Dollar Sends Warning Signs for Risky Assets including Bitcoin and Crypto

The US dollar has hit a new all-time high today at 96.6, last seen in mid-July 2020. In mid-March last year, USD went as high as 103, and after bottoming out in late May and early June, it has been mostly trending up ever since.

The latest uptrend in USD came as Federal Reserve Chair Jerome Powell was reappointed for a second term, encouraging bets on higher US interest rates.

With the Fed already announcing the paring of its bond purchases, the growing expectation for tighter monetary policy and an acceleration in economic data has the dollar well-positioned against other major currencies.

As we have been noting, the slowdown or removal of liquidity from the market is not good for the prices of risky assets, which could negatively impact crypto prices.

“A stronger greenback would have you believe the same tailwinds that propelled global asset prices—including BTC and crypto—over the last 18 months are starting to reverse course,” commented Delphi Digital.

Already, this week, crypto-asset prices tumbled, with Bitcoin going to $55,600 and Ether to $4,020.

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As a result, funding rates are resetting and even briefly turning negative since last week as after hitting ATH at $69,000 two weeks back, the market has been struggling to be bullish.

On most exchanges, funding rates are hovering in neutral territory, the highest on OKEx at 0.0257%, indicating bullish demand is muted. At $23.36 bln, Bitcoin’s open interest meanwhile remains significantly higher than September lows of $13.11 bln but down from $28.85 bln ATH on Nov. 10.

This USD is also rallying to a 16-month high amidst renewed lockdown fears in Europe after last week investors sought a safe haven on inflation worries. Surging US inflation and the prospect of a sooner than expected rate hike by the Fed has helped DXY run higher, putting pressure on riskier assets and emerging market currencies.

Emerging markets are already struggling with rising inflation and especially as the dollar strengthened. The Turkish lira (TRY) actually hit record lows against the USD.

This devaluation of lira since September (-35%) has been mirrored by strong growth in BTC-TRY trade volumes, noted digital asset data provider, Kaiko. The increase comes despite Turkey banning the use of crypto for payments back in April.

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According to Chainalysis, currency devaluation has been among the main drivers of crypto adoption in the country, accounting for a large percentage of crypto use in the Middle East.

Meanwhile, the Turkish central bank has cut its policy rate by 100bsp, further contributing to the lira’s historic meltdown. “This could favor crypto assets which are seen as a more stable investment alternative,” said Kaiko.

The post Dollar Sends Warning Signs for Risky Assets including Bitcoin and Crypto first appeared on BitcoinExchangeGuide.

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Author: AnTy

Bitcoin Trades As An Inflation Hedge for the First Time Ever Due to Gold’s Disappointing Performance

Surpassing $69,000, Bitcoin hit a new all-time high on Wednesday as it traded as an inflation hedge.

“That was the first time ever BTC traded as an inflation hedge. Crypto natives have big pockets now and thus the ability to change narratives. Perception => Reality,” said trader and economist Alex Kruger.

The sharp move up that came after CPI data showed that US inflation rose to its highest annual rate in 30 years to 6.2% in October didn’t last for long, and Bitcoin soon dropped as low as $62,755.

As of writing, BTC/USD is trading at $64,790.

The same has been the case for Ether, which hit a new high at $4,870, dropped just under $4,500, and is sitting just under $4,700. During this round of volatility, the total crypto market cap surged past $3.1 trillion, only to fall under the $3 trillion market but is yet to climb back above it.

As a result of this volatility, 172,576 traders were liquidated in the past 24 hours for more than $700 million, with Binance accounting for 47.4% of it. However, the leading crypto exchange doesn’t provide complete numbers.

The funding rate on Bitcoin perpetual contracts is now, as a result, normalized, currently negative on OKEx and FTX while being the highest on Huobi at 0.0165%.

Earlier this week, the Crypto Fear and Greed Index, which jumped to a reading of 84, has gone down to 77, representing “extreme greed” still, up from “extreme fear” with a reading of 20 in late September.

“People are looking for places to put their money,” commented JJ Kinahan, chief market strategist at TD Ameritrade, on the move.

Currently, people need an asset to invest in that grows faster than the inflation rate, and crypto is among the very few that really outperform here.

USD & Gold Benefited, but Stocks Didn’t

This new high can clearly be explained through the fundamental argument gaining traction in recent months that Bitcoin is an inflation hedge. Unlike bitcoin, whose fixed supply can’t be inflated by a government or a central bank, the US dollar’s 40% of supply came into existence just in the last 12 months.

“Bitcoin continues to enjoy the rally that began in August and accelerated through September and October,” said Sui Chung, chief executive of CF Benchmarks. After Bitcoin futures ETF drove the cryptocurrency prices last month, this month, it “seems to now be fueled by the sustained inflation that we are witnessing across all the world’s major economies.”

The US consumer price index surged as much as 6.2% on an annual basis, with gasoline leading the increase. The number of Americans filing claims for unemployment benefits also fell to a 20-month low.

In reaction to inflation news, the stock market took a dive, in contrast to Bitcoin’s initial upwards move. The hot US inflation reading inflated the worries that it could renew pressure on policymakers to lift interest rates.

Gold was also the beneficiary of investors seeking inflation hedges as it jumped to a five-month high.

US Treasury yields also spiked higher. While yields on the benchmark 10-year note rose by the most since February, real yields that take inflation into account slid to record lows. The dollar index also hit a 16-month high as it surged above 95.

But Gold Not the Preferred Choice

While gold is also advancing, Christopher Wood, Global Head of Equity Strategy at Jefferies, has taken to Bitcoin as he added another five percentage point allocation to Bitcoin in addition to the existing 5% allocation he made last December.

This increase in Bitcoin’s allocation has been at the expense of gold, which is down 2.44% YTD compared to Bitcoin’s 125% uptrend.

But Wood isn’t giving up on precious metal yet either though he said in his weekly note to investors titled ‘Greed and Fear’ that it is risky for aging gold bugs to ignore the reality of Bitcoin being a competitor to bullion as a store of value.

While Ether is not part of his pension fund portfolio as it is not a store of value, Wood said that ETH would likely continue to outperform bitcoin in the coming months. ETH is up 550% YTD.

The growing mainstream acceptance of crypto and the arrival of Bitcoin ETF in the US “means that it is timely to make a further adjustment to the global portfolio for US dollar-denominated pensions funds which was set up at the end of 3Q02 (third quarter of 2002) as a way of hedging the risk of the collapse of the US dollar paper standard,” said Wood in the note.

“In this respect, the performance of gold this year remains hugely disappointing given how negative rates are in America.”

Besides disputing traditional finance, crypto and blockchain technology also has the “potential to trigger the end of the current dollar paper standard,” said Wood, as according to him, the USD paper standard has already been living on borrowed time ever since former US president Richard Nixon removed the gold backing.

“It is increasingly obvious that central bankers in the developed world are now in a trap of their own making in the sense that they have not been able to escape from unconventional policy in the 13 years since Ben Bernanke first adopted quantitative easing in late 2008.”

In the ETF World

The first Bitcoin Futures ETF’s approval led Bitcoin to start its rally last month, marking the beginning of the bullish Q4, which is now continuing this month.

On Wednesday, both Bitcoin futures ETFs BITO and BTF had their biggest volume days in two weeks, noted Eric Balchunas, a Senior ETF Analyst at Bloomberg, adding that the options volume on BITO has also been massive, already seeing about half the options volume as GLD.

Amidst this, Bitwise Asset Management withdrew its application to list a Bitcoin futures ETF, a move made by Invesco as well, due to expensive roll costs as longer-dated typically trade at a premium to the spot price.

The company, however, did keep its filing for a physically-backed Bitcoin fund.

“Ultimately, what many investors want is a spot bitcoin ETF. We think that’s possible,” wrote Matt Hougan, Chief Investment Officer at Bitwise on Twitter.

“So Bitwise will continue to pursue that goal, and we will look for other ways to help investors get access to the incredible opportunities in crypto.”

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Author: AnTy

Cryptocurrency Market Deleverages, While El Salvador Buys 420 BTC on the Latest Dip

Since hitting a new all-time high at $67,000 last week, Bitcoin has been taking a breather.

The leading cryptocurrency’s recent peak came as the first Bitcoin exchange-traded fund made its debut. Valkyrie Funds, which launched the second bitcoin futures ETF, also filed for a leveraged ETF that is not getting approved, according to a WSJ report.

The US Securities and Exchange Commission (SEC) has reportedly asked at least one asset manager to scrap plans for such a product, signaling its intention to limit new Bitcoin-related products.

And this week, Bitcoin’s price dropped as low as $58,000, but today, it went back to spiking, already above $61,100.

During this recent dip, El Salvador bought even more bitcoin, with President Nayib Buekle tweeting,

“It was a long wait, but worth it. We just bought the dip! 420 new Bitcoin.”

The latest Bitcoin purchase by the Central American country was worth nearly $25 million, adding to the government’s 150 BTC stash. Overall, El Salvador’s treasury holds 1,120 BTC, worth more than $68 million.

“Hahaha we’re already making a profit off the bitcoin we just bought,” quipped Bukele, who further shared that they have a trust fund account in USD but is funded by both USD and BTC.

“When the BTC part revalues in comparison to the accounting currency (USD), we are able to withdraw some USD and leave the trust with the same total.”

Proper Deleveraging

During this whirlwind of a week, the drop in prices resulted in just under $1 billion getting liquidated. Binance’s API no longer reports all liquidations, so this number is likely to be much higher.

The vast majority of these liquidations occurred within a 40 minute time period.

“While unfortunate for the poor souls who were liquidated, the market was in need of a proper deleveraging,” noted Delphi Digital, according to which the majority of the momentum built up from $60K onwards was almost entirely caused by leveraged traders.

“With not much demand to push BTC and ETH beyond their recent ATHs, it seemed the only way up was to drawdown first.”

Now that overleveraged late traders have been liquidated, the funding rate has also come down from its recent high a few days ago. Currently, the highest Bitcoin funding rate is on Bybit at 0.0445%, with the lowest on OKEx at -0.0031%.

During the latest sell-off, open interest on Binance and Huobi experienced a massive wipeout. OI on bitcoin futures is currently just under $24 bln, down from $26.47 bln on Oct. 20. On CME, OI has gone down to $4.69 bln, from $5.75 bln earlier this week, now sitting at second place.

Besides Bitcoin, the base layer token took the biggest hit, with SHIB being the outlier, which went to hit a new ATH at $0.00008616. DeFi token 1Inch also recorded overwhelming returns, followed by its listing on South Korea’s biggest exchange, Upbit, along with AAVE. SHIB -13.09% SHIBA INU / USD SHIBUSD $ 0.00
$0.00-13.09%
Volume 32.96 b Change $0.00 Open $0.00 Circulating 10 t Market Cap 37.81 b
10 h Zoomer Meme Coin (SHIB) Outperforms the Boomer Meme Coin (DOGE), Will This Mark the Top of the Cycle Again? 11 h Crypto Market Deleverages, El Salvador Buys 420 BTC on Latest Dip, & Fiat Currencies Waiting on Central Banks’ Direction 1 d Robinhood’s Crypto Revenue Drops 78% in Q3 Due to Floundering DOGE, But New Coins like SHIB Not Coming until Regulatory Clarity
1INCH -9.76% 1inch Network / USD 1INCHUSD $ 5.16
-$0.50-9.76%
Volume 1.01 b Change -$0.50 Open $5.16 Circulating 180.36 m Market Cap 929.78 m
11 h Crypto Market Deleverages, El Salvador Buys 420 BTC on Latest Dip, & Fiat Currencies Waiting on Central Banks’ Direction 1 d South Koreans Flock to 1Inch After the Largest Exchange Lists the DeFi Token Along With AAVE 1 w Bonfida DEX Restricts Access to US-based Users
AAVE 4.00% Aave / USD AAVEUSD $ 339.33
$13.574.00%
Volume 705.82 m Change $13.57 Open $339.33 Circulating 13.22 m Market Cap 4.49 b
5 mon Coinbase Enables its Over A Million Wallet Users to Use DeFi — DEXs, NFTs, & More 5 mon Software Provider Temenos Enables Crypto Trading for Banks 5 mon Aave Is Testing Private Pools for Institutions to Ape into DeFi, Reveals CEO Stani Kulechov

Monetary Policies

While digital currencies are having a wild week, in fiat currencies, the yen was also hampered by expectations that the Bank of Japan (BOJ) will signal a strong commitment to maintaining its easy monetary policy this week.

Meanwhile, the Australian dollar held firm on the back of a solid commodity market and a risk-on sentiment from upbeat U.S. economic data and upbeat corporate earnings.

“After the pandemic, the dollar became the ultimate safe-haven currency, but recently the yen’s beta (sensitivity) to stock prices is becoming stronger than the dollar’s,” said Shinichiro Kadota, senior FX strategist at Barclays.

The BOJ is widely expected to downgrade its economic assessment today. The European Central Bank will also be holding its policy meeting on Thursday. The ECB is expected to keep its policy unchanged and be slow in tightening it.

The Bank of Canada meanwhile said it would end quantitative easing and could raise its benchmark overnight interest rate sooner than it previously anticipated as policymakers try to ward off concerns about high inflation.

Amidst this, the USD Index has slightly dipped to 93.85, though up from 93.48 earlier in the week, it is down from a one-year high of 94.56 at the beginning of the month.

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Author: AnTy

CME Bitcoin Futures OI Rips to $5.70 Billion to Claim the Top Spot Over Binance

Bitcoin is taking a break after hitting a new all-time high at $67,000 earlier last week.

Towards the end of the last week, we briefly went under $60k, and today it is trading just under $63k.

Right before the weekend, Bitcoin had entered into “overbought” territory, with its 14-day relative strength index (RSI) coming in at 71 at one point. If the RSI of an asset crosses above 70, it is considered overbought and oversold below 30.

“Bullish sentiment among futures traders on Bitcoin reached 92% this week,” said Matt Maley, chief market strategist for Miller Tabak + Co, referring to the Daily Sentiment Index. “That’s very high, so it needs to take a breather to work off these short-term conditions.”

The funding rate, meanwhile, is currently between 0.01% and 0.0408%. The highest is currently on OKEx, with Bybit not far behind at 0.0349%. BTC’s annualized daily basis on Binance is around 12.28%, down from 15.32% from last week but nowhere near 41.4% in mid-April. CME basis also hit February levels last week.

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As the price has stabilized some after the new ATH, the premium on CME has also come down a bit. Compared to $62,800 on Coinbase, as of writing, on CME, Bitcoin is trading at $62,850.

The open interest on Bitcoin futures on the regulated exchange CME continues to hit new highs, so much so that it has moved into first place.

OI on CME for Bitcoin futures contracts has hit $5.70 billion, higher than Binance’s $5.60 billion, according to Skew. In third place is FTX with $4.04 billion in OI, followed by Bybit at $3.23 bln, then OKEx at $2.25 bln, then Huobi at $1.46 bln, and Deribit with $1.39 bln.

According to Arcane Research, this growth in OI is driven by the Bitcoin futures ETF that has CME’s OI now accounting for 22.3% of the market versus Binance’s 22%.

Based on volume, however, Binance is a clear winner at $24.15 bln, with CME at 6th place with nearly $1 billion in the past 24 hours.

This growth in futures and perps volume highlights the growing importance of derivatives for price discovery.

Open interest in options also hit at an ATH last week at $15.72 bln. Currently, it is at $13.9 bln to start the new week. Nearly 90% of this OI belongs to Deribit, followed by LedgerX and CME, having over 3% market share each.

Besides Bitcoin, last week, Ether also came close to hitting a new high on Coinbase and then dropped under $4k on the weekend. As of writing, we are back to trading around $4,150 with total OI in Ether futures at $12.09 billion. On CME, OI has been staying above $1 bln after first hitting it in the first half of last week.

The market participants are increasingly becoming more confident that we are in the second inning of this bull cycle. They are expecting to see Bitcoin rally to be worth six digits and Ether five digits.

Alex Hoptner, CEO of crypto derivatives platform BitMEX, is one of them who sees $100k for bitcoin at the end of the year driven by wide interests of mass retail, more and more institutional players coming in, and the asset class being totally outside of the classical financial system. Hoptner, in an interview with Bloomberg, explained,

“We see a huge mass market adoption of traditional finance players come into the market as well as retail driving the market. Natural developments like the precious Bitcoin ETF helps that and the mass market adoption. But we see this also from the rising inflation that there’s more and more interest in that because this nascent outside of the classical financial system and actually pretty interesting interest rates to be gained on that one an annualized basis over 10% sometimes. So I think that all adds up to being a pretty much good rally and it’s not the end yet.”

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Author: AnTy

Bitcoin Crashes to $8k Amidst New ATH; OI on CME Ready to Surpass Binance and Claim the Top Spot

Bitcoin hit a new all-time high on Wednesday at $67,000.

For now, as Bitcoin went up, altcoins are also enjoying an uptrend, with Ether nearly hitting a new ATH at $4,380 on Coinbase. As a result, the total cryptocurrency market cap went past $2.79 trillion.

But it is expected that altcoins will soon lose their momentum as money flows out of them to chase Bitcoin’s gains and end up taking it even higher.

Tesla CEO Elon Musk also joined in on the excitement tweeting about the price action. This week, Tesla posted its third-quarter financial results, reporting record revenue and profits.

The electric car maker also continues to hold on to its stake in Bitcoin, first disclosed in February that it had invested $1.5 billion only to sell 10% of it in April.

At the end of the quarter, the company’s “digital assets” totaled $1.26 billion, down from $1.31 billion in the previous quarter. $51 million was reported as a Bitcoin-related impairment.

As of writing, BTC/USD is trading just around $63,850 and Ether above $4,170.

Interestingly, on Thursday, the price of Bitcoin crashed to $8,000 on Binance.US. According to trader Satsdart, a whale fat-fingered, selling a lot of Bitcoin on Binance.US spot. It “is never the fault of an exchange btw,” he added.

Given that the wick went down so low, some happy people out there had their bids opened at that level.

As for why one would sell at $8k, the seller “market sold, and that’s just how deep the book was.”

Overall the market remains extremely euphoric, especially after the first Bitcoin ETF started trading in the US and off-the-charts demand seen by it. In a matter of two days, ProShares Bitcoin Strategy ETF (BITO) amassed more than $1 billion in assets, unlike gold ETF in 2004, which managed to do this in five days.

Thanks to this, the open interest on Bitcoin futures has reached $27.17 billion, just inches away from the mid-April high of $27.38 billion. On CME, OI has reached $5.75 bln, just second to Binance’s $5.90 bln, with FTX coming at third spot with $4.39 bln, according to Skew.

“BTC has been on a tear, yet leveraged funds on CME continue to short, as evidenced by their net open interest moving further and further negative. These are likely the funds carrying out the basis trade. They hold BTC spot and short futures,” noted Delphi Digital.

With this, the funding rate is also climbing up, the highest currently on Bybit at 0.1669%.

“We’re seeing a whole new class of investors move into crypto. We’re seeing institutional and professional investors move into the market, and that’s moving the prices higher,” said Bitwise CIO Matt Hougan.

While not a physically-backed Bitcoin ETF as desired by the crypto community, the price appreciation shows that the market is excited about what an ETF means for the crypto market long term, he added.

This has, of course, sent the price of Bitcoin to new highs already, but it also means that five digits, $100k, is not out of the picture either. Fundstrat Global Advisors’s Tom Lee has predicted $168,000 per Bitcoin.

“Right now, sentiment is really high in this industry,” Sadie Raney, co-founder at crypto robo-advisor Makara. “There’s a lot of momentum behind Bitcoin.”

As for the regulatory threat hanging over the market, it is both risk and opportunity. While regulatory overreach could mean a setback for prices, progressive or fair regulation, which seems a likely pathway if a futures ETF is an indication “that will unlock a bull market,” said Hougan.

Because that would be the opportunity of unlocking the full potential of what crypto could be. And investors have started to bet that we’re going to be on the progressive side of that, he added.

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Author: AnTy

Tether (USDT) Market Cap Surpasses $70 Billion, Majority Issued on Tron Blockchain

As the price of Bitcoin hits a new all-time high of $67,000, the market cap of the largest stablecoin, Tether (USDT), has gone to surpass $70 billion in market cap.

The majority of Tether’s 70 billion supply, 51.42%, is issued on Tron (TRX) blockchain at almost 36 billion, followed by Ether which has 33.85 billion USDT supply circulating on its blockchain.

The rest of the USDT supply is scattered on other blockchains, including Omni, Solana, Algorand, EOS, Liquid, and SLP.

After growing 41.7 billion in the first half of this year to nearly 63 billion, Tether supply had a pause until early August. After adding 8 billion in the next month, Tether supply growth has been resting yet again since early last month, only to come back into action in October as traders and investors try to chase the bulls.

USDT’s dominance, however, has been on a decline ever since June last year when it was just above 86%. In the last 17 months, Tether’s stablecoin dominance has lost 30% of its share to now sit at 56.8%. Much of this has been lost to Circle’s USDC, whose market share went from 8% to 25.7%.

Amidst this growth, short-seller Hindenburg Research has launched a $1 million “bounty” program for information on the stablecoin company.

“We feel strongly that Tether should fully and thoroughly disclose its holdings to the public.”

“In the absence of that disclosure, we are offering a $1m bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.”

Nathan Anderson Hindenburg Founder

Hindenburg also said that it did not hold any long or short positions on Tether, Bitcoin, or any other cryptocurrency.

“This stunt from Hindenburg Research is a pathetic bid for attention,” Tether responded in a statement.

“Tether abhors and denounces their actions and transparent motives.”

Days before Hindenburg’s announcement, the US commodities regulator charged Tether with a fine of $41 million over falsely representing that USDT was fully backed by fiat currency. Tether did not admit or deny the wrongdoing.

Recently, crypto lender Celsius Network also said that Tether issues new stablecoins in exchange for collateral in the form of crypto, such as bitcoin, as part of its lending program.

“If you give them enough collateral, liquid collateral, Bitcoin, Ethereum and so on . . . they will mint tether against it,” said CEO Alex Mashinsky. “New USDT is issued for such loans,” and later destroyed when the loan is paid “so it does not permanently increase USDT in circulation.”

Earlier this month, Bloomberg reported that Celsius had borrowed $1 billion worth of USDT from Tether.

Mashinsky, meanwhile, further clarified that the loans of USDT are typically at least 30% overcollateralized.

“We have a select, small group of customers that borrow USDTs in exchange for posting security. These loans are secured by collateral in Tether’s possession of well in excess of 100% of the loan proceeds and earn monthly interest,” Tether told FT, adding:

“This practice is common to other stablecoin issuers. This lending is undertaken narrowly, efficiently, securely, and profitably.”

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Author: AnTy

Over $2 Billion in New Money Has Flowed into CME Bitcoin Futures This Month

Bitcoin price is ready to pounce at its almost $65,000 all-time high after seeing a mild case of volatility in the past 24 hours.

Late on Sunday, the Bitcoin price dropped just under $59k only to climb back above $62,700 on Monday. Currently hovering around $61k, the leading cryptocurrency is awaiting approval on a US exchange-traded fund (ETF).

Ethereum and much of the cryptocurrency market behaved the same way, with the total market cap at $2.55 trillion, down from a high of $2.62 trillion earlier in the day, according to CoinGecko.

While whales continue to accumulate BTC with Bitcoin “Supply Per Whale” basically never dropping since 2017, retail is also just as interested in BTC along with Ethereum, Cardano, and Solana. ETH -2.74% Ethereum / USD ETHUSD $ 3,752.44
-$102.82-2.74%
Volume 17.24 b Change -$102.82 Open $3,752.44 Circulating 117.98 m Market Cap 442.72 b
7 h Over 160 Projects Are Launching on Terra by Early Next Year to ‘Amplify Demand for UST’ and Send it to $10 Bln, says Founder 11 h Over $2 Billion in New Money Has Flowed into CME Bitcoin Futures This Month 2 d Euphoria is Back Ahead of ETF Listings: Bitcoin Hits $63k and Ether Nearly $4k as NYSE Certifies “Approval for Listing”
ADA -1.42% Cardano / USD ADAUSD $ 2.13
-$0.03-1.42%
Volume 2.59 b Change -$0.03 Open $2.13 Circulating 32.9 b Market Cap 70.08 b
11 h Over $2 Billion in New Money Has Flowed into CME Bitcoin Futures This Month 4 d Polkadot Sets Launch Date for Initial Parachain Auctions, DOT Soars 17% Ahead of Crypto Market 6 d Institutions Are Back to Pouring Money into Bitcoin as a “Perfect Storm” Brews for the King
SOL -2.02% Solana / USD SOLUSD $ 157.26
-$3.18-2.02%
Volume 1.68 b Change -$3.18 Open $157.26 Circulating 300.54 m Market Cap 47.26 b
7 h Over 160 Projects Are Launching on Terra by Early Next Year to ‘Amplify Demand for UST’ and Send it to $10 Bln, says Founder 11 h Over $2 Billion in New Money Has Flowed into CME Bitcoin Futures This Month 3 d Decentralized Smart Contract Platform, Cypherium, Joins China’s BSN to Boost Blockchain Development

According to a Bloomberg report, the Indian crypto exchange CoinSwitch Kuber, which launched just a year and a half ago, has 11 million users whose average age is 25. Interestingly, the majority (55%) of this user base is from outside large metropolises like New Delhi or Mumbai and from a generation with no experience with stocks and bonds.

All eyes are currently on the first futures ETF to make its debut which is expected to come on Tuesday. It could easily see us hitting a new all-time high.

While some feel this could result in some profit-taking as traders sell the news, others are pretty clear that it won’t be the case.

Crypto trader Light, who shorted CME launch in December 2017 and then shorted Coinbase listing in April 2021 that marked the top for Bitcoin, says, “it’s not a sell the news event when a large part of the market is worried it may be a sell the news event.”

But no matter the bulls or bears, volatility is expected going into this week, which we already saw last week.

“Overall the volatility on Bitcoin is going to be high irrespective of how the decision plays out,” said Pankaj Balani, chief executive officer of crypto-derivatives exchange Delta Exchange, in a note.

So far this month, Bitcoin has increased more than 43% in value. The technical setups for the cryptocurrency, however, is a concern for Risk Bensignor, the president of Bensignor Investment Strategies and a former strategist at Morgan Stanley, to whom the price action might “make me think twice about buying Bitcoin now, especially as it’s against all-time highs,” he said in a note Monday.

Bensignor further said that open interest (OI) rose dramatically during this rally which means that “there are lots of new shorts on this up move that are badly under water — that still may need to get fully squeezed out before the buying might dry up.”

As we reported, OI has risen significantly since Sept. 29 low of $13.11 bln. On Monday, it went to hit $23.11 bln, as per Bybt.

Binance is leading this race with OI at a new high of $5.5 bln, followed by CME and FTX sitting at second place with new highs at $3.97 bln in notional OI. At the beginning of this month, CME’s OI was sitting at $1.7 bln and just two days before that at $1.4 bln, while today, it is ready to surpass $4 bln.

With the Bitcoin Futures ETF involving the contracts from CME, traders on the regulated exchange are making a lot of purchases as CME Bitcoin futures’ market share rose to nearly 20% from just 13% a week back.

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Author: AnTy

Shift to Risk-on: Bitcoin Is Up 12% Already in Uptober Amidst Stock Market Weakness

Starting the month around $44,000, Bitcoin price went as high as $49,300 late on Sunday. As of writing, BTC/USD is trading around $47,650 with $26 billion in trading volume.

Last week Friday’s uptrend in Bitcoin’s price was the biggest daily gain since July, which was also seen in other crypto assets as well. After rising as high as $3,490, Ether is currently around $3,330.

In the past week, the biggest gainers include AXS, leading the gains with 137%, then OMG 100%, OHM 52%, QTUM 48%, XTZ 38%, OKB 38%, dYdX 37%, and LUNA 35%. Some other decent gainers in the past 24 hours include ALGO 14%, SHIB 9%, ENJ 8.5%, and HOT 7%.

The total market cap is now back around $2.2 trillion.

The fact that Bitcoin is holding on to the 12% spike in the price of the leading cryptocurrency may have significantly changed its technical setup, said Tom Lee’s Fundstrat. According to strategists at Fundstrat, the breakout “looks important technically.”

“Prices have eclipsed weekly highs as well as one-month downtrends,” they said. While trends turned negative last month, “Friday’s move is a big positive in helping to resolve this consolidation.”

So, it makes sense that Fundstrat is bullish and looking upward for its next key levels. “The first upside target lies at September highs at $52,956, then $64,895,” the strategists said.

The Micro and Macro Effect

This latest increase in Bitcoin’s price may be fueled by a short squeeze in part of the market, as per JST Capital co-founder Todd Morakis and Jonathan Cheesman, head of OTC and institutional sales at crypto derivatives exchange FTX.

According to Joseph Edwards, Enigma Securities’ head of research, the spike in volume on crypto derivatives exchange was a possible driver for the moves. In the futures market, Bitcoin had a net short position of -883, the smallest since mid-August.

After the brutal September — which has been historically expected and the value of Bitcoin dropped 7.2% — amid concern about increasing regulatory pressure in China and the U.S, October is looking more and more like Uptober.

Technically, “the rally has also preserved positive intermediate-term momentum” through the moving average convergence/divergence indicator, said Fairlead Strategies LLC’s Katie Stockton in a note. But at the same time, she sees a counter-trend signal coming from another technical framework, DeMark indicators, that could prevent follow-through on the move.

“We would feel more comfortable moving to a bullish short-term bias once this signal is invalidated — which in our work would require two closes above $48,800,” she said.

After trading sideways for weeks, the market was particularly excited last week, with Federal Reserve Jerome Powell saying they have no intention to ban cryptocurrencies.

This “combined with weakness in the stock market, and the month of October being a typically bullish time for crypto markets, could signal a shift to risk-on trading in crypto markets for the next several weeks, as investors seek returns in non-traditional assets,” said Leah Wald, chief executive of crypto asset manager Valkyrie Investments.

However, the dollar has been showing strength, hitting a new 2021 high at 94.5 on Sept 30 and currently at 93.84. USD is headed for its best week since June, which could spell some trouble for crypto prices.

Overall, seasonality and positive market fundamentals see the crypto market primed for substantial gains in Q4, which has often seen strong performances.

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Author: AnTy

BTC Shoots Above $50k as Funds Start Recording “Modest” Inflows, Ether’s Inflation Rate on A Downtrend

Bitcoin has hit $50,000 yet again.

The leading cryptocurrency went as high as $50,350 on Coinbase today, a level last seen on August 23rd and before that May 15.

Confidence is returning in the second leg of the bull market as bitcoin recovered sharply from its July low of around $28k.

“Purely from a TA basis, it looks like if $50 goes (it prob will), $58k will be on deck in no time. Then it’s a battle for new ATHs and potentially beyond,” said Travis Kling, who’s running Ikigai Fund.

The price appreciation, more importantly, has come during a period of the lowest spot volume in the last year, which has been due to seasonality. Kling added,

“The biggest risk to this scenario playing out is increased tapering fears. That was a much bigger concern pre-Jackson Hole. But Powell seems content to punt on tapering at least until YE. If we print strong jobs numbers in the coming months, there’s risk that timeline moves up.”

The price action turned positive as Bitcoin fund flows finally stabilized and even recorded inflows, though modest, for two consecutive days, according to ByteTree data. Transaction counts are picking up from low levels as well, up from 1.35 million in early July to now approaching 1.75 million.

Additionally, “miners inventories have now peaked, and they are selling again. This is normally bullish as it implies the market is strong enough to take the pressure,” noted Charlie Morris of ByteTree.

While Bitcoin (BTC) finally made a big move, Ethereum (ETH) has been leading the market this time around.

The second-largest cryptocurrency rallied high at nearly $3,845 late on Wednesday, a level last seen on May 16, just four days after hitting ATH at $4,380. Since July 20 low, Ether has soared 122% in value.

ETHBTC also surged to roughly 0.0785, not seen since May 19th, after breaking out of a multi-year long-term wedge.

All of this has been while ETH perpetual record low funding rates leading to optimism that this breakout can run even higher.

However, according to Loomdart, popular crypto trader, it might be time to deleverage here as “think a lot of catch up leverage stepped in yesterday to kinda hope other L1 strength can be matched, think we go higher eventually regardless, but yeah not bad place to tp,” he said.

Amidst the rising price and continued NFT mania, average gas fees on the network have risen past 136 Gwei, which is leading to more burns. 170,000 ETH worth $545 mln has been burned since EIP 1559 was implemented on August 5.

OpenSea’s contracts alone contributed to 30.67% of all ETH burned (~27k ETH), followed by Uniswap V2 and V3 contracts contributing 20.44%.

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This increasing amount of ETH getting burned has resulted in Ether’s annualized daily inflation falling to 1%, from ~3% before EIP-1559 activation. This week’s data revealed sub 1% inflation rates, hovering around 0.6% annual inflation, which is significant.

“Although it’s unlikely that this sustains until the PoS merge, EIP-1559’s impact on ETH’s inflation is the equivalent of two BTC halvings (using 3% as pre-London inflation),” noted Delphi Digital.

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Author: AnTy

Bitcoin’s the Way to Go As Inflation Records Its Highest Jump in 13 Years

The USD is getting a boost from high inflation concerns, with traders now looking forward to the Fed Chair’s testimony this week. Blackrock CEO is also concerned about inflation which he says “is going to be more systematically,” noting asset owners are the biggest beneficiaries of monetary policy.”

The US dollar continues to be perched above 90 since early last month, now aiming for 93 after data showed that US inflation for June is coming in hotter than expected. Just like the greenback, US Treasury yields also responded to the inflation data with a sharp rise.

US consumer prices rose by the most in 13 years last month as the economic recovery continues its momentum.

The rate of inflation in the 12 months ended in June jumped to 5.4% from 5%.

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However, this is to be expected as up until recently, there was a tight lockdown in the country, and still, not everything is open or operating at a standard rate. The rapid recovery of the economy is having an unwanted side-effect, higher inflation.

Transitory or Not?

In June, the cost of living jumped by the most significant amount, 0.9%, more than expected, since 2008 as inflation spread more broadly through the US economy, raising questions whether this spike in prices will subside as quickly as the central bank is predicting.

While the cost of used cars accounted for over one-third of this increase, prices for food, energy, clothing, hotels, and plane tickets also rose sharply, which also fell sharply in the early stages of the coronavirus pandemic last year.

Another measure of inflation that omits volatile food and energy also surged 0.9% in June, with the 12-month rate increasing to 4.5% to stand at a 29-year high.

While the component not associated with the used car market being twice as large, used car prices should also “probably be seen as some sort of bellwether in this case, instead of something to be ignored,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.

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Blackrock CEO Larry Fink is also concerned about inflation. “It is my view that inflation is going to be more systematical. I believe it is a fundamental, foundational change in how we navigate economic policy,” he said in an interview with CNBC.

He further noted that with interest rates low, savers are getting slammed while “asset owners are the biggest beneficiaries of monetary policy.”

Market Reaction

Traders are now looking forward to Federal Reserve Chairman Jerome Powell’s testimony before Congress on Wednesday and Thursday for any signals on potential tapering. Fed officials first made a surprise shift in tone last month about the possibility of US stimulus withdrawal that boosted the dollar in recent weeks.

Powell, however, has repeatedly been stating that high inflation will be transitory as supply chains normalize and adapt.

The stock market waved off these latest figures, with the S&P 500 seeing a slight drop after roaring to new all-time highs on Monday. Greenspan said,

“The stocks really are in a euphoric mode right now, and investors will accept any reason to continue buying the rally.”

Cryptocurrencies meanwhile remain on the back foot since late May when they first started selling-off with the total crypto market cap now at $1.34 trillion.

This week, the crypto market is experiencing losses across the board, with Bitcoin doing its thing and trading above $32,500, recovering some from its fall to $31,565 in the last 24 hours and Ether at just above $1,900 after falling to $1,860.

While down in the past two months, in the past year, when commodity prices rose between 20% to 107%, Bitcoin rallied 250%.

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Author: AnTy