JPMorgan: Bitcoin has “Considerable” Long-Term Upside as it Competes with Gold “More Intensely”

The tide is turning. This week PayPal announced support for cryptocurrencies, and now JP Morgan is changing the tune; as it says, Bitcoin is competing with gold as an “alternative” currency.

The physical gold market, favored by the older generations, is worth $2.6 trillion, including the assets held within gold ETFs.

Bitcoin, on the other hand, has a market cap of $240 billion and mostly favored by millennial investors. In 2020, to date, Bitcoin has surged more than 80% compared to gold’s nearly 25%.

To catch up to hold in terms of market value, the leading digital currency would have to surge more than 10x from current levels. JPMorgan said in a note on Friday,

“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price.”

Over time, the investment bank said crypto could be held for other reasons than just being a wealth store as gold is. JPMorgan stated,

“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”

It also mentioned that the endorsement from the payments company is “another big step toward corporate support for bitcoin.” This, according to them, would further enhance millennials’ usage of BTC as an alternative currency.

Greater interest by institutional investors

Overall, the potential long-term upside for bitcoin is considerable as it competes more “intensely” with gold, “given that millennials would become over time a more important component of investors’ universe,” states JPMorgan.

Millennials and corporate endorsement of the digital currency have also induced greater interest by institutional investors, further says the report.

This is evidenced by the spike in activity across both bitcoin futures and options at CME. Before Paypal’s announcement this week, open interest on CME bitcoin futures averaged a record of 10.5K contracts per day in Q3, up 32% from Q2 and up 127% vs. Q3 2019.

Moreover, institutional flow saw strong growth, with 692 new accounts added, and the number of large OI holders also averaged 79 in Q3, up 64% compared to Q3 2019.

“Holy Cow. Most bullish commentary for bitcoin that I have read from JP Morgan” noted Dan Tapiero, co-founder of 10T Holdings. “Widespread research piece reaches all clients of the bank. Paypal announcement “cover” for other traditional players to get involved,” he added.

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Author: AnTy

JPMorgan: Bitcoin has ‘Considerable’ Long-Term Upside as it Competes with Gold ‘More Intensely’

The tide is turning.

This week PayPal announced support for cryptocurrencies, and now JP Morgan is changing the tune, as it says, Bitcoin is competing with gold as an “alternative” currency.

The physical gold market, favored by the older generations, is worth $2.6 trillion, including the assets held within gold ETFs.

Bitcoin, on the other hand, has a market cap of $240 billion and mostly favored by millennial investors. In 2020, to date, Bitcoin has surged more than 80% compared to gold’s nearly 25%.

To catch up to hold in terms of market value, the leading digital currency would have to surge more than 10x from current levels. JPMorgan said in a note on Friday,

“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price.”

Over time, the investment bank said crypto could be held for other reasons than just being a store of wealth as gold is.

“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”

It also mentioned PayPal that the endorsement from the payments company is “another big step toward corporate support for bitcoin.” This, according to them, would further enhance millennials’ usage of BTC as an alternative currency.

Greater interest by institutional investors

Overall, the potential long-term upside for bitcoin is considerable as it competes more “intensely” with gold, “given that millennials would become over time a more important component of investors’ universe,” states JPMorgan.

Millennials and corporate endorsement of the digital currency have also induced greater interest by institutional investors, further says the report.

This is evidenced by the spike in activity across both bitcoin futures and options at CME. Before Paypal’s announcement this week, open interest on CME bitcoin futures averaged a record of 10.5K contracts per day in Q3, up 32% from Q2 and up 127% vs. Q3 2019.

Moreover, institutional flow saw strong growth, with 692 new accounts added, and the number of large OI holders also averaged 79 in Q3, up 64% compared to Q3 2019.

“Holy Cow. Most bullish commentary for bitcoin that I have read from JP Morgan” noted Dan Tapiero, co-founder of 10T Holdings. “Widespread research piece reaches all clients of the bank. Paypal announcement “cover” for other traditional players to get involved,” he added.

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Author: AnTy

The Price of Bitcoin Lags Behind The Growth of Crypto ATMs, Which Surpassed 11,100 Installs

While the price of cryptocurrencies is taking its sweet time to reach their all-time highs, Bitcoin is holding strong above the important psychological support level of $10,000, currently above $11,300; the same can’t be said of the fundamentals.

The crypto industry continues to grow fast, and the latest metric to reflect this is the crypto ATMs.

For the first time, the number of crypto ATM installations has exceeded 11,100, representing a surge of almost 75% since the beginning of this year, as per Crypto ATM Radar.

In 2020, already more than 4,700 new bitcoin ATMs have been added, more than double of last year’s growth as only about 2200 new crypto ATMs were installed in 2019. The growth of these ATMs has seen almost a parabolic uptrend in 2020.

Bitcoin ATM Installations Growth
Source: CoinATMRadar

The biggest net change in crypto ATM numbers was recorded in September as 973 ATMs were installed this month, which has been growing since May. As a matter of fact, throughout 2020, more than 250 ATMs were installed every month, unlike ever before.

Genesis Coin is the dominant contributor to this growth as it manufactured 35.9% of these ATMs, followed by General Bytes, with its share just under 30%. Other manufacturers account for less than 10% of the number of cryptocurrency machines installed by manufacturer share.

As always, most of these crypto ATMs, 86.6%, are based in North America, with the US representing 78.6%. Europe is another continent with 11.3% of this share, while others account for less than 1%.

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Author: AnTy

Here’s Why Ethereum Can Further Outperform Bitcoin and Other Large Cap Coins

The price of cryptocurrencies has started to rebound. Yesterday Ether led the market upwards, going to nearly $400 level thanks to Grayscale Ethereum product ETHE becoming an SEC reporting company that reduced its investors holding period in half to six months.

This news could bring with it “a raft of arbitrage opportunities for market participants trading across retail-focused venues vs. the more institutionally focused venues,” says Denis Vinokourov of Bequant.

Additionally, given Ethereum’s use as a hedge to DeFi exposure, “the development may result in a short squeeze, further exacerbating the likely outperformance against its large-cap counterparts,” he added.

Bitcoin also made its way above $11,700, outperformed by ETH, but today, the market is inching down.

However, unlike the strong price action, the fees are returning to normal. ETH fees continue to plummet with average transaction fees currently under $2 from August’s peak of $14.58, following the unprecedented DeFi-driven growth over the summer that topped out in August.

Interestingly, Bitcoin fees are keeping to its trend of going in the opposite direction of Ether, growing by 15.2% week-over-week and averaging about $1M per day. Average Bitcoin transaction fees started going down in Q3 and bottomed at $1.3 towards Sept.’s end only to make its way upwards to above $4 in October.

“Transaction fees currently account for 9.5% of the miner revenue, and have become a far more significant contributor to the miner revenue following the BTC halving in May,” noted Arcane Research. “The miner revenue has not been this influenced by transaction fees since the 2017 bull run.”

image1
Source: Bitinfocharts

Meanwhile, the hash rate of both the top networks is heading north, making new highs. Bitcoin’s hash rate reached a new all-time high this week with the 7-day average hash rate surpassing 140 EH/S, 36% higher since the beginning of this year.

Just like Bitcoin’s strong fundamentals, the Ethereum hash rate also hit a new peak at 254.36 TH/s last week, following the constant growth since mid-July thanks to the rise of DeFi.

“The large increase in fees meant more revenue for miners, which incentivized more miners to join the network and caused hash rate to grow,” noted Coin Metrics.

After rallying hard, September has been a challenging month for DeFi tokens, which crashed hard, potentially finding the bottom. However, the total value locked (TVL) in the ecosystem has jumped past $11 billion.

However, the alpha seeking capital exploiting the DeFi ecosystem could also make a temporary return to join the Ethereum rally. Even Bitcoin could help Ether run higher with Wrapped Bitcoin (WBTC), which continues to accelerate.

Meanwhile, Ethereum has successfully launched yet another dress-rehearsal testnet dubbed Zinken for the upcoming Ethereum 2.0 Phase 0. Unlike the previous failed attempt of Spadina, this was a smooth launch on Monday.

The good news for Ethereum kept on coming at the start of this week, another one in the form of Aztec announcing the launch of Aztec 2.0 — the Layer 2 scaling solution with privacy at its core. The zkRollup based network, live on Ropsten, has private sends by default for ERC-20 tokens on top of scalable private access to DeFi with 200x gas reduction compared to the previous version.

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Author: AnTy

Malaysia Shariah Advisory Council Sees ‘Great Potential’ in Crypto; Unclear Laws Held Back Adoption

A Shariah Advisory Council chairman in Malaysia believes cryptocurrencies have great potential. The comments were made by Dr. Modh Daud Bakar, the Securities Commission Malaysia (SC) Shariah Advisory Council chairman. However, he also highlighted the challenges in adopting these digital assets, given the lack of understanding about the technology among the masses.

The chairman’s comments come just three months after a monumental judgment allowing transactions and trade of digital assets under the Islamic law.

Mr. Bakar made these bullish comments about cryptocurrencies during SCxSC Fintech Conference 2020 in Kuala Lumpur on Oct. 6. At the conference, Mr. Bakar also noted that only 2% of Malaysians know about the nascent technology. He said that since digital assets were not considered a legal tender under Islamic laws, it was seen as a commodity, quite similar to gold and silver. Bakar explained during the conference,

“It is a medium of exchange, and we cannot stop people [from using] commodities as a medium of exchange. It is as good as buying an e-ticket or commodities in the market.”

“The acceptance of digital assets] can open up so many interesting areas in Malaysia, in which crypto can be deemed as investment assets where people can buy and hold for trading. The potential of this currency is as great as it comes with a growing digital economy of the world.”

How does Shariah Law see Digital Assets?

There has been a great debate on whether digit assets are acceptable under the Islamic laws with differences of opinion based on regions. However, in 2018 an advisor to the Indonesian FinTech firm declared Bitcoin as permissible under sharia law. In July this year, Malaysia’s council declared digital assets trading as permissible.

With a population of over 60% of Muslims, Malaysia has benefited the most from this decision. It helps further the adoption of digital assets and offers more exposure to the new population to nascent technology like Bitcoin. Bakar concluded,

“This has opened opportunities to take advantage of cryptos as a commodity or investment in a company.”

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Author: James W

Financial Firms & Law Enforcement Find Cryptocurrencies More Risky Than Opportunistic: Survey

Financial firms, government, and the private sector all see cryptocurrencies as risky, found a survey by the Royal United Services Institute think-tank and the Association of Anti-Money Laundering Specialists on Tuesday.

About 60% of respondents said cryptocurrencies were a risk rather than an opportunity with illicit usage the main concern.

The survey that maps out mainstream global views towards cryptos suggests an uphill struggle for the industry to achieve wider acceptance. Countries across the world are still grappling with how to regulate cryptocurrencies with the EU planning to introduce new rules by 2024.

The survey was based on over 550 responses from law enforcement, financial watchdogs, financial institutions, and legal and insurance firms along with the cryptocurrency industry.

Nearly 90% of respondents from financial firms said they were worried about digital currencies being used to launder money, while more than 80% are concerned about their usage to circumvent the financial system.

“All respondents accept that cryptocurrencies are vulnerable to criminals,” the survey’s authors said.

While the mainstream views about crypto are still marred by the potential criminal usage of crypto, according to blockchain analysis from Chainalysis, it is as low as 1% of all transactions. Not to forget the fact that major banks, including JP Morgan just recently, in one of its many over the years, have been involved in the illicit usage of trillion dollars and precious metal manipulation.

Only a fifth of respondents said they viewed cryptocurrencies as an opportunity, with one of the potential benefits cited was the extended access to financial services, the research found.

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Author: AnTy

China State-Owned Media Covers Crypto as 2020’s Best Performing Assets Driven by DeFi & Weak Dollar

In an unusual coordinated report on Friday, several Chinese state-owned media covered cryptocurrencies, calling them the best-performing assets of 2020.

The country’s top broadcaster, China Central Television (CCTV), ran a three-minute-long news clip, highlighting crypto assets rallying 70% this year.

“Cryptocurrency has undoubtedly become the top-performing investment” among several other global assets, said the report.

The clip also mentions DeFi and the weak dollar as the two reasons for the crypto bull market this year.

“China is just getting started on DeFi…” said a researcher at crypto fund The Spartan Group who noted the retail investors are likely to go for early DeFi projects in China like DODO and MCDex and the blue chips UNI, YFI, COMP, and MKR that also has a Chinese community.

CCTV also covered ETH being the top performer and fear of inflation driving the growth along with the central banks experimenting with CBDCs as a bull case for cryptocurrencies but government regulations being a major uncertainty.

“There is another following coverage today on CCTV2 abt PBOC encouraging accelerating DCEP adoption and enlarging beta test cases. So previously, coverage on ‘cryptoasset’s top performance’ seems to be related to this DCEP bull narrative in general,” noted Dovey Wan of Primitive Crypto.

A Bullish Affair

All of this got the Chinese crypto community’s attention, who shared the clip on WeChat as a bullish signal.

CCTV’s crypto reporting came after state-owned news agency Xinhua which also published an article titled, “Cryptocurrency is this year’s ‘No. 1 asset’” a day before. Prior to its digital version on Xinhua, the same article appeared on one of the longest-running state media, Cankaoxiaoxi, in print form.

Such a rare coordinated effort is at odds with China’s stance on crypto speculation, but trader Qiao Wage said it is a “misconception” that the Chinese government has always been “hostile” towards Bitcoin and crypto.

“If there was a parallel financial system that could rival the dollar-based system, they would love to be part of it. What they are hostile towards is fraud and speculative craze,” he said, adding, “I do agree with the view that they are against capital flight using crypto, which is pretty obvious.”

Yesterday, the South China Morning Post also reported of at least 1 trillion yuan ($145.5 billion) worth of funds moving out of China into gambling activities every year, aggravating the country’s economic and financial security risk, as per Liao Jinrong, the director-general of the International Cooperation Department under the Ministry of Public Security.

“The volume and speed of cross-border capital flows are unprecedented,” Zhu Min, head of the National Institute of Financial Research at Tsinghua University, was quoted by the People’s Daily mouthpiece this week.

“This will not only result in sustained fluctuations in major world currencies, but will also lead to higher volatility in global financial markets. Therefore, we must be prepared for potential risks,” he said.

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Author: AnTy

Pornhub Adds Two More Cryptocurrencies As Payment Options for Premium Subscriptions

The popular adult entertainment website Pornhub has been accepting cryptocurrencies since 2018 and has now added Bitcoin (BTC) and Litecoin (LTC) to its payment options.

“To further expand our cryptocurrency options for Pornhub Premium, we’re excited to announce that we now accept Bitcoin & Litecoin as payment methods!” tweeted Ponrhub Premium.

Pornhub’s foray into cryptocurrency started with Verge (XVG) cryptocurrency in April 2018, following which the adult entertainment giant added support for Horizen (ZEN) and Tron (TRX) for its premium subscription.

In January this year, Tether (USDT) stablecoin was also added to the platform after PayPal abruptly withdrew service to Pornhub in November 2019.

Back in March, the company executive shared that about 10% of its performers are choosing to be paid in crypto through its Model Payment Program, Modelhub. However, the percentage of subscription payments made in crypto isn’t seeing much growth as it accounted for less than 1% of purchases made on the platform in Sept. 2018.

A couple of months back, Pornhub vice president Corey Price said in an interview that the crypto growth since introducing it as a payment option (after PayPal cut ties) has been steady. Moreover, anonymity benefits combined with high speed and low cost of transactions make digital currencies viable in the industry.

The company that saw a total of 42 billion visits in 2019 has also hired a crypto expert for its business development team.

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Author: AnTy

Increased Demand Leads Swiss State-backed Bank to Offer Bitcoin & Crypto Trading and Custody

A Switzerland-based state-owned bank, Basler Kantonalbank (BKB), will now be offering bitcoin and cryptocurrencies through its subsidiary Bank Cler, reported the local news. The bank spokeswoman, Natalie Waltmann, said,

“We will launch an offer for the trading and custody of digital assets over the next year.”

The bank has already hired crypto expert Alain Kunz, former CEO of Tokensuisse, as its head of digital assets who said:

“Bank Cler is Switzerland’s most digitally savvy bank. Cryptocurrencies are a natural extension of their offer.”

The bank decided to offer crypto trading and custody services because of demand among its younger clientele.

This would make Bank Cler the first government-backed, cantonal bank in Switzerland to enter the cryptocurrency space. Several banks in Switzerland do offer crypto exposure but particularly in the form of certificates, and this bank will further broaden its offerings with both trading and custody.

The crypto space in the country is currently served by crypto banks, including Sygnum and Seba, along with traditional lenders like Vontobel and Falcon.

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Author: AnTy

Coinbase Teases 19 Cryptocurrencies They May List; Prices Jump Across the Board

One of the largest US based crypto exchange Coinbase has revealed that it is reviewing additional 19 cryptocurrencies for potential listing.

The San Francisco-based crypto exchange has announced that the 19 cryptocurrencies are being reviewed as per its Digital Asset Framework which will determine if they will be listed on its popular trading exchange platform.

The firm revealed that it is reviewing the graph, wbtc, uma, tbtc, theta, reserve rights, flexacoin, paxos gold, helium, ocean protocol, Hedera hashgraph, melon, keva, ampleforth, band protocol, fetch.ai, balancer, and curve.

The firm explained that the review process will check various technical and compliance analysis of the above mentioned cryptos where some of them may need to have regulatory license in various jurisdictions.

The exchange however cautioned that being under review doesn’t mean the cryptocurrency will be guaranteed of an automatic listing. The firm also clarified that those not under review doesn’t disqualify them from potential future listing. The firm stated,

“As per our listing process, we will add new assets on a jurisdiction-by-jurisdiction basis, subject to applicable review and authorizations. The omission of assets from this publication does not disqualify any such asset from active review and potential listing.”

The firm did not give any timeline on when the review process will be finalized or when the cryptocurrencies can expect to be listed.

As data from CoinMarketCap shows, most of the crypto assets under Coinbase’s review are trading within the green zone which is defined as 2-8%. There are some which have outperformed others like UMA (+10.05), Ocean Protocol (+12.93) and Melon (+17.23%).

Previous support of cryptocurrencies by Coinbase have led to a surge in the value of these coins and tokens. For instance, in June, the exchange’s support for COMP solidified its ranking as a major DeFi token. Similarly, the listing of MakerDAO (MKR) token back in May led to a surge in its prices in major exchanges. However, the ‘Coinbase Effect’ may not always yield a positive effect on the market.

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Author: Joseph Kibe