Monday, February 01, 2021
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Your Weekly Update On All Things Crypto |
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Wall Street vs. r/wallstreetbets |
Last week in the stock market was one to remember. In particular for the brick & mortar video game shop, GameStop (GME). The company's stock had been on a steady decline due to the move from physical copies of video games, to online purchases. The stock was heavily shorted by Wall Street as it seemed the company was on the wrong side of technology innovation.
This may have been a good bet, until r/wallstreetbets, a subreddit community known for discussing trading stocks and options, caught wind of the story. Despite the name, this Reddit community felt strongly against the institutional powers of Wall Street and disliked their short squeeze on little old GME. The community, now made up of over 5.3 million users, gathered its troops and hit their Robinhood accounts to buy the stock. GameStop's value exploded, recording a nearly 14x increase in price, bringing its valuation to $20 billion.
Fast forward just one day later and Robinhood woke up to find the trading of GameStop restricted on their accounts. There seemed to be a universal retail trading ban of GME, in addition to multiple other r/wallstreetbets targeted companies such as AMC and Blackberry; both known to be shorted by the Hedge Funds. Investors were furious. One Robinhood user alleged in a class-action lawsuit filed against the trading platform Thursday that the move was made "knowingly to manipulate the market for the benefit of people and financial institutions who were not Robinhood’s customers."
The New York Attorney General is now reviewing Robinhood's conduct in the matter to see if there was any collusion amongst the Wall Street elites. This is resulting in an even stronger urge from the Reddit community to take down Wall Street, and they are now setting their sites on the cryptocurrency market, and more specifically on the biggest "meme coin" of all, Dogecoin.
What does it mean for crypto?
This was most likely the largest coordinated attempt by a decentralized network of people to strike back against the Wolfs of Wall Street. We have always known that communities have immense power if they are able to organize, coordinate and protest for a common goal, but this may have been the largest protest against Wall Street we have ever seen.
The prospect of the "little guy" getting revenge against the corporate powers that be, was something to behold. But it was the news that Robinhood was halting trading of GameStop and other targetted companies that set the whole story on fire. It was a stark reminder of the need for decentralization. Main Street had finally "pulled one over" on Wall Street, and their response was to shut-down the game - no pun intended.
It seems as though the centralized world and the decentralized world are locked in an epic battle Royale for the soul of humanity. The fact that coordinated market-moving efforts like this are even possible, is evidence that we are moving in the direction of decentralization. This type of market manipulation will continue to happen as long as the general population feels the system is rigged against them. The rise of decentralized exchanges will give even more power to the decentralized organization of people like the wallstreetbets community.
While the move to decentralization and censorship resistance was ignited by Bitcoin, it is not relegated to money or stores of value. Decentralization will bleed into every facet of our lives, from social media platforms to voting systems, to corporate governance. We are witnessing the move towards decentralized in front of our eyes, and I personally believe that a decentralized future is one worth looking forward to.
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Worlds Largest Crypto Manager Gears up for DeFi |
Grayscale announced filings for several new trusts in the Delaware corporate registry this past Wednesday. It looks as though the firm is gearing up for a major move into the De-Fi space. Grayscale is the world’s largest holder of Bitcoin and cryptocurrency assets in the world. The cryptocurrency giant has, at times, purchased more than 12,000 Bitcoin in a single day.
The new corporate filings were for a number of coins related to different sectors of the cryptocurrency industry. Aave (AAVE) connected to decentralized lending and borrowing, Polkadot (DOT), Cosmos (ATOM), Cardano (ADA) all protocol level investments, and the privacy coin Monero (XMR). According to the firm, however, this isn’t to be confused with a definitive product launch. “Occasionally, we will make reservation filings, though a filing does not mean we will bring a product to the market” representatives explained to the media."
Whether it’s indicative of a new offering or not, Greyscale is definitely laying the groundwork for future launches into new verticals of the cryptocurrency space. The decision to do so could be based on the performances of the five coins over the past year:
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Polkadot's (DOT) multi-chain protocol has experienced 537% growth since its inception in August 2020 and is currently the 5th largest cryptocurrency by market cap.
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Cardano (ADA), the third-generation blockchain protocol, saw 187% growth since its Shelly mainnet launch in late July 2020. It has cemented its position as a top 10 cryptocurrency and has built deep partnerships around the world in Africa and other emerging markets.
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Aave (AAVE), the open-source, non-custodial liquidity protocol, saw 483% growth in the last quarter of 2020 and securing its place in the top 15th and as one of the leading Defi protocols.
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Cosmos (ATOM) is a decentralized and interoperable blockchain network. Its price soared from $1.50 to $9, recording 489% growth, and is currently 26th by market cap.
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Monero (XMR), is one of the original cryptocurrencies and is considered a privacy coin. It scaled 467% over the past year.
There is no doubt that the alt-coin market is heating-up and growing at an incredible speed. Greyscale, with over $25 billion USD in cryptocurrency assets, can and will attract major institutional money. The team at CryptoWeekly.co is excited to see how this plays out. Allowing a broader population to get exposure to these assets will be a pivotal stepping stone towards the global adoption of decentralization.
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CoinSwitch Kuber Raises $15M in Series A |
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India’s fastest growing cryptocurrency exchange, Coinswitch Kuber, announced that it has closed $15 million in its series A. The round was led by fin-tech global investment firm Ribbit Capital, and San-Fran based crypto-focused, Paradigm.
This funding comes at a pivotal time in the Indian market, which is experiencing unprecedented growth in crypto trading. The global spike in cryptocurrency interest has rubbed off on the Indian investors, leaving them with quite the appetite. According to reports, India’s crypto trading volume has grown 500% since March 2020. They are the second-largest bitcoin nation in Asia, just after China, and sixth in the world, with the USA, Nigeria, China, Canada, and the United Kingdom placing before them.
With the funding, Coinswitch plans to enhance the product, security, compliance, and tech capabilities. In addition, they will seek to be the leading investment platform in India by building a reputable, familiar brand with the public. CEO and Co-founder, Ashish Singhal, said: “We are thrilled to have the world’s most focused fintech and crypto investors join us as partners in our journey to make cryptocurrency investments accessible to retail investors in India.”
This is the first investment into an Indian cryptocurrency platform for Ribbit Capital and the first into any Indian project for Paradigm. Ribbit’s General Partner, Nick Shalek, says that they are “very excited to invest in CoinSwitch, which we believe can become a generational technology brand in India.” Paradigm’s Co-founder, Matt Huang, is “thrilled to partner with Coinswitch in their mission to bring simple crypto investing to India.”
According to Ashish Singhal, Coinswitch aims to “double down” on the Indian market, targeting ten times gorwthin our user base by the end of the year. To do so, Coinswitch will invest in both product and tech in combination with a slew of marketing initiatives to educate investors about the potential of crypto.
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Bitcoin: Bullish News Stiefled By Sell-Side Pressure |
Despite the immense volatility in the Bitcoin price over the past few weeks, we can see that nothing structural about the Bitcoin chart changed last week. Price has been consolidating towards the $29K range since January 8th. Despite the news of Elon Musk changing his Twitter bio to #Bitcoin on Thursday, the rally in price was short-lived. This may signal a bull-trap for Bitcoin as large sell-side pressure forces the price lower. It is important to note, that the only options for Bitcoin are not simply up or down... we could see price push sideways for some time.
This would be a welcome change of pace from the break-neck growth we have all witnessed over the past few months. When Bitcoin pushes sideways, it is an opportunity for alt-coins to flourish, and we should be grateful for that. View the chart here.
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Alt-Coins Set Sights on 40% Market Dominance |
Alt-coins continued their tear last week. Breaking through the ascending line of resistance and both the 100 and 200-day exponential moving averages. It is looking more and more likely that this is the beginning of a new alt-coin cycle. This growth in alt-coin dominance can be mainly attributed to the consolidating price of Bitcoin. When Bitcoin pushes sideways or falls slightly, alt-coins tend to suck up the exiting liquidity and go on runs of their own.
Our next milestone target is getting to 40% dominance. There is heavy resistance at this level as the big even of 40% tends to be a psychologically significant number for investors. If we can break that horizontal line with force, then things will really start to get exciting in the alt-coin space. View the chart here.
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Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. Before Cosmos, blockchains were siloed and unable to communicate with each other. They were hard to build and could only handle a small number of transactions per second. Cosmos solves these problems with a new technology vision. In order to understand this vision, we need to go back to the fundamentals of blockchain technology.
This trade is in response to the Grayscale filing. Of the five new filings proposed by Grayscale, ATOM currently represents the lowest relative value vs. Bitcoin. New investors into these trusts could lead to a major surge in price. View the chart here.
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Ampleforth was the first-ever elastic supply cryptocurrency. AMPL fairly and automatically adjusts its supply in response to demand, without any need for a bank. It was designed to be the simplest direct solution to the supply inelasticity problem.
The currency is used in multiple Defi applications today and serves as a valuable hedge for Defi protocols. Ampleforth has not been as prominent of a mover in the last few weeks, which makes us believe it is just coiling up for a big move upwards. Judging by the chart, we may be witnessing Ampleforth's meteoric rise repeating itself.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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