Hey! Welcome to Distributed Ledger, our weekly cryptocurrency newsletter that reaches your inbox every Thursday. I’m Francis Yue, Crypto Reporter for MarketWatch and I’ll bring you the latest and greatest digital assets this week.
Find me on Twitter at @FrancisYue_ to send feedback or let us know what you think we should be covering.
Cryptocurrency in the blink of an eye
Bitcoin BTCUSD, +0.19%, is up 1.4% over the past seven days, recently trading at around $40,808, according to data from CoinDesk. ETHUSD, +0.27%, is up 5% in seven days to around $2,804. Dogecoin meme token DOGEUSD, +0.09%, shed 0.6%, while another dog-themed Shiba Inu SHIBUSD, 0.14 is trading 0.2% lower than seven days ago.
Cryptocurrency metrics
| Biggest win | Price | % 7-day income |
$42.55 | 106% | |
TORChain | $8.14 | 47.5% |
Primary Attention Token | $0.86 | 24.9% |
Schedule | $0.41 | 17.9% |
Aave | $143.48 | 12.4% |
Source: CoinGecko as of March 17th. |
| The largest refuseniks | Price | % 7-day income |
People.ai | $0.04 | -55.3% |
ECOMI | $0.003 | -23.3% |
Arvive | $32.94 | -11.8% |
Terra | $88.07 | -11.4% |
Phantom | $1.24 | -10.2% |
Source: CoinGecko as of January 20th. |
Next Shiba?
The first dogecoin. Then the Shiba Inu. When we saw the astounding price spike of some so-called meme tokens, which are cryptocurrencies that originated from internet memes, many are looking for the next token that could rise over 30,000,000% in one year, like what Shiba Inu did in 2021.
However, it’s been a few months since we’ve seen any new meme tokens appear. Meanwhile, Dogecoin is down over 84% from its all-time high in May and Shiba Inu is down over 74% from its all-time high in November.
According to Ben McMillan, founder and chief investment officer of crypto asset management company IDX Digital Assets, the poor performance may be partly due to the exodus of some retail traders from the crypto market.
“If you look at the popularity of meme tokens, or frankly even meme shares, a lot of it was driven by an excess of money in the system,” McMillan told Distributed Ledger in a phone interview.
Such “extra money” began to dwindle when the Federal Reserve began winding down its bond-buying program launched during the Covid-19 pandemic in November. In addition, the US central bank on Wednesday raised its benchmark interest rate by a quarter of a percentage point, the first rate hike since 2018, and signaled more to come.
To read: As the Fed raises its benchmark interest rate by 25 basis points, here’s what it means for your credit card bills, savings, auto loans, and mortgage payments.
Joel Krueger, FX Strategist at LMAX Group, said the outflow of retail traders also “has a lot to do with leveraged trading.”
While institutions can typically incur massive losses associated with leverage, retail traders find it harder to swallow these costs, which, according to Krueger, “are often looped by it.” “They’re overexposed.”
McMillan compared the rise of some meme tokens to the 2017 Initial Coin Offering or ICO boom, which collapsed in 2018, with Facebook FB, +2.07%, Google GOOGL, +0.42% and Twitter TWTR, +5.46% ICO advertising ban. “A lot of people have been burned[frominvestinginICOsandlearnedtheirlessonandtheyareafraidtoinvestinICOsagain”McMillansaidsaid[frominvestinginICOsandlearnedtheirlessonAndthey’regun-shyaboutinvestinginICOsagain”McMillansaid[отинвестированиявICOиусвоилиурокИониопасаютсясноваинвестироватьвICO»—сказалМакмиллан[frominvestinginICOsandlearnedtheirlessonAndthey’regun-shyaboutinvestinginICOsagain”McMillansaid
“I wouldn’t be surprised if we see this kind of behavior this time – people got burned on Dogecoin, Shiba or GameStop GME, +0.97% for that matter, and are now just more sensitive to what they get into.” says in the report. Macmillan.
And it’s not just meme tokens. Faced with macroeconomic uncertainty, digital asset investors are shifting funds from smaller projects to bitcoin and ether, which McMillan says are “on the more stable end of the spectrum.”
Bitcoin dominance, which is the ratio of bitcoin’s market cap to the total cryptocurrency market cap, rose to a more than three-month high of 44% in early March. On Thursday, the figure is about 43.5%.
“Not surprisingly, bitcoin is a sort of flight to safety in the digital asset ecosystem,” McMillan said.
To read: Bitcoin trading is ‘like a game of ping-pong’, investor says as Fed launches series of interest rate hikes
EU Cryptocurrency Offer
On Monday, a proposal to require bitcoin and other proof-of-work cryptocurrencies to adopt more environmentally friendly practices in the European Union failed to win the approval of a parliamentary committee. Proof-of-work is a consensus mechanism for cryptography that requires a lot of power consumption.
The EU Committee on Economic and Monetary Affairs voted on Monday to move forward with Crypto Asset Markets (MiCA) legislation without a clause that aims to make all cryptocurrencies “subject to minimum environmental sustainability standards.”
Although the clause aims to reduce the environmental costs of cryptocurrencies, it was seen as a threat to a de facto ban on bitcoin and drew a strong backlash from the crypto community. “Legislation on what technologies energy can be used for will push Europe even further in the race for innovation,” says Noel Acheson, head of market research at crypto broker Genesis Trading. tweeted on Saturday.
Jake Chervinsky, Head of Cryptocurrency Industry Lobbying at the Blockchain Association, tweeted that “if they manage to ban PoW, they will move towards PoS (proof of stake) and after that all other sibyl resistance mechanisms. ”
Proof-of-stake is another consensus mechanism that requires less power consumption. Ethereum is moving from Proof-of-Work to Proof-of-Stake.
Cryptocurrency companies, funds
Stock Coinbase Global Inc.. COIN, +2.72%, is trading up 1.4% to $174.90 on Thursday afternoon. Over the past five trading sessions, it has grown by 1.1%. Michael Saylor MicroStrategy Inc.
MST, +1.24%
added 0.9% on Thursday to $432.49, after gaining 2.7% over the past five days.
Mining company Riot Blockchain Inc.
RIOT, +12.45% is up 8.5% to $17.8 and is up 7.8% over the past five days. Stock Marathon Digital Holdings Inc.
MARA, +10.03%, is up 7.2% to $25.97, up 5% over the past five days. another miner, Ebang International Holdings Inc.
EBON traded 1% higher at $1.14, up 2% over the past five days.
Overstock.com Inc.
Shares of OSK, up 7.42%, rose 4.9% to $50.89. Shares are up 2.2% in five sessions.
Block Inc.
Shares of SQ, +10.26%, officially known as Square, jumped 7.8% to $125.06, up 14.9% for the week. Tesla Inc.
Shares of TSLA, +3.73%, were up 2.8% to $863.78, while shares were up 3.1% over the past five sessions.
PayPal Holdings Inc.
PPL, +3.93%
rose 2.3% to $110.39 while it recorded a 12% gain in five sessions. Nvidia Corporation.
NVDA, +1.10%, was down 0.05% to $244.57, although it has seen an 8% gain in the last five trading days.
Advanced Micro Devices Inc.
The dram, -3.19%, was down 4% to $110.8 as of Thursday afternoon, while it was up 4% from five trading days earlier.
Among crypto funds Bitcoin Strategy ProShares ETF
BITO, -0.04% was down 0.4% to $25.56 on Thursday, while Valkyrie Bitcoin Strategy ETF
BTF, -0.19% was down 0.6% to $15.84. VanEck ETF Bitcoin Strategy
XBTF, -0.15% fell 0.6% to $40.
Bitcoin trust in grayscale
GBTC, +0.55%, traded at $27.36, down 0.6% on Thursday afternoon.
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