New two-step week in the cryptocurrency markets, which actually brings us back to practically the same price point as seven days ago. This reality, however, masks the story of a new all-time high hit on Saturday, with the price of bitcoin this time reaching US $ 61,800. As is often the case recently with moderate volume weekend hikes, the real test instead occurred on Monday when the traditional markets opened where bitcoin derivatives are also traded.
Sometimes you have to take a step back to realize just how dazzling the performance of bitcoin is relative to its short existence. With the price above $ 60,000, Satoshi Nakamoto, the anonymous inventor of the network, suddenly placed himself among the 20 richest people in the world. It is in fact estimated that wallets totaling one million bitcoins belong to the mysterious creator. Suddenly, his fortune exceeded 61 billion US dollars, placing him just behind Charles Koch and ahead of Rob Walton among the richest people on the planet.
It was also on the eve of this historic high that exactly one year ago, in the panic in the markets following the emergence of COVID-19, the price of bitcoin fell to $ 3,760.86. This is a return of 1643% in one revolution of the sun between the two price poles.
The increase in the value of bitcoin is often explained by the devaluation of the US dollar, or at least by the fear of devaluation following the massive injection of new liquidity into the system. If this dynamic can often appear abstract in the grand scheme of things, we have on the contrary had a very tangible example that strikes the imagination this week. Indeed, the US government voted in favor of a $ 1.9 trillion economic stimulus package. The total capitalization of bitcoin is 1,027 trillion while that of the entire cryptocurrency market is 1,700 trillion. Isn’t this comparison of a specific economic moment in history versus the value of a complete parallel economic system enough to imagine highs well beyond current prices in the future?
Speaking of the same economic stimulus plan, a survey by the firm Mihuzo Securities estimates that 380 billion dollars distributed to Americans could be invested in traditional as well as emerging markets. Still according to the data collected, 60% of this amount could be directly exposed to bitcoin. If such a volatile investment is possibly opposed to the very nature behind the idea of this aid check, the fact remains that the individuals who invested their first payment of $ 1,200 in bitcoin last April did increase that amount to about $ 10,000.
Coinbase’s public offering is expected to take place within a few weeks, so new documents filed provide some insight into what’s to come. The company plans to resell 114,850,769 shares on the secondary markets. The offer will be presented on the Nasdaq Global Select Market under the COIN symbol. In financial details provided in the prospectus, the company says it generated $ 1.14 billion in net income for 2020 and has assets worth $ 90.3 billion. It now has 43 million verified users. Bloomberg valued the firm at $ 100 billion.
The madness of NFTs (Non Fungible Tokens) does not slow down, on the contrary. You could even say that she already seems to be entering her phase of madness. As an example, tennis pro Oleksandra Oliynykova decided to sell possession of part of her arm as a token. The idea is not that of a collector. The owner could, for example, impose a tattoo on the part of the purchased arm, which arm will then be clearly visible during all the athlete’s televised parts. Production firm The Recount is placing a viral video of Trump’s public response to COVID-19 for sale via the same approach.
Bitcoin and predicted inflation have an increasingly obvious correlation in the markets. Suddenly, the meeting of the directors of the American Fed scheduled for today is awaited with interest, as much on the traditional markets as those of the cryptos. “We expect the Fed to keep borrowing costs at record highs and maintain quantitative easing,” said Joel Kruger, currency strategist at LMAX Digital. “The main focus will be on interest rate projections and whether or not the improved outlook for a resumption of the pandemic will translate into an earlier rise or not.” The latter adds that the market seems to predict a first interest rate hike around March 2023. “If the Fed goes against market expectations and announces that it will not hike rates before 2024, we believe that ‘such a result would be favorable to bitcoin,’ he concludes.
We share this graphic with you to ponder at the conclusion of this weekly letter. Bitcoin has indeed just passed the $ 3.5 trillion mark traded on the blockchain since its inception. 3,500 trillion without a single fault in the network, allowing near instantaneous transactions, without any government or bank standing between sender and receiver. It is sometimes good to remember that beyond short-term price variations and investor expectations, there lies the real revolution.
The technical portrait is located where it has been for several weeks now, namely in good shape. Yesterday’s rebound above the 30-day moving average formed a “hammer” candle, a classic bullish indicator. This low also represents a lower low in the uptrend that started in the fall. Admittedly, the continuation of the rebound today is not exactly convincing, but it does not worry considering the expectations for the Fed and the day so far bearish for the Nasdaq. A continuation of the rise and the discovery of new highs remains the most plausible scenario in our eyes at this time.
A last second addition to this letter which must be sent in a moment. CNBC has learned that Morgan Stanley is set to become the first major U.S. bank to offer access to bitcoin funds to its high net worth clients. Certainly a positive way to conclude this communication!
This article is brought to you by Fonds Rivemont. The Rivemont Crypto Fund is the first and only actively managed cryptocurrency fund in Canada. RRSP and TFSA eligible. Qualified investors can learn more here.
Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and in no way constitutes investment advice or trading instructions.
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