Ethereum, Hedge Funds, Bitcoin, Newsletters, First Mover

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.â€

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.

Ethereum, Hedge Funds, Bitcoin, Newsletters, First Mover
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.â€

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.

– Bradley Keoun

Ethereum, Hedge Funds, Bitcoin, Newsletters, First Mover
Chart purporting to show bitcoin breaking away from Nasdaq. (ByteTree) 

Bitcoin Watch

Ethereum, Hedge Funds, Bitcoin, Newsletters, First Mover
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.

– Omkar Godbole

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)

Tweet of the Day

Ethereum, Hedge Funds, Bitcoin, Newsletters, First Mover
Sign up to receive First Mover in your inbox, every weekday.
Du lịch nhật bản, hướng dẫn du lịch Nhật và đánh giá địa điểm Nhật Bản Japan travel news, japan travel guides, japan holiday destinations and japan reviews

RELATED NEWS

Coinbase Says Interest From Pension Funds and Hedge Funds Has Skyrocketed, Institutional Holdings Soar 170%

The Nasdaq-listed cryptocurrency exchange Coinbase has revealed record growth in its institutional business. “This year, interest from pension funds and hedge funds has skyrocketed, supported by the roll-out of crypto-ETPs as well as an increased understanding of the crypto economy,†said Coinbase. Coinbase Sees Interest From Institutional Investors Skyrocketing Cryptocurrency exchange Coinbase (Nasdaq: COIN) reportedly […]

Xem chi tiết: Coinbase Says Interest From Pension Funds and Hedge Funds Has Skyrocketed, Institutional Holdings Soar 170%

Mystery Whale Returns by Moving $35 Million — Miner Transfers 1,000 ‘Sleeping Bitcoins’ from 2010

Two months after the mystery mining whale from 2010 transferred a string of 20 block rewards with 1,000 bitcoin on March 23, it seemed as though the entity was finished, after spending 10,000 bitcoin total. However, it took 78 days for the whale’s next move, as another 20 blocks from 2010 were transferred on Wednesday […]

Xem chi tiết: Mystery Whale Returns by Moving $35 Million — Miner Transfers 1,000 ‘Sleeping Bitcoins’ from 2010

Commodity Strategist Mike McGlone Says $40K BTC Target ‘More Likely’ Than $20K

Bloomberg Intelligence senior commodity strategist Mike McGlone believes bitcoin is “more likely†headed for $40K instead of $20K after discussing the possibility of capitulation in a recent tweet. McGlone’s opinion follows a number of predictions that say bitcoin could drop to the $20K zone if there’s more pullback in the cards. Bloomberg Commodity Strategist Suggests […]

Xem chi tiết: Commodity Strategist Mike McGlone Says $40K BTC Target ‘More Likely’ Than $20K

Crypto Payments App Bottlepay Is Now Available Across Europe

U.K.-based crypto payments provider Bottlepay has started offering services in other European countries. Users on the Old Continent will be able to send and receive even small amounts of euro and also buy, store and spend bitcoin with merchants accepting cryptocurrency. Bottlepay Promises Low-Cost Transactions in Euro and Bitcoin The Bottlepay app will allow Europeans […]

Xem chi tiết: Crypto Payments App Bottlepay Is Now Available Across Europe

Mike Novogratz: Bitcoin Investors Waiting for a New Narrative Shift

Mike Novogratz declared institutional investors are waiting for the next narrative shift in a recent interview at the Bitcoin 2021 conference in Miami. The CEO of Galaxy Digital thinks the market is now in a consolidation phase after the price crash last month. Novogratz also commented on what the rise of defi could mean for […]

Xem chi tiết: Mike Novogratz: Bitcoin Investors Waiting for a New Narrative Shift

NYAG Court Order to Shut Down Coinseed Succeeds, CEO Creates Profanity Token for Attorney General

The crypto trading platform Coinseed is shutting down operations according to a written statement from the company’s CEO Delgerdalai Davaasambuu. A court order secured by New York Attorney General Letitia James told Coinseed to halt all of its operations. Following the announcement of the shutdown, Coinseed’s CEO said he created an ERC20 token called “FLJ†[…]

Xem chi tiết: NYAG Court Order to Shut Down Coinseed Succeeds, CEO Creates Profanity Token for Attorney General

Grand Theft Auto 6 to Feature a Fictional Cryptocurrency

One of the biggest franchises in the videogame industry, Grand Theft Auto, will feature in-game payments of “bitcoin†or another fictional cryptocurrency. Contractors will pay the player with this currency when they need to make anonymous, untraceable payments. This would constitute another push for Bitcoin awareness into mainstream media culture. Grand Theft Auto 6 to […]

Xem chi tiết: Grand Theft Auto 6 to Feature a Fictional Cryptocurrency

Bitcoin Keys Cannot be Hacked: Skeptics Question the Official Colonial Pipeline Bitcoin Seizure Story

On June 7, the United States Justice Department and the Federal Bureau of Investigation (FBI) announced the “recovery†of 63.70 bitcoin from the funds Colonial Pipeline sent to the hackers. The official story has a number of inconsistencies and federal investigators did not disclose how the FBI was able to confiscate the Darkside gang’s private […]

Xem chi tiết: Bitcoin Keys Cannot be Hacked: Skeptics Question the Official Colonial Pipeline Bitcoin Seizure Story

Alternative 401(k) Product Offers In-Plan Cryptocurrency Investment via Coinbase Institutional

El Salvador Offers No Capital Gains Tax, Permanent Residence to Crypto Entrepreneurs

White House Tech Advisor Tim Wu Keeps at Least $1 Million in Bitcoin

White House Tech Advisor Tim Wu Keeps at Least $1 Million in Bitcoin

Solana Aims to Raise $450 Million to Battle Ethereum Supremacy

Alternative 401(k) Product Offers In-Plan Cryptocurrency Investment via Coinbase Institutional

Scammers Pick Bank Transfers Over Cryptocurrency, Australian Report Reveals

As Crypto Interest Winds Down Bitcoin’s Daily Transaction Rate Plummets to Two-Year Lows