Crypto Market Forecast: Week of February 8th 2021

It was a bullish week in cryptocurrency markets as the Bitcoin price soared to new all-time highs on the back of news that Tesla has made a big bet on the asset’s future. At the time of writing, BTC has passed the USD46,000 for the first time – rising ~32% over the week. The Ethereum price rose ~26% in the same time period. On Sunday, the CME launched its much-anticipated ETH futures contract product. Additionally, the total value of assets locked into Ethereum’s DeFI sector has crossed USD35 billion for the first time.

Tesla, which became the world’s largest car company by value last year, announced on Monday in its annual report filed with the Securities and Exchange Commission that it had invested USD1.5 Billion in bitcoin as part of a new company investment policy. In the same report, Tesla said it expects to accept bitcoin as a form of payment for its products in the near future.

The news of the purchase sent bitcoin markets into a frenzy. Within an hour after the news became public the Bitcoin price jumped ~10%. The sudden surge of retail traders trying to buy bitcoin appeared to be too much for crypto market infrastructure to handle. The status pages for major crypto exchanges Gemini and Kraken both reported web and mobile connectivity issues on Monday that appear to have been caused by the huge trading demand. Binance also temporarily suspended withdrawals.

Tesla founder and CEO Elon Musk has been visibly supporting bitcoin on social media over the last few weeks and even changed his twitter profile bio to read #bitcoin recently. On February 1st, while fielding questions on the clubhouse audio chat app he said “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin. I think bitcoin is really on the verge of getting broad acceptance by conventional finance people.

Musk has also been vocal about another cryptocurrency on social media this week, popular Shiba-Inu theme memecoin Dogecoin (DOGE). DOGE rose an impressive ~116% last week as Musk appeared to endorse it on Twitter, announcing “No highs, no lows, only Doge” and “Dogecoin is the people’s crypto.” Discussing his apparent passion for DOGE on the same Clubhouse stream he said. “Occasionally I make jokes about Dogecoin but they are really just meant to be jokes … but fate loves irony.”

Crypto news for the week ahead

8th February- Launch of ETH futures on the CME

On Monday, the Chicago Merchantile Exchange (CME) launched futures contracts for Ethereum (ETH). Each contract will have 50 units of ETH and will be open to trade for 23 hours a day from 5:00 pm to 4:00 pm Central time Sunday-Friday. Futures contracts allow investors to speculate on the price direction of an asset and are useful hedges to help prevent losses from unfavorable price changes. Three years on from the successful launch of Bitcoin futures on the CME the launch of ETH futures is a sign of the growing maturity of ETH as an asset. So far, 347 contracts have been traded with contracts offering a February expiry being the most popular. Each contract has 50 units of ETH.

13th February- Tezos upgrade, Edo, set to go live.

A new network-wide upgrade is set to go live on Tezos (XTZ) this coming weekend. The upgrade will include integration with privacy protocol Sapling and a new ‘Tickets’ feature. Tickets provides a convenient mechanism for smart contracts to grant portable permissions or issue tokens without requiring the token holder or permission grantee to interact with a centralized contract. The price of the native token, XTZ, rose ~17% in the last week.

Top 10 Crypto Summary

There was a lot of movement for large-cap assets in the Brave New Coin Market Cap top 10, with Doge a new entrant occupying the 8th position, Binance coin (BNB) moving from 8th to 5th, and Cardano (ADA) leaping above XRP (XRP) to grab the fourth position on the list. The price of ADA leapt as the blockchain completed a successful testnet integration of smart contracts. The price of ADA is at its highest price level since January 2018.

Bitcoin Price Chart

Bitcoin (BTC) soared to new all-time highs and continues to climb to new heights. Backing the price gains fundamentals have also hit new peaks. Bitcoin’s hash rate touched above 155 million TH/s for the first time, difficulty also hit a new all-time high suggesting demand to mine on the network is unprecedented.