Bitcoin Market Looking for New Lows After Elon Musk’s Pump & Dump

While the endorsement from Tesla CEO and Bridgewater Associates founder is “bullish” for the leading crypto, Ray Dalio says the idea of “a church that one is devoted to determining one’s investment position on Bitcoin” is discomforting.

Bitcoin had a wild Friday as we pumped and dumped beautifully.

What looked like a change of Bitcoin market trajectory turned out to be nothing more than a short-lived pump.

This pump was propelled by the world’s richest person, Tesla CEO Elon Musk, who changed his bio to “bitcoin” that followed up with “In retrospect, it was inevitable.” This tweet was also put in block 668197 mined by yhc5t3.

It turned out to be just like the Xi pump back in October 2019 when Chinese President Xi Jinping’s call for China to accelerate the development of blockchain technology sent BTC above $10,500.

Now, the market is expecting Bitcoin to go back to testing the lows. Already Bitcoin is down more than 7% and dropped under $33,000. Trader Benjamin Blunts is calling for the incoming of new lows at “sub 28k.”

Besides this short-lived pump, Musk taking Twitter CEO Jack Dorsey’s route also resulted in others doing the same. These individuals include Reddit founder Alexis Ohanian who is also busy “staking sats,” Anthony Scaramucci of SkyBridge Capital, YouTuber MrBeast, crypto exchange Gemini founder Tyler Winklevoss and other Bitcoin enthusiasts all having simply “Bitcoin” in their Twitter bio.

“Bitcoin is the signal and it’s getting louder,” commented Michael Saylor, CEO of MicroStrategy on this.

Another positive momentum for Bitcoin came from Bridgewater Associates founder Ray Dalio this week, who turned positive on the cryptocurrency. Mike Novogratz called this endorsement from Musk and Dalio “bullish” for Bitcoin, stating:

“BTC is a store of value. All stores of values are belief systems. And we are getting new converts to the church at an accelerating rate. Stay long.”

However, Dalio was quick to chime in to say that he doesn’t call himself “a convert to the church of an accelerating rate,” rather he would be interested in the response to his assessment of Bitcoin and knowing “what am I missing?”

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Exchanges Can’t Handle the Growing Demand

While Musk tweaking his Twitter bio presented the market a pump opportunity, trading platforms couldn’t keep up with the demand they are seeing even since WallStreetBets got on the Dogecoin train and took the road to crypto space after Robinhood paused trading in some of the hot stocks on Thursday such as GME.

Robinhood also temporarily disabled the features that allowed users to buy cryptos instantly. However, the popular retail platform doesn’t offer the ownership of cryptos, rather just buy and sell opportunity through IOUs.

“Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto. Customers can still use settled funds to buy crypto. We’ll keep monitoring market conditions and communicating with our customers,” said a Robinhood spokeswoman.

As we reported, users then moved on to crypto exchanges but like every other time they couldn’t keep up with this much demand.

Binance said the risk of new users put its system under stress, with its CEO Changpeng Zhao noting that user sign-ups and trades jumped to a record high as well, forcing the exchange to briefly suspend withdrawals.

“We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”

US-based Coinbase also reported that “due to a technical issue, we are experiencing degraded service where some trades may not be able to be completed.”

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Author: AnTy

Legendary Investor Bill Miller Gives Even More Reasons to be Bullish on Bitcoin

Legendary Investor Bill Miller Gives Even More Reasons to be Bullish on Bitcoin

Bitcoin is unlike any other asset that can match BTC’s liquidity with its upside potential, says Miller, who bought MicroStrategy’s convertible bond that was used to buy more BTC, which he says had “very little downside and an almost-free call option on Bitcoin.”

Bill Miller is getting more passionate about Bitcoin with each passing day.

The veteran investor Bill Miller in his latest investor note this week, talked about the thought process behind their “recent and unique purchase,” MicroStrategy’s 0.75% convertible bond.

MicroStrategy is betting big on Bitcoin and now holds approximately 70,784 BTC, representing 0.38% of Bitcoin’s circulating supply. The company issued convertible bonds last month, the proceeds of which were used to buy even more BTC.

In Miller’s assessment, the bond had “very little downside and an almost-free call option on Bitcoin.”

Besides having “minimal analyst coverage and a CEO that owns over a quarter of the company,” the reason for purchasing the bond was the company’s Bitcoin bet, wrote Miller. His view of the world’s largest cryptocurrency is,

“There is no other asset that combines Bitcoin’s liquidity with its upside potential.”

Bitcoin proponent Michael Saylor, the chief executive officer of MicroStrategy, also played a big part in Miller’s decision as he said, “Saylor is among the longest-tenured CEOs of all publicly traded companies, and he is the only sitting CEO we can find that has thrived after presiding over a 99.86% decline in his company’s equity price.”

The mutual fund legend further pointed to Saylor’s “unique ability to catch an emerging, scalable trend early and build an enduring business around it.”

MicroStrategy was the first publicly-traded company to replace all of its cash in its balance sheet with Bitcoin; a technology Miller has “long supported.’

The digital currency with a market cap of $592 billion, according to Miller, “is still an emerging and under-owned technology in an enormous addressable market.”

With Bitcoin, buyers know what they are getting as there is no other currency in the history of the world with more information and transparency around them, he added. Not to mention, BTC has been the best performing asset over eight of the past ten years and beats even the Nasdaq.

“Not owning any Bitcoin has been a massive mistake, and we expect that will continue to be true,” further wrote Miller.

He also points to Bitcoin’s demand growing consistently faster than supply and a long-term candlestick chart showing progressively higher lows despite significant volatility. Miller said,

“Preferred mediums of exchange tend to move in long cycles, and we may be in the midst of a major global transition that continues to go largely unnoticed.”

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Author: AnTy

UNI Enjoying A Breakout Year; Uniswap Protocol Shares 2021 Roadmap

2020 was an exciting year for the entire cryptocurrency market as we set the stage for a bullish 2021.

The decentralized finance (DeFi) market also had a wild year as the total value locked (TVL) in the sector grew 20 fold to surpass $14 billion.

In the DeFi space, DEX Uniswap Protocol made waves by becoming the first project to exceed $3 billion in TVL. For now, it has fallen to $1.7 billion.

UNI token is also enjoying an uptrend, trading at $5 following a 43% rally over the past week. Currently, UNI is the 22nd largest cryptocurrency with a market cap of $1.34 billion.

Following the “breakout year,” Uniswap is now working on V3 to improve automated market-making (AMM). In its 2021 roadmap, the team shared that they will be exploring scaling solutions for faster and cheaper transactions, with an emphasis on governance.

“V3’s design is driven by a desire to drastically improve the AMM experience for both swappers and LPs, increasing capital efficiency and flexibility while introducing superior execution,” noted the team.

The team also shared a review of 2020, a year in which the Uniswap V2 was launched bringing in support for arbitrary ERC20/ERC20 pairs and flash swaps that has generated $4.8 bln in volume since then, producing $14.4 mln in LP fees.

In the entire last year, the decentralized exchange recorded $58 bln in volume, up 15,000% from 2019’s $390 mln. Uniswap even passed Coinbase on weekly volume albeit briefly.

Over 68,000 unique addresses are currently providing $2bn in liquidity across 27,000 unique trading pairs on the platform.

Just last month, the Uniswap team launched Sybil that uses third-party authentication platforms to make delegating of governance UNI tokens easy.

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Author: AnTy

Leveraged Funds are Record Short on CME Bitcoin Futures

However, this might be bullish instead of bearish for BTC.

Bitcoin continues to break new records every day lately.

Yesterday, BTC/USD broke the $29,000 level as well and the market is expecting to enter into 2021 above $30k and end 2020 with more than 300% returns.

Amidst this extreme bullishness, leveraged funds on the Chicago Mercantile Exchange (CME) are record short.

However, this might be rather bullish for Bitcoin’s price than bearish as the same picture was seen on Dec. 1st.

As data provider Skew noted, they are likely to be record long on Grayscale Bitcoin Trust, trying to collect the premium. GBTC is currently holding 607.07K BTC, 3.2% of Bitcoin’s circulating supply, which is trading at a 23.5% premium to BTC price.

Grayscale, however, hasn’t bought any BTC since Dec. 25th, as per Bybt.

These leveraged funds might also be taking advantage of the CME futures basis, the average is currently over 10%. The difference between the spot price of Bitcoin, $28,268 as of writing, and CME Bitcoin futures price, which is $29,135, is an arbitrage opportunity for these funds.

On Monday, the regulated exchange had to temporarily pause the trading of bitcoin futures after one of the biggest gaps was formed, of more than $3k, between the derivatives and the underlying asset.

CME has actually become the largest Bitcoin futures venue by the number of open contracts amidst the growing institutional interest. Open interest on CME stands at $1.60 billion, the highest among the major derivatives exchanges, as per Skew.

Now, CME accounts for more than 18% of the total OI which stands at over $9 billion.

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Author: AnTy

Here’s What’s in Store for Bitcoin Amidst the Strong Demand & Exhausted Market

The macro trend is bullish, with the BTC exchange reserve going down and the stablecoins reserve going above.

This week is turning out to be about sideways action after last week’s monstrous rally that saw us breaching the all-time high of $20k to reach a new high of $24,300.

The week started on a red note as we dropped to nearly $22,000. Today, BTC/USD has been trading at $22,600 with $5.83 billion BTC 2.69% Bitcoin / USD BTCUSD $ 23 354,3135
628.23 2.69
Volume 42.15 b Change 628.23 Open $23 354,3135 Circulating 18.58 m Market Cap 433.88 b
1 d Crypto Exchange EXMO Hacked; BTC, ETH, XRP, ZEC, USDT, and ETC Stolen By Attacker
.

Everyone is waiting for a correction to get the chance to stack even more sats. However, it is to be seen if and when that pullback comes.

In the short-term, Grayscale, an essential indicator of bitcoin’s institutional demand, has closed subscriptions temporarily with big December futures and options expiry coming this Friday while implied volatility gets “very high” along with the futures basis, painting a bearish picture.

Unlike this, the broader market with the UK virus panic and the fiscal package coming is pulling the market in the opposite ‘bullish’ direction.

“Thinking volatile pause in the trend ahead. 25K-19.5K all in play” noted trader and economist Alex Kruger while cautioning to be “careful loading short-term bullets too soon.”

He said that for a sustained move higher, the market needs the leverage and volatility first to come down.

If we recall the $10,000 breakout, last week’s breach through the $20k was much more aggressive. Compared to July’s 25% movement, December’s action was close to 35% from trough to peak from start to finish.

Although it makes sense for bitcoin to give the market the much-expected dip, there’s no knowing if we’ll see one amidst the strong institutional demand.

With whales active on exchanges, there is a dumping risk, for sure, but Ki-Young Ju, the CEO of data provider CryptoQuant, is “not short on BTC since the buying power is so strong now.”

When the Exchange Inflow Mean hits 2 BTC, as it has now, “it is likely to be sideways or bearish. It always has been sideways since November.”

The bullish macro trend is also evident in the Bitcoin exchange reserve going down, BTC supply on exchanges has declined 20% since January, and stablecoin exchange reserves going up.

“Even if we see some corrections, it would be sharp and recover very fast,” said Ju.

Stablecoin-All-Exchange-Reserve

Source: CryptoQuant

Meanwhile, Bitcoin is in a real supply and liquidity crisis, which is “extremely bullish” for the world’s largest cryptocurrency.

This crisis can be seen in the accumulation addresses that only received bitcoin but never spent them, which is at 2.7 million BTC — hoarding 14.5% of the circulating supply. In addition to this, at least 3 million, 16% of supply, is forever lost.

Not to mention, out of the 210k BTC mined in the past six months, Grayscale has acquired 185k BTC of it.

While the Exchange Balances Liquidity is vanishing, a mere 12% of BTC supply is liquid, as per Glassnode. The amount of miner unspent supply, which has been increasing since the last halving, is currently holding at 1.7 million BTC.

“I believe we will see this significantly reflected in Bitcoin’s price in the upcoming months.”

Rafael Schultze-Kraft Glassnode CTO

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Author: AnTy

Guggenheim Fund Files for Buying 27,700 BTC, 0.15% of Bitcoin’s Total Minted Supply

Guggenheim Partners LLC is the latest one to join the institutional investors bullish on Bitcoin and bet on it.

The company is reserving the right for one of its funds to invest in Grayscale Bitcoin Trust, which is solely invested in Bitcoin and tracks the leading digital asset prices less 2% fees.

GBTC is currently trading around a 17% premium to BTC price, trading around $19,500. The filing said,

“Except for its investment in GBTC, the Fund will not invest, directly or indirectly, in cryptocurrencies.”

The $5.3 billion Macro Opportunities Fund of Guggenheim, which aims for total return through fixed income and other debt and equity securities, is planning to invest nearly $500 million in Bitcoin, which will be around 27,700 BTC — 0.15% of the total minted supply of the digital asset. According to the company’s filing with US Securities and Exchange Commission (SEC) on Friday,

“The Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust.”

With this investment, Guggenheim and its chief investment officer Scott Minerd will join the likes of legendary investors like Paul Tudor Jones and Stan Druckenmiller. They have put their money into the flagship cryptocurrency. A crypto analyst noted,

“Expect a lot of fund managers to follow in PTJ and Druckenmiller’s footsteps in disclosing BTC positions into year-end window-dressing season. Career risk of owning BTC has now turned into risk of not owning BTC.”

In the filing, the company described cryptocurrencies as “digital assets designed to act as a medium of exchange.”

It also listed a wide variety of risks, including “highly volatile” prices, trading on “largely unregulated” exchanges that may be exposed to fraud and failure, a crisis of confidence in the most extensive network, and user preference to shift to competing cryptos.

The largest cryptocurrency has been enjoying a strong rally in 2020, surging to its highest level of $19,500 since the peak of the 2017 bull run. Trading around $18,750, BTC is just 8% away from its ATH, while up 160% YTD.

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Author: AnTy

Ethereum Has “Little Resistance Ahead,” Over 100,000 ETH Now Staked

Bitcoin is not the only protagonist of the ongoing bullish crypto market.

While the leading digital asset popped above $18,000, ready for a new all-time high, the price of Ether also surged to nearly $500, last seen in June 2018.

Both Bitcoin (BTC) and Ethereum (ETH) are enjoying a hot streak this week. While BTC’s realized cap topped at $130 billion on Nov. 17, ETH’s realized cap grew 3.9% week-over-week and is at its highest level since Sept. 2018 at over $36 billion.

According to In/Out of the Money Around Price (IOMAP) indicator of IntoTheBlock, “there is little resistance ahead until $581, with strong support around the $460 mark.”

At $460, 80% of the addresses currently holding ETH are experiencing profit.

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Another encouraging pattern is the percentage of ETH supply on cryptocurrency exchanges, which continues to decrease steadily. About 3 million ETH has moved off centralized exchanges since September, which according to quant trader Qiao Wang could be “a result of “productive” activities like Uniswap yield farming.”

Wang further believes “ETH could outperform BTC in the next bull run. Perhaps not on a risk-adjusted return basis, but likely on an absolute return basis.”

Another reason for this movement could be ETH holders depositing their ETH for staking for the first stage of ETH 2.0 – the “Beacon Chain.”

The progress of Eth 2.0 staking is behind schedule, with another 13,424 staking validators are required in the next 2 weeks to trigger the launch of ETH 2.0.

With about 80% of the required validators still missing, the current rate is not enough, but it is expected to ramp up towards the end of the deadline.

Still, when Phase 0 launches, it doesn’t change anything about Ethereum as the Beacon Chain doesn’t have accounts, and it can’t handle smart contracts either. It is simply the first stage in the transition of the second-largest network from a proof-of-work to a proof-of-stake consensus model.

The Beacon Chain will undergo testing in a live environment, and in the future, when Ethereum shard chains (Phase 1) are launched, the two blockchains will eventually be merged, at which PoS mining will be enabled, bringing faster processing times and cheaper transactions.

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Author: AnTy

Bitcoin’s Moon Target Set at $318,000 in Dec. 2021 by Citibank Report

With Bitcoin turning bullish, the mainstream institutions are also taking a special interest in the leading digital asset. The latest is Citibank, whose bitcoin technical analysis sees lofty price targets at over $300k per BTC by the end of 2021.

Thomas Fitzpatrick, Global head of CitiFXTechnicals product, the author of the report, traces the historical price performance of Bitcoin, which reflects that timeframes for the rally are getting longer, which puts this rally to peak in December 2021 at $318k.

“Improbable though that seems it would only be a low to high rally of 102 times (the weakest rally so far in percentage terms),” with arguments in favor of Bitcoin at their most persuasive ever, he wrote.

The report notes how Bitcoin is all about “unthinkable rallies followed by painful corrections” but a type of pattern that sustains a long term trend.

As such though it’s to be seen if such lofty levels will be hit, “the price action we are looking at clearly suggest the potential for a major move higher nonetheless in the next 12-24 months,” reads the report whose snippets were first shared by trader and economist Alex Kruger.

Although “this kind of technical analysis is of little value,” Kruger noted, “what matters here is Citi’s clients being exposed to the bitcoin moon.”

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Citibank compared the digital asset’s first rally that took it to the mainstream with gold, which similarly “was allowed to float in the early 1970s after 50 years of trading in a $20-035 range.”

And that was a “structural change in the modern-day monetary regime” ushering in a world of fiscal indiscipline, deficits, and inflation. As for Bitcoin, its move happened in the aftermath of the Great Financial crisis.

In 2020, with all the MMT, gold is likely to gain from this, but the author of the report noted that gold has restrictions such as storage, non-portable, and could possibly be even called “yesterday’s news” in terms of a financial hedge.

“Bitcoin is the new gold,” reads the report.

The leading digital asset has a limited supply, is easy to move across borders, and offers opaque ownership. But the author also says that Bitcoin may be subject to more regulatory constraints going forward.

The report further mentions CBDC, which though a much more effective mechanism for distributing stimulus, “makes capital confiscation easier.” In both the scenarios, Bitcoin will give us the digital equivalent (Bitcoin versus Fiat digital) of what we saw in the 20th century when the financial regime changed (Gold versus FIAT paper).

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Author: AnTy

Bitcoin Average Transaction Fees Jump 188% to Above $10 Following Price Rally

Bitcoin’s price is experiencing a bullish month with over 25% gains and came very close to hitting 2019 high yesterday.

Currently, BTC is trading around $13,220, having dropped over 4% since rallying yesterday, on the back of the increased trading volume, which has climbed above $3 billion.

This latest bout of volatility is not only proving good for investors, traders, and speculators but also miners as the percentage of Bitcoin miner revenue from fees increased to 22.25% yesterday — the highest value since January 2018.

This is because the average Bitcoin transaction fee has spiked 188% to above $10, as per Bitinfocharts.

The total fees have also jumped to 2.67 million from $403k on Oct. 17.

Coin Metrics BTC Fees
Source: Coin Metrics

Just last week, the average fees were mere $1.4, and from there, as the price of bitcoin rallied and the market jumped in to participate in this euphoria, the activity increased, and so did the fees.

The last time we were at this level was in February 2018, while the all-time high was $55 at the top of the bull market in mid-December 2017.

A similar surge is not seen in transaction count, but a spike was recorded in transaction transfer value.

However, with the latest surge, Bitcoin’s average transaction fee is eclipsing ETH’s at $1.69. Ethereum’s average transaction fees were higher than BTC’s for most of September after it exploded over the summer due to the rapid rise of DeFi.

But the momentum has shifted back to BTC.

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Author: AnTy

Silvergate Bank Q3 Earnings Call Upholds Bullish Trajectory; Net Income Shot Up 29% to $7.1M

Silvergate, a Fintech and crypto-focused bank, has reported another bullish quarter according to its latest earnings call. The Q3 Silvergate Bank stats show that they have been gaining on most fronts, especially with increased activity in the Silvergate Exchange Network (SEN). As earlier reported by BEG, this platform recently crossed the $100 billion mark in transfer volumes.

Notably, $36 billion of the total transfer volumes were done in the last quarter, according to the Silvergate Q3 report. The company’s CEO, Alan Lane, attributed this growth to increased activity and strong digital asset prices during the past quarter,

“During the third quarter, bitcoin and other digital currencies saw strong price appreciation and an active trading environment, which we believe contributed to the increase in the number of transactions occurring on the SEN.”

Silvergate’s Q3 Earnings Call Break Down

The California-based bank’s growth has been quite exponential, most of which can be pegged to a burgeoning crypto industry in 2020. On that note, Silvergate reported a 29% increase in net income to $7.1 million compared to the previous $5.5 million in Q2. The figure also jumped year-over-year compared to 2019’s third quarter, where the reported net income stood at $6.7 million.

As for the market growth, Silvergate’s clients are now over 900, with a larger part being institutions. Lane has also pointed out that there around 200 prospective clients who might soon be onboarded as well. With such growth, he is confident that the debut of heavyweights like JP Morgan is not a threat to Silvergate’s sustainability and market expansion. In fact, Lane believed that exchanges are better off with more banking options,

“Those exchanges really want to have multiple banking partners and multiple sources of liquidity … And when volumes increase across the ecosystem and volumes are increasing from other customers, we’re seeing the same type of volume increases from those customers that JP Morgan is reportedly banking.”

Silvergate also reported a spike in its clients’ deposits; the amount went up by $586 million, marking its second-highest quarterly increase after the 2017 bull-run. Consequently, the firm’s fee income increased to $3.3 million in Q3; this is a 40% gain compared to the Q2 $2.4 million fee income.

Another highlight is Silvergate’s lending service ‘SEN Leverage,’ which recorded a $13 million increase, bringing the total amount of credit approvals to $35.5 million. Lane is quite optimistic about this specific product, although there are no plans to scale past Bitcoin anytime soon,

“We anticipate a long growth trajectory for SEN Leverage and will judiciously expand credit availability to our customers over time.”

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Author: Edwin Munyui