Good morning. The past week’s main story is really about the few vs the money. Mark Cuban called it Wall Street vs the little guys. It’s one of those weeks where people have realized just how much power they can have if they just work together.
To put you up to speed, short traders who are hedge fund managers tried to push the stock of GameStop ($GME), a company embattled by the pandemic to doomsday. But a decentralized group of traders organized on Reddit, realizing they have actual control of the stock’s supply, refused to sell and buy more of the $GME stock. The hedge fund managers had no choice but to be more aggressive with their short positions, but to no avail. One of the hedge fund companies named Melvin Capital had to be bailed out since they lost billions.
A group of nameless retail traders vs hedge funds.
Soon new reports suggested the hedge funds, whose investors also invested in the brokers or trading apps that retail traders use, coerced these trading apps to not allow retail to buy the affected stocks, but they can sell.
u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons— Elon Musk (@elonmusk) January 28, 2021
Crypto Twitter thinks the entire event could pave more people to Bitcoin, to cryptocurrency:
The beauty of what has happened with #WSB is that Wall street is learning an expensive lesson that The Way Things Have Always Been Done is not How Things Should Be Done. There is power in numbers working together. Buy and Trade Together can be a whole lot more powerful
— Mark Cuban (@mcuban) January 29, 2021
Welcome to Monday Markets Wrap-up, part of our new series: BitPinas Daily. We will look back at all the major news and updates that happened this week. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. We highlight three to four important news of the past week and list down the rest.
Market Price as of February 1, 2021:
Bitcoin$34,151+0.14%Ethereum$1,317-0.83%Tether$0.98+1.02%Polkadot$16.14-1.02%XRP$0.46+76.92%SLP$0.016-32.60%
Bitcoin closed January 31, 2021, at $34,151 per BTC. We’re up 1% in the last 7 days and up 12% since the year began. This is 18% below the previous all-time high of $41,940, which was hit on Jan. 8, 2021.
Bitcoin’s market capitalization stands today at $605,444,136,124 which is 61% of the entire cryptocurrency market. The entire crypto market, by the way, now has a market cap of $988,090,454,221 (-4.20%).
On the table above, there’s the cryptocurrency SLP. If you wonder what that is, check out this article: Playing Axie Infinity vs Minimum Basic Salary in the Philippines.
Table of Contents.
#CryptoPH
Updated Guidelines for Virtual Asset Service Providers
“Virtual Currency Exchange” as a term is now replaced by “Virtual Asset Service Providers” or VASPs, which is in line from the recommendations of the FATF. There really isn’t a lot new here apart from the terms and the tightening or clarifying of some of the rules that are previously in place.
Read our article here: Key Takeaways: Philippines Guidelines on Virtual Asset Service Providers (VASPs) which details paid-up capital requirements and even types of VASPs.
Crypto Trading Still A Very Personal Process in the Philippines
Some quotes from our article:
“The most obvious reason for this decline is that crypto trading in the Philippines is still a very personal and informal business process,” Luis Buenaventura said, sharing that traders who might have met in marketplaces might eventually prefer to deal with each other directly, eliminating fees and marketplaces requirements.
“What Luis has described is the increasing sophistication of the Filipino cryptocurrency trader or holder. Beginners are usually advised to start using “newbie” friendly crypto apps like Coins.ph. After observing the market, the beginner realizes they can save fees by going to P2P marketplaces. Finally the beginner becomes comfortable and proceeds to trade on cryptocurrency exchanges, local or otherwise or becomes sophisticated in arbitrage on P2P marketplaces, with some of them trying decentralized finance.”
Messari Report: Philippines has the highest ownership of cryptocurrency
The key takeaway in the report is that, the stat “Filipinos have the highest ownership of cryptocurrency” was from Jan 2020. That was before Binance P2P and other marketplaces made a concerted effort to corner the Philippine P2P market. https://t.co/ETORHuJJR0 https://t.co/qkJxFWSXyf
— Michael Mislos (@mmichaels_21) January 27, 2021
We published “Philippines has High Crypto Adoption, Mature Ecosystem, Says Messari Report” which summarizes the research done by Mira Christanto of Messari.io. Some insights:
Use of crypto for financial inclusion
Filipinos have the highest ownership of cryptocurrency
Regulators have adopted a developmental mindset towards crypto
80% of PDAX’s volume is from institutions that facilitate remittances like MoneyGram
Coins.ph has the highest brand recall for crypto purchases
One word: Doge
Dogecoin goes up
The joke cryptocurrency with infinite supply increased in value as an after effect of the traders’ increasing attention to the GameStop saga which we discussed here.
$DOGE went up 975% within 48 hours from $0.008 to $0.087. In the aftermath, this is how the chart of Dogecoin looks like:
I don’t think any amount of technical analysis could have prepared us for this, but hey, welcome to crypto, where the market is open 24/7.
One analyst observed that the pump happened during the U.S. session (night time here) and then the dump happened in the Asia session. So is this another case of Asia dumping on the U.S. the bags?
Peak crypto Twitter here:
Elon Musk
Retail trade volume increases following Elon Musk’s tweet. Price goes up…. Then down.
Bitcoin’s supposed to trade at a tighter range in the coming days, but Elon Musk has other plans. The world’s richest man changed his Twitter bio to just say “#bitcoin” and then posted: “In retrospect, it’s inevitable.”
Bitcoin’s price shot up from $32,000 to $38,000 within minutes.
On top of that, consider that the announcement came immediately after the largest options expiry in bitcoin’s history, not giving traders much chance to reestablish their long exposure or close their short hedges. Shorts just got taken for a wild ride.
— Alex Krüger (@krugermacro) January 29, 2021
Still, the pump appeared rather short-lived? We definitely need to turn on our tweet notifications for Elon. He definitely can move the market, and he did this countless times already.
Mark Cuban on DeFi
Mavs owner says DeFi, NFT could work
When asked if he thinks bitcoin will ever be used for anything outside of an investment vehicle:
“Sure. If DeFi and BTC can evolve together in a manner that allows BTC to effectively be a bank account without the bank. That creates utility for BTC. But right now there are so many products being created, it’s going to be the wild west for a while,“ Cuban told Jeff Wilser of Coindesk.
His thoughts on Defi?
“It has a shot. We have to get through the wild west period, but there is so little friction in transactions vs traditional banking. If they can get away from fear of [know your customer] and other regulations and let the products leverage their advantages, it really could change banking dramatically.”
Cuban did say he’s not sure whether BTC is the beneficiary of all this because of volatility, but he admits its more of the problem of the efficiency of the markets and the exchanges, not BTC per se.
The total value locked on DeFi has increased to $27.67 billion at the time this article was written.
CipherTrace
Crypto Crime and AML Report 2020
Blockchain security firm CipherTrace has released its report on the major crypto theft that happened in 2020 as well as regulatory developments. Here are some of the key findings:
Legitimate crypto use goes up while crypto crime percentage goes down
Half of all crypto-related threats that happened in 2020 are in the DeFi space (rugpulls, etc)
Fraud is dominant crypto crime
Most BTC cross border transactions went from regulated virtual asset service provider (VASP) to a VASP with weaker KYC
What else is happening
ETH is Growth Asset Says Galaxy Digital
Harvard, Yale, Brown Endowments Have Been Buying Bitcoin for at Least a Year: Sources
Another Public Company Adopts Bitcoin as Treasury Reserve Asset
When will Michael Saylor sell?
Central banks likely to issue CBDCs in three years: BIS
Bridgewater said Bitcoin is on its Investment Radar
Coinbase announces direct listing over IPO