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ETF hopes power Bitcoin over $59,000
With the news Bitcoin exchange traded funds could be about to land in the US, BTC intensifies its upswing.
Bitcoin bounces on positive SEC noise
Reports from Bloomberg indicate that the SEC would be in favour of approving at least some Bitcoin ETFs.
The SEC is reviewing 40 Bitcoin exchange traded funds right now. It is believed that the commission will approve at least some of these. That would make any new ETFs the first of their kind in the United States.
The news filled crypto traders with renewed confidence this morning, sending BTC prices soaring. Prices nudged the $60,000 mark with highs of $59,931 registered on Thursday. At the time of writing, BTC was trading for $59,395.
Bitcoin Futures passed $60,000 this morning before falling back to around $59,650. Both BTC and futures are up over 3% on the day.
If the SEC approves a Bitcoin ETF it will be the first of its kind in the US. Previously, commissions in places like Brazil, Canada, and Europe had given the green light to crypto exchange traded funds.
So, who is making the applications? Bloomberg mentioned ProShares and Invesco and two frontrunners who may see their applications approved next week.
Valkyrie, VanEck and Galaxy Digital Funds have all made ETF applications this year too.
The Bloomberg report said that ProShares and Invesco’s proposals are based on futures contracts. They were reportedly filed under mutual fund rules that SEC Chair Gary Gensler has said provide „significant investor protections“.
Gensler helped boost Bitcoin prices last week when it was reported that he said the SEC had no plans to launch a crypto ban. His comments came in the wake of a move by the People’s Bank of China that made digital token transactions illegal in China.
That said, Gensler had previously stated he believes that the crypto market could encourage price manipulation and expose millions of investors to significant risk.
However, this time Gensler and the SEC’s actions appear to have instilled high confidence in crypto traders.
Other tokens have been brought up by the Bitcoin surge. This is a regular occurrence. When Bitcoin is up, certain coins tend to perform well, and vice versa. Ethereum, for example, reached $3,855 after Bloomberg’s report was published.
Eight consecutive weeks of inflows for the crypto market
Data from digital asset managers CoinShare said cryptocurrency products attracted $226.2m in investments for the week ending October 8th. Fittingly, that marked the eighth consecutive week for inflows across the digital token sector.
Across that eight weeks, the total invested came to $638m. The overall figure for the year-to-date is $6.3bn.
Big business, but, with the global digital currency sector worth over $2 trillion, we knew that already.
No prizes for guessing which coin attracted the most attention. Yep, it was bitcoin. CoinShare says the world’s most popular token attracted $225m during the review period. Unlike other cryptocurrencies, Bitcoin has only had four consecutive weeks of sustained inbound investment.
Ethereum saw minor outflows totalling $14 million. While still the world’s second most valuable token by capex, ETH continues to lose ground to the Bitcoin behemoth. Altcoins such as Solana and Cardano posted inflows of $12.5 million and $3 million.
Litecoin, Ripple and Polkadot all posted outflows.
These stocks could help you ride the next crypto surge
Bank of America has picked out a number of stocks that could help investors get a slice of the cryptocurrency pie. Here they are.
Digital tokens on the rise?
Despite what some objectors and sceptics might say, it looks like cryptocurrency is here to stay.
Bitcoin has recently started heading upwards again. The token, which is the most popular in the world, recently passed the key $57,000 level – the highest levels since May. April’s $65,000 all-time high is still the target for BTC, but the industry is not just Bitcoin.
There are hundreds, thousands, of other digital tokens available. The industry’s collective valuation is currently north of $2 trillion – higher than the GDP of Canada with its bountiful natural resources.
Coins like Ether, Ripple, Cardano and even meme-based internet favourite Dogecoin, all have their own fans, representing billions in capital.
Cryptocurrencies seem like they’re becoming more resilient to outside pressures too. For example, Bitcoin’s current high performance flies in the face of China’s recent crypto ban. Before, such a measure would have sent the token spiralling downward. Now, even a flat out ban from one of the world’s foremost crypto markets isn’t enough to slow it down.
That being said, digital token prices can still show high volatility. Many investors and traders are still unsure if it’s a smart investment. Others prefer to stick with old school wealth stores like gold. But many are finding crypto a worthwhile pursuit. It’s basically down to how much volatility you can stomach.
But coins do not just generate themselves. To operate, the crypto industry requires an extensive ecosystem. It incorporates everything from technology providers, blockchain developers, payment platforms and plenty in between.
For investors to get involved in the next crypto gold rush without committing to coins, there are ways they can get involved. Of course, it goes without saying that any investments carry risk of capital loss. Investing should only be undertaken if you are comfortable taking any losses.
With that in mind, Bank of America analysts have selected several stocks they believe could offer investors value as the crypto industry grows.
Bank of America’s crypto stocks to watch
“A new generation of companies for digital assets trading, offerings and new applications across industries, including finance, supply chain, gaming and social media has been created. And yet we’re still in the early innings,” Bank of America said in a note, as reported by CNBC.
The bank’s digital finance stock selections look at the wider cryptocurrency sector.
Let’s start with power. Cryptocurrency mining, the process of minting fresh coins, is power intensive. Very power intensive. In fact, in 2020, Bitcoin mining alone used as much energy as Sweden.
According to Bank of America, nuclear power firms could be ready to pounce on the crypto sector. Environmental concerns around token mining’s emissions could push miners to look for low-carbon alternatives to their current options. With low emissions and round-the-clock reliability, nuclear could be the ideal fuel source for crypto mining.
With that in mind, BoA suggests Exelon, NRG Energy and Vistra could be energy companies to watch if they move into the crypto space.
Let’s talk data centres. Since China prohibited crypto mining in its territories, there’s been a mass exodus of mining operations. It looks like North America might become mining next hotspot.
“As digital asset mining migrates to North America due to China’s near complete ban of mining activities, public data-centre companies could view this niche market as an opportunity,” BoA analysts said.
A data centre boom may be on the way. To capitalise on this, Bank of America analysts recommend two stocks: Digital Reality and Equinix.
“Greater focus on the energy consumption of digital asset mining could increase demand for data centre operators with greater renewable energy sources,” the analysts said. “Equinix data centres are powered with 37% renewable energy with a target of 100% over the next decade.”
Payment platforms and banks should also be considered.
PayPal in particular is a “must own” for Bank of America.
“We view [Paypal] as a scarce asset with accelerating structural tailwinds, while the company is well on its way to transforming its digital wallet/app into a financial ‘Super App’ for its massive global consumer base,” the bank said.
Cryptocurrency update: Bitcoin bounds upwards
Bitcoin continues its big comeback by reaching five-month highs in trading this morning.
Buoyant Bitcoin clears $57,000
The Bitcoin rally looks like it’s got some teeth.
The token reached its highest levels since May on Monday morning after clearing the $57,000 mark. Prices have subsequently pulled back, leaving BTC at around $56,500, but the coin is still up around 4.75% on the day.
This comes after Bitcoin notched 14% gains across last week. For the last two consecutive weeks, BTC has made double-digit gains.
Things are bullish in Bitcoin town.
For now, Bitcoin appears to be more resilient against potential macro trends that usually send the token’s price on a wild spiral. For example, China’s continued crypto crackdown does not seem to have blunted Bitcoin’s edge at all.
Other revelations like the Soros Foundation announcing it had started investing in Bitcoin have helped. These include US SEC Chairman Gary Gensler coming out and saying the Securities and Exchange Commission has no plans to pull a Beijing and ban Bitcoin transactions in the US.
Even the anti-crypto comments JPMorgan CEO Jamie Dimon made last week were not enough to knock BTC of its stride.
However, regulatory reform is probably on its way. Certainly, the perceived threat digital token traders have felt regarding tighter regulation has caused price wobbles in the past. Will a White House executive order waylay Bitcoin’s progress? Reports indicate that reform could be closer than it looks.
Is the White House planning a crypto regulation surprise?
Reports from Washington suggest the Biden administration is working on an executive order that could lead to wider crypto industry regulation.
According to White House insiders speaking to Bloomberg, the order would see the creation of federal agencies tasked with making recommendations on Bitcoin and Crypto. It would also touch on financial regulation, economic innovation, and national security.
A new crypto Czar could even be appointed if the order goes through.
That said, there is no hard or fast date attached to this measure. A White House spokesperson told Bloomberg that, regardless of the order making it into law, the US’ crypto strategy will be made public. It’s just a question of when.
Pressure has been building on US financial authorities to make some sort of noise regarding crypto. The market has been burning white-hot for the past couple of years, and with markets caps zig-zagging between $1.5 and $2 trillion given BTC’s performance, it’s clear something has to budge.
Treasury Secretary Janet Yellen has been agitating for a regulatory framework for digital currency regulation for some time now. Elizabeth Warren is also one of the influential voices calling for more to be done.
We don’t know when regulation will be stepped up in the US – but if these reports are accurate then we may see some sort of framework or regulatory tightening in the near future.
Blockchain firm ConsenSys announces funding round
ConsenSys, a blockchain firm specialising in Ethereum-based projects, is in talks for a new funding round. The Brooklyn-based business is hoping this fresh cash injection would take its value up to $3bn.
If it does reach this valuation, then ConsenSys would be a good case study in just how much blockchain and digital finance systems have expanded over the past 18 months.
In April, the business acquired $65m from the likes of JPMorgan and Mastercard in April. According to reports, ConsenSys is looking to raise $250m in its current funding round. Golden Tree Asset Management and Arca are alleged to be holding talks with ConsenSys.
ConsenSys mostly operates on the Ethereum platform, which is fuelled by the token of the same name.
Its projects have been used in several major Decentralised Finance (DeFi) operations. The most prominent of these is MetaMask – an important gateway for the DeFi ecosystem. More than $9bn has been facilitated by MetaMask via its token swap feature across its lifetime so far.
Bitcoin signals fight back after clearing $55,000
Bitcoin staged an impressive rally yesterday, gaining more than 10% in trading. What’s behind this latest BTC surge? We take a look.
BTC reaches $55,000
It was good news for Bitcoin traders last night when the world’s most popular cryptocurrency cleared $55,000 for the first time since May.
The token bounced on the news that billionaire George Soros’ hedge fund confirmed it is trading BTC.
Bitcoin reached a five-month high of $55,499 last night. It has fallen back to around $54,680, but bulls believe it’s only a matter of time before BTC reaches a new all-time high. Its highest levels were reached in April 2021, when Bitcoin broke above $64,000 for the first time.
Whenever Bitcoin moves it usually takes other tokens with it. This is true today. Ether, for instance, is trading up nearly 1% at $3,594, while Cardano is showing similar growth of 1.10%. Cardano is now trading for $2.26.
It appears the China crypto crackdown has not had the effect that bears were bracing for. Beijing has ruled all cryptocurrency transactions as illegal and is doing its utmost to stamp out mining and trading operations across China.
However, it seems Bitcoin is showing new levels of resilience to potentially damaging external factors.
Extra support for Bitcoin
In addition to the Soros Fund’s Bitcoin backing, a number of other institutions, organisations, and even a country potentially, are helping support the token.
For instance, Reuters reports that the Bank of America Corp published its first research coverage focused on cryptocurrencies and other digital assets on Monday. Additionally, US Bancorp has launched a new crypto-focussed service for private fund managers in the US and Cayman Islands.
„Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years,“ said Gunjan Kedia, Vice Chair of US Bank Wealth Management and Investment Services in a news release. „Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency.“
We’ve also had reports from the SEC that it doesn’t plan to ban cryptos at all. Chairman Gary Gensler was grilled by the Senate on Tuesday if the Securities and Exchange Commission would be mirroring China’s recent harsh actions. The answer was an emphatic no. It’s really for Congress to decide, according to Gensler.
Federal Reserve Chairman Jerome Powell recently also said the Fed has no intention of implementing a crypto ban either.
Regulation will likely be the name of the game. We just don’t know when it’s going to land, but for now digital token trading and investing is still A-OK in the US of A.
Bitcoin might even become currency in Brazil if comments made by Federal Deputy Aureo Riberio on Tuesday are anything to go by.
Riberio said in an interview with local media Brazilians could soon be able to use Bitcoin to buy houses, cars, and even fast food. Bill 2.303/15, which regulates cryptocurrencies, might approve the legal use of the asset, similar to El Salvador.
Not everyone is convinced by digital tokens
This new wave of digital finance fever has been tempered somewhat by a few important dissenting voices.
At the start of the week, we saw one of South Africa’s top hedge fund managers, Jean-Pierre Verster of Protea Capital Management, compare Bitcoin to a Ponzi scheme.
Now, JPMorgan CEO Jamie Dimon has spoken out against Bitcoin.
Dimon was interviewed on HBO’s Axios on Monday when he was asked if BTC is the “fool’s gold of the future?”.
The JPMorgan Boss replied: “It’s got no intrinsic value, and regulators are going to regulate the hell out of it.”
Dimon went on to say: “You can call it a security or an asset or something like that, but if people are using it for tax avoidance and sex trafficking and ransomware, it’s going to be regulated, whether you like it or not. So, it’s not a moral statement. It’s a factual statement.”
Several prominent finance figures have made their anti-Bitcoin stance very clear. Christine Largarde of the European Central Bank and Bank of England Governor Andrew Bailey have all spoken out against digital tokens.
Even Jerome Powell, who as mentioned above said the Fed has no plans to ban crypto transactions in the US any time soon, has mirrored Dimon’s comments in the past.
Despite its CEO’s feelings, JPMorgan currently offers six crypto funds for its customers.
Cryptocurrency update: Bitcoin eyes $50k
After a strong weekend, Bitcoin travels upwards. Could it really be ready to punch above the $50k level once more?
Bitcoin makes gains
Sometimes tracking Bitcoin undulations can be exhausting.
The token gained over 8% on Friday and continued on its upward path to scrape slightly above $48,000 over the weekend. Analysts are now putting the psychologically important $50k level as BTC’s new target.
But this IS Bitcoin we’re talking about here. Even when making gains it does still feel like a case of one step forward, two steps back. At the time of writing, Bitcoin was in the red, trading down 1% at $47,559.
Even so, Bitcoin has made solid gains across the end of September and into October. In fact, it’s still up 60% this year, despite major price swings and volatility.
There are a couple of reasons why Bitcoin could be on the up.
For starters, US Federal Reserve Chairman Jerome Powell said they have no plans to ban crypto transactions. This pro-digital finance move stands in stark contrast to China. Last week, the People’s Bank of China ruled cryptocurrency transactions were illegal, sending BTC down.
The Bitcoin hash rate, the rate at which new tokens are mined, is reaching all-time highs. This is a bit surprising as just five months ago China began to kick crypto miners out of the country. After this clampdown, the world was expecting the hash rate to fall dramatically.
Despite the hash rate and the computing power required to complete the complex algorithms required to mine new coins being basically unmeasurable, the overall trend is broadly upward.
CoinWarz recorded 201 exahashes per second (EH/s) on October 2nd, while MiningPoolStats currently shows just 138 EH/s. At the highest estimates, the hash rate would be a full 32 exahashes higher than the previous peak.
Exahashes per second is the preferred metric analysts use to measure hash rate.
“China kicked out nearly 90% of bitcoin miners in the country earlier this year. Hash rate fell approximately 50% as a result,” Morgan Creek Digital co-founder Anthony Pompliano said, regarding the hash rate. “Only a few months later and we are almost back to an all-time high. Economic incentives drive further network decentralization.”
PlanB bets on Bitcoin bull run…
In response to the upward trend, Bitcoin showed across the last week, some of the more well known Twitter analysts are saying the best is yet to come.
PlanB, a favourite of the crypto Twitterati, says Bitcoin may hit $63,000 by the end of October before pushing on to a bumper $98,000 November close.
On-chain analyses finished tonight: IMO we are midway, no sign of weakness (red) yet. Note color overlay is not months to halving but an on-chain signal. My guess: this 2nd leg of the bull market will have at least 6 more months to go. pic.twitter.com/HAEMYfQ1pT
— PlanB (@100trillionUSD) October 2, 2021
PlanB is a pioneer of the “stock-to-flow” charting model. Stock-to-flow measures the current stock of an asset against the flow of new production or how much is mined in a year. A higher ratio indicates more scarcity, which in turn indicates a higher value.
…but South African hedge fund manager warns off crypto
It’s fair to say Bitcoin and cryptocurrency as a whole has had an equal share of champions and detractors.
While the likes of PlanB are putting all their chips on crypto, others remain unconvinced.
Jean-Pierre Verster, founder of South African hedge fund Protea Capital Management, has joined the chorus of those who believe digital tokens have “no intrinsic value”.
In an interview with Biznews, Verster said: “I think the technology of blockchain is a wonderful technology. And will find applications when it comes to having open ledgers – when it comes to transactions that you need to make sure are captured somewhere or recorded somewhere in a way that people can’t after the facts – fiddle with those recordings. For that blockchain is great.”
Even so, Verster was keen to point out that volatility is off-putting for some investors.
“It [crypto] has got these elements of a Ponzi scheme, which means that for a long period of time, prices go up, go up, and it looks like value increases, and then it all comes crashing down,” Verster said. “So, I have not invested in crypto myself.”
Apart from the government of China, there have been other major players that have called into question the validity of digital tokens as investment vehicles.
In May, Bank of England Governor Andrew Bailey called cryptocurrencies “dangerous”, and advised people only invest if they are prepared to lose all their money.
Bitcoin battered by POBC crypto punch
Bitcoin has taken a major body blow after the latest Chinese crypto crackdown was announced this morning.
People’s Bank of China rules crypto transactions are illegal
Volatility and Bitcoin: name a more iconic duo.
With the token starting the day in the green, traders were hoping to see a reversal to the bearish patterns and price action seen in September so far.
A fresh ruling from the People’s Bank of China put paid to that.
China’s central bank has said that all cryptocurrency transactions in the country are illegal and must be banned. As anti-crypto signals go, they don’t come much tougher than that.
A statement by the POBC said that all cryptocurrencies, including Bitcoin, Tether and Ether, are not fiat currency, thus they should not be circulated on the market.
The ban includes services provided by offshore and international exchanges to domestic Chinese citizens.
China’s crackdown on digital currencies has been rumbling along across the year, but this is the most overt statement yet.
The nation already moved to ban crypto mining earlier in the year. China’s economic planning agency said efforts to completely root mining out are underway, which could pose big problems for the global BTC supply.
Additionally, the POBC is stepping up its monitoring of cryptocurrency transactions, including speculative investing.
“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the bank said
Bitcoin, as well as other tokens such as Ethereum, have been sent reeling by this news. Associated stocks such as Coinbase and MicroStrategy have also begun to slide on the PBOC’s comments.
BTC had been trading over $45,000 prior to the bank’s proclamation. At the time of writing, it had lost 5% as it spirals back into the red. Bitcoin is now being traded for around $42,500 but will likely slide further as the day progresses.
Some analysts were expecting higher prices towards the weekend with talk of $47,000. Now, it looks like BTC is going to continue to trend downwards into next week.
Looking at crypto boards just shows red. Ethereum is down nearly 10% and so is Litecoin. Polkadot has dropped over 11% while Ripple has also dropped by 8%.
Consternation over another market drop has never been far away from the Bitcoin sector after it tumbled from all-time highs of over $65,000 earlier in the year.
Arcane’s Fear & Greed index, which measures general market attitudes regarding BTC performance, was flashing bearish signals at the start of the week and this has continued.
On a scale of 0-100, with 0 being extreme fear and 100 being extreme greed, BTC registered a 27 rating on Tuesday, suggesting fears the market may bottom out are coming to fruition.
Realistically, this move should have probably been spotted earlier. As mentioned above, China has not exactly been subtle in its government-led distaste for decentralised finance. This is a nation where pretty much everything passes through government control after all.
But just when things were looking good for BTC, it’s down once more. It only goes to show just how volatile cryptocurrency trading is and how susceptible the market is to external pressures.
Perhaps wider global regulation may cause stabilisation across the board, but for now, cryptocurrencies are probably going to continue to pitch on volatile seas.
Cryptocurrency update: Bitcoin wobbles on China concerns
Bitcoin starts the week in the red thanks to stock market woes and a potential tightening of regulatory oversight.
China and regulation fears rock Bitcoin
As Bitcoin becomes ever more prevalent, the influence of non-crypto markets on futures contracts is becoming larger.
As of Monday 20th September, Bitcoin had dropped roughly 5% on the day, thanks to a fall in S&P 500 futures triggered by the China Evergrande Group situation.
Property giant Evergrande fell 10% in Hong Kong during Asian trading this morning, causing globe-spanning stock market ripples. As the S&P 500 fell 1%, Germany’s Dax had also fallen 2%.
The fallout from this is investors looking to mitigate risks across their portfolios. As cryptocurrencies exhibit high volatility, Bitcoin and other tokens may be on the chopping block.
Anticipation of an October or November stimulus taper from this week’s Fed meetings has also strengthened the greenback, making the BTC/USD pairing a little weaker, hence the price drop.
Additionally, further scrutiny is being paid to stablecoins. Stablecoins are crypto tokens backed by the USD. The most prominent of these is Tether. This is meant to cut out much of the volatility we see in the most popular coins, but regulators aren’t so sure.
There are rumblings that further regulation is going to hit stablecoins, which promises big changes for the crypto market as a whole. Some observers believe they may be a threat to the US’ entire crypto situation. A formal review into stablecoins by the Financial Stability Oversight Council could be on the way.
The total market capitalization of all stablecoins has reached $115 billion, growing over ten times over the past 12 months.
Essentially, it will be a rocky week for cryptocurrencies. Right now, all of the major tokens are in the red.
AMC to accept crypto payments
Every so often, you get an overlap of two great internet sensations. Now, the worlds of crypto and memestocks are colliding as AMC Entertainment Holdings announces its plans to accept Bitcoin and crypto tokens as payment.
AMC is the meme stock de jour; one of the stocks exceptionally popular with a new breed of traders. The likes of GameStop have already seen their prices somewhat artificially pumped by a younger generation of traders and investors in an attempt to rattle the old guard.
We know cryptocurrencies are also a favourite of new, younger investors. It seems only right that these two paths should cross.
AMC CEO Adam Aron has been fairly clever here. By aligning AMC with the crypto market, he’s continuing to appeal to the types of investors and traders already interested in the meme stock.
Additionally, the crypto sector may help create further revenue streams for the cinema chain. One idea that Aron allegedly loves is tapping into the non-fungible tokens (NFT) sector. This burgeoning digital asset market has picked up steam massively across 2021, and AMC’s entry point could be to offer its own NFTs in the form of commemorative movie tickets users can buy and keep.
It’s a shrewd move from AMC no doubt – but is banking on NFTs help alleviate the company’s potential future woes around declining cinema attendance?
Litecoin activity outstrips Dogecoin and Bitcoin Cash
Move over Doge: crypto users have a new best friend.
According to Litecoin Foundation Director Jay Milla, the number of active addresses on the Litecoin network has overtaken the number using Dogecoin and Bitcoin Cash.
The growth of wallet activity has overtaken many other large-cap tokens, as Milla recently tweeted:
Let's clear this up now: Litecoin activity has been on a the rise for well over a year! Our goal is adoption and the metrics are clear.. Charting $LTC active addresses shows who's who. #Chikundinner #Litecoin #LitecoinFAM #Evidence pic.twitter.com/LHcqHg9Vem
— Jay Milla (@MillaLiraj) September 18, 2021
At 450,000, active Litecoin addresses is over double that of Cardano’s 214,000. Bitcoin Cash’s network user numbers clock in at 101,000. Surprisingly, Dogecoin’s only totals 60,890.
Active addresses are used to monitor and rate on-chain network activity across the crypto market. Analysts use it to sport patterns across the wider sector. It is not necessarily an indicator of the number of traders or investors buying a particular cryptocurrency.
Litecoin recently took a hit thanks to some fake news. It was reported that Walmart had agreed to partner with Litecoin to accept the token as payment. This is false. No such partnership exists.
According to Litecoin, the confusion was caused by an employee tweeting the partnership announcement without authorisation. Walmart has subsequently confirmed it has not partnered with the Litecoin foundation.
Cryptocurrency update: Is the BTC bull market back on?
After making strong gains across the past couple of weeks, crypto analysts are suggesting the Bitcoin bull market is back.
Analyst says crypto bull market could make a return
Bloomberg’s Mike McGlone has stated he believes bitcoin will hit $100,000 this year in a “refreshed” crypto bull market.
McGlone, a commodity strategist, predicts the massive price, despite the May broad crypto sell-off tanking BTC prices. In terms of other coins, Ethereum was McGlone’s other top pick, predicting $5,000 being the path of least resistance.
In September’s Bloomberg Crypto Outlook, McGlone said: “Crypto-assets appear in a revived and refreshed bull market with the 2H benefit of a steep discount from previous highs at the start.”
“We see Ethereum on course toward $5,000 and $100,000 for bitcoin. Portfolios of some combination of gold and bonds appear increasingly naked without some Bitcoin and Ethereum joining the mix,” McGlone continued.
Diminishing supply but a higher level of adoption for practical use may be behind the ETH support. Ethereum’s status as the primary denominator for non-fungible tokens (NFTs), which are dramatically rising in popularity, could also help put prices on an upward trajectory.
The London Fork, a change to the Ethereum blockchain protocol, caused significant coin burn and a drop in overall ETH supply when it went live last month.
Looking to Bitcoin, McGlone believes the $100,000 price is “highly probable, especially after last year’s supply cut. Post-halving years have seen the greatest appreciation, and 4x in 2021 would be quite tame for the No. 1 crypto compared with 55x in 2013 and 15x in 2017.”
Anything can happen in the world of cryptocurrencies. Volatility is the watchword. It will be interesting to see if this most bullish of predictions comes true – especially when we’ve seen the brutal market effects a sustained sell-off can bring.
At the time of writing, Bitcoin futures were trading at $51,812.91 and were up 3.15% on the day.
Ethereum was trading for $3905.05.
Bitcoin price pump El Salvador movement gains traction on Social Media
Twitter and Reddit users are organising plans to support El Salvador’s adoption of BTC as legal tender by buying small amounts of Bitcoin.
By buying up to $30 worth at a time, the users hope this will bring attention to El Salvador’s controversial plan.
On September 7th, El Salvador brings BTC fully into its economy as legal tender. ATM machines have been installed around the country to allow Salvadorans to exchange US dollars for Bitcoin. The government has also a $150m fund to back nationwide conversion efforts.
The $30 amount comes from the fact Salvadorans will be able to download the government’s digital wallet, enter their ID number and receive $30 in Bitcoin going forward.
The whole thing smacks of the recent Gamestop/memestocks market manipulation tactics employed by the more vociferous members of the online trading community. The fact that thousands of online traders could start snapping up more BTC at one time could create ripples that end up with higher BTC/USD conversion rates. That may drain El Salvador’s conversion fund at a rapid rate, and semi-scuppering the launch.
Additionally, the citizens of El Salvador are not particularly keen on the introduction of BTC into their currency system anyway.
A poll by the local Central American University showed that of 1,281 people surveyed, at least 67.9% of 1,281 people disagree or strongly disagree with the use of Bitcoin as a legal tender.
South Korea introduces its first blockchain mutual fund
KB Asset Management, an investment-focussed branch of KB Financial Group, has launched South Korea’s first mutual fund for blockchain technologies.
The KB Global Digital Chain Economy fund will invest in three main areas:
- Hardware – This includes investment in businesses specialising in the physical products needed to run blockchain servers and/or crypto mining, Companies like NVIDIA, AMD, and Intel are just some of those mentioned by KB Asset Management.
- Software – Under this umbrella are software suppliers involved in sustaining and creating blockchains, such as IBM, Amazon Web Services and China’s Baidu.
- Users – The third segment covers companies that have integrated blockchain into their businesses. According to KB, this means it will invest in businesses such as PayPal, Square, NTT Data and Tencent amongst others.
US firms are KB’s primary investment target. A smaller allocation of funds will be put towards companies operating in Japan, Europe, and China.
KB Asset Management had more than $90 billion under management as of February, according to Korea Financial Investment Association data.
Cryptocurrency update: Institutions ride correction into Bitcoin
More institutional investors entered the crypto world last March, helping support a sector some are still reluctant to back.
Wood suggests Bitcoin correction tempted institutions into crypto
Founder and CEO of ARK Investment Management Cathie Wood has said March’s cryptocurrency market correction was a buy signal for institutional investors.
Referencing on-chain analysis undertaken by ARK researchers and data from crypto research firm Chainalysis, Wood said institutions moved money into Bitcoin during this time.
According to Chainalysis, large institutional trading transactions, i.e., those transactions above $10 million, accounted for over 60% of decentralised finance (DeFi) market movements in Q2 2021. In Q3 2020, the share was more like 20%.
Institutions now hold close to $70bn in Bitcoin, according to research from Buy Bitcoin Worldwide. $40.1bn of that total is controlled by BTC asset managers. Of thee, Greyscale is the largest digital asset manager, holding around $31bn in the world’s most popular cryptocurrency.
Greyscale itself is an important vehicle for institutional-level investors looking for crypto exposure. It’s also interesting that Cathie Wood flagged how such investors made a move into digital tokens in March. She was very likely one of them. Wood’s own ARK Investment Management is the largest shareholder in the Greyscale Bitcoin Trust with a $350 million stake of 9 million shares.
Bitcoin itself broke above $50,000 for the first time in months last week. At the time of writing, it was trading for around $47,412, down some 2.76% on the day. The coin is eyeing support at $49,000.
We’ve seen plenty of institutional-level support from moneyed investors for BTC and other tokens across the past year. However, some are not so convinced of cryptocurrency’s validity as an investment vehicle.
Paulson goes hard on Bitcoin
Billionaire investor John Paulson has fired a few harsh words Bitcoin’s way.
Paulson, who gained notoriety as a subprime shorter back in 2008, has stated that cryptocurrency’s inherent volatility would put him off from “even shorting it”.
Speaking in an interview with Bloomberg, Paulson said Bitcoin and digital tokens are not an ideal store of value since they are a “limited supply of nothing”, and hold “no intrinsic value”.
Paulson went even further. The investor said he would not recommend investing in digital tokens to anyone.
“Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless,” Paulson told Bloomberg. “Once the exuberance wears off, or liquidity dries up, they will go to zero.”
So, what does Paulson recommend investors put their cash into? The old standby gold. The talk of Bitcoin becoming the new “digital gold” has been floating around the markets for a while now, but many investors still prefer gold as a store of wealth over its upstart rival.
Some investors prefer the physical nature of gold, plus its inherent value, as making it a stable value store over cryptocurrencies.
Expecting increasing inflation to result in the metal appreciating thanks to it being regarded as a safe haven asset, Paulson heavily supports gold.
On-chain metrics could spell the return of BTC & ETH bull run
Despite Poulson’s protestations, there is a growing belief that Bitcoin and Ethereum could be about to stage another bull market surge.
Glassnode, a crypto and blockchain analytics firm, has said there is a tremendous crossover with today’s on-chain metrics and those seen in mid-to-late 2020 when cryptocurrencies began a fresh surge.
“As the Bitcoin and wider cryptocurrency market rallies higher, a remarkable on-chain divergence continues to form across both Bitcoin and Ethereum,” Glassnode’s latest Week-on-Chain report states.
“On-chain activity on both chains has remained quiet relative to bull market highs, even as price momentum continues upwards, and bullish trends in supply dynamics remain in play.”
Indicators that a new bull run is on the way are currently observable, including higher network participation and record transaction values.
Active entities on the Bitcoin blockchain are particularly noteworthy. Despite prices being near $50,000, these are still one-third below all-time highs but growing rapidly.
“It is notable that current activity on both chains is similar to the stable pre-bull accumulation range established in mid to late 2020,” Glassnode said.
“Whilst the divergence between price and on-chain activity is historically abnormal for a full-scale bull market, it is not an uncommon signature for the pre-bull, and pre-supply-squeeze dynamic,” the report continues. “These periods often accompany the end of bear market accumulation where the investors who remain, are the strong hands, those with the highest conviction.”
Cryptocurrency update: Bitcoin passes $50,000 in 3-month uptick
Bitcoin starts the week in fighting form as it reaches heights not seen since mid-May.
Bitcoin continues fightback after breaching $50,000
Bitcoin started the week strongly by building on weekend momentum to break above $50,000 for the first time in three months.
The world’s most popular cryptocurrency is currently trading at $50,345 and is up over 3.25% in a 24-hour period. According to Coindesk data, Bitcoin is now up 71.4% year-to-date.
A couple of new reports have helped push BTC towards new highs.
Firstly, Coinbase has announced it plans on adding a further $500 million worth of new crypto assets, including BTC, to its holdings. Institutional support tends to be a big support for Bitcoin. It’s no different here.
We’ve also seen PayPal announce it will offer crypto wallet services to UK customers. More on that later.
Price action remains above the 200-day moving average. That could mean we’re seeing a sustained rally, rather than a flash-in-the-pan trading moment. That said, trading volumes have remained relatively flat since the weekend, despite the uptick in price action.
Bitcoin is the crypto industry’s bellwether. With it back in the green, several other popular tokens are subsequently rallying. Cardano is up over 7%, XRP, is up over 3.75%, and Ether is showing a 2.31% rise.
Is Bitcoin back in business? We all know how quickly things can change in the world of digital finance and token trading. We’ll just have to wait and see, but the fundamentals suggest we could at least see the rally continue across the week.
PayPal offers crypto services to UK customers
As digital token trading gets more popular, an increasing number of platforms are starting to offer crypto buying, selling, and holding on their platforms.
The latest to throw its hat into the digital currency ring is PayPal. It is now offering crypto services to its UK customers. Users will be able to exchange or hold four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Crypto derivatives, like CFDs, are banned for retail customers in the UK. However, retail clients can still buy and hold the physical coins themselves, circumventing this ban. That’s essentially what PayPal is offering here.
The same service was launched in the US fairly recently. Users there can also pay for transactions using their crypto holdings too.
For some, PayPal’s decision to accept digital currencies on its platform came as a bit of a shock. There have been questions around money laundering and potential fraud caused by cryptocurrency users’ anonymity. Such critics have thought maybe PayPal and other institutions may have been put off by this.
There’s also volatility to consider. While we’ve seen Bitcoin reach a new 3-month high this week, it fell away dramatically from its all-time highs in April to below $30,000 weeks later. This may have been seen as an impediment to adoption by the likes of PayPal in the past.
This is obviously not the case. PayPal is now happy to ride the crypto train until the wheels fall off.
Jose Fernandez da Ponte, vice president and general manager for blockchain, crypto and digital currencies at PayPal, said his company’s new service could help introduce more people to cryptocurrency.
„The pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services.
Global digital currency adoption soars over two years
The adoption of cryptocurrencies has grown 2,300% over the past two years Chainanalysis research has revealed.
Those stats represent the acceleration in crypto trading at the end of Q2 2021 against Q2 2019. Chainanalysis data also reveals it is up 881% across the last year.
The blockchain specialist said it rated activity in 154 countries against three criteria to establish its results:
- The amount of on-chain crypto received
- On-chain retail value transferred
- Peer-to-peer (P2P) exchange trade volume
The above metrics were weighted by purchasing power parity (PPP) per capita. P2P exchange trade volume was weighted by the number of internet users in a given country.
Institutional support, i.e., that from banks, businesses, and brokers, is what drove adoption in North America, Western Europe, and East Asia.
According to Chainanalysis’ report, digital tokens have been seen as “compelling” by such players, particularly as prices were reaching all-time highs at the start of the second quarter.
On the other hand, peer-to-peer activity pushed growth in emerging markets. Crypto users and investors in these areas see digital currencies as a to preserve savings in the face of currency devaluations. They also can use it for overseas remittance or carry out business transactions.
“Central and Southern Asia, Latin America, and Africa send more web traffic to P2P platforms than regions whose countries tend to have larger economies, such as Western Europe and Eastern Asia,” the report states.