{"id":6793,"date":"2021-02-27T16:09:34","date_gmt":"2021-02-27T21:09:34","guid":{"rendered":"https:\/\/cointelegraph.com\/magazine\/?p=6793"},"modified":"2021-02-27T16:09:51","modified_gmt":"2021-02-27T21:09:51","slug":"bitcoin-plunge-ethereum-suffer-musk-billions-022127","status":"publish","type":"post","link":"https:\/\/cointelegraph.com\/magazine\/2021\/02\/27\/bitcoin-plunge-ethereum-suffer-musk-billions-022127","title":{"rendered":"Bitcoin plunges, Ethereum suffers, Musk loses billions: Hodler\u2019s Digest, Feb. 21\u201327"},"content":{"rendered":"
Coming every Saturday, <\/i><\/b>Hodler\u2019s Digest<\/i><\/b><\/a> 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 \u2014 a week on Cointelegraph in one link.<\/i><\/b><\/p>\n Bitcoin has had an exceptionally trying week, and it doesn\u2019t bode well for March \u2014 a month that\u2019s traditionally bearish for the world\u2019s biggest cryptocurrency.<\/span><\/p>\n After hitting record highs of <\/span>$58,300 <\/b>last Sunday, Bitcoin suffered a dramatic reversal of fortunes \u2014 crashing to <\/span>$46,000 <\/b>on Tuesday. Elon Musk might not have helped matters\u2026 in the run-up to the correction, he had tweeted that BTC and ETH seemed high.<\/span><\/p>\n Analysts and investors alike breathed a sigh of relief on Wednesday when Bitcoin managed to retake <\/span>$50,000 <\/b>\u2014 with some proclaiming that the asset had undergone a \u201chealthy correction.\u201d <\/span>But this narrative proved shaky when BTC plunged yet again on Friday to lows of $44,454.84.<\/b><\/p>\n All of this comes amid a backdrop of unease in the traditional markets, and this week\u2019s price activity suggests BTC faces an uphill struggle if it\u2019s going to appreciate further. <\/span>Generally, analysts are looking for $50,000 to become an established support before expecting any bullish continuation.<\/b><\/p>\n <\/p>\n A flurry of good news throughout the week may have prevented things from going bad to worse for Bitcoin. <\/span>Early in the week, two institutions announced they were doubling down on their BTC buy-ins.\u00a0<\/b><\/p>\n MicroStrategy purchased an additional <\/span>19,452 <\/b>coins, with CEO Michael Saylor declaring that his company has no intention of slowing down. <\/span>It came after Square <\/b>announced<\/b><\/a> it had purchased 3,318 BTC for $170 million \u2014 following on from a $50-million spending spree in October 2020.<\/b><\/p>\n Bitfinex and Tether also announced that they had reached a settlement with the New York attorney general, linked to ongoing allegations that Tether <\/span>misrepresented<\/span><\/a> the degree to which USDT stablecoins were backed by fiat collateral. <\/span>Under the terms of the deal, both companies will have to pay $18.5 million in damages, report on their reserves periodically, and stop serving customers in the state.<\/b><\/p>\n On Friday, JPMorgan <\/span>helped to cheer up the markets<\/span><\/a> by telling clients that allocating 1% of a portfolio to Bitcoin would serve as a hedge against fluctuations in stocks, bonds and commodities.<\/span><\/p>\n <\/p>\n Moving beyond Bitcoin, there\u2019s been a lot of movement in the altcoin markets.\u00a0<\/span><\/p>\n Last week, Binance Coin had stolen the show with a stunning triple-digit surge that helped it become the world\u2019s No. 3 cryptocurrency. <\/b>Fast forward to this week, and it\u2019s now been overtaken by Cardano\u2019s ADA.<\/span><\/p>\n A fresh wave of optimism and buying volume on Friday pushed its price to a new all-time high, and momentum for the project has been building throughout February. <\/span>Open interest for ADA futures also rose to $580 million, surpassing Litecoin to become the third-largest derivatives market.<\/b><\/p>\n Despite NFTs <\/span>entering into a bull market <\/span><\/a>\u2014 with a report suggesting that they\u2019ll explode in popularity even more as 2021 continues \u2014 it\u2019s definitely been a week to forget for Ether. After touching new all-time highs of <\/span>$2,000 <\/b>last weekend, ETH has tumbled by more than <\/span>26% <\/b>this week\u2026 taking it below <\/span>$1,500 <\/b>at times.<\/span><\/p>\n All of this comes as an <\/span>exodus<\/span><\/a> from the Ethereum blockchain continues, with 1inch becoming the latest DeFi project to expand to Binance Smart Chain.<\/span><\/p>\n <\/p>\n As the old saying goes: \u201cThe sun don\u2019t shine on the same dog\u2019s ass every day.\u201d<\/span><\/p>\n The sun was certainly shining on Elon Musk when the week began. <\/span>One analyst had <\/b>suggested<\/b><\/a> that Tesla had made $1 billion in profit since making its Bitcoin investment. <\/b>That\u2019s more than the profit generated by selling electric vehicles (what it\u2019s known for) across the whole of 2020.<\/span><\/p>\n Alas, that was before the carnage seen on the crypto markets. <\/span>To make matters worse, Tesla\u2019s share price has dropped by more than 20% from the highs of $890 seen on Jan. 26. <\/b>These joint factors prompted Musk to lose his crown as the world\u2019s richest man. Some analysts wasted little time in attributing TSLA\u2019s crash to its association with Bitcoin.<\/span><\/p>\n But there\u2019s another threat on the horizon, with reports suggesting that the U.S. Securities and Exchange Commission <\/span>could investigate<\/span><\/a> Musk\u2019s alleged impact on BTC and DOGE through his many, many tweets.<\/span><\/p>\n The billionaire made a concerted effort to shrug off these concerns, suggesting he would even welcome such a probe.<\/span><\/p>\n <\/p>\n We\u2019ve been learning a lot more about Coinbase this week as it gears up to launch on the stock market. <\/span>One particular hipster-ish announcement came when the exchange declared that it\u2019s held Bitcoin and other cryptos on its balance sheet for nine years.<\/b><\/p>\n Coinbase sought to package this announcement as a paean to other corporations that might be considering a similar move \u2014 touting itself as an authority in advising institutions about how to deal with their own prospective investments.<\/span><\/p>\n In other news, the company <\/b>submitted<\/b><\/a> its S-1 report to the Securities and Exchange Commission this week. <\/b>The filing revealed that the exchange generated revenues of $1.1 billion in 2020 \u2014 96% of which came from transaction fees. <\/span>Net income in 2020 came in at $327 million\u2026 a stark contrast to the $46 million loss seen the year before.<\/b><\/p>\n <\/p>\n <\/p>\n At the end of the week, Bitcoin is at <\/span>$46,609.99<\/b>, Ether at <\/span>$1,470.17 <\/b>and XRP at <\/span>$0.43<\/b>. The total market cap is at <\/span>$1,429,222,267,885<\/b>.<\/span><\/p>\n Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are <\/span>Fantom<\/b>, <\/span>Pundi X <\/b>and <\/span>Cardano<\/b>. The top three altcoin losers of the week are <\/span>Dodo<\/b>, <\/span>Horizen <\/b>and <\/span>Venus<\/b>.<\/span><\/p>\n For more info on crypto prices, make sure to read <\/span>Cointelegraph\u2019s market analysis<\/span><\/a>.\u00a0<\/span><\/p>\n <\/p>\n \u201cAs gas price stays too high, we see a lot of projects, tokens and users coming to BSC, and this is the right moment for 1inch to expand to other blockchains.\u201d<\/span><\/p><\/blockquote>\n Sergey Kunz<\/b><\/a>, 1inch co-founder<\/b><\/p>\n <\/p>\n \u201cSince our founding in 2012, Coinbase has held bitcoin and other crypto assets on our balance sheet \u2014 and we plan to maintain an investment in crypto assets as we believe strongly in the long-term potential of the cryptoeconomy.\u201d<\/span><\/p><\/blockquote>\n Coinbase<\/b><\/a><\/p>\n <\/p>\n \u201cIncredible scale for a technology that critics claimed couldn\u2019t scale.\u201d<\/span><\/p><\/blockquote>\n Ryan Watkins<\/b><\/a>, Messari researcher<\/b><\/p>\n <\/p>\n \u201cIt\u2019s very rare to see pre-GPU era bitcoins move, it only happened dozens of times in the past few years. And no, it\u2019s probably not Satoshi.\u201d<\/span><\/p><\/blockquote>\n Antoine Le Calvez<\/b><\/a><\/p>\n <\/p>\n \u201cThe company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world\u2019s most widely-adopted cryptocurrency, can serve as a dependable store of value.\u201d<\/span><\/p><\/blockquote>\n Michael Saylor<\/b><\/a>, MicroStrategy CEO<\/b><\/p>\n <\/p>\n \u201c[I\u2019m] very positive on Bitcoin, very happy to see a healthy correction here.\u201d<\/span><\/p><\/blockquote>\n Cathie Wood<\/b><\/a>, Ark Investment Management founder<\/b><\/p>\n <\/p>\n \u201cWe are now sitting on 2.35x the previous cycle ATH OF 20k. WE ARE JUST GETTING STARTED.\u201d<\/span><\/p><\/blockquote>\n Bitcoin Archive<\/b><\/a><\/p>\n <\/p>\n \u201cSquare believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future.\u201d<\/span><\/p><\/blockquote>\n Square<\/b><\/a><\/p>\n <\/p>\n \u201cI think you can expect that we\u2019ll have a billion people storing their value \u2014 in essence, a savings account \u2014 on a mobile device within five years, and they\u2019re going to want to use something like Bitcoin.\u201d<\/span><\/p><\/blockquote>\n Michael Saylor<\/b><\/a>, MicroStrategy CEO\u00a0<\/b><\/p>\n <\/p>\n \u201cWe\u2019ve experienced 2018 & 2019. This is nothing.\u201d\u00a0<\/span><\/p><\/blockquote>\n Micha\u00ebl van de Poppe<\/b><\/a>, Cointelegraph Markets analyst<\/b><\/p>\n <\/p>\n \u201cI do think people get drawn into these manias who may not have as much money to spare. So, I\u2019m not bullish on Bitcoin, and my general thought would be: If you have less money than Elon, you should probably watch out.\u201d<\/span><\/p><\/blockquote>\n Bill Gates<\/b><\/a>, Microsoft founder<\/b><\/p>\n <\/p>\n \u201cBut we\u2019re now to the point where ETH 1.0 \u2014 oh, we need ETH 2.0 so soon, come on, Vitalik, get it going, man \u2014 ETH 1.0, most regular users are priced out of using the majority of applications on Ethereum.\u201d<\/span><\/p><\/blockquote>\n Lark Davis<\/b><\/a>, crypto influencer<\/b><\/p>\n <\/p>\n \u201cI lost most of my life savings and haven\u2019t received a response from a human. I\u2019d think they would refund or they would lose all their customers. I\u2019m sick to my stomach but will join the lawsuit with plenty of proof(screenshots) if not refunded.\u201d\u00a0<\/span><\/p><\/blockquote>\n u\/dtk6802<\/b><\/a>, Reddit user<\/b><\/p>\n <\/p>\n \u201cIn our view, many institutional investors are entering with a buy-and-hold mentality given their understanding of Bitcoin as digital gold.\u201d<\/span><\/p><\/blockquote>\n Martin Gaspar<\/b><\/a>, CrossTower research analyst<\/b><\/p>\n <\/p>\n \u201cI think Tesla is going to double down on its Bitcoin investment.\u201d<\/span><\/p><\/blockquote>\n Dan Ives<\/b><\/a>, Wedbush analyst<\/b><\/p>\n <\/p>\n We love an outlandish prediction here at Hodler\u2019s Digest\u2026 and Michael Saylor certainly delivered the goods this week.<\/span><\/p>\n The MicroStrategy CEO declared that Bitcoin will be the savings method of choice for a staggering 1 billion people in just five years\u2019 time. <\/b>That\u2019s despite the fact that just 21 million BTC exist\u2026 and his company already owns 90,000 of it.<\/span><\/p>\n Saylor\u2019s comments came after U.S. Treasury Secretary Janet Yellen launched her latest attack on Bitcoin, describing it as \u201cinefficient.\u201d<\/span><\/p>\n In a confident interview with CNBC, he declared that Bitcoin \u201cis the dominant digital monetary network,\u201d adding: <\/span>\u201cI think you can expect that we\u2019ll have a billion people storing their value \u2014 in essence, a savings account \u2014 on a mobile device within five years, and they\u2019re going to want to use something like Bitcoin.\u201d<\/b><\/p>\n <\/p>\n <\/p>\n Microsoft founder Bill Gates had a big warning for Bitcoin buyers this week.<\/span><\/p>\n Speaking to Bloomberg, he warned: <\/span>\u201cElon has tons of money, and he\u2019s very sophisticated so, you know, I don\u2019t worry that his Bitcoin would randomly go up or down.\u201d<\/b><\/p>\n Gates said it would be a mistake for the average investor to blindly follow the mania of optimism surrounding Musk\u2019s market moves, telling those who aren\u2019t billionaires to \u201cwatch out.\u201d\u00a0<\/span><\/p>\n Criticizing Bitcoin\u2019s energy consumption, he added: <\/span>\u201cI do think people get drawn into these manias who may not have as much money to spare. So, I\u2019m not bullish on Bitcoin, and my general thought would be: If you have less money than Elon, you should probably watch out.\u201d<\/b><\/p>\n This isn\u2019t to say that Gates thinks digital currencies are a bad thing. He just believes that they should be transparent, reversible and (essentially) centralized.<\/span><\/p>\n <\/p>\n As you\u2019d expect, a post-mortem is now fully underway after this week\u2019s carnage in the crypto markets.<\/span><\/p>\n Curiously, data from Santiment suggests that the initial crash may have been linked to a huge transaction that took place after Sunday\u2019s all-time high of $58,300. <\/b>The transfer of 2,700 BTC \u2014 worth $156 million at the time \u2014 was the second-biggest transaction of 2021.<\/span><\/p>\n It\u2019s possible that this whale cashing out contributed to unbearable selling pressure in the market, which snowballed into the largest one-hour candle in Bitcoin\u2019s history. <\/span>If enough alarm bells weren\u2019t ringing, this self-same wallet also dumped 2,000 BTC just before last March\u2019s infamous flash crash.<\/b><\/p>\n <\/p>\n A prominent crypto influencer has warned that Ethereum\u2019s competitors will continue to siphon away users should Eth2 fail to launch soon amid ever-increasing gas fees.<\/span><\/p>\nTop Stories This Week<\/b><\/h2>\n
<\/h4>\n
<\/h4>\n
Increasing stock market volatility drags Bitcoin and altcoin prices lower<\/b><\/a><\/h4>\n
MicroStrategy purchases another $1 billion worth of Bitcoin, now owns 90,000 BTC<\/b><\/a><\/h4>\n
<\/h4>\n
Cardano is now a top-three cryptocurrency as ADA price soars 27% in 24 hours<\/b><\/a><\/h4>\n
<\/h4>\n
Musk no longer world\u2019s richest man after Tesla and Bitcoin slump<\/b><\/a><\/h4>\n
Coinbase has held Bitcoin on its balance sheets since 2012<\/b><\/a><\/h4>\n
Winners and Losers<\/b><\/h2>\n
Most Memorable Quotations<\/b><\/h2>\n
<\/h2>\n
Prediction of the Week<\/b><\/h2>\n
<\/h4>\n
<\/h4>\n
1 billion people will store life savings on their phone in Bitcoin by 2026 \u2014 MicroStrategy CEO<\/b><\/a><\/h4>\n
<\/h4>\n
FUD of the Week\u00a0<\/b><\/h2>\n
<\/h4>\n
Bill Gates warns Bitcoin buyers: If you have less money than Elon Musk, watch out<\/b><\/a><\/h4>\n
<\/h4>\n
Whale who sold Bitcoin before 2020 crash cashed out $156 million before this week\u2019s 20% dip<\/b><\/a><\/h4>\n
<\/h4>\n
Crypto influencer warns Ethereum fees will drive users away<\/b><\/a><\/h4>\n