[Daily] Bitcoin the monster

Good morning! Welcome to The Daily Moon. Sam Bankman-Fried’s gamer friends will have to wait. The bankrupt cryptopreneur may soon be banned from playing League of Legends under his revised bail conditions. Only email access to review case documents and phone calls/texts with lawyers will be allowed. Guess he’ll have to unwind some other way this weekend.

As of Thursday, 8PM IST

The markets sustained the bull rally. Bitcoin rallied amidst US economic data showing positive trends. Ethereum zoomed on easing regulatory concerns around staking. Nasdaq fell in early trade on investor uncertainty about Alphabet's AI chatbot Bard. Back home, Sensex and Nifty ended higher on buying in IT stocks.

Under BTC’s Spell

After a little back and forth, Bitcoin is back to the bull rally. The king crypto zoomed to $24,620 levels after US inflation stayed mellow. Though the market’s a bit confused about what’s the exact trigger.

Was it inflation?BTC doesn’t like inflation. That’s because price rise forces the US Fed to hike interest rates. When interest rates go up, investors run short of funds to spend. Consequently, BTC prices fall.

Was it the US Fed?The US saw the smallest inflation-rate increase since October 2021. It means a gradual reduction in rate hikes. The data release led to a ripple effect among BTC traders:

1. Short traders who bet that BTC will fall had to liquidate their positions. These traders liquidated almost $70 million in short positions, which means they faced losses. Short sell failures help BTC’s bull rallies.

2. Bitcoin’s computational power or hash rate hit ~317 million terahashes on Wednesday. The higher the hashrate, the higher the value of BTC.

There is a contra-view as well. Inflation worries are far from over. So if the numbers swell in February, it means trouble for BTC. Ordinals effect?The Ordinals NFT project on the Bitcoin blockchain has also played a role in the rally. An NFT collection called DeGods burnt its Solana collection and put its artwork on the Bitcoin network. With NFT collections’ switch to Bitcoin, the demand for the token is also up.

The conspiracy theory We know that the SEC has turned the heat up on crypto. Bitcoin may be the safer option because the SEC chief had once claimed that BTC is a commodity. Some Twitterati even believe that the BTC pump is due to altcoin conversion into BTC.

Will XRP’s Rally Last?

The ongoing SEC-Ripple lawsuit indirectly triggered an XRP rally. A media personality wants access to the Hinman speech documents. As a result, Ripple’s XRP rose ~4.5% to reach $0.4 levels.

FYI The SEC and Ripple are in a legal battle over the latter’s XRP token. SEC claims XRP is a security, but Ripple disagrees.

Why the speech?Former SEC official William Hinman made a controversial speech in 2018 where he said that BTC and ETH are not securities. Since then, the crypto community wanted to understand the basis of this statement. The SEC, on its part, has sought to seal all discussions related to the Hinman speech. But if it gets out, the regulator will have to justify its positions on crypto.

But XRP bear hug persistsWhile XRP went up, its charts don’t hold a lot of promise. There was no rise in Open Interest, meaning traders haven’t bet on an upward trend yet.

Elon Swings DOGE Again

Elon Musk on Twitter is just, er, never dull. Controversial? Yes. Scandalous? Yes. Irreverent? Yes. But the most interesting and cryptic are his tweets on crypto. Especially those that tease Dogecoin.

At it againMusk tweeted this picture on Tuesday:

It is his dog, Floki. And Musk called him “So much better than the other guy!” But because it’s his dog, the DOGE community was excited. Enough for DOGE’s value to rise 5.28% hours after the tweet.

Teasing glimpsesThe fun(ny) thing here is, Musk has never outlined any concrete plans for DOGE and Twitter. He claims to be a fan of the meme coin and his tweets hint at DOGE but there has been nothing concrete. The alternative explanation is Elon is just looking for engagement.

Ethereum Casinos: Banned Soon?

Regulators love a good crypto application. Especially one with risk potential. Ethereum casinos seem to be both.

Ethereum casino? For real?As real as they come. Of course, these are online. And you can play as long as your jurisdiction doesn’t consider cryptocurrency illegal. They’re a way forward in the world of online gambling. Just that you can place bets using ETH.

How does it work?You need a crypto wallet, an ETH supporting casino. And that’s it. Just a warning: if you get the wrong deposit address for the casino, your ETH is gone. You know the regulators are going to crack down on it.

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