Markets

DOGE Taps a Lifetime Price High, Mark Cuban Says Dallas Mavs Shop Won’t Sell Its Dogecoin

15/04/2021 by Idelto Editor

This week a number of digital assets saw significant gains, but the meme-themed digital asset dogecoin has seen a significant rise during the last 48 hours. Dogecoin tapped a high of $0.143 per unit on Wednesday and has spiked more than 104% during the last week. Meanwhile, the billionaire investor and television personality, Mark Cuban, says the Dallas Mavericks have been seeing increased dogecoin sales.

Dogecoin Skyrockets to New Heights, Food Network Star Guy Fieri Gives a Shoutout to Shiba Inu Crypto

Dogecoin (DOGE), the meme token that was launched on December 6, 2013, has skyrocketed to new heights on Wednesday. 2021 has been quite the year for DOGE traders, as the crypto asset touched an all-time high (ATH) at $0.143 per unit on April 14th.

The digital currency has jumped more than 104% against the USD in seven days and during the last week gained 82% against BTC. The cryptocurrency featuring the likeness of the Shiba Inu dog has also seen a massive +1,181% gain in three months’ time.

Elon Musk has always been a fan of dogecoin and other celebrities have been open DOGE fans as well. This week the star of the American food reality television show “Diners, Drive-Ins and Dives,” Guy Fieri took dogecoin to “Flavortown, USA” when he tweeted about the meme coin on April 13.

“Rollin’ out to the MOON,” Fieri tweeted with a rocket emoji and a dogecoin hashtag. Overnight trading sessions (EST) then saw the crypto token gather more than 20% during the course of the day on April 14.

Dallas Mavs Owner and Shark Tank Investor Mark Cuban Says Dogecoin Sales Have Increased This Month

Musk’s company Tesla also accepts bitcoin (BTC) these days and the company keeps BTC on the balance sheet as well. Moreover, if someone is to purchase a Tesla with bitcoin, Musk said the electric car firm doesn’t plan to convert the BTC into fiat.

In a very similar move, Mark Cuban, a well known investor and one of the hosts on Shark Tank, explained on April 13, that the Dallas Mavericks have been getting a lot of dogecoin sales, and the team is not selling.

Cuban tweeted:

FYI, the Mavs sales in dogecoin have increased 550pct over the past month,” Cuban explained. “We have now sold more than 122k Doge in merchandise. We will never sell 1 single Doge ever. So keep buying [at the Dallas Mavs Shop].

Dogecoin Gets a ‘Fast N Loud’ Push

If the Mavs are planning to keep dogecoin (DOGE) on its balance sheet, then the NBA team just might be the first corporate entity to do so with the meme-based coin. In addition to triple D’s Fieri, Richard Ray Rawlings star of Discovery’s “Fast N Loud” also mentioned DOGE this week. “Screw it, I’m on the Dogecoin train now. To the moon,” Rawlings tweeted.

Furthermore, the customized high-performance gaming PC company Ibuypower also talked about dogecoin on social media. The official Twitter account for Ibuypower told its 190,000+ followers:

Should we add Dogecoin as a form of payment? Asking for a friend.

Meanwhile, across many nations, the terms “dogecoin” and “DOGE” have been trending on social media. The term “dogecoin” on Google Trends (GT) indicates the word is rising in the U.S. in terms of queries. The trend is the same on a worldwide search and similarly, the term “DOGE” is rising as well globally on GT. At the time of publication, DOGE is exchanging hands for $0.123 to $0.132 per unit on Wednesday evening (EST).

What do you think about dogecoin surging and all the celebrities talking about the crypto asset? Let us know what you think about this subject in the comments section below.

Analysis: Jerome Powell On “60 Minutes”

14/04/2021 by Idelto Editor

In this episode of “Fed Watch,” the hosts listened and reacted to several clips from the Jerome Powell “60 Minutes” interview.

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In this episode of Bitcoin Magazine’s “Fed Watch” podcast, hosts Christian Keroles and Ansel Lindner listened and reacted to several clips from the Jerome Powell “60 Minutes” interview. All audio is used under fair use and they added their commentary to it. You can get the full interview here and the YouTube playlist of clips here.

Powell, the chairman of the Federal Reserve, appeared on “60 Minutes” this week. The interview seemed to be a public relations attempt by the Fed. It fell one year after the Corona Crash of 2020.

Lindner and Keroles took three clips and broke them down in unapologetic fashion. The first clip is amazing because Powell said that the Fed sees the same persistent issues today which were present back during the Great Financial Crisis (GFC), and if they keep coming up they might as well fix them. This comment got the hosts’ blood boiling. It was not as if they did not try their best to fix it back after the GFC. What makes them think they’ll be able to fix it this time?

The second clip they tackled is one where Powell addressed the U.S.’s unsustainable debt. He drew a distinction between an unsustainable “path” and an unsustainable “level” by saying the U.S. is on an unsustainable path, but is currently not at an unsustainable level of debt. He’s really splitting hairs because the path has not changed for 40 years. There’s one way out of the debt and that is default.

The last clip they looked at was about the digital dollar. They feel this was a topic they must cover on “Fed Watch” because it is a very large topic when people discuss the future direction of central banking in regards to central bank digital currencies (CBDC). Powell’s comments here are no surprise, pouring cold water on the idea of digital dollar. The Fed has no intention of being first in the CBDC race and Powell offered a skeptical approach that is missing from many other central banks.

The last few minutes of this episode consisted of a discussion on the Coinbase direct offering happening today and a whirlwind macro summary. Overall, this was a very fun and informative episode once again from “Fed Watch.”

VanEck Launches ETF Offering Exposure To Bitcoin-Focused Companies

14/04/2021 by Idelto Editor

The Digital Transformation ETF launched by VanEck provides investors with exposure to the likes of MicroStrategy, Square, Riot Blockchain and more.

VanEck, an assets management company with roots in the cryptocurrency space, has long desired to offer a bitcoin exchange-traded fund (ETF) on the public market. The U.S. Securities and Exchange Commission has, however, not approved its filing to do so (or any other such filings, for that matter).

But in the meantime, VanEck has launched a new ETF that allows eager investors access to the Bitcoin market, albeit in a less direct way.

The new ETF, called the Digital Transformation ETF, is designed to provide investors with exposure to companies that have invested in or provide services for “the digital transformation of the world’s economy.” For many of the fund’s primary holdings, this means companies that are all-in on bitcoin.

The Digital Transformation ETF offers exposure to the likes of MicroStrategy, Riot Blockchain, Square and others that have directly allocated their treasury assets to bitcoin or directly contribute to the Bitcoin ecosystem in some way.

Would-be investors should note the clever distinction between direct bitcoin exposure and this product. They are not investing in cryptocurrency, either directly or indirectly, through derivatives. Instead, they are investing in relevant digital asset companies that participate in the cryptocurrency space.

To be eligible for inclusion and tracking in the ETF, a company must generate half of its revenues from digital assets projects, generate at least half of its revenues from projects that have the potential to generate half of their revenues from digital assets or digital assets projects or have at least half of its assets invested directly in digital assets or digital assets projects.

Bitcoin’s Kimchi Premium Bubble: Inflation, Deflation and Consequences

14/04/2021 by Idelto Editor

Bitcoin often trades at a premium in South Korea; what happens when this bullish spread quickly dissipates?

The Kimchi premium—the spread between Bitcoin price on South Korean exchanges and Western exchanges—has always been an indicator attracting people’s attention in the bull market. The source of this spread is rooted in the inability to easily get a substantial amount of USD out of the country due to institutional frictions. Thus, this lack of arbitrage opportunities coupled with a huge demand for bitcoin among Koreans makes bitcoin trade at a premium on Korean exchanges when speculative frenzy hits the masses.

As with any bubble, at one point, when money inflows stop propping up the price, it is going to crash or at least correct somewhat. Sometimes, even a small pin is enough for the bubble to start deflating. This is exactly what happened today when Upbit suspended its deposits and withdrawals. The premium has fallen from 21 percent and hit 10 percent at its lowest point.

This is not the first time this bubble emerged and popped. In the peak of the 2017–2018 bull run the Kimchi premium reached 51 percent before it all came crashing down. Caution from this event is one of the reasons why the market has thrown a tantrum today. Traders see the Kimchi premium correction as a top signal and the harbinger of an overall market correction.

However, this is exactly a case of the tail wagging the dog. According to CoinGecko, the total bitcoin trading volume of the five major Korean exchanges—Bithumb, Upbit, Coinone, GOPAX, Corbit—makes up to 3.2 percent of the global bitcoin trading volume. Even in a case of the collapse of the bubble on Korean exchanges, it should not affect the global price much. Local bubbles come and go, which is not that significant.

What is significant, however, is the attention people pay to these sorts of things. Risk-on assets such as bitcoin are dominated by narratives and the Kimchi premium narrative is still a powerful one, if the amount of major media outlets and Twitter accounts mentioning it is any indicator. As with any narrative, though, it usually takes several invalidations for it to stop occupying people’s minds.

Will today’s premium correction make the premium disappear? Probably not. The bullish narratives for bitcoin are still untouched, the demand for bitcoin didn’t go anywhere, and the institutional frictions to withdraw money from the country are still in place. All this makes a perfect cocktail for the bubble to continue existing.

It is also worth noting that the Kimchi premium is not specific to bitcoin and is present for some other cryptocurrencies too, reflecting the arbitrage opportunities taken by traders and the overall bullish sentiment among Koreans.

The Kimchi premium can be a good and reliable indicator of the demand for bitcoin when taken within the context of its origin and combined with other factors affecting bitcoin’s price. On the other hand, used separately, it can give birth to false narratives and bring a lot of misinformation and damage. As with any indicator, one should be cautious to use it and never make any investment decisions based on this particular piece of data alone.

This is a guest post by Lex Moskovski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Coinbase Is Severely Overvalued At 1,500,000 BTC

14/04/2021 by Idelto Editor

With an initial share price of 554,212 sats, Coinbase is an unattractive investment in bitcoin terms. Here’s why.

This morning, Coinbase, Inc. ($COIN) started trading after a direct listing on the Nasdaq stock exchange, with a current share price of 554,212 sats ($349). With 261.3 Million shares outstanding, the company has a market capitalization of 1,475,878 BTC ($91.19 billion) at the time of writing. While Coinbase has played a large role in the history of Bitcoin, especially in the United States over the last decade, the company is unattractive from an investment standpoint in bitcoin terms, and anyone using the world’s soundest money as their unit of account for economic calculation should agree.

The Real Unit of Account

While valuing equities with bitcoin as a primary unit of account can be inconvenient over a short amount of time due to volatility in the dollar exchange rate, it is absolutely crucial to understand valuations in bitcoin terms if you wish to retain (and grow) your purchasing power into the future.

You cannot escape the opportunity cost of bitcoin, and the opportunity cost of not accumulating the world’s strongest and most sound monetary asset, is quite large. Regardless of how bullish you may be on Coinbase and the company’s moat in the *cryptocurrency* industry, bitcoin obsoletes all other money. To think that any company should be worth 7 to 8 percent of global wealth is ludicrous, nevermind one that holds less than 0.2 percent of the global money supply, with about 4,487 BTC.

If these measurements seem outrageous or incomparable, you might be missing what is truly taking place. Bitcoin is still a nascent, yet extremely robust and hardened technology and monetary asset. A reaction to growing global demand for an alternative monetary system, the emergence of Bitcoin in contrast to the increasingly fragile and unstable incumbent fiat monetary order, Bitcoin stands to appreciate in orders of magnitude over the next couple of decades, as it continues on its path toward becoming fully global money.

Prudent Capital Allocation

It is clear from a risk management perspective that executives at Coinbase should use their newfound access to public markets to dilute the current shareholders equity to buy bitcoin for the company’s balance sheet. Afterall, Coinbase should understand the ills of fiat and the merit of bitcoin the asset better than nearly anyone.

Conducting this economic calculation using the soundest money is even more imperative at the tail end of the long-term debt cycle, as shareholders should be looking for ways to turn the company’s record revenue and profits into sound money to protect the balance sheet from being debased. Similar to a calculation made by companies to issue debt to buy back their stock, in a sound money economic system that still has equity markets denominated in a weaker currency, a prudent strategy would be to dilute shareholder equity on a shares-outstanding basis to acquire bitcoin.

The contrast between valuing equities with expected future-discounted cash flows when sovereign debt offers negative real rates, against valuing equities as part of a fixed, 21,000,000-piece economic pie is severe. Those who adopt a bitcoin standard will have their purchasing power increase at the expense of those who don’t. This is not opinion, but rather an empirical economic reality.

Going forward, bitcoin accumulation very well may be the new share buyback, in an increasingly popular move that not only boosts share price, but does not completely decapitalize the business and promise away future free cash flows at the expense of boosting earnings in the present. Coinbase has certainly had a meaningful impact in the adoption curve of Bitcoin, but for the company to remain viable over the long term, accumulating bitcoin is absolutely imperative.