptocurrency blew past $45,000, $46,000 and $47,000 in less than an hour on Monday evening, driven by Tesla’s announcement that it had bought $1.5 billion of bitcoin.
Bitcoin hit $47,513.57, a new all-time high, before settling back to $47,053.09, up 20.6% in the last 24 hours.
$45,000 was supposed to have been a milestone of sorts but the cryptocurrency’s race upwards turned it into an afterthought. The cryptocurrency has risen about 67% year-to-date.
A combination of traders in Asia just waking up to the Tesla news combined with a lack of resistance levels above $45,000 were possible causes for the sudden gap upwards.
While those might be the immediate catalysts for the sudden surge in the cryptocurrency, they’re not the only reasons for bitcoin’s stunning rise.
A growing number of big institutional investors including Paul Tudor Jones II and Bill Miller have pushed into bitcoin as a potential hedge against inflation, as the Federal Reserve and central banks around the world pump trillions of dollars of freshly created money into financial markets to stimulate their coronavirus-racked economies.
Tesla joins publicly traded companies including Michael Saylor’s MicroStrategy that have steered corporate money into bitcoin (BTC, +21.35%). And from the price of bitcoin today, it’s clear some investors think it’s just getting started.
“We think this is just the start to a much wider adoption from household institutional names, finally ready to make the crossover into the crypto space,” Joel Kruger, strategist at the cryptocurrency exchange LMAX Digital, said in an email.
As more institutional investors like Tesla are buying bitcoin and “hodl” it for the long term, bitcoin’s liquid supply is continuing to decline, according to blockchain analytics firm Glassnode’s newsletter on Monday.
“Currently, around 78% of issued bitcoin are either lost or being hodled,” the newsletter said. “This leaves less than 4 million bitcoin to be shared amongst future market entrants — including large institutional investors such as PayPal, Square,
Bitcoin’s latest rally also pushed prices for other major cryptocurrencies including ether (ETH, +9.84%), algorand (ALGO, +17.97%), and litecoin (LTC, +11.34%).“Mainstream adoption [for crypto] is happening right before our eyes, and it is taking place before the entire world,” Mati Greenspan, founder and CEO of Quantum Economics, wrote in his newsletter on Monday.
With this latest surge, the market value of bitcoin ($860.4 billion) has once again passed that of Tesla ($818.4 billion) after topping it for the first time ever earlier Monday.
3. Tesla Invests $1.5B in Bitcoin, Plans to Accept Crypto Payments
The announcement that much of the crypto world has been hoping for is here: Tesla has invested in bitcoin.
The electric vehicle maker said Monday in an annual report filed with the U.S. Securities and Exchange Commission that it has put an aggregate $1.5 billion into bitcoin under a new investment policy and that the company may “acquire and hold digital assets from time to time or long term.”
The announcement caps a history going back to at least 2018 of Tesla founder and CEO Elon Musk tweeting and commenting on bitcoin and other cryptocurrencies including dogecoin.
4. Wall Street Shifts Focus From Blockchain Infrastructure to Crypto Assets
News that Goldman Sachs, JPMorgan and Citi are considering entering the crypto custody market likely surprised many who haven’t followed the blockchain tech or digital asset moves of major U.S. financial institutions over the last half-decade. However, analysis based on publicly available blockchain initiatives data clearly shows that many institutions — some more than others — are slowly de-prioritizing blockchain tech and shifting their focus to native crypto assets.
To assess how institutions are adapting to blockchain technology, we surveyed their initiative announcements. We looked at credible media, such as CoinDesk and the Financial Times, and defined an initiative as a reported “investment, internal or external-facing company project, or consortium participation event primarily involving the company.”
We can see a clear shift. In 2015 and 2016, financial institutions tended to have a technology-first focused strategy. They were founding members of consortia like R3 and the development of the Corda protocol. More recently, as you can see in our matrix, leaders in the space have shifted away from this earlier positioning to focus their efforts more towards digital assets (at least in terms of the number of total initiatives).
5. Cardano, Polkadot Market Caps Surpass XRP as Some Bet on Alternatives to Ethereum
Cardano (ADA) and polkadot (DOT) are now fourth- and fifth-most valued crypto assets, respectively, after they both surpassed XRP in market capitalization earlier Monday. That’s due to the recent rally in decentralized finance (DeFi) and the increased cost of using the Ethereum blockchain.
According to data from analytics site Messari, cardano’s market cap stands at approximately $21.82 billion while and polkadot’s is at roughly $19.83 billion. For XRP, that figure is about $16.36 billion.
The latest rally of the two cryptocurrencies of these public blockchains is not “idiosyncratic pumps,” according to investors and analysts who spoke to CoinDesk, but is a bet on these public blockchains’ “Ethereum-killer” narrative. Investors and traders are increasingly viewing Ethereum’s blockchain as too expensive and difficult to use while decentralized finance (DeFi), usually built on Ethereum, continues to boom.
Data from blockchain analytics firm Glassnode shows when ether’s price jumped after the CME launched its ether futures contract on Sunday, the Ethereum blockchain’s transaction fees started climbing again. On a 24-hour moving average, the network’s total transaction fees, as of 14:00 UTC (9 a.m. ET) Monday, Feb. 8, was at $1,003,727.15.
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February 09, 2021
