Speculative Frenzy Spills Into Crypto as Bitcoin Tops $38,000
Comment of the Day

January 29 2021

Commentary by Eoin Treacy

Speculative Frenzy Spills Into Crypto as Bitcoin Tops $38,000

This article by Yakob Peterseil and Joanna Ossinger for Bloomberg may be of interest to subscribers. Here is a section:

Musk’s page on Twitter simply said #bitcoin with no further explanation, but speculation that the world’s richest man might be a Bitcoin investor was enough to set off the dramatic rally.

Prices spiked in a matter of minutes, for the biggest intraday move in almost a year.

“This huge melt-up is due to Elon’s tweet,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, which bills itself as the world’s biggest crypto lender. Musk’s
support for Bitcoin “creates a safe zone for some of the smaller companies and possibly everyone in the S&P 500 to allocate into Bitcoin,” he said.

Musk also tweeted an image of a “Dogue” magazine cover featuring a whippet in a red sweater -- a play on the fashion magazine “Vogue.” He also sent posts calling Cyberpunk a great video game and said, “In retrospect, it was inevitable.”

Binance, the world’s largest cryptocurrency exchange by volume, briefly suspended withdrawals on Friday to address a large increase in requests. Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high. “We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”

Eoin Treacy's view

The kind of activity that has been witnessed in GameStop this week is considered normal in the completely unregulated cryptocurrency markets. Since there is no hard fundamental to base value on, the market is dependent on momentum to stoke bull markets. When an anarko-capitalist idol like Elon Musk tweets, it tends to get a lot of attention.

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