Cryptocurrency update: ETH soars while Dogecoin spins
Ether starts the week strongly, breaching all-time highs, while Dogecoin chases its tail.
Ether soars to all-time high
It makes for refreshing reading when a cryptocurrency that isn’t Bitcoin makes its own stellar gains.
This week, it’s Ether (ETH), the digital token for the Ethereum blockchain. The token has reached a new all-time high, breaking above $4,000.
While Bitcoin steals the headlines, ETH has actually made more substantial gains across 2021 so far. As of May 10th, 2021, Ether’s year-to-date return was a cool 435% against Bitcoin’s 104%.
Ether’s total market cap is now valued at around $470bn. For context, the stock market valuation of JPMorgan Chase, the US’ largest bank, floats around $488bn.
Behind the ETH drive is intensified worldwide interest in Decentralised Finance (DeFi). DeFi is functions around trading, lending, and other financial processes, that seek to match those of traditional banking and financial firms, executed via blockchain technology.
The Ethereum blockchain serves as the foundation for the DeFi world, as well as being a basis for non-fungible tokens, one of cryptocurrencies hottest trends. Transactions undertaken on the Ethereum blockchain are charged in a small amount of Ether, giving the token a practical use.
The more use the Ethereum blockchain gets from DeFi developers then the higher ETH prices will climb, in theory, and that’s what we’re currently seeing.
Elon Musk sets Dogecoin’s tail wagging
Shiba Inus are known to be bold, strong-willed, quirky, and confident. It’s a dog breed likes to do things differently; one that doesn’t always do what its owners want.
While very cute, and with massive meme-potential as the internet has clearly shown, there’s no telling what a Shiba will do from one minute to the next.
Those characteristics that make fuzzy, feisty Shibas a bit of a handful apply neatly to Dogecoin, the once joke currency that runs to the beat of its own drum. Choosing the Shiba Inu as the token’s mascot is looking more appropriate every day.
Dogecoin had an exceptionally eventful weekend after notorious tweeter and Dogecoin meme supporter Elon musk sent the token spinning.
Firstly, on Saturday 8th May when hosting Saturday Night Live, Musk triggered a Dogecoin sell off after calling the currency a “hustle” during his opening monologue. The currency’s value subsequently tumbled.
But come Monday 10th, Musk was giving Dogecoin a bone again. This time, the billionaire meme machine said his SpaceX firm would be accepting payment via Dogecoin from a Canadian firm Geometric Energy Corp, to send a satellite to the moon.
Yes, Musk and Co. are planning to literally send Dogecoin to the moon. The DOGE-1 satellite mission is said to be launching in Q1 2022.
“This mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce,” SpaceX Vice President of Commercial Sales Tom Ochinero said in a press release. “We’re excited to launch DOGE-1 to the Moon!”
According to GSC, the rocket’s payload will “obtain lunar-spatial intelligence from sensors and cameras on-board using communications and computational systems”.
Does anyone else think this is getting out of hand now? Thanks to the power of Musk’s tweets, Dogecoin has gained an almost unbelievable 11,000% year-to-date. Perhaps it’s not the Shiba Inus that need putting on a leash but Musk himself.
After all, real currency from real pepole is being pumped into Dogecoin at the whims of a figure who clearly sees it all as a bit of a joke. Of course, the token did start life as a novelty, but its huge gains, and the spotlight afforded by Musk and his ilk, is turning it into something serious. Let’s hope no one gets bitten.
BoE’s Bailey gives stark crypto warning
“I’m going to say this very bluntly again: buy crypto only if you’re prepared to lose all your money.”
Harsh words from Bank of England Governor Andrew Bailey, speaking at the Bank’s Thursday May 6th press conference.
When asked for his opinion on crypto, Bailey said: “They have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.”
Bailey’s words echo those of the UK’s Financial Conduct Authority. In January, the FCA said: “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.”
Cryptocurrency trading is currently not available in the UK for retail customers.
It will be interesting to see if Bailey’s thoughts have any actual effect on token prices.
Institutional support for cryptos as a whole as been up this year, mirroring crypto gains. Visa and Mastercard are upping their crypto offering; Tesla is dabbling with crypto trading alongside its core EV business; Banks like Deutsche Bank are exploring more crypto services.
Bailey’s comments do represent the fact that full support amongst financial circles for digital currencies has yet to be realised. They also reinforce the fact that volatility is never far away from cryptos. Massive price increases have been paired against violent crashes. Losses are a very real possibility – something all crypto traders should keep in mind.