Musk Announces Doge-Tesla Partnership as Interest Rate Hikes Confirmed
Fed tapering and increasing interest rates shook the equity and crypto markets last week, but not exactly as many investors were expecting. With news of interest rate hikes, risk-on assets were expected to fall, however, Bitcoin reacted positively immediately after the hawkish announcement but has since fallen to levels not seen since October. Elsewhere, news from Tesla boosted the Dogecoin community, the first SMS was confirmed for auction as an NFT and Adidas began development in the metaverse.
- DOGE prices spike as Tesla announces acceptance
- Kraken CEO believes Bitcoin under $40k is a huge buying opportunity
- Vodafone to sell world’s first SMS as an NFT
- Sporting giant Adidas to launch new NFT project
- Federal Reserve confirms tapering and 3-year interest rate hikes
DOGE prices spike as Tesla announces acceptance
Tesla made an unexpected announcement during the week that Dogecoin (DOGE) will start to be accepted for a line of new merchandise. The announcement was made by Tesla’s CEO, Elon Musk, via Twitter on Tuesday. Musk has been a long-time supporter of Dogecoin, being called the Dogefather by many in the cryptocurrency community, he has consistently pushed for new utility to be built on the blockchain.
According to Musk’s tweet, customers will initially be able to purchase Tesla-branded products with DOGE. From there, the CEO plans to “see how it goes”. What products will be involved in the offer is currently unclear.
After Musk’s tweet was published, DOGE prices jumped by over 20% in 1 hour, climbing to $0.22. Since then the coin has settled back at $0.17.
During the same week, Musk was also named Time Magazine’s Person of the Year. In an interview, conducted with Time, Musk reiterated that he believed Dogecoin provided a better payment option than Bitcoin. “Even though it was created as a silly joke, Dogecoin is better suited for transactions.”
Kraken CEO believes Bitcoin under $40,000 is buying opportunity
Although cryptocurrency markets remained mixed last week, the CEO of Kraken, Jesse Powell, outlined that recent fear, doubt, and uncertainty will likely provide many opportunities going forward. In an interview with Bloomberg, Powell stated that Bitcoin below $40,000 would only ever be a buying opportunity.
The CEO was pushed by interviewer Emily Chang due to previous over-ambitious price predictions but Powell remained steadfast in his conviction. “It’s hard to know where [the bitcoin price] goes, but when you look at a long-term trendline of bitcoin and it’s just up consistently. I always tell people, if you think about buying bitcoin, think about it as a five-year plus investment.”
Powell also commented on issues with the U.S. Dollar, stating that the rising inflation was “out of control.” November CPI figures released during the week prior highlighted a 6.8% 12-month increase – the highest figure seen for 39 years. He concluded that eventually “the dollar was going to zero.”
Vodafone plans NFT auction for world’s first SMS
The world’s first SMS read ‘Merry Christmas’, therefore, it seems fitting that the message is due to be sold as an NFT in the lead-up to the holidays. The text message was sent using Vodafone’s network and by Vodafone employee, Richard Jarvis.
The SMS will be auctioned as an NFT by Aguttes Auction House in France, bringing together 30-year old technology with today’s NFT capabilities. The final payment will be made in Ether, the native cryptocurrency of Ethereum, and will be subsequently donated to the UN Refugee Agency. The new owner will gain ownership of the SMS and be given a replica of the original communication protocol.
Maximilian Aguttes, Auction House Founder, commented on the NFT sale during the week. “The first printed book, the first phone call, the first email – all these inventions have changed our lives and communication in the world. This first text message received in 1992 is a historic testament to human and technological progress – we are delighted to be able to support the sale of this landmark piece of history for this cause.”
The auction for the sale of the SMS NFT is scheduled to take place on December 21.
Sporting giant Adidas enters the metaverse with NFT project
At the start of December, the sports clothing giant, Adidas, hinted at a new partnership between the Bored Ape Yacht Club NFT collection, the investor Gmoney, and the NFT series Punks Comic. It was revealed last week that the collaboration was building towards the launch of the ‘Into the Metaverse’ Originals NFT collection.
The project is set to incorporate elements from each of the prominent NFT brands, with Adidas intending to bring virtual wearables into the Sandbox blockchain metaverse. The company also intends to bring NFT branding into physical clothing products, such as Gmoney’s orange beanie.
The Originals NFT project was launched on December 17th. Erika Wykes-Sneyd commented on the successful launch during the week. “As part of our ambition to celebrate ideas that are defining a new age of originality, we’ve landed at the forefront of creativity, which is the open metaverse. It’s a natural place for Adidas Originals to enter: a wild world where possibilities are truly limitless and where anyone can express and be rewarded for their most original ideas.”
Bitcoin rises as Fed announces tapering plan and 2022 interest rate hikes
The Federal Reserve’s monetary easing policies are coming to an end. Since the start of Covid-19, the Fed has implemented new policies to deal with the pandemic economic fallout. This has involved the monthly purchase of bonds and occasional stimulus cheques for U.S. residents. Similar policies have been implemented worldwide. As a result of these policies, inflation is now climbing closer and closer to all-time highs.
After a 2-day meeting at the Federal Open Market Committee (FOMC), the Fed confirmed that it would begin reducing the bond purchase program with a complete termination by March 2022. December’s purchase will be reduced to $90 billion, down from $120 billion. Meanwhile, January’s purchase is set to be $30 billion.
Within the same FOMC meeting, it was also disclosed that the central bank is planning for 3 interest rate hikes in 2022. In addition, 2 more are planned for 2023 and a further 2 for 2024.
The confirmation of Fed tapering and interest rate hikes was expected by many to send risk-on assets tumbling last week, however, both equities and cryptocurrency markets experienced daily gains after the news before sliding to lows not seen since October.
Coinciding with news from the U.S., the Bank of England also increased interest rates for the first time in 3 years. Interest rates in the U.K. were increased from 0.1% to 0.25%.
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