Crypto Market Analysis: 18th May 2021

The price of bitcoin has tumbled over 25% in the last seven days, hitting a low of $42,025 over the weekend, as investors took profits en masse.

Bitcoin, as well as peers such as Ethereum which have also slumped by similar amounts in the last week, has sold off after a staggering run year-to-date which had seen it double since the start of 2021.

Amid a wave of profit-taking last week, much of the reason for the sell-off is being placed on Elon Musk, the Tesla CEO, after a series of tweets about bitcoin, its energy usage, and the company’s position in the cryptoasset.

‘We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted.

‘Cryptocurrency is a good idea on many levels and we believe it has a promising future but this cannot come at great cost to the environment.

‘Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.’

Nonetheless, Musk himself seemed to counter many rumours this morning after clarifying that Tesla had not sold any of its bitcoin recently.

Having bottomed at $42,000, bitcoin bounced back to trade at $44,300 this morning, with Ethereum at $3,376 having dropped to $3,095 at its low point.

Facebook to launch US stable coin

The group behind Facebook’s Libra project plans to launch a US dollar stablecoin after scaling back its global ambitions amid resistance to its plans in Switzerland.

The Diem Association, which was formerly known as Facebook’s Libra project and is made up of 26 financial firms and non-profits, said it was relocating its main operations from Switzerland to the United States in a statement.

It has said it will now run a blockchain-based payment system that allows real-time transfer of Diem stablecoins, with plans to register as a money services business with the US Department of the Treasury’s Financial Crimes Enforcement Network.

Stablecoins, digital currencies pegged to a fiat currency, are being used increasingly via numerous networks. California-based Silvergate Bank will issue the Diem USD stablecoin and manage the Diem USD reserve, with a pilot expected before a full rollout.

“We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper,” the association said.

EOS doubles after raising $10bn to launch exchange

EOS coin saw its price double in a day last week after the company behind the coin said it had raised $10bn to build a next-generation cryptocurrency exchange.

Block.one, the company behind the EOSIO software, said it was launching a subsidiary to create the crypto exchange, with billionaire backers including Peter Thiel among the investors in the project.

The platform, called Bullish Global, will be a blockchain-based exchange and is set to be released this year.

“Bullish’s balance sheet is strong, and its vertical integration offers stability and liquidity to the cryptocurrency space. I’m happy to join Bullish as an investor and advisor as it gets started on a long and fruitful journey,” Thiel was quoted as saying.

EOS’ price soared in response, jumping to a peak above $14 last week, before retreating back to trade around the $10.50 mark. It started in May priced at just $6.

eBay to allow NFTs on the platform

eBay has said it will allow the sales of NFTs on its platform in the future amid a recent frenzy for the tokenised collectibles.

The e-commerce company is expected to slowly build up sales of digital collectibles on the platform, starting with a smaller group of verified sellers.

“In the coming months, eBay will add new capabilities that bring blockchain-driven collectibles to our platform,” eBay exec Jordan Sweetnam told Reuters.

eBay has already invested heavily in infrastructure for physical collectibles like trading cards, as well as items like sneakers and watches which they help verify for buyers.

The NFT market shows little sign of slowing, with British auction house Christie’s selling nine CryptoPunk NFTs for nearly $17 million last week, according to a tweet posted on May 12.

Ethereum founder Vitalik donates $1.2bn to India relief fund

Ethereum creator Vitalik Buterin has pledged $1.2 billion to India’s Covid-19 relief fund.

The 27-year-old programmer, who created Ethereum in 2013, transferred new Dogecoin copycat Shiba Inu tokens which had been gifted into his Etherscan public wallet – which had a combined worth of more than $1bn dollars – to the India Covid Relief Fund.

Buterin handed the assets over to a relief project established by Polygon chief Sandeep Nailwal who created the fund last month in response to the coronavirus crisis in India.

Buterin had already personally gifted $600,000 to help kick off the fund previously.

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