Seasonal Correction? Retail and Institutions Still Buying Bitcoin & Ether

During the summer of 2017, ETH price corrected 67.8% from $420 to $135 to surge to $1,420 ATH a few months later. As such, investors remain hopeful with EIP-1559 and The Merging coming while OTC desks report their biggest outflows.

The price of Bitcoin made an all-time high at nearly $65,000, which followed a correction to $47k.

But in the first 10 days of May, Bitcoin price had moved back to almost $60k, and it was after this bounce that the market simply started winding down. The price went down to $30k on Coinbase and even lower on other cryptocurrency exchanges, representing a 54% drawdown.

Now, we are ranging between $33,500 and $42,500.

While this may incite fear-like sentiments into some with the market looking extremely fragile, not everyone feels the same.

Mike Alfred, Head of Strategy at NYDIG, is still looking at $100k in the fall.

When it comes to Ether, it plunged 55% to $1,900, which according to long-term Eth investor Tetranode, is “just a season correction to shake out the overleveraged tourists.”

He pointed to the summer of 2017 when ETH price corrected 67.8% from $420 to $135 only to surge to $1,420 ATH a few months later. This time, according to him, EIP-1559 will send ETH prices higher, followed by The Merging, which will push it to “$10,000 minimum,” he said.

According to Chainalysis data, investors spent about $410 billion buying up Bitcoin during this bull market. During the crash, professional investors bought at cheap levels, helping put a floor.

The volatility has noobs, and traditional finance people are hooked on cryptocurrencies, and they are buying the dips.

“We had kept dry powder,” said Felix Dian, former Morgan Stanley trader who is running an $80 million crypto-focused fund at MVPQ Capital, who bought the BTC dip at around $35k.

Charles Erith of ByteTree Asset Management was also among the buyers who told Bloomberg, “It’s obviously not regulated, and it’s a very young asset, but I don’t think this is going to be a revisit of 2018.”

Jill Carlson, principal of Slow Ventures and co-founder of the Open Money Initiative, believes that companies are still considering using this as a balance sheet asset.

While there is some confusion, “the reality is institutions are still buying bitcoin. If you look at the data from yesterday, OTC desks had their biggest outflow, meaning institutions buying, that they’ve seen in three or four months. And that to me indicates that institutions are still coming in and buying the debt,” Carlson said in an interview with Bloomberg.

“People that were borrowing money to invest, they were wiped from the system,” Kyle Davies, co-founder at Three Arrows Capital in Singapore, told Bloomberg. His firm bought more BTC and ETH during this sell-off.

“Every time we see massive liquidation is a chance to buy,” he added. “I wouldn’t be surprised if Bitcoin and Ethereum retrace the entire drop in a week.”

While some retail traders have capitulated from the market, as seen in the $8.60 billion worth liquidations (incomplete figures as it doesn’t include Binance’s numbers fully), they also took the chance to scoop off cheap coins.

One such retailer, Brjánn Bettencourt, a photographer who sees crypto as a “serious long-term investment,” told Reuters, “Investing in crypto is not for the faint of heart.”

These ups and downs of crypto are actually part of crypto’s appeal. Investing in cryptos “feels like that scary rollercoaster,” he had said. “You’re riding it up and riding it down and feeling every twist and turn, which to me is exciting and fun.”

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Author: AnTy

Bitcoin Wrap Up: 4 Big Things that Happened This Week

This week started around $10,350 and recorded an increase of 13.5% to now trade around $11,500 while keeping the ‘real’ volume stable around $2 billion.

However, there were much more exciting things than the price that happened in the bitcoin market this week.

For starters, JPMorgan strategies revealed that while older investors go for gold, younger ones prefer bitcoin. Also, over the past five months, both gold and bitcoin ETFs saw strong inflows as old and young both see the case for an “alternative” currency.

Institutional Investors are Back

It’s not just the retail investors that all up in bitcoin’s business, institutional investors have also entered the market. After a long time, Bakkt finally made progress and set new records twice in a row that eclipsed the previous ATH.

“The trading activity on Bakkt has exploded after bitcoin crossed $10,000 again. Both open interest and volume saw new all-time highs last week,” noted Norwegian cryptocurrency analysis firm Arcane Research.

In the first half of July, trading volume on the ICE-backed exchange remained around $30 million which has since surged to $80 million in August. Open Interest on Bakkt contracts saw even more explosive growth of 575% from mid-July level.

Bakkt Bitcion Futures
Source: Arcane Research

Similarly, volume on CME has spiked from around $100 million to now over $650 million. OI on CME bitcoin contracts meanwhile is slowly making its way to $1 billion, with 120% jump from last month, as per Skew.

San Francisco-based crypto exchange Coinbase, which has been recording trading volume between $30 to $100 million up until July 27 the day bitcoin broke the key levels of $10,000 and $10,500, has now made its way to $275 million.

Explosive Q2 Reports

Square all but gobbled all the BTC mined in Q2 as it reported a revenue of $875 million from bitcoin, up 600% year over year, accounting for a big chunk of the company’s $1.92 billion in revenue.

What’s interesting is that much of this revenue is the Square burning the BTC for its customers as only a “small margin” is charged from the users on each sale. The company recorded $17 million gross profit, less than 3% of total gross profit, from trading bitcoin last quarter.

Another bullish Q2 report came from Genesis Lending, which saw $2.3 billion loans in the origination, hitting new all-time highs.

“BTC loans increased as a result of the flattened futures curve enticing traders to long basis by borrowing BTC, selling it spot while buying short-dated futures,” noted Jack Purdy of Messari.

With crypto getting more institutionalized, prime brokers like Genesis have a “pivotal” role to play by providing a full suite of products just like in the traditional financial world.

Bitcoin is the Choice

Wolfe Research wrote a technical analysis of the largest digital asset titled “Bitcoin — More than just a bit,” where it talks about bitcoin chart set-up looking “pretty darn good.” Not only is it above upward-sloping moving averages, but it also has “positive momentum readings across all periodicities.”

As per the research, the first reasonable target for BTC is $13,850 from June 2019 and is expected to make a new all-time high in this cycle.

As we reported, $1.2 billion publicly-traded company MicroStrategy also disclosed in its Q2 2020 earnings call that it is diversifying its cash holdings to include bitcoin. This movie has been made in the company’s search for yield, as it expects yields on government bonds to turn negative all over the world thanks to all the money printing by the central banks.

The Fed Tailwind

The biggest driver of all the bullishness in the markets will continue to push them higher as already, another fiscal stimulus is on the way, which would be a trend changer because “nobody is expecting it despite the negative headlines,” said economist and trader Alex Kruger.

Moreover, the US Federal Reserve is also expected to make a harder commitment to ramp up the inflation soon, until it hits at least 2%. Markets are already betting on higher inflation as seen in the falling dollar, surging gold prices, and people looking at bitcoin as an alternative currency.

Such a case would be “widely bullish” for alternative asset classes, said Ed Yardeni, head of Yardeni Research.

“This is the scenario bitcoiners have waited for,” said trader Scott Melker.

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Author: AnTy

Chrysler Building’s Blockchain Real Estate Owners To Sell Building In Zurich, $135M Cash & ERC20

The current owner of the Chrysler building is offloading a property valued at around $135 million to a blockchain-based real estate firm. It’s expected that the buyers will pay a fifth of the asking price in the form of tokenized securities.

RFR Holdings, based in New York are the new owners of the Chrysler building after purchasing it in early 2019 as part of a joint buying agreement. The firm recently arranged to offload its common stake in Zurich-based corporate building to a real estate agency known as BrickMark, and which has offices in both Germany and Switzerland.

Announcement of the Purchase Agreement

This past Wednesday, BrickMark sent out a presser stating that as per the acquisition agreement, it would be paying 20 percent or a fifth of the asking price in the form of its official BMT security token.

Based on the terms agreed upon by all parties, BrickMark will now own eighty percent of the commercial property. It will also have an option to the shares remaining with RFR, though it has to do so by September 2020. While the selling price has not been made public, experts believe that the tokens are valued at tens of millions of euros.

Stephan Rind, the BrickMark CEO commented on the deal and stated that it was one-of-a-kind, and was so far the largest transaction to involve the use of digital tokens. Stephan went on to add that:

“There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry.”

The commercial building in question is located in Bahnhofstrasse, in its down street area. In this area, the rent per square meter ranges between thirteen thousand and fifteen thousand dollars a year, a figure that makes it among the most affluent shopping areas around the globe.

News reports from 2014 indicate that Swatch Group acquired a property close to that location at an estimated price of four hundred and nine million dollars.

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Author: Daniel W