Crypto Market Forecast: Midweek Update 24th September

• It’s a challenging week of trading for digital assets as strong headwinds turned markets bearish. Bitcoin (BTC) and Ethereum (ETH) are down ~6.07% and ~9.08% week on week.

• Global financial markets have been spooked by the potential collapse of Chinese real estate giant Evergrande. The company is struggling to meet debt obligations and while the Chinese government may bail out the US$300 billion firm, regulators don’t seem to know how to deal with it.

• The situation is being viewed as the Chinese equivalent of a Lehman Brothers situation. If Evergrande did implode the systemic effects would be severe. As a result, this week there was a move away from risk assets and crypto sold off.

• The U.S. Federal Government revealed that it will hold interest rates steady and anchored near zero. Officials indicated that they expect to begin reducing monthly asset purchases “soon,” but did not say when exactly. They announced the first interest rate hike will be in 2022. The USA is considering raising its debt ceiling.

• The continuation of the hawkish, aggressive monetary policy may be a net positive for Bitcoin markets. If the Fed continues to create more liquidity that can be pumped into risk assets, that will also boost BTC’s appeal as an inflation hedge.

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Altcoin Watch

• Most large-cap altcoins have also had challenging weeks with Cardano (ADA), Binance Coin (BNB), and Chainlink (LINK) down by 3.3%, 9.4%, and 14% week on week. Avalanche (AVAX) has been a standout performer, though, up 18% over the same period.

• Altcoins had to deal with Fear, Uncertainty & Doubt this week when SEC chairman Gary Gensler said that he doesn’t see room for thousands of cryptocurrencies. He compared the current crypto space to the lawless, wild west era of banking before federal regulation was set up.

• Gensler said that he doesn’t see how “five or six thousand private forms of money” can exist in the future. Gensler sees the majority of these cryptocurrencies as securities. The regulator seems intent on stiffer rules and stronger investor protection.

• Gensler has an especially dim view of lending platforms, DeFi, and stablecoins, which he described as poker chips at the Wild West Crypto Casino. He said the SEC is working alongside banking regulators to gain expanded authority from Congress to regulate stablecoins.

What we’re looking at: AMC announces Dogecoin support

AMC, a leading American movie theater chain has announced plans to begin accepting payments in DOGE. The theatre had already revealed plans to accept Bitcoin, Etherum, Litecoin, and Bitcoin Cash for online payments by the end of 2021. The addition of Dogecoin was the result of a Twitter poll by AMC CEO Adam Aron on September 22nd asking Twitter users “Should AMC accept Dogecoin?”

Response to the poll was overwhelming. Aron said the poll received 4.2 million views and was his most replied to and retweeted tweet ever. 140,000 voters said 77% ‘yes’ to the proposition and 23% said ‘no’.

AMC was at the centre of the meme stock craze of 2021. An army of redditors from the WallstreetBets subreddit backed the stock and pushed its price from US$3 to highs of nearly US$70 at one point. The reddit army chose AMC because as a brick-and-mortar physical cinema it was picked by most Wall Street analysts to fail during the pandemic. Buying AMC was a way of counter trading Wall Street, by sinking their shorts and hitting them where it hurt the most, their wallets.

AMC and Dogecoin appear to be a match made in heaven, because like AMC, DOGE confounded industry experts by going on an unexpected price surge backed by an army of retail investors looking to make fools out of institutions. The DOGE run has been even more surreal with the price of the asset rising from US$0.004 at the start of January to a peak price of US$0.68, in June a 16,000% price gain. The DOGE price is currently US$0.22.