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By on April 21, 2021 0


Plumber Buying Doge Shows The Power Of Retail Crypto Investors

(Bloomberg) – A tough weekend for the legions who dumped into all things crypto after Coinbase Global Inc.’s direct listing did little to undermine its grip on retail traders. Dogecoin rallied around 20% more on Monday, even after most of the biggest tokens, including Bitcoin, fell further. For Mike McGlone, a commodities strategist at Bloomberg Intelligence, the recent rise of the joke token is an example of retail involvement in crypto markets. His plumber recently told him he had bought. For McGlone, this is the result of the “perfect storm” of pandemic lockdowns, a lot of money in the system and the ability of investors to speculate around the clock. “The markets will never change – this one is. that 24/7 and the easiest to access in history, ”he said. This is “a great example of playing just for fun – unless the participants lose too much money, especially because they took too much risk at the casino.” The rout provided a stern reminder of one of the fundamentals of the market: violent price swings are common A fake report from an anonymous Twitter account that the US Treasury was cracking down on crypto money laundering was enough to do drop Bitcoin down to 15% on Sunday, days after hitting a record high of $ 64,870. While the weekend’s low liquidity likely exacerbated the nose drop, the world’s largest cryptocurrency fell a further 3.5% on Monday. of weight to throw. This dynamic is especially prevalent on weekends, when traditional trading desks darken as Bitcoin and other cryptocurrencies continue to change hands. Even though Coinbase’s direct listing marks an important milestone for crypto, for institutions and traders venturing into crypto, learning to live with this volatility is a key first step. last week, because of Coinbase, the crypto markets can be very volatile, ”Philip Gradwell, chief economist at crypto data tracker Chainalysis, said over the phone. “It’s in a sense nothing new if you’ve been in the industry for a few years.” Even by crypto standards, sentiment seemed tense at the end of last week. Bitcoin soared ahead of Coinbase’s highly anticipated listing, bringing year-to-date gains to over 118% at one point. This enthusiasm has spilled over into so-called altcoins such as Dogecoin, which has soared by over 13,000% in the past year. According to data from Bybt.com, around $ 9.3 billion in so-called long Bitcoin futures positions were liquidated on Saturday, followed by an additional $ 700 million on Sunday, according to data from Bybt.com. Michael Novogratz tweeted over the weekend, adding that “everything will be fine in the medium term” as the institutions enter the space. Shifting power dynamics in favor of institutions will be the “holy grail” for Coinbase, BI analyst Julie Chariell said last week, given that companies are less likely to dispose of their holdings as quickly as traders. detail. Although retail investors only accounted for 36% of the exchange’s volume in the quarter ending December 31, more than 90% of Coinbase’s revenue came from retail transactions. But even if Bitcoin carved out a place for itself in the portfolios and on the balance sheets of companies beyond MicroStrategy Inc. and Tesla Inc., the weekend will likely still belong to the individual investor. McClurg, CIO at Valkyrie Investments, said in a phone interview. “When you see a stock like this over the weekend, it’s just when all institutional traders are sleeping or not working.” For more articles like this, please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP