The Truth about Musk, Dogecoin and Alt Season #56
Market Meditations | December 21, 2020
Michael Saylor’s proposal to help Musk buy bitcoin and whether Dogecoin pumping might be an early sign of altcoin starting a new cycle.
Delighted to be writing to you as we approach the holidays. It has certainly been an action packed start to the week… Bitcoin price movements, Elon Musk on Dogecoin and the Ledger data breach have all certainly kept us busy.
Delighted to say this free edition is brought to you by Phemex, you can use my link to get free Bitcoin and a discount on fees. This is where I trade crypto with leverage, here’s a tutorial to help you get started.
Database Containing Personal Information of Over 270,000 Ledger Customers Released on Raidforums. In July, Ledger announced it had suffered a data breach in June that compromised personal data from ~9500 customers. Yesterday, a database containing the personal information was published on RaidForums, a marketplace for buying & selling hacked information, and it turned out that the leak was much bigger than previously thought. Personal information of over 270,000 has been leaked, including emails, physical addresses, and phone numbers of Ledger hardware wallet buyers. The database also contains emails of over 1 million Ledger customers. Read more. PS: In case you forgot, I made a free easy to follow 9 step security guide last month.
Bitcoin Shortage as Wall Street FOMO Turns BTC Whales into ‘Plankton’. With BTC/USD continuing to explore new highs, the ‘original’ whales are beginning to look like plankton as we continue to see institutional investors line up (One River Asset management confirmed on Wednesday that it planned to bring its Bitcoin and Ether holdings to more than $1 billion by 2021). According to the CryptoQuant data covering exchanges, outflows hit yearly highs in the hours before $20,000 broke for the first time in history. The combined shortage of BTC on exchanges and institutional buying in OTC venues lays the fight for a fight over the remaining supply ‘and price rises are the only logical solution’. Read more.
U.S. Lawmakers Reach Agreement on Stimulus Bill, Vote Could Come Tonight, Mcconnell Says: CNBC. On Sunday, U.S. Congress reached agreement on a $900 billion pandemic relief package according to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer. The text of the bill isn’t released yet, but is expected to provide $300 a week in enhanced federal unemployment benefits, a $600 check to many Americans, plus help for schools, vaccine distribution and small businesses according to The Wall Street Journal. The stimulus package gave a boost to the stock markets earlier this year and this risk-on sentiment could further drive up demand for the cryptocurrency market. Read more.
Open Interest in CME Bitcoin Futures Skyrockets 42% in a Week, Records a New High of $1.47 Billion. CME group’s bitcoin futures hit a new record high of $1.47 billion in open interest, up from $1.03 billion just last week. This huge increase is yet another sign that institutions are eager to gain exposure to this year’s hottest industry. The Block writes that ‘the spike in the open interest, or the value of outstanding derivative contracts that are yet to be settled, suggests that more money is flowing in the market, and traders expect a near-term rise in bitcoin’s volatility.’ Open interest on CME crypto futures are interesting to follow as it is currently the only regulated exchange to offer cash-settled bitcoin futures and thus the most accurate indicator for institutional interest in the U.S. Read more.
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The Truth about Musk, Dogecoin and Alt Season
Bitcoin might go to the moon but Dogecoin seems destined to go to Mars. The meme-based cryptocurrency surged this weekend after Tesla CEO Elon Musk tweeted about it. With a bio reading ‘Former CEO of Dogecoin’, Musk was single handedly responsible for sending the coin +25% higher and providing the market with some action this weekend. Are these early signs that new retail investors are entering the market ready to buy new altcoin bags?
In this article, we briefly take a look at Dogecoin’s price action and how Elon’s tweet impacted the market. After that, we take a look at Michael Saylor’s proposal to help Musk buy bitcoin and whether Dogecoin pumping might be an early sign of altcoin starting a new cycle.
The Musk Effect
DOGE/USDT broke out of its downtrend in mid-December and was consolidating after a first impulse move upwards. Yesterday, Musk decided to amuse himself on Twitter with tweets about bitcoin impacting his productivity. After that, he cryptically tweeted about the $500 million market cap project DOGE.
It’s not the first time Musk has tweeted about this meme-based project and given the price surge last time, users were on alert watching Elon’s tweets on crypto. With over 40 million followers, Musk’s tweet not surprisingly made an impact on the market with users blindly buying anything Musk talks about in public hoping to be the first one in line.
DOGE managed to hold its gains on Sunday and went even higher slightly after, touching $0.0054 for the first time since July. Altcoins saw a decent correction today after bitcoin briefly touched $22,400, but DOGE still trades 25% higher since Elon publicly ‘shilled’ what seems to be his favorite altcoin to date.
DOGE Pump = Alt Season?
In the category of ‘altcoin season indicators’, DOGE/BTC reversals are another community favorite besides the ETH/BTC chart. Doge has been very cyclical in nature and has quite reliably preceded periods of strong altcoin performance in the past. Will this time be any different?
DOGE pumps are considered a good indication of retail presence in this market, which is a necessary requirement for alts to do well across the board. It mirrors retail FOMO as a community project based on a meme, with fundamentals behind the coin basically non-existent. It’s too early to tell whether altcoins will outperform bitcoin from here on out, but signals are starting to accumulate.
Follow My Playbook
We’ve come so far if you think about it. Billionaires are now publicly hitting up other billionaires to buy Bitcoin, almost like we’re participating in the world’s most elaborate ponzi scheme. Although Musk is known to not take Twitter too seriously and would probably not discuss this publicly if he had any intention of buying short-term, the brief dialogue between Michael Saylor and Musk caught the industry’s attention. As The Crypto Dog tweeted out shortly after: ‘Even if Elon doesn’t do it, many others are listening now.”
Of course not everything is done altruistically, especially in an industry as competitive as Wall Street. CEO’s on Twitter were very kind to Musk yesterday as they very well realise that such a known public figure being publicly bullish on bitcoin would further strengthen their already locked-in position. Don’t pay attention to what everyone says, pay attention to what they do.
Musk’s recent Dogecoin optimism has sent the coin soaring. Altcoins saw a decent correction today after bitcoin briefly touched $22,400, but DOGE still trades 25% higher since Elon publicly ‘shilled’ what seems to be his favorite altcoin to date. In the category of ‘altcoin season indicators’, DOGE/BTC reversals are another community favorite besides the ETH/BTC chart. DOGE pumps are considered a good indication of retail presence in this market, which is a necessary requirement for alts to do well across the board. It’s too early to tell whether altcoins will outperform bitcoin from here on out, but signals are starting to accumulate.
Monday, 21st December
Vaccine Campaign Widens:
More than 3,700 sites around the U.S. are due to start administering Moderna’s COVID-19 vaccine as soon as Monday, vastly widening the rollout started last week with the Pfizer (NYSE:PFE) vaccine.
Wednesday, 23rd December
ONX Airdrop to ANKR Holders:
‘We are incentivizing all ANKR holders with a complimentary ONX token airdrop to celebrate the launch of the OnX Decentralized Platform.’ Users must hold at least 100 ANKR on a participating exchange by December 23rd, 2020.
Friday, 25th December
NYSE and NASDAQ will close at 1pm on Christmas Eve and all day Christmas Day.
Saturday, 26th December
Release Mainnet Binaries of Loki Network (LOKI):
“The start of the 2 week mandatory upgrade period before Loki’s hardfork. This will include the rollout of the Loki launcher and Loki Deb updates, which will allow users to easily setup Lokinet and upgrade lokid on their Service Nodes.”
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