Crypto Corner: Week Summary 5 April 2021

data taken at 8:51 am 09/04/2021

The Bitcoin price (BTC/USD) failed to reach a new all-time-high (ATH) in the past two weeks, confirming a strong resistance near the $60,000 level. The lower trading volumes observed also illustrate the strong consolidation within the $50,000-$60,000 range: the daily aggregated trading volume across all major exchanges decreased to reach its 2021 low on Sunday. The Bitcoin market seems to be settling down for now… just until the next ‘breaking news’ happens.

On the other hand, major alternative cryptocurrencies are still setting new record highs: the Ether price (ETH/USD) reached a new ATH at $2,151 on Tuesday, and it is quoting at $2,073 at the time of writing. Polkadot (DOT/USD) also reached a new ATH on Saturday at $46.7. DOT is now quoting at $41.26. The Bitcoin dominance has been dropping fast since February this year, now at 56.65%. The investors interest is shifting to smaller projects with a high potential for growth. The overall cryptocurrency market capitalisation rallied from $350 billion in October last year, to almost $2 trillion on Tuesday this week.

Cryptocurrencies total market capitalisation. Source: Tradingview

While Bitcoin fans and critics are still throwing price projections at each other, the growth of cryptocurrency adoption remains unruffled. Of course Wirex reached the 3.5 million customers threshold this week, but next week will come the highly anticipated listing of the Coinbase stock on the Nasdaq exchange. 115 million shares of the company will start trading on Wednesday under the ticker symbol COIN. With its 56 million verified users and its $223 billion of assets held on its platform, Coinbase is today the best cryptocurrency exchange for new token listings. The research firm Messari described the so-called “Coinbase Effect” in its paper entitled ‘Analysing the Crypto Exchange Pump Phenomenon’, pointing out that the average five-day return over 28 token listings is at an impressive +91%.

Given the record cryptocurrency market capitalisation reached this week and the record revenues reported by the company on Tuesday, the market timing of this IPO seems to be just perfect. Coinbase estimates its revenues for Q1 to be ‘approximately $1.6 billion’. This is already 40% above the total revenues of 2020.

Furthermore, Coinbase settled last month the CFTC investigation into its ‘wash sales’ practice between 2015 and 2018. Although Coinbase activities are not regulated by the CFTC as reminded by Commissioner Dawn D. Stump, this settlement could have sent a positive signal to investors, assuming incorrectly that the cryptocurrency trading activity of the firm is properly regulated.

Some analysts expect the Coinbase valuation to come near $100 billion, which would propel the company in the top 20 firms of the Nasdaq-100 index. This could certainly lead the way for other exchanges in the sector.

Still on the adoption front, more medium and small companies start to accept payments in cryptocurrencies. The service offer is growing:

• VISA is making progress on the development of crypto payment services. It is piloting the settlement of transactions on the Ethereum blockchain. It announced ten days ago that ‘after months of anticipation and careful planning, [it] completed the first successful settlement transaction (…) —with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage’.
• Microsoft surveyed its XBOX users about a cryptocurrency payment option, despite its historic founder Bill Gates labelling himself as a Bitcoin skeptic.
• Gift cards paid with Bitcoins at Bitrefill can let their owners buy from dozens of shops and sites.

Last but not least, Wirex also recently teamed up with Agoda and Booking.com to bring travel promotions to its customers!