Crypto Guides, Knowledge & Insights

How The ‘Elon Effect’ Has Affected The Bitcoin Market So Far

The ongoing market bloodbath in the Crypto-industry has left many wondering how some of the highest losers, which includes Bitcoin, will survive going forward. Usually, a bear market is perceived as a regular phase for digital currencies, but since Bitcoin largely benefitted from Tesla‘s support, there are valid reasons to question Bitcoin’s stability going forward.　　After Tesla suspended Bitcoin payments from its EV buyers due to energy consumption concerns, the market has lost a fortune up until the time of this writing, with over $300 billion wiped from the crypto market.　　The “Elon Effect”　　Tesla had an undeniable impact on the price of Bitcoin and its overall adoption. When the company announced its $1.5 billion worth of Bitcoin purchase, Bitcoin bulls were off the charts as prices soared instantly. Despite Bitcoin dropping to lower levels that week, and analysts predicting that there was room for the asset to drop lower, the “Elon Effect” sent Bitcoin back up to $44,200.　　When Tesla‘s Bitcoin bet paid off, as the electric vehicle company recorded the highest quarterly report it had seen since its creation: a whopping $438 million in profit, a large amount of which came from the company’s Bitcoin investment, analysts noted that institutions may have

2021-05-17Deep Dive

Here's how Bitcoin's intraday volatility complicates leverage trading

Derivatives exchanges offer up to 100x leverage, but traders must consider how Bitcoins intraday volatility increases their liquidation risk.　　The crypto sector is in a bull market, and frequent evidence comes from anonymous traders who post their five-, six- and seven-figure investment returns as screenshots on Crypto Twitter.　　This condition creates a FOMO-like situation where everyone gets greedy. The temptation to boost potential earnings by twenty times or more is often irresistible for most novice traders.　　Today, almost every cryptocurrency exchange offers leveraged trading using derivatives. To enter these markets, a trader has to first deposit collateral (margin), which is usually a stablecoin or Bitcoin (BTC). However, unlike spot (regular) trading, the trader cannot withdraw from a futures market position until it has been closed.　　These instruments have benefits and can improve a traders outcomes. However, those who often rely on incorrect information when trading futures contracts end up with heavy losses rather than profits.　　The basics of derivatives　　These leveraged futures contracts are synthetic, and it is even possible to short or place a bet on the downside. Leverage is the most appealing aspect of futures contracts, but it is worth noting that these instruments have long been used in stock markets, commodities, indexes, and

2021-05-17Deep Dive

Why Uniswap, Cardano, Solana, and Dogecoin Could Become Best-Performing Cryptos Of 2021

The year has been a good one so far for altcoins. There‘s no denying Bitcoin’s pedigree and influence on the market as it is still the biggest cryptocurrency by far in the crypto space. Having said that, there are a lot of altcoins or relatively smaller and cheaper cryptocurrencies which have attracted investors and newbies looking to diversify their crypto portfolios. As crypto adoption continues to grow so has the interest in it which has been evident in the last few months. Institutional interest is at an all-time high as many traditional companies, firms and institutions are boarding the cryptocurrency bandwagon.　　There are a lot of altcoins putting up impressive numbers guaranteed to give back good yields and this article sheds light on four of them.　　Uniswap (UNI)　　Uniswap is one of the dApps based on the Ethereum blockchain. The project allows users to trade Ethereum tokens through liquidity pools. The DeFi coin boasts of being the first decentralized exchange with the option of a margin and leverage trading.　　The UNI coin has two main services, thus delivering and utilizing liquidity. Although it is new in the crypto space as it was released into the market last year, its performance has made it one

2021-05-17Deep Dive

Banking System Uses Significantly More Energy Than Bitcoin, Research Shows

A new report shows that the banking system consumes more than twice the amount of energy that bitcoin does. The authors analyzed bitcoins energy usage and compared it to the banking and gold industries.　　Banking System Consumes Much More Energy Than Bitcoin　　Galaxy Digital published a report last week entitled “On Bitcoin‘s Energy Consumption: A Quantitative Approach to a Subjective Question.” The authors described, “This report took a quantitative approach, comparing Bitcoin’s energy usage to that of other industries.”　　Within the report was an energy consumption comparison between the banking system, gold, and bitcoin.　　According to the report, the Bitcoin network consumes an estimated 113.89 TWh/yr in total. The estimate comprises miner demand, miner electricity consumption, pool electricity consumption, and node electricity consumption.　　While the report estimates that the gold industry utilizes roughly 240.61 TWh/yr, it says that the banking system consumes the most energy.　　The authors noted that “The four key areas of electricity consumption associated within the broader banking system with enough data to establish acceptable estimates are banking data centers, bank branches, ATMs, and card networks data centers.” They wrote:　　We estimate the banking system uses 263.72 TWh of energy each year.　　In conclusion, the report highlights bitcoins features that can offer financial freedom to

2021-05-17Deep Dive

CBDCs Are Not That Stable And May Eventually Kill Bitcoin, Says Financial Expert

Financial journalist Edward Chancellor predicted that launching central bank digital currencies can be catastrophic for Bitcoin.　　Edward Chancellor – a British journalist and financial historian, explained that the first central bank digital currencies are likely to raise inflation which can lead to the destruction of Bitcoin. He agreed that CBDCs are “cool” but certainly not stable.　　 CBDCs Would Mean The End Of BTC　　Nowadays, many central banks of numerous leading economies such as China, Japan, and the US, are researching the option of launching their own CBDC. In a recent interview for Reuters, Edward Chancellor opined that central bank digital currencies are highly risky projects.　　He said that CBDCs might even kill Bitcoin. Chancellor explained that it is much easier to distribute and “print” digital currencies rather than cash, and that will cause an utterly high level of inflation.　　He then added that in order to solve the issue, the governments and central banks would have to fix the emission of their digital coins – which number would be much higher than 21 million bitcoins:　　“When banks get it right with CBDCs this will kill Bitcoin.”　　The historian analyzed that changes in the form of money are normal and have happened multiple times in the past.

2021-05-17Deep Dive

Did Elon Musk Just Suggest Tesla Is Dumping Its Bitcoin?

Tesla and SpaceX CEO Elon Musk may have implied on Twitter today that Tesla has sold, or plans to sell, its Bitcoin.　　When Twitter user @CryptoWhale tweeted the hypothetical scenario that “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their#Bitcoin holdings,” Musk replied with a single word: “Indeed.”　　Although it is unclear which part of the tweet Musk is agreeing with (the prediction Tesla dumped its Bitcoin or the comment about how much hate hes getting), or whether hes even agreeing at all, the insinuation that Tesla could dump the 43,200 Bitcoin it bought in February for $1.5 billion immediately depressed the price of Bitcoin by almost $5,000 dollars, down to $44,700.　　Musk, who has spent much of the year publicly supporting Bitcoin, started to trash the coin earlier this week, pointing out the environmental damage caused by fossil-fuel-powered Bitcoin mining operations.　　The rest of todays damage was done when Musk widened his criticism against Bitcoin, lobbing invectives at some of the most prominent Bitcoin maximalists on Crypto Twitter, and tearing arguing with their claims that proof-of-work mining helps decentralize the network.　　“Hey cryptocurrency ”experts“, ever heard of PayPal？ Its possible … maybe … that I

2021-05-17Deep Dive

Elon Musk On Why Dogecoin is Superior to Bitcoin

The Dogecoin saga with Elon Musk is one that continues giving. The market also seems to continually be swayed by the hot takes from the cryptocurrency community, and with Elon Musk responding to critics back to back, giving little to no room for critics to create misconceptions, it becomes easier to see where the Billionaire is coming from.　　What his beliefs are, and what Cryptocurrency he finds promising and worthy of his support in the long term.　　For Elon Musk, Doge has already won the battle.　　There have been questions poking at Musks decision to prioritize DOGE over Bitcoin. Top Bitcoin proponents are surprised by the fact that Musk is willing to dump the most valued cryptocurrency, with a fixed supply, for an altcoin like DOGE. We can see Anthony Pompliano mirroring the sentiments of other Bitcoiners in the trending tweet which reads:　　“The richest guy in the world bought billions of dollars in the best performing asset in the world for the last decade but is now spending time trying to make an internet joke become more technically efficient. Unreal.”　　However, Musk is not swayed by the unending criticism from the Bitcoin community. The unconventional Billionaire has stuck with his decision to build upon

2021-05-17Deep Dive

Research shows 46 million Americans would use crypto for retail purchases

BitPay has released a report that shows crypto is gaining traction among U.S. consumers as a means of making retail payments.　　However, the report also detailed why full-scale mass adoption of crypto for payments is still years away from becoming a reality.　　Interest in cryptocurrency as a payment method on the rise　　Multiple use cases for cryptocurrency exist, including lending and borrowing, store of value, gaming, and tokenization. But to this day, its still generally associated more with payments than anything else.　　Despite big pushes from suitable “payment tokens” such as Bitcoin Cash and Litecoin, cryptocurrencies have yet to impact the world of retail payments significantly.　　Several factors hinder the adoption of cryptocurrency in this regard. Problems such as transaction speed and cost, volatility, liquidity and convertibility, security, and counter-party risk.　　To make the experience as slick as using a Visa debit card, many organizations believe the solution lies in developing appropriate layer 2 infrastructure.　　Layer 2 refers to any secondary or additional framework that runs on top of an existing blockchain. They generally exist to improve speed and scale but operate independently of the main chain.　　With increasingly slick layer 2 solutions, not forgetting the rise in cryptocurrency ownership, interest in using crypto for payments is rising.　　BitPay

2021-05-16Deep Dive

MicroStrategy Buys $15 Million Bitcoin, Rejects Elon Musk’s Bitcoin Criticism

For months, MicroStrategy CEO Michael Saylors huge acquisitions of Bitcoin have been overshadowed by Elon Musk, the Tesla and CEO of SpaceX who disclosed purchases of billions of dollars in Bitcoin earlier this year.　　But when Musk turned his back on Bitcoin this week, citing environmental concerns, the price crashed. So Saylor seized the opportunity to buy the dip.　　“MicroStrategy has purchased an additional 271 bitcoins for $15.0 million in cash at an average price of ~$55,387 per #bitcoin,” tweeted the CEO of the cloud computing firm yesterday.　　Saylor confirmed that MicroStrategy holds 91,850 Bitcoin, purchased for approximately $2.241 billion at an average of $24,403 per Bitcoin.　　The share price of MicroStrategy fell immediately after the announcement, from $494 to $481 about half an hour later. Shares in the NASDAQ-listed Virginia company closed at $488. Bitcoin didnt really budge and is still worth about $50,000.　　MicroStrategy‘s purchase brings its Bitcoin holdings to 0.437% of Bitcoin’s entire supply. Tesla has disclosed holdings of under half of that: 43,200 Bitcoin, or 0.206%.　　And MicroStrategy is far deeper into Bitcoin than Tesla. MicroStrategy‘s Bitcoin holdings comprise 97% of its market cap of $4.76 billion. Tesla’s Bitcoin exposure amounts to just 0.3% of its $757 billion market cap.　　No surprise, then,

2021-05-14Deep Dive

Coinbase Reports Record Revenue and Says It Will List Dogecoin in 6 Weeks

Coinbase has had a spectacular 2021. The company announced $1.80 billion of revenue, $585 million more than the fourth quarter of 2020, and $191 million more than its results from a year ago.　　Much of these numbers are driven by the growing interest in cryptocurrencies. 56 million users and 6.1 million monthly transactions put the company right on the money radar, primarily since Coinbase benefits from the fees generated by every trade made on its platform.　　The IPO was also good news for Coinbase, which has benefited from increased confidence in its brand. Being fully regulated, Coinbase has become a benchmark for U.S. institutions and investors looking to increase their exposure to cryptocurrencies.　　Coinbase Global, Inc. announced today the release of its first quarter 2021 shareholder letter. The letter, including the companys financial results, can be found on the Investor Relations website at https://t.co/h2LGcznWvK　　— Coinbase News (@CoinbaseNews) May 13, 2021　　Coinbase shares rose 3% in after-hours trading session following the positive results. However, alarm over a possible investigation by the IRS and DOJ into Binance raised nervousness among traders, and the stock fell 6.5%.　　Coinbase is the leading cryptocurrency exchange in the United States. It offers a trading platform, a wallet, a custody service, and

2021-05-14Deep Dive

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