 January 11, 2021  The top stories in bitcoin, crypto and more – all in one place, delivered daily. Sponsored By:  By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.
Top shelf Bitcoin shaved off a clean 20% in trading late Sunday, having failed to establish itself above $40,000. The index of all the crypto assets came down with it, with analysts calling the decline a healthy correction for an overheated market.
"Hefty spot selling against an over-levered market caused the price drop," trader and analyst Alex Kruger told CoinDesk's Omkar Godbole. It is unclear whether it was miner selling or macro traders liquidating positions.
Block none? Mining reset
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 Big year Bitcoin. DeFi. Ethereum 2.0. The biggest trends in crypto this year began to move the needle in the rest of the world. Multi-billion dollar funds bought bitcoin as an inflation hedge. Institutions began discussing the merits of decentralization. And the banking sector warmed to crypto.
CoinDesk's 2020 Year in Review covers the major events, ideas and themes in crypto, and why they matter. The series is a comprehensive collection of op-eds, essays and interviews from some of the biggest names in crypto, published throughout the month.
Quick bites
 The list Who moved the needle on crypto this year? What were the projects that mattered? Who shattered the glass ceiling and broke the mold?
From DeFi to bitcoin's late year surge, 2020 was full of big stories, trends and personalities. We've unveiled CoinDesk's 2020 Most Influential list, a selection of 12 people who helped push the industry forward this year. See who made the list.
Market intel Inverse relationship  Q4 If the 2020 Q1 was the quarter of market turmoil, Q2 the bitcoin halving and Q3 the explosion of stablecoins and decentralized finance applications, Q4 was the quarter of institutional FOMO for bitcoin and of Ethereum launching the first phase of its ambitious migration to a proof-of-stake (PoS) blockchain. The latest CoinDesk Quarterly Review looks at the performance of bitcoin and ether compared to macro assets and other crypto assets, and at their progress, milestones and value drivers over the past three months. Download the free report.
At stake Sell-off With prices dropping by double-digit percentages across nearly all crypto assets, the total crypto market cap shed some $156.8 billion in the past 24 hours at press time, according to Messari data. This comes just five days after the crypto market table crossed the $1 trillion level for the first time.
There isn't yet a clear consensus cause for a nosedive in assets like bitcoin, ether, xrp and other large-cap cryptos. Analysts are pointing to over-levered market conditions, increased selling from bitcoin miners and growing bearish sentiment in traditional markets during a period of political instability in the last weeks of U.S. President Trump's tenure. There are some visible cues on the bitcoin blockchain that help piece together the story as it was unfolding. Crypto trader @lightcrypto pointed to one Coinbase sell order for 180 BTC (a multimillion-dollar sale) that preceded a $1,200 drop, CoinDesk's Omkar Godbole wrote.
Crypto is not the only market where individual sellers and buyers can have such a pronounced impact on price. The history of the stock market is punctuated by stories of short sellers, companies cornering markets and manipulating prices as well as panic selling and bad decisions.
There's the story of two commodities traders who cornered the onion market in the 1950s. That market manipulation caused prices to crater and led to the Onion Futures Act, which bars futures speculation on onions as well as "motion picture box office receipts." More recently, in March 2020, during the early days of the coronavirus pandemic, a writer in Forbes wrote about how bearish billionaire investor Bill Ackman's emotional CNBC interview caused one of the largest sell-offs in economic history.
"Hell is coming," Ackman reportedly said on live broadcast. "Shut it down now," he said of the economy. "There is a tsunami coming." The Dow Jones Industrial Average tanked over 1,000 points while he was on the air, triggering a circuit breaker. Forbes reported Ackman took out "doomsday hedges" to short sell the market in January. During this coronavirus-induced market rout, media companies and analysts pointed to Warren Buffett's sage advice, proffered in a 2017 shareholders letter, that downturns are inevitable. As an investor for the long term, Buffett said the best move is the easiest: buy and hold. He quotes Rudyard Kipling's "If": If you can keep your head when all about you are losing theirs ...
Still, crypto's volatility can be painful. This market drop, seemingly out of the ether (not the crypto), is the largest intraday loss since March, CoinDesk's First Mover notes. It's why government bodies, like the U.K.'s Financial Conduct Authority (FCA), are taking steps to protect retail and smaller investors. Last week, a long-simmering ban on leveraged derivatives products went into effect, while today, the watchdog issued a statement highlighting the risks of investing in crypto. "Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors' money," the agency said. Investors could lose "all their money."
During the run-up, many bitcoin bulls pointed to changing conditions indicating the sustainability of a rally to a high around $42,000. Institutional investors and corporations loaded up on the inflation hedge, contributing to the growing sense of bitcoin's role as "digital gold."
Many haven't lost the faith. Though as Guggenheim Investments Chief Investment Officer Scott Minerd succinctly said: it might be "Time to take some money off the table."
Who won #CryptoTwitter? 
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Monday, January 11, 2021
Crypto Sheds $157B
