While tumbling in price, Bitcoin (BTC) has taken the vast majority of cryptocurrencies with it. Outside of Solana, AAVE and a few others weathering the storm, everything looks in the red.
The chart may be looking quite grim now – after a rough week that sent the price of 1 BTC plummeting from $59,434 USD to $43,974 USD (at the time of writing). Although Bitcoin price fall doesn’t seem to have come to a halt yet, this is not the first time it happens to BTC and in the past it has always recovered, eventually.
Routine Blow-Offs Of Around 30%
Below is a table showing that drastic drops in value are recurrent events.
Date
BTC price % drop
January 2017
35%
March 2017
33%
May 2017
32%
July 2017
40%
September 2017
41%
November 2017
30%
December 2017
21%
December 2017
23%
December 2018
84%
January 2021
31%
February 2021
26%
May 2021
32%
A drop in value almost as big as the current one took place as recently as January – and the market promptly pushed the price to a new all-time high not long after.
Of course, cryptocurrency trading remains high-risk, high-reward – and panic selling may not be the best move, as we see big corporations continue buying the dip.
In the past week Bitcoin (BTC) has gone through a few price dips – the kind of situation that could scare new investors causing them to sell-off their assets in fear of losing everyting.
Has anything actually changed though? Has something triggered the drop in price? Is there a reason to panic?
The market has shown various times that when public sentiment about cryptocurrency lowers due to some public figure or negative news there are people who sell their assets. This looks like an emotional reaction with little regard for fundamentals.
In a post by Glassnode they state that there are “strong signals that short-term holders are leading with panic selling”. Bitcoin which is down to $44,757 USD at the time of writing from $55,000 USD one week ago is seemingly being driven by weak hands.
[…] weak hands traders have predictable buying and selling behaviors as they are driven by fear, uncertainty, and doubt (FUD).
While the long-term price action seems to be driven by the monetary preferences of the world changing from fiat money to crypto, short-term price action is driven by leverage and derivatives markets.
As the price of Bitcoin has dropped to around $44,000 USD, it looks like institutions are buying the dip. The recent three-month consolidation can be thought of as bitcoin simply moving from weak hands to strong ones.
Bitcoin: Number of Accumulation Addresses [Glassnode]
There is also an increase in accumulation addresses, which are thosethat have at least two incoming transactions but have never spent any coins. This suggests that long term investors are buying this dip too.
The Importance of Research
An important phrase in the crypto world is “Do Your Own Research” (DYOR), meant to encourage people to understand what they are buying so that they get to know the project or technology they are investing in. By not just following sentiment, investors can feel more secure about their decisions.
DYOR seems to be applicable beyond the crypto world – due to the amount of misinformation floating around, one needs to keep a keen eye on the sources, or get professional advice.
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Operation “Hidden Treasure” was initiated by the Internal Revenue Service (IRS) and Department of Justice (DOJ) on Thursday in an effort to uncover the unreported crypto income of U.S. citizens and other illegal activities taking place on the platforms.
The IRS has recently started investigating various crypto platforms to try to discover illicit activities, ramping up its crypto-related auditing and guidance for individuals that own and trade cryptocurrency.
We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion. (1/3) https://t.co/68UB1InOBK
Chainalysis, a blockchain forensics firm whose clients include U.S. federal agencies, concluded last year that among transactions that it examined, more funds tied to criminal activity flowed through Binance than any other crypto exchange. The firm tracked Bitcoin worth $2.8 billion USD that moved on to trading platforms in 2019. Chainalysis determined that roughly 27%, or $756 million, has been hidden on Binance. The exchange has assured regulators that they have done as much as possible to stay within the current regulatory framework.
We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity. (2/3)
As recently reported by Bloomberg, the Commodity Futures Trading Commission (CFTC) is also probing Binance (not registered with CTFC) to find out if it allowed U.S. residents to trade derivatives. The CFTC previously filed a civil lawsuit to halt the U.S. commodity derivatives business of BitMEX, which is one of the world’s largest cryptocurrency derivatives exchanges. Exchanges are now, more than ever, under regulatory scrutiny.
The repercussion on Bitcoin price
Bitcoin (BTC) losses accelerated Thursday after Bloomberg reported the Binance investigation.
The "news" title is bad. Article itself isn't so bad actually (but who reads). It described how @binance collaborated with law enforcement agencies to fight bad players, but somehow made it look like a bad thing… 🤔 Anyways. Back to work.
Many of the top cryptocurrencies dropped in price, down double digits. Bitcoin fell 10% after the news, continuing the negative run it experienced after Tesla announced it would stop accepting Bitcoin as payment for their vehicles.
Following Tesla’s suspension of Bitcoin payments due to energy implications, there have been many responses from the industry showing that the network can be operated in a more sustainable way.
After pinning the suspension of Bitcoin payments to its excessive power consumption in a tweet, the announcement sparked a Bitcoin (BTC) sell-off that dropped close to 13% of its value in 24 hours.
This could raise questions affecting the image of cryptos in the public eye, so various players in the industry have come forward to show that Bitcoin and cryptocurrencies can be more environmentally friendly. For starters, the energy required to mine does not necessarily come from non-renewable sources. There are also other cryptocurrencies that use less electricity than Bitcoin (even at scale), thanks to Proof-of-Stake (PoS) or other consensus algorithms needing less computational power to function.
Green Changes Submitted To Enhance Bitcoin’s Proof-of-Work Algorithm
Michael Dubrovsky, co-founder of Siphox and Powx, revealed that the nonprofit Powx has drafted a Bitcoin Improvement Proposal (BIP) that aims to produce a “durable, low energy” Bitcoin Proof-of-Work (PoW) system.
We (at https://t.co/lpduPaC5FI) have had a draft of a Bitcoin Improvement Proposal—Durable, Low Energy Bitcoin PoW—for a while now. Looks like the energy issue is finally getting some attention. Bitcoin can be made compatible w low-energy optical compute https://t.co/1p4afK4eMYpic.twitter.com/f8SUM5aJip
The paper details how the algorithm, dubbed “Optical Proof-of-Work (OPOW)”, could greatly reduce energy dependency by leveraging photonics.
Accelerating development of low-energy computing can be hardly called a waste. This technology has potential to drastically reduce data centers energy use in the future.
There are changes that can be implemented to the Bitcoin protocol to make it less energy-hungry however, due to its decentralised nature, upgrading it can be a lengthy process.
Bitcoin Mine in New York Going Carbon Neutral
Greenidge Generation, a New York-based bitcoin mining operation, has announced that they will be carbon neutral by the start of June following the media storm that concerned many people about the environmental impact of cryptocurrency mining.
— Greenidge Generation (@GreenidgeLLC) May 14, 2021
Greenidge’s real estate is 150 acres in size and has an on-site and a power plant capable of generating over 100MW of clean energy an hour. The plant uses natural gas to generate electricity running at high levels of thermodynamic efficiency, thus lowering the cost of producing power.
The Greenridge Natural Gas Power Station [Twitter]
We are demonstrating we can provide the same critical transaction verification and processing services to secure the bitcoin network while maintaining a fully carbon neutral footprint. We call on others to join us in significantly reducing greenhouse gas emissions now.
Jeffrey Kirt, CEO of Greenidge Generation Holdings [source]
Craig Wright is in the news again, this time with his ongoing court case to get access to 111,000 Bitcoin (over $7 Billion AUD) held in two digital addresses – he claims the private keys were “stolen” earlier this year.
The Australian computer scientist who now lives in the UK, claims he is Satoshi Nakamoto who created Bitcoin, and has launched a London high court lawsuit against 16 Bitcoin Core software developers in an effort to secure his “lost” Bitcoins.
“Our client has always maintained that he created Bitcoin to operate within existing laws and that in the event of loss or theft, where legitimate ownership can be proven, the developers have a duty to ensure recovery,”
Paul Ferguson, lawyer representing Wright
The case is largely centred on who wrote Bitcoin’s whitepaper, which first outlined the vision of Bitcoin and was published under the pseudonym Satoshi Nakamoto in 2008.
It does seems odd, that a person so deliberately private and anonymous would suddenly feel the need to burst into the spotlight and claim the title as the great Creator of Bitcoin.
Reached by email, Cobra from Bitcoin.org said:
“We’ve been threatened to take down the Bitcoin whitepaper by someone who obviously isn’t the inventor of Bitcoin (if he was, that would make him the 25th richest person in the world, which he obviously isn’t).
Cobra
It remains to be seen if the courts will decide in favour of these seemingly absurd and highly controversial claims. It smells a bit like the old classic, “the dog ate my homework”. If you can’t prove it, then you don’t own it. The true power of the blockchain is that it is so beautifully open and transparent.
If Craig Wright really is Satoshi Nakamoto, could he retrace the breadcrumbs and provide real evidence to back up his claims?
It looks like MicroStrategy just bought the Bitcoin dip after Tesla announced it would stop accepting it as payment, citing “environmental concerns”.
Michael Saylor, CEO, confirmed the US$ 15 million purchase via Twitter. MicroStrategy now owns a total of 91,850 Bitcoins for roughly 2.241 billion at an average price of US$ 24,403 per Bitcoin.
MicroStrategy has purchased an additional 271 bitcoins for $15.0 million in cash at an average price of ~$55,387 per #bitcoin. As of 5/13/2021, we #hodl ~91,850 bitcoins acquired for ~$2.241 billion at an average price of ~24,403 per bitcoin. $MSTRhttps://t.co/EwZnRkAt6k
Tesla took a toll on Bitcoin after it announced the company wouldn’t accept Bitcoin payments due to environmental problems, and it was looking into more “environmental friendly” cryptocurrencies, like Dogecoin.
It appears the announcement sparked a heated debate where not only Saylor but influencers like Anthony Pompliano discussed Bitcoin’s energy consumption.
Ironic because no incremental energy is used in a #bitcoin transaction. The energy is used to secure the crypto-asset network, and the net impact on fossil fuel consumption over time will be negative, all things considered.
Not only BTC plunged after the announcement, but the entire crypto market shed billions. The whole crypto market dipped below US$ 2 trillion, and most currencies saw price drops between 5-30%. However, Most proof-of-stake (PoS) cryptocurrencies saw a surge in price after Tesla backtracked on Bitcoin.
Coinbase, one of the leading cryptocurrency exchanges in the United States, has finally announced its intention to list the famous dog-themed cryptocurrency Dogecoin (DOGE) in the coming weeks.
This is a much anticipated and important announcement for many Dogecoin holders as they are hoping the coin can reach the $1 USD price. This does seem crazy as the coin was only $0.000233 USD back in 2016.
DOGE is Coming to Coinbase
During the exchange’s earnings call on Thursday, the Chief Executive Officer, Brian Armstrong, revealed that they are planning to add Dogecoin in the “next six to eight weeks” for trading. Bloomberg cited the CEO’s comment, which reads that “the proliferation of alternative coins, including Dogecoin and Binance Coin, is a challenge because competitors support them and Coinbase doesn’t.”
Coinbase supports a number of cryptocurrencies for trading, including Mirror Protocol (MIR), Internet Computer (ICP), Tether (USDT), etc. However, it’s yet to add Dogecoin on its platform, despite the fact that the meme cryptocurrency has made headlines across several crypto media amid its massive increase in value. The exchange seems to support coins only when they’ve reached scale.
However, Armstrong noted the exchange would lower the barrier and accelerate the time it takes to list new coins.
DOGE is up Over 5,500% YTD
Interest in Dogecoin rose significantly over the recent months amid the massive growth. The price of DOGE has increased by over 5,500 percent since the beginning of 2021.
Dogecoin price chart. Source: CoinMarketCap
This is quite surprising given that the cryptocurrency was only considered a joke during its early years. In fact, Dogecoin was even abandoned by its creator, Billy Markus, back in 2015. Doge’s Little Brother Shiba Ino (SHIB) Meme Coin Surges 700%.
DOGE was trading at $0.5641 USD on CoinMarketCap, during the time of writing. It’s rated the fourth-largest digital currency, with a market capitalization of $73.5 billion USD.
Just because a coin is cheap to purchase, does not mean that it is a good investment. Let’s take CSHIBA for example. This cute new experiential meme token has a Total Supply of 100,000,000,000,000,000 but a market cap of only $776,257. The price of the 1 CSHIBA coin is only $0.0000000000182261. So you could say “this coin is cheap”? Well, let’s take a closer look.
The price when the coin was launched was around $0.00000000024415. Then the price quickly rose in a matter of hours 200$ to $0.00000000074257. The token’s value then dropped down to under $0.00000000001626. This shows the volatility of these new coins, especially those with a very large total supply.
Market Cap = Current Price x Circulating Supply.
Coin Market Cap is probably the most misunderstood and overlooked factor by noobs when jumping in to buy a cryptocurrency. Luckily it is relatively easy to learn about, thanks to the the priceless educational documentation on the Binance Academy website.
“Within the blockchain industry, the term market capitalization (or market cap) refers to a metric that measures the relative size of a cryptocurrency. It is calculated by multiplying the current market price of a particular coin or token with the total number of coins in circulation.“
academy.binance.com
Two important things to understand: 1. A high-volume and liquid market is harder for whales to manipulate, making the asset less volatile as it would take a large amount of orders to affect the price. 2. A low-volume market could be easily affected with only a relatively small amount of money, causing a significant impact on both the price and market cap.
What is circulating supply?
The term circulating supply refers to the number of cryptocurrency coins or tokens that are publicly available and circulating in the market. Circulating supply of a cryptocurrency can increase or decrease over time, as tokens are mined or burned.
The circulating supply of a cryptocurrency can be used for calculating its market capitalization, which is generated by multiplying the current market price with the number of coins in circulation. So if a certain cryptocurrency has a circulating supply of 100,000,000 coins, which are being traded at $5.00 each, the market cap would be equal to $5,000,000,000.
Bitcoin is the top large-cap coin with a market cap of over $940 trillion and a 24hr trading volume of over $90 trillion. Generally mid-cap cryptocurrencies have marketcaps between $1 billion and $10 billion. Any cryptocurrency with a market cap under $1 billion is considered low-cap. Generally these smaller coins are considered to have more untapped potential upside but also are much higher risk. Small-cap cryptocurrencies have a market cap of less than $1 billion and are most susceptible to dramatic swings based on market sentiment.
On the first day of its futures markets, launched on 11 May, traders lost over 1.34 trillion Shiba Inu (SHIB) in just 24 hours.
Crypto exchange OKEx, which listed SHIB futures, oversaw nearly $40 million worth of liquidations. Also at the time of writing Bybt Liquidation Data shows that in the last 24 hours $82.36 million USD worth of SHIB has been liquidated.
Sib Price Chart by TradingView
Shiba Inu (SHIB) was launched as a Dogecoin competitor on the Ethereum blockchain last year. Early SHIB investors saw massive gains from the crypto as the price soared, as Crypto News predicted on 27th April in our coins to watch.
The coin has grown rapidly during its journey, hitting 10306.7% in the last 30 days and 989.5% in the last 7 days according to data on CoinGecko. Recently the coin has faced various problems brought on by mass liquidations from various parties.
Vitalik Donates SHIB To India’s COVID-19 Crypto Relief Fund
Ethereum co-founder Vitalik Buterin was given half the supply of SHIB after launch, but has removed 95 percent of liquidity from a SHIB Uniswap pool. Vitalik donated 500 ETH and about 50 trillion SHIB, worth around $1.14 billion USD at the time of transaction to the India COVID-Crypto Relief Fund.
We locked the 50% of the total supply to Uniswap and threw away the keys! The remaining 50% was burned to Vitalik Buterin.
shibatoken.com
Shiba Inu’s white paper — which was released on May 1 — cited the project’s co-founder who stated that Vitalik’s holdings as a “vulnerable point”. This was, in the view of the developers, another way to burn it. Anticipating that the Vitalik would not spend the tokens, by sending these tokens to him, they effectively removed them from circulation. But seeing as that isn’t the case, the crypto relief fund might sell the coins back to the market for USD, putting them back in circulation.
