While media attention has largely shifted to stories concerning record setting stock markets and volatile ‘meme stocks’ (a term now as meaningless as ‘hipster’ and ‘Karen'), the Crypto market has settled into its own subdued rhythm.
The Crypto market is still thriving, but without the media attention that it enjoyed a couple of months ago. Admittedly, the price of many top digital assets practically halved in value from their peaks a couple of months ago. Although taken in the grand scheme of things, their respective present values are basically unchanged from where they were before Elon Musk lent his influence to Bitcoin and Dogecoin and kicked off the crypto bull run.
As of July 2021, the top crypto assets have achieved a more ‘natural’ price, as evidenced by relative stability in their respective prices.
Stability entered the Crypto market about a month ago. Consequently, opportunities when trading digital assets has contracted slightly. Take, for example the past seven days, Bitcoin has moved less than 4.4% in price, while Litecoin has moved 5.2%.
With this being so, the crypto space is vast, and many projects can still experience the volatility that traders are interested in taking advantage of.
Let’s explore some of the more volatile crypto assets of the past week. Coincidently, at the time of writing, more examples cropped up. Perhaps this is a sign of an uptick in volatility.
Dogecoin is still in a precarious position. The fanfare it generated earlier in the year hasn’t exactly dissipated, but its aura of excitement has definitely dimmed. Still, Dogecoins trade at US$0.20 per coin at the time of writing, which is at a price in an order of magnitude larger than where it was when, seven months ago, the calendar ticked over into 2021.
In the past seven days, Dogecoin has moved -15% in price.
I hadn’t originally intended for this Ethereum to be included in this article, as it was moving sub-10% in the week. However, volatility has picked up recently. In the past seven days, Ethereum has moved -16.5%. Ethereum is currently trading at ~US$1,950.
Internet Computer, down by 15.1%
Shiba Inu, down by 18.4%
Compound, down by 19.8%
Around seven years ago, in 2014, 15 year old me was intrigued by cryptocurrencies. At the time, Bitcoin was hovering around $800, and the talk of the town was no how much cryptocurrencies were worth but how increasingly harder it was to mine. The “Explain like I’m Five” rundown for crypto mining is that computers figure out blocks of mathematical equations, and for doing so, get allocated Bitcoin/crypto.
The higher a computer’s contribution, the more Bitcoin they receive. The better the computer, the higher the contribution, the more coins the computer gets.
As more and more Bitcoin get mined, the harder the mathematical equations get. Therefore, there becomes a point where a lower powered computer’s contribution will reward them with less Bitcoin than it cost to power the machine, becoming not worth mining it.
My computer wasn’t the best – so mining Bitcoin around this time was not an option as I would’ve received barely any Bitcoin (Remember, I was a 15-year-old that would have never thought Bitcoin would’ve reached the levels it’s at right now.) However, other cryptocurrencies still provide some yield for your electricity bill. The one I picked? Dogecoin.
At the time, I mined around 30,000 Dogecoin, which was worth maybe $8 U.S Dollars. It is now worth $1,500 U.S Dollars. Jackson Palmer, an Australian programmer, created the coin in 2014 and has admitted to making the coin as a joke. Now, assuming people held on to their coins, some serious money is currently circulating around. It would be normal to see people donating 50,000 – 100,000 coins to random people on the /r/dogecoin subreddit. Many people held millions in Dogecoin, which is now undoubtedly worth way more than they would have ever expected it to be worth.
I bring this up because Dogecoin, unlike Bitcoin, has an infinite number of coins that can be mined. Therefore theoretically, the value of Dogecoin shouldn’t rise to a significant amount. The reason why Dogecoin is worth around 5 cents now is due to the rise of retail traders. Sprinkle that with the recent endorsement for cryptocurrency by the wealthiest person in the world, Elon Musk, and you have yourself a recipe for the most unexpected generation of wealth.
The retail trader has seen their influence in the limelight recently, with their collective power inducing one of the most legendary short squeezes of all time with GameStop. Now, they are one of the main factors contributing to the run in Dogecoin. Are there any fundamental reasons in the run-up to Dogecoin? Not really. However, this shows what retail traders can do collectively.
Many institutions are now, if not they should be, looking at what retail traders are looking at to lower their risk, like what happened to GameStop.
What’s next, retail traders?