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Data Suggests Only Whales Moves Dogecoin

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It was Doge day afternoon all over again on Wednesday as Dogecoin (DOGE) continued its assault on the cryptocurrency market capitalization rankings. The meme coin overtook XRP to become the fourth-largest cryptocurrency by implied market capitalization after climbing to an All-Time High of $0.69 per-coin valuation  — a target that was specifically set by traders on social media.

But cryptocurrency’s latest media darling may not be as wholesome as it seems. For all the hype surrounding Dogecoin (and its de facto master, Elon Musk), publicly available data suggests relatively few people are actually using the blockchain and those who do use its account for an incredibly large portion of its overall activity.

Consider that the dollar value of coins sent across the Dogecoin blockchain on Tuesday exceeded $58 billion. That figure was 70 percent higher than the amount transferred on Bitcoin ($34 billion) and 260 percent higher than on Ethereum ($16 billion).

Digging into on-chain data further, we see that despite Dogecoin moving a higher value of coins than the two largest cryptocurrencies in the world, it achieved this with a mere fraction of their transactions.

Over 1.4 million transactions were counted on the Ethereum blockchain yesterday, according to data from Bitinfocharts, while close to 300,000 were counted on Bitcoin. Compare this to just 76,000 recorded on the Dogecoin blockchain, and an apparent wealth gap begins to emerge.

Indeed, when looking at Dogecoin’s average transaction value on the day in question, it stood at almost double that recorded on Bitcoin (BTC). The average DOGE transaction value stood at $800,000, compared to $420,000 on BTC. Its statistics relative to Ethereum paint an even more dire picture — Dogecoin’s average transaction value exceeded Ethereum’s by 8,000 percent, despite processing only 5 percent of the number of transactions.

Combined with the long-standing reality that one single address holds 28 percent of all coins in existence, while just 12 accounts for 67 percent, it becomes clear that Dogecoin isn’t exactly the people’s champion that interested parties would have the public believe.

A recently published report by Galaxy Digital piled on the misery regarding Dogecoin’s general lack of authenticity as a true cryptocurrency project. Titled “Dogecoin: The Most Honest Sh*tcoin,” the report highlighted the fact that Dogecoin’s GitHub repository (where updates to the blockchain’s code are logged by developers) hasn’t been touched since 2017. What’s more, the number of fully synced nodes (computers running copies of the Dogecoin blockchain) is just 26 percent of the overall node count, suggesting few people are willing to make the effort to maintain the blockchain’s network security.

But even if the Dogehouse seems like a ghost town, the glaring reality remains that Dogecoin is the best performing digital asset in the cryptocurrency space. The coin has recorded 14,000 percent growth since Jan. 1, when it was priced at a fraction of a cent.

Both credit and blame for Doge’s seemingly irrational ascent have been placed on the “Dogefather” himself, Elon Musk, who has taken great pleasure in posting Doge memes to his 52 million followers on Twitter throughout much of 2021.

However, it should also be noted that the coin’s recent peak of $0.69 is the same price target set by Reddit traders intent on artificially pumping DOGE’s valuation. The price point was originally intended to be reached on April 20 — a joke on top of a joke on 4/20 day. Dogecoin only reached a price of $0.420 at the time (boom), but now, a little over two weeks later, it has finally achieved its jocular goals. The ultimate price point being pursued by traders is $1.

If more evidence is needed that markets are not always rational, look no further than this year’s GameStop pump, where the share price of a near-dead brand increased by over 9,000 percent.

“Dogecoin has always been a joke, and the joke keeps getting funnier,” stated the Galaxy Digital report. Author of the report and head of firmwide research at Galaxy Digital Alex Thorn did praise Dogecoin for its lack of pretense, noting that the coin’s fortunes weren’t tied to foundation announcements or developer promises and that its only goal was to elicit a reaction.

“Dogecoin’s longevity is ensured so long as one truism remains: people love a good joke,” Thorn ended.

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Coinbase Cofounder Issues Serious Crypto Price Warning As Bitcoin ‘Death Cross’ Fear Spreads

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Bitcoin and cryptocurrency prices have struggled last week with the crypto market’s combined value slipping under $1.5 trillion—down from $2.5 trillion in May.

The bitcoin price, after getting an unexpected boost from Tesla billionaire Elon Musk last weekend, has resumed its decline over the last few days, falling back toward $30,000 per bitcoin.

Now, as bitcoin charts show the price 50-day moving average has fallen below the 200-day moving average—a pattern known as the “death cross”—Coinbase cofounder Fred Ehrsam has warned “most” cryptocurrencies and crypto-assets “won’t work” and “90 percent of NFTs” will have “little to no value in three to five years.”

Bitcoin’s “death cross,” despite its ominous name, appears to be a lagging price indicator. The last time the trading pattern occurred in March 2020, it heralded a huge bitcoin bull run that helped even smaller cryptocurrencies surge to all-time highs.

“People are going to try all sorts of things,” Ehrsam, who has gone on to found the blockchain investment firm Paradigm since leaving Coinbase in 2017, told Bloomberg this week, warning many of those smaller cryptocurrencies won’t survive. “There’ll be millions and millions of cryptocurrencies and crypto-assets, just like there were millions and millions of websites. Most of them won’t work.”

Coinbase, the San Francisco-based bitcoin and cryptocurrency exchange, went public this year at a huge $100 billion valuation but has since seen its market cap plummet, falling by a third amid waning interest among retail traders and global regulatory pressure.

Since bitcoin was created in 2009, thousands of cryptocurrencies have been created with crypto data provider CoinMarketCap currently counting just over 10,000 different coins.

Some, such as ethereum, the second-largest cryptocurrency after bitcoin with a market capitalization of $250 billion compared to bitcoin’s $660 billion, have established themselves as cryptocurrency mainstays—while others including EOS and, more recently internet computer, have made splashy debuts only to fade away over time.

Internet computer’s ICP token is down over 90 percent from its all-time high price set shortly after its launch in May, while EOS, which made headlines when it raised $4.1 billion ahead of its launch in 2018, is trading 80 percent lower.

Ehrsam also warned against investors betting on NFTs (non-fungible tokens). The popularity of NFTs, that use cryptocurrency technology to allow all manner of digital real estate from artwork to tweets, memes and YouTube videos, to be tokenized and sold via a blockchain, has exploded over the last few months—though data suggests the market is already significantly down on its early-May peak.

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Banking Giant BBVA Opens Bitcoin Trading and Custody Service in Switzerland

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Spanish banking giant BBVA’s swiss entity, BBVA Switzerland, has started offering bitcoin trading and custody services.

Announcing the news on Friday, BBVA Switzerland said the services will be available to all of its private banking clients from Monday, June 21. The launch comes six months after the bank began trialing the services in Switzerland.

“This gradual roll-out has allowed BBVA Switzerland to test the service’s operations, strengthen security and, above all, detect that there is a significant desire among investors for crypto-assets or digital assets as a way of diversifying their portfolios, despite their volatility and high risk,” said Alfonso Gomez, CEO of BBVA Switzerland.

While the bank currently only supports bitcoin, it said the aim is to also offer other cryptocurrencies in the future. As for the launch of the services in other countries, BBVA Switzerland said that would depend on maturity, demand, and regulation in those markets.

BBVA said its bitcoin services are novel as clients can manage their investments alongside traditional assets in the same portfolio. Customers willing to convert their bitcoin into fiat and vice versa can do so “without delays and without the illiquidity that affects other digital wallets or independent brokers,” said BBVA. That’s because the bank operates with several sources for converting cryptocurrencies, it said, without disclosing those sources.

BBVA’s services come as more mega-banks open up to the crypto space. In recent weeks, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, and other financial institutions have moved to provide crypto services to their clients.

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Goldman Sachs Partners Crypto Management Firm Galaxy Digital, Offers Bitcoin Futures

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Galaxy Digital’s co-president Damien Vanderwilt announced today that his firm has partnered with Goldman Sachs to help provide bitcoin futures products. The partnership marks one of the first occasions where an American multinational investment bank has partnered with a crypto asset service provider.

Galaxy Digital is a financial services and investment management innovator founded by the company’s CEO Mike Novogratz. Vanderwilt explains that Goldman Sachs, the bank with $2.1 trillion assets under management (AUM), may entice other financial incumbents to follow its lead.

“There’s a whole dynamic with the major banks that I’ve seen time and time again: safety in numbers,” Vanderwilt explained during his discussion about the subject. “Once one bank is out there doing this, the other banks will have [fear of missing out] and they’ll get on-boarded because their clients have been asking for it.”

According to Vanderwilt, Goldman depends on Galaxy because regulatory policy stops the multinational investment bank from handling the leading crypto asset directly. Max Minton, head of digital assets for Goldman’s Asia-Pacific region said during the announcement that the bank procures clientele with the assets they demand.

“Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade,” Minton remarked. “In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.”

The statements from Minton and Vanderwilt follow the report that said Goldman was prepping to offer ether futures and options swaps. At the time, Goldman said “institutional adoption will continue” in the crypto space.

In mid-April Galaxy Digital revealed it had entered the bitcoin exchange-traded fund (ETF) fray when it submitted its Form S-1 registration with the U.S. Securities Exchange Commission (SEC).

Vanderwilt also said that when more institutional players join the crypto ecosystem volatility will grow less and less.

“You’re moving the market participants from being north of 90% retail, a huge chunk of which have access to ridiculous amounts of leverage, into an institutional community, who have proper, tried-and-tested rules and regulations about leverage, asset-liability mismatch, and risk,” Vanderwilt concluded.

“The more activity that moves into the institutional community, the less volatility there will be.

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