Crypto Roundup: February 1st, 2021

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Bitcoin appeared to be hitching a ride on Elon Musk’s rocket on Friday. The cryptoasset rose 20% to $ 38,000 as the richest man in the world added #bitcoin to his Twitter bio and a record number of option contracts expired. Despite the surge, the world’s largest crypto soon drifted back to earth.

This wild swing ended an otherwise relatively quiet week in the cryptoasset market. Bitcoin largely drifted sideways when a report found that the Ivy League universities accumulated the crypto asset while Stellar, EOS and other altcoins made double-digit gains.

The highlights of this week

  • Ray Dalio joins Bitcoin
  • The Gamestop saga puts crypto in the spotlight

Ray Dalio joins Bitcoin

In another example of cryptoskeptics changing their minds, Wall Street billionaire legend Ray Dalio has come to Bitcoin.

“I think Bitcoin is a damn good invention,” said the former skeptic in a post on LinkedIn, before concluding that the cryptoasset “looks like a long-term option for a highly unknown future.”

Dalio’s comments come the same week that two other high-profile figures shared their feelings. Alfred Kelly, CEO of VISA, said the company was “uniquely positioned to make cryptoassets safer, more useful and more applicable to payments,” and billionaire Mark Cuban wrote on his personal blog that blockchain-based assets “are now becoming legitimate stores of value became”.

The Gamestop saga puts crypto in the spotlight

Mayhem hit the U.S. stock market this week when subreddit group WallStreetBets coordinated a 700% price hike for GameStop, forcing hedge fund Melvin Capital to close its short position at billions in losses.

In response, many trading apps shut down and continued to fuel the turmoil as traders looked for alternative ways to buy and sell.

Industry commentators saw this as a positive omen for decentralized assets. SkyBridge Capital’s Anthony Scaramucci told Bloomberg that the saga “is proof that Bitcoin will work,” and Anthony Pompliano told CNBC that the events will serve to “accelerate the digital decentralized financial system.”

Next week

Looking ahead, Wall Street-inspired upheavals may be in sight for the crypto market. Crypto subreddits have seen 500% growth over the past week, with some suggesting the new traders might try to chase the stop losses of hedge funds shorting Bitcoin.

Another potential catalyst could move the market on Wednesday as thousands of business leaders gather for the virtual summit on Michael Saylor’s Bitcoin corporate strategy. This is to help other companies follow MicroStrategy and add Bitcoin to their balance sheets.