Elon Musk, Tesla, and SpaceX Receive Accusations of Alleged Dogecoin Pyramid Scheme

Jenson Nunez
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Elon Musk, Tesla, and SpaceX Receive Accusations of Alleged Dogecoin Pyramid Scheme

The plaintiff intends to stand for people who lost their funds investing in Dogecoin. The accusation described Elon Musk and his entities, Tesla and SpaceX, as a non-legal organization that operates by inflating its price.

After the depreciation of 93% during 14 months of the dogecoin, Elon Musk, and his companies, Tesla and SpaceX received accusations of encouraging the acquisition of the currency. The complaint got filed in federal court in Manhattan, New York, by a US citizen named Keith Johnson, as highlighted by Bloomberg.

The plaintiff expressed that he got deceived by the dogecoin pyramid scheme encouraged by Elon Musk, Tesla, and SpaceX. He identifies them as an organization that carries out illegal extortions to inflate the price of the said digital asset.

According to the plaintiff, the defendants falsely claim that Dogecoin is a legal investment when it is worthless. This situation made many investors trust their funds in the digital asset and lose money.

The price of Dogecoin achieved a solid position after the billionaire took on Twitter or other media to mention the asset. Some experts have called this situation the Elon Musk effect, though some of his price comments do not have the same power anymore.

The Plaintiff Asks for USD 258 Billion

Through his lawsuit, Keith Johnson requested billionaire Elon Musk and his companies a sum registered at USD 86 billion in damages caused and USD 172 billion for treble damages.

Keith intends to become an example for those people who lost their money investing in digital assets since April 2019. In addition, it requests an order to suspend them from further encouraging Dogecoin.

The famous defendant remains silent on this situation. If the court determines that Elon Musk, Tesla, and SpaceX are guilty, they must give at least USD 258 billion between the two sums of money asked by the affected party.

Dogecoin became the first “meme coin,” founded as a joke in 2013 by Jackson Palmer and Billy Marcus to make fun of the high marketing behind altcoins (non-mainstream cryptocurrencies known to fluctuate wildly in value) invading the digital space.

The joke coin soon raised the interest of billionaire Elon Musk, who started tweeting ironically about the asset. Over 2020 and the first months of 2021, Musk’s joking tweets about Dogecoin regularly sent its price to reach high positions in the charts.

By: Jenson Nuñez

The Price of Bitcoin Is Close to a Crucial Turning Point

Alexander Salazar
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The Price of Bitcoin Is Close to a Crucial Turning Point

Various signs indicate a possible rally in the short term now that the Bitcoin (BTC) price is nearly USD 20,000.

Bitcoin is trading at around USD 20,531 and has accumulated a 1% loss over the last 24 hours. While its daily trading volume is above USD 24.55 billion, its market capitalization is about USD 390.86, according to CoinGecko.

The recent increase in volatility has made it clear that the crypto market has entered a new winter. However, nobody knows how long it will extend.

Risk asset prices drop one after the other as the world economy falters and the US Federal Reserve (Fed) tries to get tough on inflation. The decentralized central bank recently announced the highest interest rate hike since 1994. They have tightened monetary policy twelve times since World War II but did not cause a recession only once.

Since there might be further drops in the short term, central banks may return to bailout measures to prevent economic catastrophe.

The Price of Bitcoin Seems to Be Capitulating

The price of Bitcoin has been falling even though its fundamentals remain strong, which could create long-term opportunities.

While the hash rate is at all-time highs, the production speed will decrease with each halving event. It is impossible to change the maximum circulation,  and the network continues to work uninterruptedly. In the meantime, the amount of circulating US dollars, global debt, and inflation are increasing.

The selling speed has increased, leading short- and long-term holders to sell at a loss. That usually forms the bottom of the decline as positions curb bearish intent and weak hands leave.

According to the weekly CryptoQuant metrics overview, most on-chain indicators show bullish signals, suggesting an undervalued price of Bitcoin.

Given that the short-term sentiment is usually quite bearish, there might be further drops in the coming days. However, when volatility decreases, the bulls could return in force.

The Price Chart Needs a Respite to the Upside

The weekly BTC/USDT chart shows that the price is near a relevant support zone, which was the maximum of the bullish cycle in 2017. USD 20,000 causes extreme fear now, but it was a reason for euphoria two years ago, proving the market has grown.

The price is testing the 200-week SMA, which often works as a support to search for the bottom of bearish markets.

The Relative Strength Index (RSI) is in an oversold zone not seen since the bottom reached in the 2018 crypto winter.

The value of Bitcoin has fallen for almost 12 consecutive weeks without any healthy rebound.

There might be at least a relevant respite to the upside, but it is still early to say the bearish market has ended.

By Alexander Salazar

What Could Happen if the Price of Bitcoin Falls Below $20,000?

Jenson Nunez
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What Could Happen if the Price of Bitcoin Falls Below $20,000?

Bitcoin reached a low point registered at $20,100 early this Wednesday, June 15. The market is in its most delicate position in three years.

During the first hours of Wednesday, June 15, the price of bitcoin reached scary levels: it was very close to going below $20,000, a mark that appears to break and would leave

users facing an unprecedented scenario to date in the history of digital currencies in the market.

A breakout of $20,000 would mean that, for the first time in history, bitcoin would not receive the support of a market cycle. Specifically, the market cycles that the digital asset has fulfilled focused on the procedures of diminishing the monetary emission in the Bitcoin network through the halving.

Every 4 years, the amount of BTC that gets handled in each Bitcoin block gets halved. That situation happened before at least three times, which leaves users dealing with four market cycles.

Those cycles have clearly harmed the market. Each new cycle brings higher price highs than the previous one. And never in history has the digital asset fallen below the previous cycle high once it broke it.

When BTC first surpassed $1,000 during the 2017 cycle, it never crumbled back from that stage, which was the previous cycle’s high. In that bull run, bitcoin approached a new high level registered at $20,000.

The rise in the market value has attached to this pattern of increase and the closest it had come before breaking it was during the March 2020 pandemic-driven crash. But at that time, BTC crashed down to $3,000 momentarily.

Now, the panorama shows landscapes much more precarious in perspective. Bitcoin bounced as high as $21,000 but was almost touching the $20,000 mark.

The Possible End of the Halving Cycle for the First Digital Asset in the Market

The level of 20,000 has not been lost. But the closeness of that downside break seems to be taking its toll on investor trust to make new moves. This behavior appears due to the fear and greed index on Alternative.me. According to records on this outlet, the market is currently dealing with the extreme fear of investors.

Although this situation has not changed, the current level of the said index shows the lowest rates in almost three years, even before the pandemic impacted the market.

Perhaps the fear experienced happens due to the risk that bitcoin will lose a trend that looked so safe and certain until now. The halving cycle and its impact on the market were already taken for granted in a certain way and now it seems at risk of losing that certainty.

By: Jenson Nuñez

Changpeng Zhao, the Wealthiest Man in the Crypto Space, is not Worried about Falling Digital Assets

Jenson Nunez
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Changpeng Zhao, the Wealthiest Man in the Crypto Space, is not Worried about Falling Digital Assets

Binance CEO Changpeng Zhao expressed that he is not concerned as crypto shows normal market behavior.

Amid so many pessimistic critics, who consider that the current Crashdown in digital assets represents the collapse of the crypto space, the CEO of Binance, Changpeng Zhao, considered this year the wealthiest human being in the crypto space, seems relaxed and without fear of losing his vast wealth.

In an interview with Bloomberg Market, CZ highlighted that fluctuations are normal behavior for both digital assets and stocks as part of market behavior and projected a likelihood of more bear markets in the future.

CZ said it is normal for markets to fluctuate and change, as is the same for the equity markets. Netflix went down at least 70%. It is part of normal market behavior and is not the first bearish cycle Binance has gone through.

Furthermore, amid the current panorama, CZ explained that his exchange got prepared for the situation by housing enough funds.

According to the CEO, despite the market correction, users are still high, hence the requirement to apply preventive procedures for what is happening. CZ noted that Binance stands to benefit, especially with other entities getting rid of their staff, a situation that has widened the talent pool.

It is worth noting that Binance has been one of the few prominent crypto entities that have not launched a layoff strategy, like Coinbase, Crypto.com, and Gemini, among others, did so a few days ago.

On the current downturn and Terra’s responsibilities, Zhao explained that Terra’s Crashdown is part of the crypto sector’s demise that comes with a bear market. It is worth considering that in May, he acknowledged the personal losses he experienced with Terra, reporting that he had USD 1.6 million in LUNA, which got diminished to USD 2,200.

He stated that such a phenomenon would likely impact more people because most entered the crypto sector during the bull cycle without knowing how to deal with operational risks. Zhao acknowledged that the losses from the Terra accident were relevant.

Other Investments

CZ also highlighted that Binance Holdings Ltd.’s deal to invest $200 million in Forbes is “turning around” after the publisher’s deal to go public through so-called SPAC fell through.

In the interview with Bloomberg, Zhao confirmed to the outlet that Binance still has plans to invest, although he did not explain further details on how the terms would change.

In addition, he spoke of how committed he was to investing in Twitter after the CEO of Tesla, Elon Musk, said he wanted to acquire the social network for USD 44 billion. At the time, Binance pledged to help with at least $500 million to own Twitter Inc.

Asked if he got disappointed by Musk’s apparent lack of appetite to place the complete purchase, CZ replied that he was disappointed a little bit because the company was hoping to contribute to Twitter in some way.

By: Jenson Nuñez

Tether Would Minimize its Commercial Paper Reserves to Zero and Denies any Ties to Celsius

Jenson Nunez
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0
Tether Would Minimize its Commercial Paper Reserves to Zero and Denies any Ties to Celsius

The company in charge of USDT included issues about the state of its commercial paper reserves and denied links to Celsius and Three Arrows Capital, which could present insolvency.

Stablecoin issuing company Tether added some allegations linked to the state of its commercial paper reserves and the alleged ties to some entities rumored to present insolvency.

In a statement on Wednesday, the firm denied rumors that its “commercial paper portfolio got supported by 85% by Chinese or Asian commercial paper and is trading at a 30% discount. Tether called the allegations a complete lie and stated that those lies likely got spread to generate more panic and profit in an already damaged market.

The statement highlights a report by Bloomberg in December last year stating that a significant part of the firm’s USDT stable coin holdings got backed by short-term debt from Chinese real estate companies.

As Crypto Briefing recalls, at the time, the financial markets were in a state of fear over the possible Crashdown of Evergrande, the largest real estate developer based in China. Tether denied having any debt to Evergrande and classified the report as false propaganda.

Tether Spoke About Rumors About USDT Reserves

Citing its latest reserves report revealed in May, the issuer of the world’s largest stable coin, USDT, explained that more than 47% of the total reserves supporting USDT are now US Treasury bonds, classified as one of the most secure tools to invest. The company also stood firm on its objective to minimize its reserves of commercial paper.

In its report last month, Tether highlighted that commercial paper, a form of short-term unsecured corporate debt, accounted for less than 25% of its reserves. The company then explained that it had diminished its commercial paper reserves by more than 17% and clarified that it counts on the final plan of eradicating this backup instrument.

No ties to Celsius and Three Arrows Capital

Tether also spoke about the problems that crypto lending service Celsius is currently facing and denied its links to that entity. The issuer determined that the Celsius position got liquidated without a loss before withdrawals went frozen on Monday. The entity exposed that Tether currently has zero exposure to Celsius apart from a small investment achieved with Tether equity.

According to CoinDesk, an operation last year determined that Tether had lent $1 billion to Celsius through Bitcoin as collateral. Tether added in the most recent statement that its lending activities with Celsius and other borrowers have always been overcollateralized.

The company in charge of USDT also denied reports mentioning it counts on credit exposure to crypto venture capital firm Three Arrows Capital. According to a report by The Block, the fund, one of the most prominent investors in Terra, is now facing possible insolvency after presenting $400 million in liquidations.

The makeup of USDT reserves has long been a ​​concern, and this is not the first time the company faced a wave of fears among investors regarding their retains and the crypto market in general.

By: Jenson Nuñez

The Price of Bitcoin is in a Dangerous and Unknown Zone

Jenson Nunez
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0
The Price of Bitcoin is in a Dangerous and Unknown Zone

The actual panorama for Bitcoin got experienced just three times in history. Every time this phenomenon took effect, the price bounced.

Bitcoin is in an unsafe zone for its price, especially regarding its historical support that, until now, seemed to have enough solidity. But with the digital asset just dancing above $21,000, the current price level goes below that indicator, which previously served as backup.

A few weeks ago, the 200-week moving standard usually reflected robust support for the price. But right now, BTC is below that standard.

Moving standards are indicators that measure upward and downward trends in the market. In this particular case, the 200-weekly moving standard is the 200-week average of the price of bitcoin. Therefore, it gives a good overview of how the market would react in the future.

Currently, the price of that indicator lurks around $22,300 per BTC. Meanwhile, bitcoin trades on exchanges presented figures registered at $21,200, according to data from TradingView.

Since the beginning of bitcoin, this situation took effect only three times; between August and September 2015, then in December 2018, and in March 2020. At that last moment, this situation kept active for about a week; now, the price appears below that mark for more than three days.

Imminent Bounce for Bitcoin Price

The scenario looks harsh for the digital asset. However, the history lived by BTC in the market can suggest a different story. While this breakout of the moving standard has been rare, the few times this phenomenon has happened, it got followed by a sudden bounce in BTC price.

When this situation happened in 2015, BTC reached a low position of just over $200 and, in weeks, it approached $500 per unit. In 2018, it went from 3,100 to 4,200 in a few weeks, but although it received support again, it did not break below it.

Finally, in 2020 the price changed from 3,800 to more than 8,000 in just a month.

This data looks promising, but it needs a more profound study to cover another aspect of risk for the price of bitcoin. The crypto space would be facing a historic moment: the threat that the market period focused on halving represents.

 Historically, the top of one cycle becomes the backup for the next. But the closeness of that level at present appears to drown the market in a sea of fear, while the predictions do not look as promising as users would want.

By: Jenson Nuñez

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