Bitcoin Back above $50k and Ether $4k as Both the Crypto Assets Hit Record Volume on CME
As Bitcoin prepaid to fight its latest, which could likely be the biggest hurdle for Bitcoin, and Gary Gensler coming off “much more aggressive,” the market has bought the dip.
After falling to $46,000, then again just under $47k yesterday, Friday it is showing some strength, for now at least, as the price of Bitcoin moves to $51,000.
With BTC already back above $50k and ETH $4k, the market is feeling good. But it remains to be seen if the upward move would be sustainable or would Bitcoin remain choppy as it has been for the past few months.
While some expect Bitcoin to continue to range for a lot more, others expect Bitcoin to take the front stage soon.
— ∞ CO฿IE (@CryptoCobain) May 13, 2021
Bitcoin’s latest slump was driven by the news of the leading cryptocurrency exchange Binance being under investigation by the Justice Department and IRS.
“I think a lot of people are starting to realize that Gary Gensler is going to be much more aggressive, and the SEC commissioner is going to try and make his mark on the crypto industry,” said Nic Carter, founding partner at Castle Island Ventures noting that,
“A lot of these exchanges are hosting the trading of dubious products, things that resemble equity things that might be potentially brushing up against securities laws.”
Bloomberg reported the news on Thursday to which Binance CEO Chengpeng Zhao responded with “The “news” title is bad” and “When you see FUD, click Unsubscribe.” Trader and economist Alex Kruger noted,
“Crypto markets crashed today because of a Bloomberg article about Binance. Did you know Bloomberg journalists get paid more if their story moves the market? The bigger the move, the bigger the bonus.”
Buy those dips
These slumps, however, don’t last for long; in bull markets especially, they reverse fast as people scoop up the buy the dip opportunities as we see currently with the market back in green mode. CME Group also recorded a huge interest in these dips as it tweeted,
“CME cryptocurrency products set two new daily volume records today: Micro Bitcoin futures traded over 52K contracts and Ether futures surpassed 11K contracts trade.”
Regular bitcoin futures on CME also saw an increase in volume at $4 billion, the last time this much volume was seen was on April 22nd, as per Skew. Ether futures, meanwhile, are unstoppable, with volume surpassing over $2 billion on May 13 on CME, up from just $200 million on April 15.
The latest biggest hurdle
Before Binance news, Tesla CEO Elon Musk caused a slump in the market during a time when traditional markets, especially tech stocks, have been feeling heavy due to rising inflation. Stephen Kelso, head of markets at ITI Capital, said,
“Bitcoin is also a manifestation of the value of the internet, and hence it stands to reason that social media and the cult of celebrity has, and will continue to have, an effect on driving demand.”
While still believing “strongly” in crypto, he is concerned about it driving a massive increase in fossil fuel use, especially coal. As we said, it isn't a good look for Tesla either and raises questions on its decision making.
“Surely he would have done his diligence prior to accepting Bitcoin?” said Nic Carter of Coin Metrics. “Very odd and confusing to see this quick reversal.”
Carter says a larger share of Bitcoin is mined during the wet season with hydro, but there are some “great secular trends” emerging. Recently, the Chinese province of Inner Mongolia, which is 70% coal-powered, banned Bitcoin mining and a lot more hash rate onshore onto the US, which is a greener grid than China. Carter said in an interview with Bloomberg,
“Bitcoin miners tend to be long bitcoin. They want to accumulate bitcoin. So their duty is to render themselves as environmentally friendly as possible or buy carbon offsets if they can't.”
According to Antoni Trenchev, managing partner and co-founder of Nexo, “the community now has to work even harder to push the renewable mining narrative,” and this latest hurdle could likely be the biggest for Bitcoin.