Is the bull run over? BTC loses $50,000 as transaction fees surge: Hodler’s Digest, April 18–24
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
Things were looking markedly bearish for Bitcoin following last weekend’s swift and sudden correction, which caused Bitcoin to crash by 20% in a single hour.
Within minutes last Sunday, $60,000 became a distant memory… with bulls forced to defend $55,000 instead. BTC’s prized $1-trillion market cap was also lost, and at one point, dominance sunk below 50% — a milestone that hasn’t been seen since 2018.
But by the early hours of Friday, as selling pressure heightened, the world’s biggest cryptocurrency succumbed, dipping below $50,000 for the first time since March.
Ether, which had managed to hit a new all-time high of $2,641.09 in the hours before the crash, also wasn’t immune from the sell-offs.
Mass liquidations, an overheated futures market, the decline of the Kimchi premium, whales selling and concerns over President Joe Biden’s tax plans may all have been factors in the major correction.
There’s been no shortage of reaction to Bitcoin’s loss of momentum, with PlanB, the analyst behind the stock-to-flow forecast, insisting that the fall below $50,000 doesn’t mean that the current bull run is over.
Pointing out that nothing goes up in a straight line, he tweeted: “#Bitcoin has gone up 6 months in a row, until this month. This looks like the mid-way dip that we also saw in 2013 and 2017.”
ExoAlpha’s Élie Le Rest also believes that there are reasons to be optimistic, saying: “This kind of market pullback is very healthy as it contributes to deleveraging market participants and builds ground for a more stable growth.”
The next major move in Bitcoin’s price will prove decisive, helping us to determine if this is merely an overdue correction or the opening salvo of the next bear market cycle.
Veteran trader and chart guru Peter Brandt wasted little time in making a cheeky observation, writing: “The chances of a correction in cryptos is directly related to the prevalence of laser eyes on Twitter. Want the correction to end? Get rid of your laser eyes.”
In other signs that history is repeating itself, Bitcoin transaction fees measured in U.S. dollars neared all-time highs recorded in 2017.
Data from Blockchair shows the average cost of a BTC transaction hit $58 on Tuesday — approaching the record of $62 set in December 2017.
The latest spike in BTC transaction fees comes amid a major decline in the Bitcoin network hash rate, which may have been exacerbated by massive power outages in the Chinese mining hub of Xinjiang.
And the spike has also prompted some crypto exchanges to introduce less expensive ways of moving Bitcoin around as a matter of urgency, too.
OKEx has now integrated the Lightning Network, while Square’s Cash App has quietly raised the minimum Bitcoin withdrawal to 0.001 BTC — 100,000 satoshis — markedly higher than the 0.0001 BTC that was in force previously.
As crypto traders with furrowed brows were confronted by a sea of red, industry heavyweights were focusing their attention on how to go green.
Earth Day 2021 happened this week, and with Bitcoin regularly castigated for the high levels of energy that it takes to keep the network secure, some of the cryptocurrency’s most vocal backers made the case for BTC’s environmental efficiency.
A new report authored by The Bitcoin Clean Energy Initiative argues that Bitcoin mining incentivizes the generation of electricity “from renewable carbon-free sources.”
The paper has received support from top crypto luminaries including Square’s Jack Dorsey, Tesla’s Elon Musk, and Ark Invest’s Cathie Wood.
Coinbase Pro has announced that it is listing Tether on its platform, paving the way for trading pairs linking the ERC-20 version of USDT with BTC, ETH, USDC, the euro, the British pound and the U.S. dollar.
This is a rather big deal, and it signifies that the exchange is not concerned about the stablecoin’s previous regulatory issues or the long-running controversy over the validity of Tether’s backing.
Bitfinex chief technology officer Paolo Ardoino told Cointelegraph: “We are gratified by Coinbase’s decision to add Tether tokens on ERC-20 to its Coinbase Pro platform. This is happening as we near a market capitalization of $50 billion and represents another step forward as we broaden our community.”
Winners and Losers
At the end of the week, Bitcoin is at $49,237.93, Ether at $2,203.74 and XRP at $1.06. The total market cap is at $1,813,860,544,571.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Solana, Celo and PancakeSwap. The top three altcoin losers of the week are Bitcoin SV, NEM and Ontology.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“Contrary to what you may have been told or wish, #crypto is not a get rich quick scheme.”
Changpeng Zhao, Binance CEO
“Bitcoin is up 600% in last year. Gold is up 3% in last year. No more tweeting until gold can beat inflation, Peter!”
Anthony Pompliano, Bitcoin proponent
“Without any strong catalyst, breaking above $60k looks difficult at this time, and a break below $50k may drive Bitcoin down to $30k. Traditional markets showing signs of exhaustion may also put a dent on the crypto markets recovery.”
David Lifchitz, ExoAlpha chief investment officer
“ETH is rapidly becoming the currency of the digital world and BTC is the pristine collateral and base layer.”
Raoul Pal, Real Vision CEO
“I think the crypto space is amazing right now. It’s the best-kept secret in the world and maybe the history of the financial markets.”
Thomas Farley, New York Stock Exchange president
“DOGE is relatively well suited for payments. It’s extremely fast and efficient — transactions cost less than a cent.”
Jason Lau, OKCoin chief operating officer
Luke Martin, blockchain developer
“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”
Morten Friis, NatWest head of risk committee
“I would argue that such a change is critically important for Bitcoin to remain the world’s dominant cryptocurrency. PoW’s current energy demands and carbon footprint are already unsustainably high.”
Chris Larsen, Ripple co-founder
“The chances of a correction in cryptos is directly related to the prevalence of laser eyes on Twitter. Want the correction to end? Get rid of your laser eyes.”
Peter Brandt, veteran trader
“70% of our time should be focused on core work, 20% on strategic bets, and 10% on innovative experimentation.”
“I think we could pull back to $20,000 to $30,000 on Bitcoin, which would be a 50% decline, but the interesting thing about Bitcoin is we’ve seen these kinds of declines before.”
Scott Minerd, Guggenheim chief investment officer
“Could Bitcoin really be stopped by government? I actually think maybe it could be.”
Curtis Spencer, Electric Capital co-founder
Prediction of the Week
The chief investment officer of Guggenheim has repeated his warning that Bitcoin will crash to $20,000.
Speaking to CNBC, Scott Minerd said: “Given the massive move we’ve had in Bitcoin over the short run, things are very frothy, and I think we’re going to have to have a major correction in Bitcoin.”
It is worth noting that Minerd is adamant that Bitcoin could hit $400,000 in the long run. He said: “I think we could pull back to $20,000 to $30,000 on Bitcoin, which would be a 50% decline, but the interesting thing about Bitcoin is we’ve seen these kinds of declines before.”
Many Bitcoin proponents have dismissed suggestions that deeper losses were inevitable, referencing a combination of factors including strong on-chain indicators. Minerd has also been wrong before. Back in January, he said Bitcoin had put in a price top for 2021… and since then, it has more than doubled.
FUD of the Week
A token on the Binance Smart Chain has been receiving a lot of attention from crypto enthusiasts on TikTok, but there are warnings that its recent rally is unsustainable.
SafeMoon’s price rose from $0.00000029 to $0.0000074 in merely three weeks — gains of 2,200%. The altcoin then dramatically dropped by 50% in two days.
Luke Martin, a well-known cryptocurrency trader, described the price trend of SafeMoon as “unSAFEMOON” after it had dropped 65% in a short period on April 22.
The British bank NatWest has said that it will refuse to serve business customers that accept cryptocurrency payments.
A report in The Guardian quoted the head of the bank’s risk committee, Morten Friis, as saying: “We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”
Friis’ comments echo similar sentiments recently attributed to HSBC, another U.K. bank, that used identical statements in announcing its decision to bar customers from buying MicroStrategy stock. HSBC’s anti-crypto stance also saw the bank refuse to allow account holders to deposit profits from cryptocurrency exchanges earlier in the year.
Electric Capital co-founder and partner Curtis Spencer has implied that the Bitcoin network may owe its continued existence to the grace of world governments.
In a panel at the Collision Conference web summit on Tuesday, Spencer said lawmakers are the ones giving Bitcoin a chance to grow by not imposing harsher restrictions on mining operations in their respective countries.
He argued: “Could Bitcoin really be stopped by government? I actually think maybe it could be. If you think about the cost of attacking the network, it’s not something that nation-states couldn’t do.”
Spencer then pointed to what happened in Xinjiang, where a power outage dramatically affected Bitcoin’s hash rate.
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