Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip

Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip; Goldman Sachs says Still Just 1% of Institutional Money

Despite the healthy pullback, more correction cannot be ruled out yet but $30k will be protected because many institutional investors bought around this level.

Bitcoin is taking a breather and hovering around $35,000 after the deep pullback earlier this week. This profit-taking at an ATH of $42,000 was expected after Bitcoin rallied more than 1,000% from the March 2020 lows.

“There’s signs that retail investors are taking profit,” said Ryan Rabaglia, OSL’s global head of trading. “Heightened volatility is often correlated with an uptick in retail participation.”

The market is particularly focusing on the US Dollar Index right now, which has been gaining strength, currently hovering around 90.

“We think a pullback is healthy,” said David Grider, the digital strategist at Fundstrat Global Advisors. According to him, the recent price action doesn’t indicate that Bitcoin has topped out.

However, further losses can’t be ruled out either, with miners continuing their selling while no significant stablecoin inflows in the picture. No outflows are seen from Coinbase either; as a matter of fact, BTC is flowing into exchanges.

On the basis of this, “We might have second dumping,” said Ki Young Ju, CEO of data provider CryptoQuant.

Still, $30k will be protected, and in the event of a dip, we might not go down below $28k because “there are many institutional investors who bought BTC at the 30-32k level,” Young Ju added.

These institutions were actually into buying the dips that came on Sunday and Monday. The large amounts of BTC holders that can be seen as a proxy for institutional adoption “increased significantly” since the start of 2021. This jump in address with at least 1,000 BTC shows that this institutional adoption is here to stay.

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However, according to Goldman Sachs’ Jeff Currie, the level of institutional investment in the market is still very small though “the market is beginning to become more mature.”

“The key to creating some type of stability in the market is to see an increase in the participation of institutional investors, and right now they’re small,” said the investment bank’s head of commodities research on CNBC., adding that the investment in BTC is, “roughly 1% of it is institutional money.”

While for institutions, Bitcoin is a hedge against fiat debasement and risk of inflation, as it emerges as a store of value, for some, it is a way to fix economic injustice as well.

“For the first time in history, we have a Plan B option to the current financial system which has seen years of redlining, racial discrimination and other egregious acts by retail banks to the Black community,” said Isaiah Jackson, author of “Bitcoin & Black America.”

According to him, Bitcoin gives Black people an opportunity to not only shift their money but also their mindset because the world’s leading digital currency is unconfiscatable and has no barrier to entry.

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Author: AnTy

Cryptocurrency Exchange, Coinbase, Hires Goldman Sachs for IPO Plans

San Francisco-based cryptocurrency exchange Coinbase has hired Goldman Sachs Group to lead the preparations for its stock market listing, reported Reuters, citing a person familiar with the matter.

Coinbase revealed that it has confidentially applied with the US Securities and Exchange Commission (SEC) to go public.

As we reported, a cryptocurrency company to list on the stock market is huge news for the industry. Messari valued the company at $28 billion following this announcement, raised from the $8 billion valuations it got during its last funding round.

Coinbase has been rumored to go public for a long time now, and it started making plans for the listing in July.

Founded in 2012 by CEO and board director Brian Armstrong and board director Fred Ehrsam, Coinbase has raised $525 million to date.

Coinbase’s filing comes after multiple startups, including Airbnb, DoorDash, Wish, Roblox, and Affirm, have filed to go public or have already gone public this year.

The crypto market is in full bull mode, with Bitcoin hitting yet another all-time high yesterday above $24,000. Armstrong wrote in a blog post cautioning newcomers to cryptocurrency,

“While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk.”

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Author: AnTy

Macro Investor Raoul Pal Goes ‘Irresponsibly Long’ on BTC, But More Bullish on ETH

You got faith in it; bet everything on it. This seems to be the philosophy of Raoul Pal, a former Goldman Sachs hedge-fund manager who announced over the weekend that he is going all-in in Bitcoin.

However, he did clarify that he can afford to take this road and cautioned others to do the same as him and “do your own research and size accordingly.”

By betting his 98% liquid net worth, Pal has beaten another vocal Bitcoin bull Anthony Pompliano who says his 90% investment is in BTC. But as Pal points out, he is

“older and in a position to take more risk. And it is risk, no guarantees.”

The prominent bitcoin bull is putting it where his mouth is as he prepares to sell all of his gold and invest it all in Bitcoin and Ethereum. Pal, the co-founder of Real Vision tweeted,

“I have a sell order in tomorrow to sell all my gold and to scale in to buy BTC and ETH (80/20). I don’t own anything else (except some bond calls and some $’s). 98% of my liquid net worth. See, you can’t categorize me except #irresponsiblylong.”

While only 20% of the latest investment is in Ethereum, Pal has a “hunch” that it would be Eth that would beat Bitcoin in price performance. Explaining the reason behind his 80/20 allocation, he said,

“I think ETH outperforms possibly by 5 to 1 but who knows. BTC is the easy bet.”

It would be no surprise if Eth actually outperforms Bitcoin because it did so in the last cycle too.

Compared to Bitcoin’s 1,300% gains in 2017, ETH rallied 9,162% the same year. Moreover, while BTC is just over 7% away from its all-time high of $20,000, ETH has yet to surge 63% to reach its all-time high of $1,570.

In terms of year-to-date performance as well, ETH has gained 341% to Bitcoin’s 156% while trading at $575 and $18,470, respectively.

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Author: AnTy

Goldman Sachs New Digital Asset Manager Reveals Plans to Bring A ‘Digital Token’ to the Bank

  • U.S. financial giant Goldman Sachs is pushing forward its plans to launch a digital asset with the appointment of its new digital asset manager, Mathew McDermott, former head of the bank’s investment internal funding operations.
  • McDermott confirmed the bank is looking into a digital asset of its own.

According to CNBC, Goldman Sachs is rejuvenating its efforts towards a digital asset with the appointment of Mathew McDermott as its new head of digital assets. McDermott replaces Justin Schmidt to radically transform the traditional financial system and embrace digital technologies like blockchain to create a digital finance market ecosystem. He said,

“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain.”

In his pragmatic and radical approach in transforming the digital assets section of the bank, Mathew McDermott will start by digitizing the $1 trillion repurchase agreements (repo) market. Blockchain aims to reduce the costs and inefficiencies of the crumbling repo market, a market “ripe for standardization,” he explained.

“By leveraging distributed ledger technology, you can standardize processes to manage collateral across the system, and you have a much more efficient settlement process given the real time settlement.”

Mathew further said Goldman Sachs will explore digitized systems and the benefits to the credit and mortgage markets by partnering and discussing with other financial institutions and banks in a bid to build a stable network.

Read More: Is Goldman Sachs The Latest Bank To Jump On The Bitcoin Bandwagon?

The Goldman Sachs digital token

Mathew further said the bank is focusing on plans to launch its own digital token in the future if possible use cases are realized.

“We are exploring the commercial viability of creating our own fiat digital token, but it’s early days as we continue to work through the potential use cases.”

The rise of blockchain technologies and associated cryptos is posing a threat to the overall finance market as we know it. Despite the implications, McDermott is looking forward to being successful stating,

“With any technological advancement, there will be a disruption to the existing status quo.”

He did not reveal any crypto holdings but believes the cryptocurrency market is facing a resurgence. He explained the bank has “seen an uptick in interest across some of the institutional clients who are exploring how they can participate in [crypto] space.”

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Author: Lujan Odera

Grayscale Consuming 53% More Bitcoin than Minted Since Halving

Goldman Sachs’ call covering bitcoin on Wednesday left the crypto community disappointed after they said that the largest cryptocurrency is not an asset class and they do not recommend it to their clients.

The report compared bitcoin with the Tulip mania from the 1600s and further argued that it is used for illegal activities and is prone to hacks. But the market trend showcases a completely different picture.

For starters, Bitcoin price jumped over 4% and went above $9,000 despite the negative remarks from the investment bank. BTC is continuing its upwards movement from yesterday and it makes its way to $9,400.

Also, institutional interest in the crypto market has been picking up lately with the open interest on bitcoin futures and options at CME Group hitting new highs. The volume on Deribit, the leader in the bitcoin options space, has been growing steadily as well.

Now, as per crypto enthusiast and independent researcher Kevin Rooke, since the historic halving event on May 11, Grayscale Investments have bought 18,910 BTC.

“Wall Street wants Bitcoin, and they don’t care what Goldman Sachs has to say,” said Rooke.

What’s even more interesting is only 12,337 BTC has been mined since the halving which indicates a rapidly growing institutional demand for Bitcoin.

Technically, the BTC mined since halving till May 27th should be 14,400 because the event cut down the miner inflow in half, from 1800 BTC per day prior to halving to 900 BTC per day.

But the halving also caused a decline in hash rate and the time it has been taking to find the blocks increased from the regular 10 minutes to 14.3 minutes which is still sitting high at 10.4 minutes on May 26th despite the 6% downward difficulty adjustment to 15.14 terahashes per second. It was only today that the block time has fallen below 10 minutes. As such, the less number of newly minted BTC.

The week following the halving when issuance was cut in half, 6,300 new BTC were minted while Grayscale’s Bitcoin Investment Trust bought 12,021 BTC on $112 million in inflows.

“GBTC had a record $29.9M/week inflows in Q1. Hasn’t been below $60M/week the past month,” shared Dan Elitzer.

As of Q1 of 2020, Grayscale was holding 1.7% of all bitcoin and this demand was driven by institutional investors, heavily dominated by hedge funds, at 88%.

At that time, Grayscale noted that “large increases in dollar-denominated inflows relative to Grayscale AUM have historically preceded market rallies.”

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Author: AnTy

Goldman Sachs’ Lazy Bitcoin Assessment is Embarrassing

Crypto community has been eagerly awaiting Goldman Sachs’ client call today in which they were to discuss bitcoin. But it all turned out to be a complete disappointment, as had been expected and not what was hoped.

Godlman’s bitcoin explanation is centered around illegal activity, forks, and exchange hacks.

“Cryptocurrencies Including Bitcoin Are Not an Asset Class,” summarized Goldman.

Ouch!

But as Cameron Winklevoss of crypto exchange Gemini points out, CFTC has already declared bitcoin a commodity over four years back.

Interestingly, Goldman also foresaw Bitcoin’s commodity-like financialization as early as 2014. At that time, they also hinted at the potential future price of bitcoin at between $1,000 and $1 million.

Predictable & Unrealistic, Naive & Lazy

Last week, it came into notice that Goldman Sachs will be covering “Implications of Current Policies for Inflation, Gold and Bitcoin” today.

Now, before the call has to go live, the leaked images showed what the investment bank thinks about bitcoin and it’s not pretty or surprising, it’s all the same old, same old.

The world’s leading cryptocurrency, according to Goldman Sachs, does not generate cash flow, any earnings, diversification benefits, dampens the volatility, or shows evidence of hedging inflation.

What it does is “abet illicit activities” such as Ponzi schemes, ransomware, money laundering, and darknet markets.

Moreover, “cryptocurrencies as a whole are not a scarce resource,” argues Goldman pointing out the forks BCH and BSV.

What else? It is “susceptible to hacking or inadvertent loss,” Goldman says, mentioning QuardrigaCZ and Parity.

And Oh, it’s “Tulipmania” on steroids. In the year prior to their peaks, while Nasdaq rallied 109% and Tulip prices 485%, Bitcoin and Ethereum rose 2,292% and Ethereum 14,193% respectively.

Bitcoin is antithetical to Goldman’s business model

Simply put:

Goldman Sachs “believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients,” states Goldman.

All of this because Goldman sees Bitcoin as competition and they don’t “gain anything by you buying BTC. No spread, no management fee, nothing,” said trader Cantering Clark. “You buying Bitcoin is antithetical to their business model,” he added. They also,

“believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”

“I guess equities are now off limits?,” is Digital Currency Group founder and CEO Founder/CEO, Barry Silbert’s reaction to Goldman Sachs commentary on Bitcoin.

Dissing Gold Too

During the call, Goldman Sachs covered the macroeconomy where while talking about COVID-19 and GDP/economy risk, they projected Q3 to be a decent opening only to go downhill from there. They believe the “real numbers” for unemployment are far higher but calling it “not a depression.”

While they have zero concerns about inflation or debasing the US Dollar, they are more concerned with deflation. But believes negative interest rates are good for the economy.

“They are aggressively shitting on gold,” shared trader Scott Melker who live-tweeted Goldman’s client call that he was attending.

The precious metal also doesn’t offer any “reliable downside protection.”

“Don’t listen to what people say, watch what they do”

Not acknowledging the best investment of the last decade which is also outperforming most of the asset classes in 2020 so far doesn’t seem like a good call from the bank.

But it’s not like the bank is right all the time. Earlier this year, its analysts called for a $150-$200 price target for oil while it went down below zero last month.

Not to forget that, in mid-2017, the bank saw big declines in part due to bad market calls from its strategists.

The crypto community certainly didn’t take it lightly, given that Goldman didn’t even take its time to at least make well-informed and good criticism.

“It’s not that it’s a “bad call” – it’s just naive and lazy. It’s embarrassing,” said Peter Hans of Arca. “There are two types of people in FinServ, those who fear progress and those who embrace it.”

But does it really matter what they say. Jamie Dimon, the CEO of JPMorgan has been calling BTC a “fraud” only to turn around and profess his love for the technology and just this month the bank opened its services for bitcoin exchanges Coinbase and Gemini.

As such, the only take from all of this is, “’Don’t listen to what people say, watch what they do.”

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Author: AnTy

Global Macro Investor: Even 1% Chance of 100x Upside Makes Bitcoin “Crazy Attractive” to “Macro Guys”

Global-Macro-Investor-says-even-1-Chance-of-100x-Upside-makes-Bitcoin-Crazy-Attractive-to-Macro-Guys
  • Former Goldman Sachs executive Raoul Pal says Bitcoin at current value ‘ludicrously’ underpriced
  • Macro guys find it “super interesting” and “they’re all in it”

Former Goldman Sachs executive Raoul Pal, the founder of Real Vision Group told Stephen Livera on his podcast this week that Bitcoin at its current price may be ‘ludicrously’ underpriced and has the potential to hit $8 trillion.

“If you try and get your head around the digitization of everything… around an alternative financial system.”

Explaining how Bitcoin can hit trillion-dollar market capitalization, he points to analyst PlanB’s stock to flow model that puts BTC value at $1 million and beyond in the future. Bitcoin derives this value from its scarcity just like gold and silver.

Gold currently has the higher SF of 62 while BTC is currently at 25, after the fourth reward halving, its SF will double and come very close to that of gold at 50.

“Even if it has a low probability. If you recreate a low probability of let’s say, what’s the global money supply and global debt? It’s something like $80 trillion. So if it’s worth $80 trillion dollars, let’s say you have a 10% probability. That’s $8 trillion. [Bitcoin] is currently worth $200 billion. So even if it has a 1% chance of working – that’s how probabilistic frameworks work.”

This is the reason Pal says Bitcoin is “ludicrously underpriced,” and that makes it

“crazy attractive..sucking in so many of these macro guys, because they’re like, ‘Damn, nothing else has this payoff’.”

Even as low as a 1 percent chance of bitcoin going 100x, that’s enough for the macro investors to put their skin in and finding it “super interesting.’”

“I know all these macro guys, they’re all in it. They get it. They get the optionality. They may be complete believers, part believers, partial believers. But even then, if it’s a 1% chance of being right and the upside is 100x from here, you’d do this all day.”

You can check out the full podcast here.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: AnTy