A Week after a Major Sell-off, Cryptocurrencies Are Back
Bitcoin, Ethereum, and Dogecoin all rallied on Monday, barely a week after crypto was hit by a sell-off. Bitcoin has soared over 10 percent, Ethereum up over 7 percent and Dogecoin is up 11 percent. According to available data, this all happened within a 24-hour time frame.
Bitcoin peaked at over $31,100, a six-week high. Ethereum reached $2,300 and Dogecoin is now trading at about 20 cents. The crypto started as a meme, and it now has a market capitalization of $28.8 billion. The surge in prices appears to be the result of signals sent by giants in the tech industry of their support for digital currencies.
Jeffrey Halley, a senior market analyst at Oanda, supports speculation that Amazon may be getting ready to accept digital currency as payment. Halley went on to say this speculation may have played a role in the market rally. This supposition was prompted by a posting on Amazon’s website for a product lead for blockchain and digital currencies.
The position posting, which was announced late last week, was widely reported in numerous media outlets. The successful candidate would, amongst other tasks, be responsible for helping the payment team at Amazon develop new capabilities. When asked for a comment, Amazon did not immediately reply to the request.
Virtual Currencies Soar on Bullish Comments by Musk and Dorsey
Bullish comments by the chief executives of Tesla and Twitter have resulted in virtual currency values soaring. Both Elon Musk and Jack Dorsey both shared how they have, or plan to, incorporated virtual currencies into their respective businesses.
All this came in complete contrast to the downturn in crypto a week ago, as investors showed concern over the emerging Delta variant of the coronavirus. At the time, Bitcoin prices dropped to below $30,000. But then, according to another market analyst at Oanda, Elon Mush rode to the rescue.
During an online event with Jack Dorsey, Musk disclosed that Tesla and SpaceX both own Bitcoin. Musk revealed during the event that outside of Tesla and SpaceX, the only major investments he has are in those in Bitcoin, Ethereum, as well as Dogecoin. Musk is well known for shifting market sentiment with little more than a tweet. Over last weekend he posted a meme on Twitter reading, “Dogecoin is money.”
Although Outspoken, Musk’s Messages Have Been Mixed
Although his messages concerning crypto have been mixed, Musk has been outspoken. During the last few months, the prices of several cryptocurrencies, including those owned by Musk, have been wildly vacillating.
In May, Musk appeared on the popular TV sitcom, Saturday Night Live. During his appearance, he called Dogecoin a “hustle.” As a result of this comment, the price plummeted. Also in May, Musk announced that Tesla would no longer accept Bitcoin as payment for a vehicle, citing the huge amount of energy needed to mine it.
Last week, Musk changed his mind, stating that Tesla would be keeping Bitcoin on its books and would probably start accepting payment for vehicles in Bitcoin once again. The caveat, when half the power required to mine Bitcoin comes from clean energy sources such as wind and solar.
Craig Erlam, senior market analyst at Oanda was quoted as saying, “Crypto was given a helping hand by its old friend Elon Musk, and the help could not have come at a more opportune time”. Erlam suggested the near-term outlook for crypto is beginning to look brighter.
Meanwhile, Dorsey told investors and analysts that Bitcoin will be a significant component of Twitter’s strategy going forward.
In a message to shareholders, Dorsey noted three trends that are relevant to Twitter. AI (Artificial Intelligence), decentralization, and the internet which now provides people with instant access to a global native currency; Bitcoin. Dorsey said last week, “Twitter intends to lead the way in all three.”
Dorsey’s other company Square has purchased millions of dollars in Bitcoin. He has also started an initiative for crypto developers, adding that when it comes to the internet having a native currency, Bitcoin is perhaps the best bet.
Dorsey, and others, are of the opinion that if the internet was to have a native currency, everything would move much faster and everyone on the planet could be reached.