Bitcoin stable after Wednesday’s drubbing—Ethereum and Dogecoin sink again

May 20, 2021, 9:09 AM UTC

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Good morning. Let’s kick off today’s newsletter with a brief musical intro. Take it away, fellas.

You reached for the crypto ₿ too soon /

You cried for the moon 🚀/

Shine on you crazy diamond hands.

BullSheeters, did any of you buy on the dip yesterday? Did you jump back in when Elon Musk tweeted “TSLA has 💎 🙌 “? What about when Cathie Wood reiterated her $500,000-or-bust price target? Did you double-down then?

Wednesday is a day many of us won’t soon forget. Bitcoin plunged more than 30%, sinking below $32,000, and then recouped much of that, all in one gut-wrenching 24-hour stretch. It’s a bit more stable this morning with BTC trading around $40k.

Why all the volatility? According to MarketEar, the crypto market is heavily skewed to margin bets. In other words, investing with borrowed funds. When the price goes haywire and falls, many of those margin accounts are automatically liquidated, pushing out a gusher of sell orders. More than 775,000 such liquidations happened yesterday. That could explain much of the tumult.

Meanwhile, crypto Twitter seems like the same old Wild West outpost this morning. Some are saying $40,000 is nowhere near the top. I’m even seeing a fresh call for $70,000.

To all you crypto bulls out there, this one’s for you:

come on you ravers /

you seers of visions /

come on you pumpers, you HODLers /

you Robinhood traders, you margin-call prisoners…

… and SHINE!

But first, let’s see what’s moving the markets.

Markets update


  • The major Asia indexes are mixed in afternoon trading with the Nikkei up 0.2%.
  • The yen is falling today after the finance ministry’s debt team revealed yesterday there’s no way the country will be able to balance its budget by a very ambitious 2025 target.
  • Shares in Tencent Holdings are up 0.7% in Hong Kong ahead of today’s earnings call. The stock has been battered in recent months, losing $200 billion in value as antitrust clouds gather over Beijing.


  • The European bourses are mostly higher out of the gates this morning with the Stoxx Europe 600 up 0.6% in early trading.
  • Oatly priced its IPO yesterday at the top of the range, valuing the Swedish plant-based food and drink maker at roughly $10 billion.
  • On that note… I met some buddies last night for dinner at a restaurant in the Prati neighborhood of Rome. Over a meal of animal protein, three of us agreed we’re more or less onboard with a veggie meats future; the fourth, a social scientist, is a big skeptic.


  • U.S. futures point to another rough open. That’s after the major averages fell on Wednesday. For the S&P 500, it was the third straight day of losses. We haven’t seen a four-day losing streak since February.
  • Investors, you can exhale. The FOMC meeting minutes came out yesterday and there’s no imminent talk of tapering. The topic, however, will come up at “upcoming meetings.”
  • Can’t mention tapering without checking in on interest rates. The yield on the 10-year Treasury note is pretty stable today, hovering around 1.663%.


  • Gold is off, trading above $1,870/ounce.
  • The dollar is flat after a big spike yesterday.
  • Crude is up with Brent around $67/barrel.
  • As I covered above, Bitcoin is a bit less volatile today. As of 4 am ET, it was a mere $459,782.13 below Cathie Wood’s target price, which counts for progress. But Ethereum, Dogecoin and just about every other alt-coin is down.



Those were the days…

All-time-highs as in… last month.


Let them eat 🍰 with 💎 🙌


The greater celebrity theory


Tweet of the day



Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

Making $COIN. Coinbase Global fell nearly 6% yesterday in a bad day for momentum and crypto-linked stocks. But there's a silver lining, COIN bulls. All that volatility in crypto markets probably means the giant cryptocurrency exchange just scored a banner day for transaction fees.

Hitting its... Target was an outlier yesterday as its shares soared more than 6% after the retailer reported knockout quarterly results on Wednesday, helped by—get this—in-store sales.

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Market candy

Quote of the day

Now, Musk's got two reasons not to buy Bitcoin—it's a bane on the environment, and as the recent drop demonstrated, a tough investment to defend when it does well, and more than an embarrassment when it goes bad.

That's Fortune's Shawn Tully, who's been analyzing since Day 1 Tesla's daring and somewhat murky investment in Bitcoin. You may recall he calculated what Tesla paid (and pocketed when it sold a 10% stake) for its crypto booty. Yesterday, he calculated another figure to watch: the price level in which Tesla's whole Bitcoin gambit becomes unprofitable. Hint: at one point yesterday, TSLA was underwater on its stake.

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