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Bitcoin Breaches $16K as (Committed) Holders Diss Dalio’s Diss

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Bitcoin briefly climbed above $16,000 for the first time in three years before quickly falling back below the psychological threshold. 

Digital-asset market traders and analysts say the cryptocurrency is likely to make another run higher, with strong demand expected from traditional investors looking for a hedge against inflation, at a time when sellers appear unwilling to part with their bitcoin holdings.   

“Against the backdrop of stimulus from the Federal Reserve, we expect investors holding cash to continue to allocate to bitcoin,” said Kyle Davies, co-founder of the digital-asset fund Three Arrows Capital.

In traditional markets, European shares headed toward their first drop of the week on disappointing earnings reports, and U.S. stock futures pointed toward a lower open. 

A powerhouse panel discussion between Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey is scheduled for 5:45 p.m. central European time (16:45 universal coordinated time, 11:45 a.m in New York). The topic is “central banks in a shifting world.”  

Gold strengthened 0.2% to $1,870 an ounce. 

Read More: Bitcoin Price Breaks Above $16K for First Time in 3 Years

Market Moves

Ok, so apparently hedge fund titan Ray Dalio doesn’t like bitcoin. 

But guess who’s not selling? People who already own it – and look to profit handsomely from doing so. 

The oldest and largest cryptocurrency doubled last year, and it’s doubled again in 2020. Compare that with the Standard & Poor’s 500 Index of large U.S. stocks, which has gained 44% since the start of 2019. 

So what’s happened, according to data extracted from the Bitcoin blockchain, is that holders of a common form of the cryptocurrency are now nearly unanimously in the money – sitting on paper profits, as it were. And that might be because they simply don’t want to part with the digital asset that’s already made them so much money. 

It also means that nobody’s really even close to needing to cut bait. And since many investors view bitcoin as an of out-of-the-money option on economic armageddon, rampant inflation, a revolution in financial technology or all of the above, they’re just letting the bet ride.    

As reported Thursday by CoinDesk’s Omkar Godbole, the percentage of so-called “unspent transaction outputs,” or UTXOs, recently topped 98%, a level not seen since the bull run in late 2017. As well, the number of UTXOs in profit reached a record high of over 110 million. A UTXO is leftover bitcoin after a transaction, akin to receiving change after making a large cash payment.  

“A high percentage of UTXOs in profit potentially signals that there is relatively low sell pressure since there’s a low risk of capitulation,” the cryptocurrency analysis firm Coin Metrics wrote this week in a report.  

Chart showing UTXOs in profit climbing to highest percentage (red line) since 2017. (Coin Metrics) 

Sure, bitcoin might be the biggest bubble the world has ever seen – and the holders might be deluding themselves to believe that these gains can continue forever. It also could be that bitcoin is just at the beginning of that bubble. 

Charlie Morris, CEO of the cryptocurrency fund manager ByteTree, has been arguing all year that bitcoin is really a technology, which partly explains why it has historically traded in sync with the tech-heavy Nasdaq stock index. On Thursday, Morris noted in a newsletter that bitcoin has recently, and noticeably, started to outperform large tech stocks. (See chart below.) 

“Just as investors flock to gold when they see it outperforming the stock market, I believe bitcoin will attract capital from tech,” Morris wrote. “We can be fairly certain that tech is a bubble, yet bitcoin isn’t.”

It just so happens that many hedge funds like Dalio’s Bridgewater tout their own track records when they’re casting about for funds from big investors like pension funds, endowments and rich family wealth offices. (At least one Twitter troll was quick to compare Dalio’s fund performance with bitcoin’s. Spoiler alert: Dalio loses.) 

Whatever the case, bitcoin holders appear satisfied with the cryptocurrency’s performance, and they appear to be sticking with it. 

bitcoin-nasdaq

Chart purporting to show bitcoin breaking away from Nasdaq. (ByteTree) 

Bitcoin Watch

hourly-chart-17

Bitcoin’s hourly price chart.
Source: TradingView

Bitcoin’s first attempt to establish a foothold above $16,000 has failed for now. The cryptocurrency rose to a three-year high of $16,157 early Thursday only to fall back quickly to $15,700. 

The failure to keep gains above the psychological hurdle could be attributed to overbought conditions signaled by technical indicators. 

Analysts told CoinDesk Wednesday that the cryptocurrency is likely to consolidate for a couple of weeks before resuming the uptrend and challenging the record high of $20,000 by the end of December.

It remains to be seen if the bulls take a breather as anticipated by analyst or push for early test of record highs. The latter cannot be ruled out as the market is facing sell-side liquidity issues and it’s easier for the bulls to force rapid price rallies. The options market is showing strong bullish sentiment with the demand for call options outstripping the demand for put options by the most on record. 

The cryptocurrency has recovered back to $15,900 and could soon cross back above $16,000. Another rejection above that level would validate overbought signals and may yield  a bigger pullback than the one seen early Thursday. 

Read More: Bitcoin Likely to Consolidate Before December Rise Toward $20K, Say Analysts

What’s Hot

Ethereum‘s ‘unannounced hard fork’ was trying to prevent the very disruption it caused (CoinDesk) 

DeFi pioneer MakerDAO’s dollar-linked DAI stablecoin breaks $1B market capitalization (CoinDesk) 

Stablecoin issuer TrustToken taps Chainlink (LINK) for on-chain proof of reserves for TrueUSD dollar-linked token (CoinDesk)

U.S. representatives rip OCC Commissioner Brooks for ‘excessive focus’ on crypto industry (CoinDesk)

Bridgewater’s Dalio sees governments banning bitcoin should it become “material” (CoinDesk)

African startups should tokenize debt and equity on blockchain to “break the white man’s curse” (CoinDesk Opinion)  

Pakistan securities regulators publish position paper on regulating digital assets (SEC Pakistan)

Venezuela’s peer-to-peer bitcoin volume relative to the size of its economy is the highest in the world, due to factors including migration, capital controls, risk of government seizure, demand for hard money and exposure to the petro, the cryptocurrency backed by the government (CoinDesk)  

Ethereum heavyweights launch LiquidStake loans to stake the stakers in staking system 2.0 upgrade tests get underway (CoinDesk) 

Flash loans aren’t the problem, centralized price oracles are (CoinDesk Opinion) 

Analogs

The latest on the economy and traditional finance

OPEC deepens forecast for drop in global oil demand, down 10% from 2020 levels, trims expectations for 2021 rebound (WSJ)

U.S. commercial banks are reducing already-low interest rates on customer savings as deposits swell to $15.9T from $13.2T at start of year (WSJ) 

Russia says “Sputnik V” vaccine is 92% effective at preventing coronavirus cases (Reuters) 

Japan’s Nikkei Index hit a near 29-and-a-half-year high on the back of favorable tech shares trading in Asia and the U.S. (Reuters)

Failed IPO of Jack Ma’s Ant Group has led to several companies advancing their own offerings in Hong Kong looking to take advantage of surplus liquidity (Nikkei Asian Review)

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Apple to Debut Faster Watch with Temperature and Glucose Testing Capabilities, AAPL Stock Slightly Up

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Beyond the company’s move in seeking advancement in its smartwatch, it is also working assiduously to explore new areas, notably in the Apple car pursuits.

American multinational technology company Apple Inc (NASDAQ: AAPL) is set to debut a faster model of Apple Watch as the tech giant seeks to beat competitors in terms of product performance. Per a Bloomberg report citing people close to the company’s plans, the proposed new Apple Watches will also brandish the abilities to check temperatures and user’s blood glucose levels.

The Apple Watch was debuted in 2015 and has grown to become a vital part of the Cupertino-based company’s product suite. While the watches have seen bigger upgrades in times past, the currently scheduled boost will place it at the echelon of smartwatches with unique capabilities in the market. The temperature check feature became a necessity following the advent of the COVID-19 pandemic, and the increased demand for handy temperature checkers.

As against the usual format for checking blood glucose levels, the feature designed into the Apple Watches will not involve pricking fingers for traces of blood. Instead, the Apple technology will analyze the blood without being invasive, according to the Bloomberg report. The new model dubbed the Apple Watch Series 7 also has a faster processor, improved wireless connectivity, and an updated screen. 

The Apple Watch with the temperature capability may not be hitting the market until the next year 2022, while that designed to check blood glucose may take a couple more years before it is available commercially.

Apple stock is currently trading at $127.79 in the pre-market, representing a growth of 0.35% from the previous close.

Beyond Apple Watch, the Company Is Expanding Its Product Suite

One of the major tenets of the top technology companies including Apple is the ability to innovate and match with the competition. Beyond the company’s move in seeking advancement in its smartwatch, it is also working assiduously to explore new areas, notably in the Apple car pursuits.

While the details of the Apple self-driven car production remain sketchy, CEO Tim Cook once confirmed the firm is building its tech in autonomous systems. Per his word;

“We’re focusing on autonomous systems. It’s a core technology that we view as very important. We sort of seeing it as the mother of all AI projects. It’s probably one of the most difficult AI projects actually to work on.”

Many have attributed this comment to the proposed self-driven cars which have been spotted on many occasions being tested by the company on the streets of California. The latest update from the Apple cars involves the potential pursuit of a partnership with either Contemporary Amperex Technology Co. Ltd. (CATL) and BYD Ord Shs A (SHE: 002594) for Lithium Iron phosphate batteries supply, according to an earlier Coinspeaker report.

The deal has neither been confirmed by either Apple or the two companies, however, people close to the matter noted the conditions to set up a plant in the United States set by the former is of disinterest in CATL. The cost considerations and the unrest between Washington and Beijing are the major considerations to pull the deal through.

Apple’s ties with Chinese firms are well engrafted as the assembling of the proposed upgraded main Apple Watch will be done by Luxshare Precision Industry Co Ltd (SHE: 002475). The Apple Watch SE is billed to be assembled by Foxconn Technology Co Ltd (TPE: 2354) alongside Taiwan’s Compal Electronics Inc (TPE: 2324).

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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El Salvador Becomes First Country to Accept BTC as Legal Tender, Its Cogress Approves Bitcoin Law

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President Bukele said the country may explore Bitcoin mining as a way to put its geothermal energy option to full use.

Latin American nation, El Salvador has made history as the first country to accept premier digital currency, Bitcoin (BTC) as a legal tender. Per a Coindesk report, a supermajority in the country’s legislative arm voted in favor of the Bill proposed by President Nayib Bukele to officially recognize the cryptocurrency as an official currency to complement the United States Dollar it currently uses.

Bitcoin has come a long way from when it was first introduced by Satoshi Nakamoto with the publishing of the currency’s Whitepaper in 2008, and the eventual launch of the currency in 2009. Since then, the coin has been tossed around in many scenarios, some encouraged its growth, and others largely held it bound. Government regulations, energy consumption criticisms to mention a few accounts for the latter, however, events in the past year seeing multinational corporations begin to invest and acquire the digital currency stirred the changes we are seeing today.

While many governments are exploring means to clamp down on crypto and Bitcoin activities, in particular, the El Salvadoran legislature has teamed up with Bukele to back the coin for its uniqueness. The vote that passed the bill came with 62 members voting in favor, 19 voting against, and 3 abstentions. The nation’s move is against the norm and there are plans for government officials to go explain the plans of the new law to the International Monetary Fund (IMF).

Bitcoin Is a Legal Tender in El Salvador: Here’s What to Expect

With Bitcoin becoming an official legal tender – as will be finalized when President Bukele signs it into law – businesses are now mandated to accept the cryptocurrency for payments. Beyond payments, all forms of taxes can be paid using BTC, transactions or investments involving Bitcoin will not be subjected to a capital gains tax.

The acceptance of Bitcoin as a legal tender is not targeted at offsetting the role of the Dollar in the country’s payment ecosystem and will serve as the reference point for the new form of money. The issue of volatility is also going to be addressed through a Trust that will be opened at the Development Bank of El Salvador. This trust is going to help mitigate the risks associated with price fluctuations as it will help merchants in the conversion of their Bitcoin holdings to Dollar in real-time. An initial allocation of $150 million will be made into the new Trust.

“If there’s an ice cream parlor, he doesn’t really want to take the risk, he has to accept bitcoin because it’s a mandated currency but he doesn’t want to take the risk of convertibility, so he wants dollars deposited in his banking account, when he sells the ice cream, he can ask the government to exchange his bitcoin to dollars,” said President Bukele in a Twitter Space conversation hosted by Nic Carter of Castle Island Ventures. “Of course he can do that in the markets also but he can ask the government to do it immediately.”

In addition, President Bukele said the country may explore Bitcoin mining as a way to put its geothermal energy option to full use.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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Robinhood IPO on Horizon with $30 Billion Valuation Expected

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Robinhood IPO will offer over 22 million Class A shares, whereby they will be priced at $16-$19 per stock.

Robinhood Markets Inc, an America-based fintech company, has inched its way towards a $30+ billion IPO deal following immense growth in the past year. Its rapid development is attributed to its trading platform’s user-friendliness and simplicity, making it popular among the younger generation. Currently, it boasts of about 13 million users and a net value of over $11 billion having experienced a revenue ascent to around $260 million in 2020 from around $110 million in 2019.

Nevertheless, Robinhood has faced heavy backlash and lawsuits in the past year. The iconic Berkshire Hathaway investor Warren Buffett discredited the company’s reputation for easy trading by saying that it promotes a casino-like behavior. His partner Charles Munger backed him up saying it makes the stock market a gamblers’ ground and it makes money in “dirty ways”.

Additionally, a complaint was filed by Massachusetts regulators against Robinhood. Accusations ranged from their gamification of trading and use of aggressive methods to failure in preventing disruptions and outages in their trading platform. Rich Repetto, a brokerage analyst from Piper Sandler, reported that the company’s “zero commission” statement was true, however, its order flow payments and high trading volumes did more than cater for the revenue gap.

Furthermore, multiple class-action lawsuits have hit the company following their trading outages last year. Many users reported being locked out of the trading platform during major moves. Recently also, users reported restrictions from purchasing volatile stocks and unresponsive customer service.

Robinhood reacted to critics, saying that their users preferred the new way of trading compared to traditional methods. The company also reiterated its transparency and distanced itself from any conflicts of interest in its business model. More recently, the company has improved their customer service one of their customers committed suicide.

Amidst the chaos, Robinhood’s iOS downloads increased exponentially and more than $3 billion was raised by venture capitalists.

Bigger Picture on Robinhood IPO

Robinhood completed all requirements for its $30+ billion IPO offering, with Nasdaq as its stock exchange preference. It also widened its executive team to include Silicon Valley and Wall Street veterans such as Amazon’s Jason Warnick.

Silicon Valley’s unicorn has continued to express its novelty by allowing non-professional investors access to its shares before its IPO debut. Robinhood IPO will offer over 22 million Class A shares, whereby they will be priced at $16-$19 per share. Consequently, Robinhood users can now purchase the company’s shares on the Robinhood app. This move is intended to decentralize investment by making it accessible to people of diverse financial status rather than professional traders and the wealthy few.

To encourage both novice and experienced investors, Robinhood has provided prospectus with detailed information on its IPO including its business model, administrative personnel, and risks of investment.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
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