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Although the price of BTC advanced 3.34 % in the past seven days, last week’s market news was centered on an unprecedented confrontation: a large number of retail investors took on the strategy of large Wall Street hedge funds , who had short positions for the company GameStop (GME), and expected to lower their price to the lowest possible value. Retail investors began acquiring GME shares and took its price from $ 20 at the beginning of the year, to almost $ 400 at the beginning of the week, as reported by CriptoNoticias.
The funds of Hedging had already borrowed and sold 72 million GME shares at a price close to $ 20. Instead of an expected share decline, retail investors stepped up GME share purchases. The rapid rise in price implied great losses for the hedge funds since the shares that they had already sold and had to return peremptorily, were worth between ten and twenty times more.
The uniqueness of this The situation is that in a market that claims to be free, large funds resort to short positions frequently, even if the first consequence of this strategy is to bankrupt the company that is the object of this maneuver. The defensive action of GME’s price by the group of investors grouped in the Reddit forum r / WallStreetBets, is also perfectly legal.
However, the reaction of the big investors was the of preventing retailers from continuing to buy GME, an openly illegal action that could be investigated by the US Congress in the coming days, according to the publication Politico.com.
Bitcoin in the case of GameStop
Although when the confrontation began to be reflected in the media, a direct relationship between it and Bitcoin was not seen, the WallStreetBets members did reflect at least traits of the bitcoiner attitude. In the first place, due to a critical position before the large financial conglomerates, one of the reasons behind the birth of Bitcoin. What happened this week also puts market ethics under the microscope, especially the practice of short positions.
CriptoNoticias highlights that the founder of the investment firm SkyBridge Capital, Anthony Scaramucci, points out that the situation raised has similarities with the decentralization of BTC and the role that small investors play today. Also, CriptoNoticias pointed out the humorous touch of CoinMarketCap, which listed a fictitious token allusive to WallStreetBets in its top cryptocurrencies.
Featured Tweet of the Week
One of the most recognized entrepreneurs in the market, Tesla CEO Elon Musk spoke out against short positions in a tweet highlighting that it is not legal to sell, for example, a house or a car that is not owned, but questions the fact that it is allowed to sell shares that are not owned, since they are borrowed from an investment bank, in the case of short positions.
But this week we do not highlight this tweet precisely, but the fact that the day Friday, January 29, Elon Musk incorporated the bitcoin logo on his Twitter profile and just tweeted: “In hindsight, it was inevitable.” Musk’s prominence on Twitter and the inclusion of the bitcoin logo on his profile caused the price of BTC to rise from $ 32,000 to more than $ 38,000 in less than two hours, as we reported in CryptoNews. At the time of writing the price of BTC fluctuates above $ 32,400.
The WallStreetBets effect and Elon Musk boost Dogecoin
To complete the unusual week ending this Sunday, Elon Musk, who usually mentioned Dogecoin on Twitter as its CEO, was also responsible (along with WallStreetBets and Mia Khalifa) for a Bullish rally of the Shiba Inu dog meme cryptocurrency, which took it from $ 0.0120 to $ 0.0820 between Thursday and last Friday; a 580% appreciation.
Bitcoin in institutional portfolios
In Ark Invest’s annual report, commented on Sunday by CriptoNoticias, this investment firm points out several reasons why Bitcoin should be present in traditional investment portfolios. Ark Invest referred to institutional investment milestones over the past year and maintains that such foray into new investment strategies will intensify in 2021.
The study suggests that MicroStrategy and Square’s decision to include bitcoin as a cash reserve in their respective organizations could lead other corporations to examine this investment alternative. For its part, MicroStrategy is organizing an event, this February 4 and 5, in which it will reveal the procedures it followed for the acquisition of bitcoin as part of the corporate balance sheet, so that more corporations can join.
Bitcoin floor price stable at $ 29,000, says Willy Woo
According to the metric that he developed on the so-called bitcoin floor price, the well-known analyst Willy Woo maintains, in his most recent subscription newsletter, that this minimum is stable at USD 29,000. For Woo, the price is currently in the lower range of the consolidation band, which is between $ 32,000 and $ 42,000. This was reported on Tuesday, January 26, by CriptoNoticias.
The analyst maintains that the capture of benefits by the “strong hands” has already ended, as he calls holders with large amounts of BTC that invest for the long term. “The sales volume comes from new investors who have recently entered the rally,” notes Woo, adding that this reflects that the bullish rally is just beginning.