First Mover Asia: Bitcoin Falls After Edging Toward $50K; Altcoins Rally

Polygon and terra continued as market stars on Wednesday; ether drops slightly.

AccessTimeIconDec 22, 2021 at 11:30 p.m. UTC
Updated May 11, 2023 at 5:03 p.m. UTC

(Edited by James Rubin)

Good morning. Here’s what’s happening:

Market moves: Bitcoin and ether’s prices moved little with Christmas only three days away; layer 1 and scaling system tokens rally.

Technician’s take (Editor’s note): Technician’s Take is taking a holiday hiatus. In its place, First Mover Asia is publishing the second in a series of stories on the year in cryptocurrency markets by CoinDesk markets analyst Damanick Dantes and Managing Editor of Markets Brad Keoun.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.


Bitcoin (BTC): $49,008 +0.3%

Ether (ETH): $4,017 -0.06%


S&P 500: $4,696 +1%

DJIA: $35,753 +0.7%

Nasdaq: $15,521 +1.1%

Gold: $1,803 +0.7%

Market moves

Bitcoin, the largest cryptocurrency by market capitalization, remained around $49,000 during U.S. trading hours on Wednesday after a failed attempt to break through the key $50,000 threshold. At the time of publication, bitcoin was down slightly. Ether was also in the red but not far off where it began the day.

The small price movement on bitcoin and ether came with continued low trading volume across major centralized exchanges, according to data compiled by CoinDesk, as the market heads into the year-end holiday season.


Meanwhile, tokens associated with layer 1 protocols and scaling systems, including MATIC and LUNA, were market stars on Wednesday. The two coins have generated strong 30-day returns, despite a recent broader market sell-off.

MATIC’s price hit a record high earlier Wednesday, according to data from CoinGecko, after popular decentralized exchange Uniswap announced it launched on Polygon, a protocol that provides lower transaction costs compared with the Ethereum blockchain.

The recent rise of of these protocols comes as the growth of smart contracts deployed on Ethereum have paused, crypto research boutique firm Delphi Digital wrote in its newsletter on Wednesday.

Data compiled by Delphi Digital shows the number of smart contracts deployed each month has dropped significantly from earlier this year.

(Delphi Digital)
(Delphi Digital)

“The rising costs of deploying contracts has likely played a key role in pushing developers to alternatives networks,” Delphi Digital wrote. “Whether this can eventually pick up on Ethereum-centric layer 2s [companion systems] remains to be seen.”

End of year market wrap

Market Wrap Year-End Review: Musk Pumps Bitcoin and Dogecoin: Dogecoin pumped along with bitcoin thanks to some high-profile tweets. (by Damanick Dantes and Brad Keoun)

Hello, Market Wrap readers! During the final two weeks of 2021 we’re using this space to recap the year’s most dramatic moments in cryptocurrency markets – and highlight key lessons from this fast-evolving corner of global finance. Over a series of eight posts starting on Dec. 20 and running through Dec. 30, we’re recapping what shook crypto markets this year. (For the latest crypto prices and news headlines, please scroll down.)

On Monday, we recounted how even as bitcoin staged a powerful price rally to the start of the year, some institutional investors began to question the sustainability of the trend. Today, we’ll show how, during January and February, coordination and posts on social media fueled even more demand for bitcoin and other cryptocurrencies, delaying an immediate price correction.

As bitcoin (BTC) soared in February, social media, particularly Twitter, appeared to take on an expanded role in cryptocurrency markets, with prices pumping in response to tweet after tweet. It became clear that investor appetite for risk remained strong despite earlier concerns about rampant speculation.

Tesla CEO Elon Musk and then-Twitter CEO Jack Dorsey tweeted away to push bitcoin higher from $40,000 in January to nearly $57,000 in February. The viral effects of social media pushed retail traders into full-on buy mode, with bones thrown to the doggy-themed joke token dogecoin (DOGE) that added billions of dollars to that cryptocurrency’s market value.

On social media, some traders banded together in an effort to keep crypto prices elevated – similar to the way retail traders in traditional markets had coordinated to roil stocks like GameStop.

For example, Musk, ranked by Forbes as the world’s richest person, added the #Bitcoin hashtag to his Twitter profile, contributing to an immediate 11% BTC price rally. Shortly afterward, Jack Dorsey also added the #Bitcoin hashtag to his twitter profile.

The bitcoin endorsements by Musk and Dorsey went viral, inspiring a league of traders who dismissed the cautionary warnings of more experienced investors. It all seemed like a lot of fun. And bitcoin was not the only cryptocurrency to advance.

Musk also suggested in a tweet that dogecoin might be “the future currency of earth.” Musk’s involvement in the dog token tribe helped send DOGE mooooning (his word), along with other alternative cryptocurrencies.

Such hijinks kept the crypto party going. Here’s a look at relative performance in January; DOGE vastly outperformed bitcoin in January, as shown below:

January returns (CoinDesk Indices)
January returns (CoinDesk Indices)

How could one man cause such a massive move in crypto markets? CoinDesk’s Edward Oosterbaan explained earlier this month how Musk’s star power was able to sway the price of BTC and DOGE. (Spoiler alert: None of this is all that deep.)

“Musk is far from the only person to move the crypto market for no apparent reason other than making an endorsement,” Oosterbaan wrote. “A sizable portion of the industry from meme coins to NFTs has proven to be highly responsive to celebrity shilling.”

Oosterbaan continued: “High-profile celebrities and Twitter accounts sowing FOMO (fear of missing out) are likely here to stay. The power of social media in the crypto market is testament to the general lack of regulation and maturity, and the inherent liquidity of 24/7, permissionless assets.”

The chart below tracks Musk’s influence on the DOGE price over time, using data from TradingView.

Elon's impact on dogecoin price (TradingView)
Elon's impact on dogecoin price (TradingView)

During bitcoin’s swift ascent in January and February, retail traders used social media as a gateway to discover new alternative cryptocurrencies and react to market sentiment in real time.

In just a few tweets, Musk and other popular figures were able to pump and dump coins, leading to significant price gains and losses.

The lesson of this ever-so-bizarre stretch of crypto markets history is that social media was, and still is, a force that’s impossible for traders to ignore.

Important events

1 p.m. HKT/SGT (5 a.m. UTC): Japan economic index (Oct.)

3 p.m. HKT/SGT (7 a.m. UTC): Germany import price index (Nov. YoY/MoM)

9:30 p.m. HKT/SGT (1:30 p.m. UTC): U.S. durable goods orders (Nov.)

9:30 p.m. HKT/SGT (1:30 p.m. UTC): Initial jobless claims four-week average (Dec. 17)

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

“First Mover” co-host Lawrence Lewitinn substituted for Christine Lee. Joining Lawrence was Robinhood Crypto Chief Operating Officer Christine Brown. Starting Dec. 22, Robinhood U.S. customers (not available in Nevada or Hawaii) will be able to customize and send a crypto gift to friends and family from the Robinhood app. Meanwhile, Robinhood has acquired cross-exchange crypto trading firm Cove Markets. Plus, crypto billionaire and FTX CEO Sam Bankman-Fried addressed crypto scrutiny.

Latest headlines

Bitcoin Mining Profitability Starts Falling After Stellar Year: Research: The end of 2021′s crypto mining gold rush may have just started.

Uniswap Launches on Polygon, Driving MATIC to All-Time Highs: The popular decentralized exchange is deploying on Polygon in a bid to attract more retail traders.

NEAR Token Jumps Over 20% After UST Integration: Tokens of the layer 1 blockchain are up 23% after Terra said its UST stablecoins would be supported on the network.

Arcade Raises $15M to Offer NFT-Backed Loans: The project lets users borrow against the value of their NFTs.

Coinbase Prime to Streamline Institutional Crypto Trading With Link to Enfusion System: This is Coinbase’s first connection with an Order Execution Management System.

Under Armour Steps Into the Metaverse With ‘Wearable’ Steph Curry Sneakers: The non-fungible tokens (NFT), which are digital replicas of the sneakers Curry wore when he broke the all-time National Basketball Association record for three-point shots, will be the first wearable, cross-platform metaverse shoe, UA said.

Longer reads

Secure America’s Financial Strength With Stablecoins, Not Central Banks: Stablecoins are already expanding the reach of the U.S. dollar, but if the government were to restrict stablecoins in favor of a central bank digital currency (CBDC), that trend could quickly reverse.

Said and heard

“When it comes to stablecoins, a rapidly developing type of digital asset, Americans are at an inflection point. Many of us want to embrace stablecoins and use them to improve both the financial system and our competitive standing in the world. Others – particularly those working for legacy institutions – want to stop stablecoin innovation in favor of a central bank digital currency (CBDC) built and controlled by the federal government.“ (Jake Chervinsky, head of policy at the Blockchain Association in a CoinDesk op-ed.) ... ”The train has already left the station. Blockchain technology is here.” (Rosie Rios, former treasurer of the United States Department of the Treasury, in an interview with CNBC “Make It.”) ...“These numbers are stark, but they’re not surprising.” (CDC Director Dr. Rochelle Walensky to the Associated Press on the rise of omicron infections in the U.S. last week.) ... ”Volatility has been the name of the game this year.” (CoinShares Chief Strategy Officer Meltem Demirors on CNBC.)


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Muyao Shen

Muyao was a markets reporter at CoinDesk.