Bitcoin, Ether, and Doge Break Records Before Taking a Dive Following Turkey Ban

Bolstered by stock market excitement, Bitcoin secured new all-time highs last week, while similar moves littered the altcoin space. In this week’s round-up, find out how cryptocurrency is taking a step towards a greener future with the Crypto Climate Accord.   

• New all-time highs for Bitcoin and Ether
• Dogecoin continues to shock the world
• Cryptocurrencies take a step towards sustainability
• Coinbase debuts on Nasdaq
• XRP boosted by small victories in Ripple lawsuit
• NFT of first trade on NYSE
• Continued optimism for a growing economy but is it artificial?
• Big-ticket reports to watch out for this week

Bitcoin and Ether break records before pulling back

It was an extremely bullish week in the cryptocurrency markets, with Bitcoin and Ether posting record highs. Ether was slightly ahead of Bitcoin this time, pushing above $2100 early in the week and breaking $2500 for the first time. Whereas Bitcoin sailed through its previous all-time high of $61,000 on Tuesday and continued its push above the $64,000 mark.

Both digital assets are believed to have benefited from the buzz around the anticipated Coinbase listing, which occurred last Wednesday.

Robert Kiyosaki, author of the renowned financial advice book ‘Rich Dad Poor Dad announced a valuation for Bitcoin. He believes, in only five years’ time, each Bitcoin will be worth $1.2 million, and therefore you would be able to buy a million-dollar house with just one Bitcoin in 2026.

Bitcoin has increased annually by 169% on average over the last five years. To achieve Kiyosaki’s valuation over the next five years, Bitcoin would need to continue that trend with an average 82% annual increase. This definitely isn’t inconceivable given Bitcoin’s past record.  

Crypto prices cooled on Friday after news from Turkey that the country will ban the use of cryptocurrencies for payments. While the news has put some traders on edge, most in the crypto community are far from worried. 

Check back in on the Xcoins blog later this week for our investigation into the potential impacts of countries restricting crypto.

Who let the DOGE out?

Another coin that was stoked by the enthusiasm of last week was Dogecoin. The meme cryptocurrency which started as a joke back in 2013, but holds store of value utility and peer-to-peer transfer capability just like Bitcoin or Litecoin, broke its all-time high record. It breached the 10 cents mark for the first time ever, which is where momentum was expected to cease. However, the joke was on everyone else when Dogecoin continued to soar to over 20 cents.

The coin has been boosted during the past year by fans such as Tesla’s CEO Elon Musk and Mark Cuban and unlike many other coins holds a strong tight-knit fanbase. Musk has openly described himself as a fan of the coin and was quick to comment on the cryptocurrency’s success during last week’s growth, potentially pouring more fuel on the fire. 

Although Dogecoin has increased by 2000% this year, the advance has been dismissed by many as online hype. Few believe that institutional money will flow into it, as the coin holds no real advantage as a store of value over its competitors, however, if 2020 proved anything, it’s that anything can happen!

For a coin that was always just there for the fun of it, it is another example of what strange things can become well-loved in the cryptocurrency world. It is certainly not one to rule out, but we certainly wouldn’t suggest you make it the basis for your portfolio.

Crypto takes a step towards a greener future

A Crypto Climate Accord was signed at the start of last week, a private sector-led initiative committed to making the cryptocurrency industry 100% renewable. The goal is to decarbonize the cryptocurrency industry by 2030. Over recent months, cryptocurrencies and in particular Bitcoin have been in the spotlight, not only due to their price increases but due to their increasing demand for energy.

The Accord, which was announced by Energy Web, Rocky Mountain Institute (RMI), and Alliance for Innovative Regulation (AIR), plans to bring together the crypto and fintech industries to transition to 100% renewable energy usage. The ambitious plan utilizes the Accord as a coordinating platform to implement scalable solutions to every sector of the industry.

Blockchain technologies are already being accepted by many, but if they start to become more sustainable too, they will increasingly become harder to ignore.

Coinbase lists on Nasdaq

The public listing, on the U.S. Nasdaq exchange, was enormously successful for the company, and after the first day of trading, Coinbase was valued at $85 billion, up from $68 billion before listing, it has since fallen to $63 billion.

A reference price for Coinbase shares was given of $250 ahead of listing on Tuesday. At open, the shares jumped to $381 and continued up to heights of $429 before falling back to $342. Open trading is often volatile and a better indication of the company’s value will likely be found in the coming weeks as the volatility subsides.

Optimism for cryptocurrency markets exuded from Coinbase co-founder Fred Ersham who stated that there’s no evidence the top is in for the market.

“As somebody who’s been working in crypto for 10 years. I’ve heard that statement hundreds, if not thousands of times,” Ehrsham said. “I think it will be volatile from here, but that’s just the nature of such a huge technology coming into existence, and I don’t think it could happen any other way”

The prominent investment vehicle, Cathie Wood’s Ark Invest, placed $250 million into Coinbase on the first day of trading, exemplifying a widespread belief that as cryptocurrency adoption increases, Coinbase’s value is likely only to go one way.

The listing sets a precedent for other exchanges, with Kraken announcing last week that it could follow in Coinbase’s footsteps in 2022.

Positive signs for XRP

XRP, the token associated with the Ripple Network, reached prices this week not seen since 2018 and this feat is made even more surprising after the bumpy road Ripple has faced over the last six months.

The Ripple Network is focused on the connection between banks, payment providers, and financial institutions. However, during December 2020, the SEC filed a lawsuit against Ripple, questioning whether XRP was security rather than a cryptocurrency.

As a result, XRP has spent the majority of 2021 much lower than its competitors and has remained low as the cryptocurrency market has exploded. With many coins posting all-time highs, XRP has been far from such glorious heights.

However, over the past couple of weeks, Ripple has secured several victories regarding their legal battle with the SEC and now many believe they will either settle or win the lawsuit. Either of these outcomes is seen as a positive for the coin, which has resulted in the coin flirting with the $2 mark this past week.

Purchasing the first-ever stock trade

NFT’s continue to crop up in different sectors and last week was the turn of the New York Stock Exchange (NYSE). The NYSE announced that it would be minting NFTs for the first trade completed on chosen U.S. traded companies.

The NYSE’s Stacey Cunningham confirmed that the first six companies to be included in the NFT offer will include: Spotify, Snowflake, Unity, DoorDash, Roblox and Coupang. With a 2.5 million tweet sold not that long ago, it is anyone’s guess as to how much these may sell for.

Forbes completed a similar NFT auction for a cover of their latest issue, which included the Gemini owners, the Winklevoss twins. The magazine NFT cover sold for $333,333 two weeks ago.

Continued optimism for a growing economy but is it artificial?

The economy continued to show signs that it was moving in the right direction last week. JPMorgan announced that debt repayment was up considerably, with many consumers able to use stimulus checks to pay off existing debt. The interpretation of this is that many consumers have boosted their savings during the Covid crisis, which is encouraging economic recovery. Companies are now seeing a level of spending via credit and debit cards that they have not seen since the start of the pandemic.

Although positive for the upcoming year, many economists believe that the current increases in GDP and consumer spending are still being artificially lifted and that when the government payments end there will be economic battles to come. 

Chief economist for the Americas at Natixis, Joseph LaVorgna noted “I don’t see growth as being particularly durable. The economy is going to slow a lot more next year than people think and probably will be well under 3%.” 

Unlike a V-shaped recovery, which was a defining phrase of 2021, there is a belief that a more accurate definition is a K-shaped recovery. The pandemic has resulted in higher-earners, usually working in offices, prospering and coping during the pandemic, whereas lower-earners, often in hospitality or leisure sectors, have lost out in comparison. So whilst positive numbers suggest consumers on average are saving more, the numbers are likely skewed to the top end. Although falling, jobless claims figures are still high and infer much more still needs to be done to assist lower-earners. 

With consumers holding on average more cash, and government spending continuing to hold Covid worries at bay, the cryptocurrency sector continues to enjoy part of the rewards.

CPI figures jump higher

Inflation concerns continued to hover in the background as CPI figures jumped significantly during the week, boosted by a 9.1% increase in gas prices. 

On Wednesday, Jerome Powell reiterated that an increase in interest rates this year was ‘highly unlikely’ as a combat mechanism to rising inflation, claiming that bond purchases would be greatly reduced before that happens. He added that most central banks globally expect to see interest rates near zero until 2023. The Fed is loathed to increase interest rates through fear of slowing the current prosperous economic growth.

Big-ticket reports to watch out for this week:

Tuesday – The People’s Bank of China Interest Rate Decision, UK Unemployment Rate, and ECB Lending Survey

Wednesday – New Zealand CPI Figures, Australia Retail Figures, UK CPI Figures, Bank of England Governors Speech, Canada CPI Figures, Bank of Canada Interest Rate Decision

Thursday – European Central Bank Interest Rate Decision, U.S. Jobless Claims

Friday – E.U. Manufacturing PMI Figures, UK Manufacturing PMI Figures, U.S. New Home Sales 

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