In retrospect, it was inevitable – this week’s crypto market moves once again centered around Elon Musk. The biggest news this week, of course, was the revelation that Tesla has Bitcoin on its balance sheet, which caused a quick 10% jump in BTC’s price which never reverted, unlike some of the other big “newsy” moves of late. This perhaps signifies that news of Elon Musk being excited about crypto is just air (causing a pump and reversion) while news of him actually buying a ton is more robustly great for crypto’s outlook – we’ll see how similar stories play out in the future.

The BTC move itself was, at first, mostly BTC-dominant, but in the following days many altcoins have caught up. ETH reached a new all-time high as well, for instance, and most alts rallied a ton largely off of their BTC/ETH betas, renewed interest in altcoins given e.g. Elon’s tweeting about such coins as DOGE, and liquidations driven by this organic interest. Exchange tokens (BNB, FTT, etc.) had a massive rally on Wednesday, perhaps reflecting the idea that all this good news for crypto is really good news for companies which profit from more crypto trading. Both USDT and e.g. most crypto derivatives have been trading at quite elevated premia, again reflecting the idea that many people are trying to get in right now (as you’d guess from the rally!).

One key difference between the BTC moves and the alt moves has been how “organic” they’ve seemed vs. how caused by liquidations. BTC’s price movement has seen many fewer liquidations than e.g. the move up to $20k, and $30k, and $40k, which is perhaps contributing to why we’ve seen a lot less reversion this time than other times. Alts, on the other hand, have rallied more in price terms, in many cases, but that’s largely because of the open interest-fueled, liquidation-driven momentum we’ve always seen. It remains to be seen what will happen, but if there’s a big crash alts could see all their outperformance undone as a result.