Crypto’s strength this week comes as the stock market has started to stagnate in the 2,800-2,900 point range, seemingly playing with the idea of a reversal as the economic outlook remains dismal, with a total of 30 million Americans filing for unemployment over the past month.
Jerome Powell, Chairman of the Federal Reserve, went as far as to say that the U.S. economy is currently in its worst rut in history due to the outbreak of COVID-19. The recovery will not be V-shaped, Powell added, asserting that it may take a while for life to return to pre-virus levels due to the long-lasting effects of the shutdown of the world’s biggest economic powerhouse.
Whatever the case, analysts are still bullish on Bitcoin.
Roch Rosenblum, the co-head of trading at GSR, remarked to Bloomberg that the ongoing BTC rally is predicated on the macroeconomic environment:
“This latest run past $8,000 is as much about positive macro sentiment as it is about the upcoming halving. We’re starting to have a lot more certainty, as more countries begin to share their plans to reopen the economy in May.”
Chart from Coin360.io
This optimism was echoed by Zac Prince, a co-founder of crypto startup BlockFi, who said that the “current market dynamics are driving a bolstered interest [for] digital currency.” These dynamics he was referencing was the Federal Reserve’s commitment to money printing and the growth in stablecoins.
Related Reading: Crypto Tidbits: Bitcoin Surges to $7,800, More U.S. Stimulus, Tether Erupts
Bitcoin & Crypto Tidbits
Elon Musk ‘Talks’ About Bitcoin Again: Elon Musk created quite the stir in global financial markets on May 1st, when he tweeted “[The] Tesla stock price is too high imo,” resulting in the asset collapsing by approximately 10% during the day’s trading session. Although many holders of TSLA saw Musk’s statement as controversial because of the seeming effect it had on their investment, the operator of the @Bitcoin account on Twitter, which has over one million followers, decided to leverage the situation to tweet that the “Bitcoin price is too low imo.” The Tesla chief executive surprisingly responded, first with the tweet below that has Musk laughing at the comment. Musk followed this up ten minutes later by asking @Bitcoin how much it would cost for “some anime Bitcoin.” While he made these comments in jest, Musk has previously mentioned crypto in interviews in a positive manner.
Bitcoin price is too low imo
— Bitcoin (@Bitcoin) May 1, 2020
Bitcoin Spikes in Popularity in China: According to Samson Mow — CSO of Bitcoin development company Blockstream — the Chinese term for “BTC” (比特币) recently exploded in popularity on Weibo. This comes shortly after the Chinese term for “Bitcoin halving” experienced a similar treatment last week, suggestive of a larger hype cycle for cryptocurrency. As of April 29th, the search term was the 19th most popular term on the trending page, registering hundreds of thousands of comments on the matter from the over 400 million users that frequent the social platform.
Andreessen Horowitz (a16z) Raises Big Crypto Fund: This week, Katie Haun and Chris Dixon, partners at Andreessen Horowitz (a16z) — one of the largest Silicon Valley venture capital firms — unveiled “Crypto Fund II,” a new “$515 million fund that will be used to invest in crypto networks and businesses.” The two partners claim they will be focusing on five main categories of investments in the cryptocurrency space, one of them being DeFi: next-generation payments, modern store of value, decentralized finance, new ways for creators to monetize, web 3.0.
Ethereum 2.0 Draws Ever Closer: The “Topaz” testnet for Ethereum has continued to gain transaction, with the network recently hitting 100,000 slots. The Topaz testnet is currently testing Ethereum 2.0 software, which is expected to be launched in late-June or July to the mainnet.
Milestone! 100k slots at Topaz testnet! 24.4k validators3200 finalized epochs90% participation@prylabs controls less than 53% of the networkSome nodes with 300 peers pic.twitter.com/LDZxiC8a0r
— Terence Tsao (@terencechain) May 1, 2020
Photo by chuttersnap on Unsplash