WMA: Elon Musk fuels Bitcoin surge as Wall Street takes a beating at its own game
Get the weekly summary of cryptocurrency market trends, news, and forecasts!
This Week’s Summary
- The Crypto Market ends the week at a total market capitalization of $1 trillion.
- Bitcoin increased by nearly 3% over the week to trade again above $33,000.
- Ethereum set a new all-time high (ATH) at 1,467.48 on Monday.
- XRP’s value skyrocketed by nearly 80% after Ripple hit back at the SEC in a fraud allegations lawsuit.
- Wall Street investors lost billions of dollars after a group of Redditors exposed them on their short positions for GameStop shares.
Crypto Trends 25th – 31st of January 2021: PERFORMANCE & ANALYSIS
The cryptocurrency market ends one of the most spectacular weeks in 21st-century financial history. Bitcoin, XRP, and Dogecoin recorded impressive gains. The Wall Street scandal saw many trading platforms restrict operations. Elon Musk sent mysterious tweets, and the crypto market passed $1 trillion again in market capitalization.
Let’s start with the event that rocked the financial world the most in the past week, even if it has little to do with the cryptocurrency market.
Shortly put, a group of Reddit members, called Wall Street Bets, discovered that Wall Street hedge funds had borrowed a substantial amount of GameStop shares. They intended to lower their price of the shares enough to repurchase them at a lower price, return them to GameStop, and make a nice profit.
The Wall Street Bets, a group of mostly gamers with a strong nostalgia for the classic gaming retailer, decided to ruin the hedge funds’ plans. So, they started buying the stocks in significant numbers. Millions of followers bought the GameStop shares in just a few hours, increasing their value by more than 600% in the process.
The hedge funds started losing money because they had to buy back the shares at a substantially higher value than they initially purchased them. It is estimated that the Wall Street investors who were shorting the GameStop shares lost more than $19 billion following the Wall Street Bets Robin Hood-like attack.
And speaking of Robin Hood, a trading platform by the same name restricted users from buying GameStop stocks. NASDAQ followed suit and halted GME trading. Both moves were seen as attempts to safeguard Wall Street from losing any more money.
The short but spectacular string of events rippled through the entire financial world. In the crypto industry, the popular website for tracking various cryptocurrencies’ capitalization, CoinMarketCap, added an informational ticker for the Wall Street Bets stock crusade.
A few days after the GameStop stock fiasco, many investors’ attention turned towards Dogecoin, which many see as a joke intruder into the self-entitled world of crypto traders. As thousands of investors started buying the tokens, Dogecoin increased in value by more than 1,000%% in one day. With an overall increase of 225% over the past week, Dogecoin is now trading around $0.030.
In the Dogecoin frenzy aftermath, Elon Musk changed his Twitter bio description to a single word, “Bitcoin.”
Unsurprisingly, Bitcoin increased in value in the next few hours, adding more than $6,000 to its value. When the storm of tweets and speculations settled, the primary crypto corrected its value but still recorded a 2% increase. Bitcoin is trading now at around $34,000.
Ethereum set a new all-time high (ATH) at 1,467.48 on Monday. While the investors were hoping for a continuous surge, the second crypto in command dropped points over the week, and it is now trading at around $1,350.
XRP registered a remarkable comeback and an 80% increase in value in a week when its parent company, Ripple, responded to the United States Securities and Exchange Commission (SEC) in a lawsuit concerning fraud allegations. As a result, XRP is trading now at around $0.484.
What’s in the News?
- Following the Elon Musk tweet and the subsequent stunning Bitcoin surge, several major crypto exchanges like Binance, Kraken, and Bittrex experienced technical problems.
- Cryptocurrency exchange Coinbase plans to go for a Direct Public Listing (DPO) of its Class A common stock instead of an Initial Public Offering (IPO).
Next Week’s Market Forecast
The next week, the cryptocurrency market should move on and out of the GameStop drama influence. Some industry voices expect Bitcoin to get back in the saddle and ride far beyond the $40,000 level, with some hoping to go as far as $300,000. So far, the first month of 2021 has been an eventful one for the crypto market, and the remaining eleven ones promise to be just as memorable.