A Flood of Demand Has Coinbase Boosting the Size of its Debut Junk-Bond on Lower Rates

A Flood of Demand Has Coinbase Boosting the Size of its Debut Junk-Bond on Lower Rates

Moody initiated a debit-issuer rating for Coinbase at non-investment grade or junk, citing an “uncertain regulatory environment and fierce competition” for not rating the company higher.

The demand for the crypto sector in the traditional markets is so high that cryptocurrency exchange Coinbase has to boost the size of its junk-bond offering to $2 billion from $1.5 billion.

In fact, at least $7 billion of orders poured in, according to a Bloomberg report citing a person with knowledge of the matter.

“Institutional investors are aggressively buying Coinbase debt,” said Su Zhu, CEO, and co-founder of Three Arrows Capital. “Huge endorsement of supercycle.”

Coinbase had announced that it is raising debt just this week, and now it has sold equal amounts of 7-year and 10-year bonds at interest rates of 3.375% and 3.625%, respectively, which is lower than the initially discussed borrowing costs.

The new bonds are rated one step below investment grade, and according to Bloomberg bond indexes, a similarly rated debt has a 2.86% yield on average.

Before Coinbase (COIN), MicroStrategy (MSTR) sold $500 million of notes in June to fund its Bitcoin purchases. Meanwhile, the crypto exchange is earmarking its proceeds for general corporate purposes, including product development and potential mergers and acquisitions.

“The strong demand is clearly a big endorsement by debt investors,” said Julie Chariell, an analyst at Bloomberg Intelligence.

Non-Investment Grade Rating

Moody’s Investors Service initiated a debit-issuer rating for Coinbase at non-investment grade or junk, citing an “uncertain regulatory environment and fierce competition” as the reason for not rating the company an investment-grade debt issuer. Moody’s analysts in a report published Tuesday wrote,

“Coinbase’s financial profile suggests investment grade credit strength, but for now the uncertain regulatory environment and fierce competition offset these strengths.”

The credit rating agency assigned a Ba1 rating to Coinbase’s senior guaranteed notes, saying three factors viz. increased regulatory clarity, a big expansion to boost revenue, and prudent cost management during fallow periods could lead to an upgrade of Coinbase’s overall rating.

According to Moody, the fact that Coinbase earns “a percentage of the notional value of trades matched on its platform” can be “very lucrative” in an up market, but when prices decline, the firm’s transaction revenue will also decline.

And while Coinbase is diversifying its products and expanding its subscription-based revenue to address its reliance on transaction revenue,

“it will take time for this strategy to have a material effect.”

And, of course, regulatory uncertainty is a big risk. Recently, Coinbase said they are getting pushback from the SEC on the launch of its lending product. On Tuesday, SEC Chief Gary Gensler said that crypto lending and staking services fall under securities laws.

“Given the novelty of crypto assets, many questions remain unanswered relating to the future regulatory frameworks of the plethora of tokens, blockchains and products and services that are part of decentralized finance.”

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Author: AnTy

ETH/BTC Continues its Descent as Fees Drops Under $3, ConsenSys Launching MetaMask Institutional

Etehreum’s average fees have dropped lower than Bitcoin’s, while MetaMask Institutional comes as cryptocurrency funds, family offices, and financial institutions “increasingly” seek exposure to DeFi.

The price of Ether is subdued at around $2,500, following the 60% drop in its price from the all-time high of $4,380 last month. Ether actually more than doubled its price in just over a fortnight to hit this peak.

During the recent sell-off, Eth went as low as $1,725 on Coinbase.

Much like the weakness in the USD market, ETH is also feeling the woes against BTC.

ETH/BTC started its uptrend on March 29 when it was around 0.03. After two and a half months of a continuous uptrend, climbing to 0.082, a level last seen in May 2018, ETH/BTC topped out on May 15.

The subsequent sell-off during which ETH dropped harder than Bitcoin, as it usually happens – the opposite of a bull market where Eth price typically outperforms Bitcoin, ETH/BTC fell to 0.055.

As of writing, ETH/BTC is down at under 0.063 after climbing to 0.075 momentarily as Bitcoin leads the cryptocurrency space in strength in the current “crab” market, with El Salvador declaring it a legal tender acting as a likely catalyst.

Bitcoin leading the market is seen as a bullish scenario for the rest of the market because as long as Bitcoin maintains its strength and pumps while altcoins do not, the money will eventually rotate into them and pump them higher as we saw during the end of 2020 and into 2021. BTC 3.61% Bitcoin / USD BTCUSD $ 40,526.78
Volume 48.51 b Change $1,463.02 Open $40,526.78 Circulating 18.73 m Market Cap 759.27 b
5 h Bitcoin (BTC) Price Trading Analysis June 14: Market Outlook Bullish Continuation, Here’s Why 5 h Ethereum (ETH) Price Trading Analysis June 14; Market Outlook Is Slightly Bearish, Here’s Why 6 h Bitcoin Surges Above $41k — MacroStrategy, PTJ, FOMC Meeting, BCIE ‘Adopting BTC for Legal Use’

Seeking Exposure

The lack of price action has the Ethereum exchanges inflow volume reaching its lowest volume since November 15, 2020.

Akin to this absence of activity, the fees on the second-largest network have fallen to a single digit, last seen before the DeFi summer. The standard gas fee is currently a mere 5 gwei, as per ETHgas station, which skyrocketed to 2,000 gwei briefly for the first time ever during the market sell-off.

Average fees have gone down to $2.7, even lower than Bitcoin’s average of about $5, as per Blockchair.

The total daily fee on Ethereum is also on a downtrend, recording about 3.7 million on June 13, last seen in December, down from 117.2 million on May 11, according to Coin Metrics.

Amidst the lack of momentum, the popular Ethereum wallet MetaMask is launching its services for institutions to help them access and engage with DeFi.

With the decentralized finance ecosystem reaching past $40 billion, cryptocurrency funds, family offices, and financial institutions are “increasingly” seeking exposure to space, and through MetaMask Institutional, the company aims to enable funds to swap tokens, borrow, lend, invest, and interact with DeFi protocols and applications using its interface.

Prior to its commercial launch, ConsenSys is collaborating with a select group of partners, custodians, and professional trading firms to give feedback throughout beta testing.

“Ideal partners have customers already deploying capital into DeFi protocols,” it noted.

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Author: AnTy

Bill Miller ‘Strongly’ Recommends Investing in the ‘Single Best Performing Asset Class’ Bitcoin

The risk of Bitcoin’s price going to zero is “lower than they’ve ever been before,” Mutual fund legend Bill Miller told CNBC Friday.

According to him, more institutional investors would be coming to the leading cryptocurrency, which almost went to $16,000 last week — its 35-month high.

At the time of writing, BTC/USD has been trading around $15,120 after recording an 9.5% drop over the weekend, which soon reversed.

Bitcoin’s story is “very easy” as it is just about “supply and demand,” said Miller.

“Bitcoin’s supply is growing around 2.5% a year, and the demand is growing faster than that.”

Miller also shared that the investment committee’s chief investment officer for the endowment of Johns Hopkins University told him that because of the “asymmetric properties” of Bitcoin, “everybody is going to want to own at least some” of it.

Although they “may never own Bitcoin,” Miller said that’s a “bold statement” from a college endowment. Miller serves on the investment committee of the Baltimore-based university’s endowment.

An investing revolution

Currently, the chief investment officer of Miller Value Partners, Miller beat the S&P 500 for 15 years when he was managing the Legg Mason Capital Management Value Trust Fund. During the peak of the last bull run, Dec. 2017, he revealed that his hedge fund MVP1 had half of its investments in BTC.

Bitcoin hasn’t only been the best performing asset of the last day but has also been outperforming the traditional assets in 2020.

Compared to gold’s 28.26% YTD performance, S&P’s 8.63%, and WTI’s -40.70%, bitcoin is up over 117% this year, as per Skew.

Miller “strongly” recommends bitcoin as he told CNBC, “(Bitcoin has) been very volatile, but I think right now it’s staying power gets better every day.”

He warned of inflation “coming back” due to the federal reserve “gunning the money supply” and fiscal relief coming from Congress, which means,

“Every major bank, every major investment bank, every major high net worth firm is going to eventually have some exposure to bitcoin or what’s like it, which is gold or some kind of commodities.”

After legendary investor Paul Tudor Jones talking up Bitcoin, another valued investor Bill Miller thinks everyone should own the digital asset.

“The mere fact that these old school value investors even consider Bitcoin as an investment, just shows you how much this space has developed in the last 12 months,” said Charles Edwards, founder of Capriole Investments. “This is an investing revolution,” he added.

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Author: AnTy

Low Financial Literacy Investors Twice As Likely to Own Crypto vs Market Gurus: Bank of Canada

A new study released by the Bank of Canada has revealed that folks with lower financial literacy are more likely to own Bitcoin than those with higher literacy levels. The paper’s main point of the research was the use of ‘Cash Alternatives’ in Canada throughout 2019; some of the points highlighted include the adoption of cryptocurrencies and the possibility of a Central Bank Digital Currency (CBDC).

According to the report, cash payments in Canada decreased from 54% to 33% between 2017 and 2019 as more people opted for credit or debit cards instead. It highlights that this trend was mainly fueled by the rise of e-commerce, hence ease of making digital payments. Nonetheless, most Canadians are still using cash within the local Point-of-Sales (PoS).

Crypto Ownership Demographics

With cryptocurrencies getting more hype by the day, the survey revealed that at least 89% of Canadians have heard of Bitcoin. Out of these, 5% percent own BTC while another 1.6% have portfolios in other crypto assets such as Ether and Litecoin. As for the gender and age demographics, the groups which were mostly aware or own Bitcoin fall under young, male, university-educated, or high-income Canadians.

While those demographics may seem to favor financial literate folks, the research revealed that BTC ownership is more correlated to the less financially aware Canadians, ranking the sample into three where 47% had high financial literacy followed by the medium at 35% and finally low at 18%. Interestingly, 8% of the latter group said they own crypto assets compared to 4% of the highly financially aware.

However, awareness is still high among the more financially literate, with around 93% having heard of crypto assets instead of only 72% at the lower financial literacy group. While the digital payments space may be booming, the researchers noted that at least 86% of Canadians have no plans of shifting from cash.

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Author: Edwin Munyui

Bitcoin Exhausted with ‘Major Market Driving’ Event Next Week

In yet another drop this week, Bitcoin fell even lower to as low as $11,390. Since falling to that level, we have recovered a bit to move back above $11,500.

These losses came despite the open positions in bitcoin derivatives hitting new all-time highs this week, both bitcoin futures and options markets now have a record open interest. OI in CME bitcoin futures also printed a new ATH with “Leveraged Funds significantly cutting long exposure.”

The next upwards resistance level for bitcoin is $14,000, according to Simon Peters, an analyst at eToro.

“If prices continue to climb, it will test investors’ mettle,” he said. “I would expect to see exchange inflows increase as investors look to crystallize their gains potentially. This could push the price back toward $12,000.”

Consolidation Phase

Meanwhile, Bitcoin’s drop saw the broad crypto market getting red with heavy losses resulting in wiping out $19 billion from the entire market.

Also, the funding rates in the altcoins went from “outrageous exuberance to negative funding,” in these last few days. “Now you can get paid to be long,” noted trader and economist Alex Kruger.

However, the likes of Augur (33%), Golem (29%), ICON (21%), Decred (6%), Komodo (5.39%), Wanchain (2.17%), and among others are the few altcoins still maintaining the gains.

As bitcoin struggles to get above $12,000 level, a push to the volatility higher has the Bloomberg Galaxy Crypto Index hovering at 600 level, which has been acting as resistance dating back to mid-2019.

For this index to see further increases this year, this level needs to be broken and remain above that. Moreover, the Moving Average Convergence Divergence (MACD) indicator entering a negative divergence indicates future gains are hard to come by in the short term.

Crypto Index
Source: Bloomberg

The good thing is the crypto index is in an uptrend, and the ongoing correction could be just a consolidation phase.

As we reported, it is the strength in the US dollar that is seeing every other asset dumping. The crypto market is also taking its cue from the USD, just like gold and other risky assets.

“Strong dollar gains are really weighing on all risky assets, and you’re probably seeing a little bit of exhaustion after rallying up to that fresh 12-month high earlier in the week,” said Ed Moya, senior market analyst at Oanda Corp.

Risk is High

The big event coming up that could further spell more losses for the bitcoin and crypto market is Federal Reserve Chairman Jerome Powell delivering a speech at Jackson Hole next week on August 27.

During this annual symposium, he will be talking about the central bank’s monetary policy framework, with a focus on a new inflation strategy.

“This has been the major market driver since July, bigger than the fiscal package and coronavirus statistics,” said Kruger. “All asset classes. This is all one big trade now.”

A similar opinion is shared by trader Cantering Clark who says the “headline risk is high” here given the relation Bitcoin, gold, and USD has been having.

However, if Bitcoin falls, that won’t be out of the norm as during the last bull cycle, from mid-2016 to the end of 2017, the largest digital asset had nine corrections ranging between 30% to 40%, only to make it’s way higher.

So, if history is any indication, these are just ‘buy the dip’ opportunities before moving onto new highs.

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Author: AnTy

Japanese Finance Minister Doesn’t Want to Put Crypto’s in Same Tax Class as Stocks

Japanese Finance Minister Taro Aso has hinted that he might not be willing to lower the tax bracket for cryptocurrencies from up to 55% and bringing it to a flat rate of 20%, similar to that of stocks.

Any form of crypto transactions or trading in Japan falls under miscellaneous tax categories, which has a steep tax rate of up to 55%.

Aso claimed that a majority of crypto investors in the country are not institutional investors, but rather small retail investors, and lowering the tax is not possible at present as it would make it more difficult for the common households to invest in digital currencies.

Japan is considered at the frontier in terms of implementing crypto regulations and many G-20 nations even asked for the country’s help to resolve digital asset regulations in their respective countries. However, for a country that was among the first to legalize crypto trading, a majority of its population have hoarded cash. Aso explained:

“Out of 1900 trillion yen [17.6 billion USD] financial assets held by households in Japan, around 900 trillion yen [8.4 billion USD] is now being held as cash deposits and that is abnormal,”

Japanese Investors Are Still Bullish On Cash

Japan may be one of the top tech-centered nations known for its inventions and progressive society, but the business owners in the country are still following traditional ways and believe in keeping their savings in cash.

Aso claimed that a majority of businesses in Japan are cash oriented and it would be quite difficult for the government to convince these business owners to put their cash in crypto.

Japan also modified its existing cryptocurrency legislation called the Payment Services Act (PSA) recently. The modification would now deem any form of virtual currency as a crypto asset.

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Author: James W

Another Horrific Day: Bitcoin Crashes to $8,630, What’s the Next Stop?

  • Support at current levels and price could go even lower to $8,200 but it is still a “normal bull market retracement level”
  • After the S&P 500 lost nearly $1.737 trillion in the past two days, it rebounds while gold seeing flight into the safe haven
  • Bitcoin and gold correlation over the past 30 days is negative indicating BTC has characteristics of both risk-off and safe-haven assets

The bears are holding strongly to the market as the prices took a hit yet again. Today, in yet another crash, Bitcoin price fell to $8,630 level briefly on Bitstamp and is currently teetering on the edge of $8,800, having broken through $9k.

The market is in deep red. Yesterday’s daily candle was closed below the monthly opening and now we have gone back to late-January levels.

“Heavier bids at 8.8k. I can stay solvent longer than the market can remain bearish. If it 8.8k caves, even heavier bids at 8.4-8.5k,” said trader CryptoGainz.

Altcoins to crash harder but expect to be completely wrong about Bitcoin

As bitcoin takes a fall, altcoins tanked. According to trader Cantering Clark, the “hard cold truth” is the altcoins that have been enjoying the rally until recently will “go on to make new lows, and repeat this pattern again.”

“As for BTC, always be prepared to be completely wrong. A lot of trading in general is about preparation. When Bitcoin drops there is much more reflexivity in price because no one really agrees on a fair value. Price is what determines value, overthrow is then tremendous,” said Clark.

Meanwhile, trader Nik Patel sees BTC dipping into the 200MA at $8,900 and reverse or further drop to the 360MA and take out the stops at about $8,200.

Support is looking weak at current level and though price could go even lower, is still a “normal bull market retracement level,” says analyst Bob Loukas.

Amidst this bearish scenario, analyst Mati Greenspan gave a dash of hope to bitcoiners as he states, “the retracement off the February peak actually looks like a bullish flag from this angle.”

Risky assets struggling during a flight into safe havens

In the stock market, the S&P 500 has lost about $1.737 trillion in value in the past two days, according to S&P Dow Jones Indices’ Senior Index Analyst Howard Silverblatt.

After a four-day losing streak, stocks opened higher across the board Wednesday with 10-year Treasury yield also retreating from its record lows.

Risk assets are struggling as coronavirus cases continue to climb steadily outside the epicenter in China.

“The ultimate impact remains entirely unknown at this stage,” said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “And uncertainty is the enemy of conviction.”

Gold also rebounded on Wednesday after it hosted its biggest one-day decline in about four months. However, it has been expected that the safe-haven hasn’t reached its peak yet, with the possibility for another Fed rate cut by 25 basis points becoming certain.

“It is a typical flight into safe havens after the coronavirus has spread not only to the Asian countries but also to Italy and Middle East,” said Peter Fertig, an analyst at Quantitative Commodity Research.

Bitcoin both risk-off and safe-haven asset

Bitcoin is doing badly in the current environment, meanwhile, it has the arguments that the digital currency is a safe haven during turmoil has been shattered.

Coin Metrics also found that the correlation between Bitcoin and gold over the past 30 days has been negative, “adding evidence to the thesis that BTC only reacts to certain types of events and not others.”

One explanation to this could be that it COVID-19 is more of a macroeconomic shock than an uncertain geopolitical situation, meaning, “perhaps BTC has characteristics of both risk-off and safe haven assets with a truly unique reaction function.”

“Bitcoin just picks the status as an alternative asset when other things look crowded,” said Mark McCormick, global head of currency strategy at TD Securities.

Meanwhile, crypto data provider Glassnode says, as per MVR Z-score, there’s still much room for bitcoin to rise to. The MVRV Z-Score is used to assess when Bitcoin is over or undervalued relative to its fair value and at current value, it says there’s much room to grow for BTC.

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Author: Bitcoin Exchange Guide News Team

Bitcoin SV (BSV) Price Analysis (February 23)

Key Highlights

  • BSV/USD trade has been featuring lower lows and lower highs in its price valuation.
  • The price worth of BSV put under slight check-making pressure by the US dollar.
  • A downward-break of the $300 lower range point may cause fearful trading conditions in the BSV/USD market price.

Major distribution territories: $500, $600, $700
Major accumulation territories: $200, $150, $100

Bitcoin SV (BSV) Price Analysis

Some degree of featuring lower lows and lower highs has continued to play out in the BSV/USD trading cycle from February 16 until the present. Those market-moving patterns took shape mainly around $300 mark.

The crypto may continue to put under a check-making slight pressure by the US economic monetary instrument around the mark mentioned earlier. But, a sudden intense downward pressure could result in letting the pair to a lower value position a bit below or around the major accumulation territory afterward.

Bitcoin SV (BSV) Technical Indicators Reading

It appears that the 14-day SMA trading indicator will take position around $300 price territory for a while. And, the 50-day SMA trend-line points to the north closer to the BSV/USD market value mentioned from below. That signifies the potential of seeing the $300 mark serving as a pivotal line for the BSV/USD market bulls in the long run.

The Stochastic Oscillators have densely traversed southward closely to range 20. That showcases that there haven’t been many selling forces in this crypto-economy.


The BSV/USD market north wall that previously occurred on January 14, hasn’t decimated by the bears pushing effort that came up in the succeeding trading sessions until the present. By so doing, the bears’ action has only led the price to move in a ranging outlook chiefly around $400 and $300 values. A downward-break of the $300 lower range point will signify dangerous warning of witnessing fearful price trading conditions.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (bitcoinexchangeguide.com) holds any responsibility for your financial loss.

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Author: Ben Jordan

Negative Interest Rates Driving Institutional Investors to Bitcoin: Crypto Trends Report

  • Lower yield prompt institutional investors to seek riskier investments
  • Negative interest rates, easy monetary policies, Brexit, and upcoming US elections driving the demand
  • Bitcoin’s physical markets have advantages over gold

With negative interest rates making their way into major economies around the world, what impact it will have on Bitcoin?

CoinShares, a digital asset management firm released its Crypto Trends Report for November 2019, where it talks about how the negative interest rates are pressuring the traditional banking model and shifting the investment strategy.

As such, concerns regarding a recession cycle have risen and the contagion that could spread quickly across even the healthiest for markets.

The prices of hard assets might be above pre-crisis levels on the back of “cheap money” but “median income trails far behind median house prices.”

These concerns have investors returning to gold markets which are on a steady rise. Bitcoin, that has established itself as an “institutional store-of-value asset class” is also seeing interest from new funds.

Lower Yield Prompt Institutional Investors to seek Riskier Investments

As we can see currently the economies are making a shift from cash but demand for cash is still on the rise. The report mentions the Euro’s total cash value outstanding in banknotes is now exceeding €1.25tn with the US following the same trend. To control this upward trend, regulators are placing ceilings on potential cash use.

“Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive. This would jolt lending, boost demand, and stimulate the economy,” says IMF in one of its posts.

Cash is a liquid asset but returns no yield and is subject to inflation by default.

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in the US Between 1913 and 2018

According to the IMF, “lower-for-longer yields may prompt institutional investors to seek riskier and more illiquid investments to earn their targeted return.”

Bitcoin’s easier self-custody & trading gives it Advantages over Gold

In 2019, gold hit a six-year high, climbing to 2011 peak, marking the return of demand into the traditional asset class from central banks and investors alike. Negative interest rates, easy monetary policies, Brexit, and upcoming US elections contributing to the gold demand.

Worldwide Google Search Interest for ’Gold’

When it comes to the digital gold, the CoinShares says having checked off the requirements by regulators and shedding a near-decade of concerns on its viability, Bitcoin has “firmly established itself” as an institutional asset class, since the start of futures on the Cboe and CME.

Bitcoin’s physical markets have established on and off-ramps on a global scale and this the report says gives it advantages in terms of easier self-custody over gold. Moreover, global trade is easier to facilitate with BTC than with physical gold markets, especially with settlement finality.

Though Bitcoin was designed to address the payments industry, it has swung into Store-of-Value asset class with the additional benefit of total ownership and ability to transfer value easier and faster than other SoV assets.

As the price of Bitcoin recovers to $8,660 today and has been hovering around this range the past six days, many are optimistic yet some wonder if we will see a new high in 2019 or the 2020 bitcoin halving will kick in to effect during Q1. Time will tell, but for now this is great data and research to digest to keep understanding the number one blockchain-based crypto asset in Bitcoin, now over 11 years since its whitepaper release by Satoshi Nakamoto.

“}” data-sheets-userformat=”{“2″:13057,”3”:{“1″:0},”11″:3,”12″:0,”15″:”Open Sans”,”16″:11}”>Latest Bitcoin Price News and Crypto Market Updates

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Author: AnTy