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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.
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: BTC breaks $43,000 level
Bitcoin made strides this weekend before settling over $43,000, yet the upcoming US Infrastructure Bill may put the brakes on further momentum.
Bitcoin makes weekend gains but could face further derailment
Bitcoin’s torrid month could be over as prices shot above $45,000 on the weekend.
The token reached a 3-month high on Saturday, reaching $45,300. Things have cooled a little since then, with BTC dropping back to $43,788 at the time of writing.
This is good news for Bitcoin traders. The token has struggled to keep a hold of gains over the past 3 months, sinking as low as $29,000 on some weeks. Could we be about to see a major breakout for the world’s most popular cryptocurrency?
According to Datamish research, the weekend’s price action was guided by a short squeeze when 126 BTC positions were liquidated on Friday. Bullish traders are helping keep the coin afloat, as it pushes towards the $45,000 200-moving day average.
It’s interesting because last week concerns over tax provisions within the proposed US infrastructure bill had caused a bit of market uncertainty. However, institutional activity from the likes of Grayscale is picking up again. That’s put more confidence back into the BTC market.
Amendments to the bill put forward by Democratic senators would exclude crypto miners involved in transaction validation on distributed ledgers, as well as firms selling private key hardware or software wallets, from tax reporting provisions.
It seems these proposals were enough to instil upward momentum back into Bitcoin.
But as ever there’s a twist in the tale: it’s been announced that the version of the Infrastructure Bill that will be voted on in the US Senate tomorrow will be the original bill without these key amendments. BTC Bulls are not happy with Biden right now.
We’ll have to see how the market reacts to the vote’s outcome tomorrow to gauge price action, but the BTC breakout could now be in jeopardy.
Brazilian BTC ETF promises a greener future
Much has been made of crypto mining’s environmental impact this year. Tesla u-turned on its pledge to accept Bitcoin as payment after citing environmental concerns earlier in the year, for example.
A new ETF launched in Brazil promises carbon neutrality in the hopes of inspiring industry-wide change.
BITH11 from alternative investment fund Hashdex Asset Management is claiming to be Brazil’s first green crypto ETF.
Carbon credits are the keys to the fund’s eco-friendly credentials. To offset the carbon produced in the mining process, Hashdex says it plans to spend big on carbon credits through a partnership with Germany’s Crypto Carbon Ratings Institute (CCRI).
The CCRI will produce annual reports estimating the level of energy consumed and the amount of carbon generated through the ETF’s Bitcoin mining activities. 0.15% of the ETF’s liquid assets will be pumped into carbon credit acquisitions, as well as investment in green technologies, every year, according to Hashdex.
This is not the first Bitcoin fund Hasdex has launched this year. Its first, HASH11, was launched on the B3 Brazilian Stock Exchange earlier in the year and has so far gained 33% since going live.
Dogecoin to soar by the end of the year?
Dogecoin, the novelty token-turned serious asset, could rally massively by the end of the year, according to industry observers polled by price comparison website Finder.
The coin’s “pump and dump” cycle could help inspire price action across 2021 after Dogecoin recently found a $0.20 floor. The industry now believes Dogecoin will end the year at $0.42 – a 60% rise against current prices.
Don’t get too excited, however. Of the 42 industry insiders surveyed by Finder, 80% of them agreed Dogecoin is in a bubble. And bubbles almost always burst. While the majority of respondents posit strong price action this year, 55% think it will collapse in 2021 too. 42% say it will happen next year, while only 3% forecast a bursting dogecoin-shaped bubble in 2023.
“Dogecoin seems largely dependent on Elon Musk’s erratic tweets,” said John Hawkins, senior lecturer at the University of Canberra. When surveyed, Hawkins predicted dogecoin will be worth 15 cents by the end of 2021 and will be completely worthless by 2030.
Cryptocurrency update: Bitcoin on the rebound?
Bitcoin makes some big strides in trading today. Are we looking at a BTC bounce back?
Bitcoin gains 35%, starts week in the green
What a torrid couple of weeks it’s been for Bitcoin. The world’s most popular cryptocurrency has been battered recently, with prices falling below $30,000 for the first time since last year.
Now, it looks like BTC is preparing to bounce back. As of Monday, the crypto had gained 35% in early trading, reaching over $39,000. This was the first time Bitcoin had breached that level since June 16th – but still some $26,000 off the currency’s all-time highs.
At the time of writing, Bitcoin had retreated to around $38,355.
Datamish data shows a short squeeze appears to have driven prices higher in the short-term. Those taking short positions have apparently had to sell as price action turned positive. Why is currently unknown.
Datamish is an independent service that tracks Bitcoin long and short positions.
One of the key reasons why Bitcoin may have rekindled its fighting spirit is the news Amazon is planning to accept BTC as payment, potentially by the end of 2021.
According to reports from City A.M., the online retail colossus is exploring how cryptos can be fully integrated into the Amazon ecosystem. Bitcoin would be the launch point, with Ethereum, Cardona and Bitcoin Cash potentially being acceptable payment for Amazon transactions going forward.
Either way, the bulls will be happy with this price action – but let’s not get too hasty. This is cryptocurrency after all. We’ve seen volatility that would sink any other asset become normal in the world of crypto trading. Anything can change at any minute.
While the outlook is currently good, there are some global stories and opinions that could knock BTC off its current upward course.
Bitcoin mogul suggests Chinese crypto trading could soon be a thing of the past
According to Bobby Lee, one of China’s first Bitcoin trading pioneers, cryptocurrencies could face an outright trading ban if the Chinese crypto crackdown intensifies.
Lee, the former owner of BTC China, the nation’s first Bitcoin exchange, is speaking from experience. He was forced to sell BTC China in 2017 following the first of the Chinese government’s crypto clampdowns.
Chinese authorities have been ruthless in their pursuit of crypto market regulation in 2021. So far, we’ve seen outright bans on crypto mining within China, and tougher restrictions on retail trading and institutional banking services.
According to Lee, the next logical step for China’s government to take is an outright ban on crypto trading.
“The next thing they could do, the final straw, would be something like banning cryptocurrency altogether,” Lee said in an interview with Fortune. “I put it at the odds of 50-50.”
Lee did not mention how this would be enforced from a practical standpoint.
China’s authoritarian stance on crypto trading has been the catalyst for BTC prices crashes in 2021. When China announced its mining ban back in May, Bitcoin prices were in free fall. While this has opened up mining operations in other countries, China was responsible for the vast bulk of BTC token mining.
The global hash rate, the rate at which new BTC tokens are created, as fallen dramatically since the ban.
Will Lee’s prediction ring true? It’s hard to say. Control is the Chinese government’s modus operandi. There are many exchanges, including Binance, still operational in Chinese jurisdictions. If the nation is really serious about clamping down on crypto trading, these could fall next.
Keep an eye on China. Its actions will likely define BTC price movements going forward.
Man Group chief likens cryptocurrency trading to Dutch tulip bubble
Luke Ellis of Man Group has claimed that cryptocurrencies hold “no inherent worth’, comparing the current situation to the 17th Dutch tulip bubble.
Man Group is the world’s largest listed hedge fund, controlling assets worth $127bn for clients worldwide.
According to Ellis, cryptocurrencies are mainly popular with traders because of their price swings, rather than any practical application. Much of the actual trading is done by market participants who doubt crypto’s ultimate utility.
“If you look at cryptocurrencies as a whole, it is a pure trading instrument. There is no inherent worth in it whatsoever. It is a tulip bulb,” Ellis said. Ellis also described crypto tokens as “things to trade because they go up and down a bunch”.
Tulip bulb refers to the Dutch tulip trading bubble. In the 17th century, prices of tulip flowers skyrocketed before massively collapsing, leaving hundreds of tulip traders and speculators bankrupt.
Could the same be happening with cryptos?
We’ve seen similar rhetoric from a number of institutional sources recently. Governor Andrew Bailey of the Bank of England, for instance, has warned cryptocurrency traders may stand to lose all their money due to the product’s inherent volatility.
But some tokens have an actual practical use. Ether is used as payments for transactions on the Ethereum blockchain. The Ethereum blockchain is rapidly expanding in scope and is thought to be the leading network for the decentralised finance sector. We’ve also seen the rise of non-fungible tokens (NFTs); artworks and media held digitally and bought exclusively with cryptocurrencies.
Bitcoin, however, may have gained too much value to be used as an actual means of exchange. But when you have countries like El Salvador enshrining it as legal tender, it may still yet serve a purpose beyond simply being a tradeable project.
Digital currency is such a young asset that bubbles may likely occur during these development stages. However, this just requires extra vigilance on the part of traders and investors. Volatility is never far away – and all bubbles have to burst eventually.
Cryptocurrency update: Bitcoin tipped for global finance shakeup
Bold predictions for Bitcoin this week, despite its recent woes. Could we be on the cusp of a worldwide financial revolution?
BTC to overtake USD by 2050?
A panel of 42 cryptocurrency experts believe Bitcoin will replace fiat currency as the dominant form of finance by 2050.
The survey, undertaken by personal finance site Finder.com, showed 54% of respondents thought hyperbitcoinisation, i.e. the shift from fiat to BTC tokens, will occur by then. A further 29% believe this will happen by 2035.
Developing and emerging economies may be the driving force behind this global change. We’ve already seen El Salvador commit to using Bitcoin as legal tender. Other countries, such as Venezuela, may pursue similar options to extract themselves from the dollar in the long term.
Survey respondents were also feeling bullish regarding BTC prices. The consensus seems to be a price of $66,000 will be reached by 2021’s end. This was only slightly higher than the all-time high seen in April this year, prior to the BTC crash.
The most bullish price prediction comes from Morpher CEO Martin Fröhler, who suggests BTC token prices could climb as high as $160,000 by the end of the year.
This seems wildly optimistic. BTC has struggled to clear $32,000 and its predicted it may fall below $30,000 again soon.
Another thing to remember when looking at this survey’s results is participants’ vested interest in high crypto prices. At cryptocurrency experts, traders, and investors, they want to see high prices as it will pay off for them in the long-term. Take this survey with a grain of salt.
Indeed, not all respondents are bullish. University of Canberra senior lecturer John Hawkins is among the most bearish survey respondents. He gave an EOY prediction of US$20,000, stating that countries adopting Bitcoin may actually have negative impact on its price:
“I’m assuming El Salvador adopting it as legal tender puts a floor for a while. But after the price has dropped a lot, they may remove the legal tender status.”
Ethereum co-founder walks away
Anthony Di Iorio, one of Ethereum’s eight co-founders, has announced he is leaving the world of cryptocurrencies.
It’s a leftfield move from a man who has done a fair amount to promote decentralised finance and digital currencies through his work on the Ethereum blockchain and token.
Di Iorio has cited fears around his personal safety as one of the key reasons for pulling out.
Speaking to Bloomberg, Di Iorio said he doesn’t “feel necessarily safe in this space”. He also and warned that cryptocurrency is not what the world needs.
“[Crypto is] really a small percentage of what the world needs,” Di Iorio said, adding he wants to “to diversify to not being a crypto guy, but being a guy tackling complex problems. I will incorporate crypto when needed, but a lot of times, it’s not.”
According to Di Iorio, he has hired security teams to safeguard himself while attending meetings and travelling since 2017.
The world of decentralised finance is all built around personal freedom. But, because it is decentralised, it has also attracted a large following from the world’s criminal element. Money laundering and fraud is a big problem in the DeFi sector. Thieves and criminals have been particularly attentive to cryptocurrencies recently thanks to the staggering price increases we’ve seen across the past year.
Di Iorio will instead be focussing his attention and resources on more entrepreneurial endeavours.
ETH has struggled to find its footing again after Bitcoin’s collapse sent nearly the whole crypto market into the red.
Whales snap up more XRP tokens
XRP, the token for the Ripple network, has seen an upswing in whale transactions in the past week.
For context, whales are single-address entities that own 1,000 or more tokens in a single wallet.
In this case, the number of XRP coins involved has scaled into the hundreds of millions. Research from Whale Alert, a leading blockchain tracker, has revealed 124 million in XRP transfers, sourced from two transactions, took place in the past couple of days.
On 19 July 2021, a leading XRP address moved 84.3 million coins to an unknown wallet. The total value of the mentioned transaction, recorded by Bithomp.com, stands at around $50 million.
In a separate transfer, around 40 million XRP coins worth over $23 million were moved from a crypto wallet to the digital exchange Binance on Saturday 17th July.
We’ve recently seen a high level of growth in the number of Bitcoin tokens sitting in whale wallets. Because of the price collapse, canny investors are buying the dip, in the hopes of another BTC price rally.
This may be the same here. It’s been reported that the XRP 50-day moving average is about to fall below the 200-day moving average. This so called “death cross” could spell disaster for XRP token prices – but it does present an acquisition opportunity. The trouble is with crypto is that prices are so volatile that death crosses such as the one mentioned could become more frequent.
Right now, the market is in a depression – but if enough whales hoover up enough tokens, the principles of supply and demand could kick in, and thus support prices again.
Cryptocurrency update: Whales master the Bitcoin sea
Whales are causing a big splash in the world of Bitcoin, increasing their holdings, possibly turning a bearish market into a bullish one.
Whales increase their Bitcoin holdings
The number of BTC tokens held by whales has increased by 80,000 last week, according to Glassnode data.
Whales are clusters of IP addresses controlled by a single network participant holding a minimum of 1,000 BTC. As of Friday 2nd July, whales controlled 4.2m Bitcoin tokens split between 1,922 entities.
Commentators say increased whale interest is good for the Bitcoin market, which has struggled throughout June. Whale numbers are at a current all-time high. It was these entities that helped power BTC from $10,000 at the start of the year to nearly $60,000 in February.
While the BTC market did break above $64,000 in April, this was mainly during a sell-off period for whales. Since then, BTC has struggled to break out of the $34,000 range. By early May, according to Glassnode, whales’ collective stash had fallen to 4.17m Bitcoin tokens.
If more large entities are picking up BTC tokens during its current market downturn, then this could help power prices upwards. Although if this is the case, then we may be looking at a similar cycle to what we saw earlier in the year: whales buy, price shoots up; whales sell, price declines.
What this does indicate is that small-scale investors do not have the muscle to course correct BTC. It appears only institutional-level investors, with institutional-level capital, are able to buy in bulk in order to trigger bull runs.
When the whales began to sell following April’s peak, for example, prices plummeted. At its lowest, BTC was trading for below $30,000 – something that hadn’t happened since 2020.
The market will be taking whales renewed interest as a sign the good times could be returning. It will be hoping the bottom has been reached. However, there are numerous factors had play outside of large-scale investors’ interest that can have a big effect on Bitcoin prices, both positively and negatively.
Bitcoin hash rate difficulty dramatically drops
The Bitcoin hash rate has recorded its highest ever drop in difficulty.
According to BTC.com, the difficulty rate has dropped 28% as China ramps up its crackdown on cryptocurrency mining operations.
The hash rate refers to the rate at which new Bitcoin tokens are generated when computational algorithms are solved on the BTC blockchain. Mining difficulty refers to the amount of power needed to validate Bitcoin transactions. The network adjusts difficulty levels every two weeks in response to competition amongst miners.
The drop in difficulty suggests a lower level of competition of miners using the Bitcoin network.
It’s thought the drop in difficulty rate added $1,000 to the BTC price in early hours trading on Monday 5th June. Transaction fees on the blockchain network have also fallen.
China was responsible for 65% of the global Bitcoin hash rate. That has fallen away dramatically since the new outright ban on digital assets the Chinese government has imposed. Mining operators have either had to relocate or sell their mining rigs to foreign cryptocurrency farms.
A difficulty correction is due in another two weeks, by when we’ll get a clearer picture of how the Chinese mining ban has affected Bitcoin mining operations.
Ethereum reaches big Bitcoin-beating milestone
Ethereum is used to playing second fiddle to Bitcoin, but the world’s second-most popular cryptocurrency recently overtook its larger cousin in one key metric.
On July 3rd, Ethereum registered the highest number of single-address users on its network at over 750,000 – 50,000 more than Bitcoin. This data comes from cryptocurrency analytics firm Santiment.
In fact, Bitcoin’s total number of single user addresses has dropped 38% over the past three months, reports Bitinfocharts.
What’s bearish for Bitcoin could prove bullish for Ethereum.
ETH is up 1000% year-on-year and has outperformed Bitcoin in terms of price action threefold in 2021. Long awaited upgrades to the Ethereum blockchain, increasing experimentation in decentralised finance (DeFi) by banks and institutions, plus the non-fungible token (NFT) craze have all lead to a spike in Ethereum network use.
Ethereum’s utility could make it the cryptocurrency of choice if the world moves towards decentralised finance models. To use the Ethereum blockchain network, users must pay transaction fees using ETH tokens. That gives it a more practical use of Bitcoin, whose massive price now all but precludes the token being used as a currency in everyday payments.
ETH prices may increase if its user base continues to expand.
Cryptocurrency update: ETH spike predicted, Goldman lead forecasts merger & UNI surges
In this cryptocurrency update, Goldman Sachs predicts big things ahead for digital currencies, ETH could rise with a new network upgrade, and UNI breaks into the cryptocurrency top ten.
Is ETH about to soar?
A change in the way ETH tokens are processed on the Ethereum blockchain could feed into higher prices for the crypto going forward.
A proposal, called EIP 1559, has been accepted by the network’s developers that will increase the scarcity of ETH tokens. Under the change, the platform will burn a small amount of Ether every time that the currency is used to pay gas fees on a transaction. Gas fees are small fees applied whenever a transaction is processed on the Ethereum blockchain.
As this process involves destroying ETH tokens, analysts believe the resulting reduction in supply will support the price of ETH. Less tokens, coupled with growing demand, means more scarcity, and could mean higher prices.
Higher demand comes from the fact the new proposal will also go someway towards standardising gas fees. At present, Ethereum users feel there is too much guesswork on gas fees. Many turn to external trackers to find out daily fee levels. With more clarity, more users could start using the Ethereum blockchain for their blockchain needs.
ETH has already made considerable gains across the last 12 months – even outpacing Bitcoin in terms of growth. This time last year, ETH was trading at around $200; now, it is over $1,700. In percentage terms, that’s growth of 750%, compared against Bitcoin’s 530%.
EIP 1559 is scheduled to go live in either July or August when it will be bundled into a wider Ethereum network upgrade. It’s possible that the crypto may enjoy further price increases in the run up to EIP 1559’s release and after too, should its implementation go smoothly.
Goldman digital lead says more cryptocurrency infrastructure mergers are coming
Matt McDermott, Global Head of Digital Assets for Goldman Sachs Global Markets Division, has said that banks and institutions like Goldman may be under more pressure to grow their crypto businesses, highlighting mergers and acquisitions as the way to do it.
Speak in a company podcast, McDermott said: “This is a fast-evolving landscape where the crypto incumbents have certainly made huge progress over the last couple of years. There is an expectation from clients now that the incumbent banks will develop their offerings to satisfy that demand. And so, certainly anticipate a certain amount of consolidation across that space.”
Goldman has already pledged to update its cryptocurrency trading desk offering and has stated it will start offering CME bitcoin futures and non-deliverables, in a bid to disseminate “Bitcoin content” to institutional clients.
Institutional support for BTC is rapidly expanding; from Elon Musk’s Tesla investing in $1.5bn of the crypto, to Deutsche Bank creating new digital currency assets and services. This is only a very small slice of the institutional-level support cryptos are beginning to enjoy. Expect a lot more in the future.
According to a recent Goldman Survey, 40% of Goldman’s institutional clients already have exposure to crypto, either through holding the asset directly, derivatives or securities products. A further 32% were most interested in prime brokerage for physical or spot to gain exposure to cryptocurrencies.
“Talking to clients, they’re much clearer on why they want to invest. Really what they’re interested in is broader market behaviour. And really identifying what are the most efficient ways for them to get exposure and to think about hedging,” McDermott said.
“In terms of kind of institutional demand, we have seen no signs of that abating,” he said.
UNI breaks into crypto top ten
UNI, the native token for decentralised exchange and app UniSwap, has enjoyed a rally in the last week.
According to Messari rankings, UNI is now the 8th largest cryptocurrency in the world by market cap. Following last week’s 50% price increase, UNI is worth a total of $17.7bn at the time of writing.
This continues a major spike observed across March 2021. Between March 4th and March 5th, UNI’s market cap grew from $8.8bn to $14.7bn. UNI is also now the only Decentralised Finance (deFi) application (dApp) token to make it into the top ten.
UNI is also ranked as the second-largest Ethereum-based asset currently in existence, with Tether Dollars (USDT) holding the place as the largest Ethereum-based asset in the world.
Record increases in UniSwap trading value is probably the key factor behind UNI’s surge. Each week in the month of February brought with it a new all-time high for trading volume on the exchange, ending the month with a record-breaking $31.9 billion in trading volume.
An upgrade to the UniSwap platform, “V3” is on its way too, which may have also contributed to the impressive market cap rise.
The Fed has concerns about Facebook’s Libra – Bitcoin and other cryptocurrencies slump
While stock markets are holding all-time highs on the back of Federal Reserve Chair Jerome Powell’s speech last night, the cryptocurrency market has moved in the opposite direction.
Bitcoin is off around 2% to trade below $11,800 after yesterday’s comments from Federal Reserve Chair Jerome Powell.
Speaking to the House Financial Services Committee, Powell stated that:
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability. These are concerns that should be thoroughly and publicly addressed.”
That’s the opposite of what the market wanted to hear. Traders were betting that Libra would work to allay institutional fears surrounding cryptocurrency. It is intended to be a stable cryptocurrency (tethered to a basket of fiat currency), overseen by a not-for-profit, and governed by a panel of industry big names including finance giants like MasterCard, Visa, and PayPal.
It seems that central bankers don’t see that this makes much of a difference.
Security concerns continue to hound Bitcoin
Criminality has always been one of the banes of cryptocurrency. The anonymous nature of transactions makes it useful for money laundering. On top of that, because crypto is usually stored in virtual wallets or on cryptocurrency exchanges, it is a prime target for hackers. The world’s biggest crypto exchanges have lost millions in Bitcoin and its peers over the past few months.
While many in the cryptocurrency community have claimed Libra isn’t a real crypto, parallels were always going to be drawn between the two. Libra could have opened doors for Bitcoin and the like, instead it could bring the regulators down upon digital currencies.
Powell has called for the project to be paused until regulators are satisfied that their main concerns have been addressed. Regulators have long-circled the cryptocurrency market, and the threat of action has been a key drag on crypto prices.
Libra could have sped up the process. There’s a chance this might work out for the best – regulation was always going to come, so maybe tackling the issue headlong could remove a barrier to the mainstream for BTC and its fellow altcoins.
But the fact remains that Powell’s attitude towards Libra is a fundamental punch to the speculative rally Bitcoin is currently undergoing. Adoption looks to be a long way off, and opposition to Libra means the best chance the crypto market has of mass adoption has already stumbled.
Bitcoin mining difficulty surges as miners follow the bulls
Just like traders, miners are piling back into Bitcoin as the price continues to surge. After coming off the boil once hitting a year-to-date high on June 26th, BTC has rebounded and is within striking distance of the key $14,000 handle.
The huge appreciation seen in Bitcoin has not gone unnoticed in the mining community. Miners earn newly-minted Bitcoin as rewards when they process transactions – using computational power to solve complex proof-of-work algorithms to verify transactions and record the data as a new block on the chain.
Competition for those rewards is heating up. Multiple miners work on the same bundle of transactions, but only the first to correctly complete the algorithm in the ‘block header’ adds their block to the chain and earns the reward. This is shown by the biggest two-week rise in mining difficulty in 12 months.
Difficulty is adjusted every two weeks to make sure that new blocks are added to the chain at a consistent rate. This is done every 2016 blocks – at a rate of 10 minutes per block this should take two weeks to discover the next 2016. If more blocks than that are added during the previous two-week period then the difficulty is increased to bring the rate of discovery back down.
Because of this, Bitcoins are always produced at more-or-less the same rate. No matter how popular BTC mining becomes again, the market isn’t facing an increase in supply – if prices are going to fall, it won’t be because of increased mining activity.
How does this affect the BTC outlook?
The increased mining difficulty does nothing to change market fundamentals, but it does signal increased confidence that at least some of the huge gains recorded during the recent rally can be consolidated.
Whether or not a break above $14,000 and a move towards the all-time high near $20,000 is on the cards, the signs are that the market expects to leave 2019’s $3,300 lows far behind.