SWIFT Aims to Test Tokenization in 2022, Clearstream, Northern Trust, SETL to Participate

December 24, 2021 Bitcoin.com

Fish food? Data shows retail investors are buying Bitcoin, whales are selling

December 16, 2021 Coin Telegraph

Bitcoin

The number of Bitcoin addresses holding less than 1 BTC has been rising in the face of a 30% price correction from $69,000.

Bitcoin (BTC) staged an impressive recovery after dropping to its three-month low of $42,333 on Dec. 4, rising to as high as $51,000 since.

The BTC price retracement primarily surfaced due to increased buying activity among addresses that hold less than 1 BTC. In contrast, the Bitcoin wallets with balances between 1,000 BTC and 10,000 BTC did little in supporting the upside move, data collected by Ecoinometrics showed.

"Bitcoin is still stuck in a situation where small addresses are willing to stack sats [the smallest unit account of Bitcoin], while the whale addresses aren't really accumulating," the crypto-focused newsletter noted after assessing the change in Bitcoin amounts across small and rich wallet groups, as shown in the graph below.

*Bitcoin on-chain data featuring fish and whale BTC wallet clusters. Source: Ecoinometrics*

Ecoinometrics further asserted that the situation for Bitcoin is "not ideal," suggesting that the BTC price may end up resuming its decline in the absence of influential buyers.

Bitcoin's downside target sits near $42K

Ecoinometrics' bearish outlook appeared as Bitcoin grappled with the Federal Reserve's policy decision on Wednesday to reduce its bond purchases by $30 billion every month to unwind them down by April next year entirely.

The $120 billion a month stimulus program was instrumental in sending the BTC price from below $4,000 in March 2020 to $69,000 in Nov 2021. And now that the liquidity threatens to go away, with lending to become costlier as the Fed prepares for three rate hikes next year, many fear that it would hurt investors' appetite for risk assets like Bitcoin.

Bitcoin price briefly popped above $49,000 after the Fed FOMC meeting confirmed at least three interest rate hikes and some adjustments to the current market supporting practices in 2022. https://t.co/TpTX7tGmYL pic.twitter.com/lXw47icZmB
— Cointelegraph Markets (@CointelegraphMT) December 15, 2021

Mike Novogratz, chief executive officer of Galaxy Digital Holdings, admitted that Bitcoin might feel "pain ahead" but anticipated that its price would not fall anywhere beyond the $42,000-support.

“$42,000 is at a pretty important level, and low 40s should hold,” the crypto billionaire told Bloomberg TV in an interview Tuesday, adding:

"So much money is pouring into the space, it would make no sense that the crypto prices would go much below that. If you’re long, it feels painful, but it’s probably healthy."

*BTC/USD daily price chart showing $40K-42K support. Source: TradingView*

Bitcoin accumulation stronger among retail

In reality, unique wallets holding more than or equal to 1,000 BTC have been declining all across 2021, with data from Glassnode showing its number dropping to 2,147 from 2,475 since Feb. 9.

*The total number of Bitcoin addresses with at least 1,000 BTC balance. Source: Glassnode*

In contrast, the number of unique wallets holding at least 0.01 BTC (around $485 at current exchange rates) rose in 2021, from 8.46 million to 9.39 million year-to-date.

Meanwhile, addresses holding at least 0.1 BTC (~$4,855) surged from 3.12 million to 3.30 million in the same period, indicating that "fishes" played a key role in pumping the Bitcoin price from around $30,000 to as high as $69,000 this year.

*The total number of Bitcoin addresses with at least 0.01 BTC and 0.1 BTC balance. Source: Glassnode*

One more piece of evidence showing that retail investors have been bullish on Bitcoin, came from addresses that hold at least 1 BTC.

These wallets decreased in quantity in the first half of 2021 as the BTC market grappled with the China ban and other negative news, but started increasing the second half as El Salvador adopted Bitcoin as its legal tender.

*The total number of Bitcoin addresses with at least 1 BTC balance. Source: Glassnode*

The number of Bitcoin wallets with at least 1 BTC also kept rising during the BTC price correction from $69,000 to $42,333 in the November-December session, signaling accumulation. It reached a seven-month high on Wednesday just as Bitcoin underwent a rebound to $50,000 from its weekly low near $46,000.

On-chain analyst Willy Woo also spotted retail accumulation rising to levels seen after the March 2020 crash, which led to Bitcoin's two-year-long bull run.

*Accumulation among wallets holding less than 1 BTC. Source: WIlly Woo*

Additionally, Bitcoin's momentum indicator that preceeded its price breakout to $69,000 earlier this year is also hinting at a potential BTC price breakout ahead.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cardano’s ADA price eyes 30% rally with a potential ‘triple bottom’ setup

December 14, 2021 Coin Telegraph

ada

The only glitch in the bullish setup, for now, remains the Federal Reserve’s taper acceleration plans.

Cardano (ADA) may rally by nearly 30% in the coming days as it forms a classic bullish reversal pattern.

Sharp ADA rebound underway

Dubbed “triple bottom,” the pattern typically occurs at the end of a downtrend and consists of three consecutive lows printed roughly atop the same level. This means triple bottoms indicate sellers’ inability to break below a specific support level on three back-to-back attempts, which ultimately paves the way for buyers to take over.

In a perfect scenario, the return of buyers to the market allows the instrument to retrace sharply toward a higher level, called the “neckline,” that connects the highs of the previous two rebounds. The move follows up with another breakout, this time taking the price higher by as much as the distance between the pattern’s bottom and neckline.

So far, ADA’s price has been able to paint the triple bottom halfway, now rebounding after forming the third low, as shown in the chart below.

*ADA/USD 4-hour price chart featuring triple-bottom setup. Source: TradingView*

The point at which ADA’s price reversed was accompanied by a rise in trading volume, suggesting that the rebound had enough backing from buyers. Therefore, Cardano’s token looks poised to at least pursue a run-up toward $1.40.

Moreover, if the price further breaks above the neckline level decisively, it will likely continue to rally until it hits $1.63 — as per the triple bottom scenario.

Accumulation area

The potential triple bottom scenario emerged after ADA’s price plunged by more than 60% from its record high of $3.16 achieved on Sept. 2 earlier this year. It also surfaced as the Cardano token became one of the worst performers quarter-to-date, dropping nearly 45.50% compared to its top rival Ether’s (ETH) 15% gains.

ADA’s multi-month selloff pushed its daily relative strength index (RSI), a momentum indicator, into oversold territory. In addition, ADA’s price drop also led it to what appears like a dependable “accumulation area,” as shown in the chart below.

*ADA/USD daily price chart featuring accumulation area and oversold RSI. Source: TradingView*

Both RSI and the accumulation area also point to a buying scenario in the ADA market, thus supporting the triple bottom scenario on the four-hour chart.

Risks remain for ADA’s price

It is important to notice that ADA dropped by more than 5.50% in the past 24 hours, much in sync with other top crypto assets in the space, with Bitcoin (BTC) sinking by over 3% and Ether by almost 5% in the same period.

At the core of the crypto market’s uniformed decline was the United States Federal Reserve’s two-day policy meeting starting Tuesday. In the meetup, the U.S. central bank will likely decide to accelerate the tapering of its $120-billion-a-month asset-purchasing program, one of the key catalysts behind the crypto and stock market rally since March 2020.

Other parts of the Fed meeting will see the officials discussing the prospects of rate increases next year from its current near-zero levels. Cheaper lending had also played an important role in pushing the Bitcoin and altcoin market prices higher across 2020 and 2021, including ADA.

As Fed officials initiate their policy meeting, ADA is testing $1.18 as its weekly support for a potential price rebound. The $1.18 level is the 0.618 Fib line of what appears to be an accurate Fibonacci retracement graph in predicting ADA’s support and resistance levels.

*ADA/USD weekly price chart. Source: TradingView*

Should ADA fail to rebound and close below $1.18, its next Fib support may come at the 0.786 Fib line near $0.674, around 42% below. Nonetheless, ADA/USD may also test $1 as psychological support for an early upside retracement, similar to its multiple rebounds between February and July 2021.

Austria Plans to Tax Cryptocurrencies Like Stocks, Vows Equal Treatment

November 12, 2021 Bitcoin.com

China’s Real Estate Giant Evergrande Narrowly Dodges Default for Third Time in 30 Days

November 11, 2021 Bitcoin.com

French central bank pilots blockchain-based CBDC for debt market

October 19, 2021 Coin Telegraph

Banks

Led by Belgian financial services firm Euroclear, the latest French CBDC trial involved a system by tech giant IBM.

The central bank of France continues actively exploring a central bank digital currency (CBDC), completing a significant trial of a blockchain-based CBDC in the country’s debt market.

Over 500 institutions in France have participated in a 10-month experiment testing a CBDC issued by Banque de France for government bond deals, The Financial Times reported Oct. 19.

The CBDC trial was led by Belgium-based financial services firm Euroclear and used a system developed by American technology giant IBM. The CBDC test also involved the French public debt office alongside the central bank and a consortium of major financial companies operating in France, including firms like BNP Paribas, Crédit Agricole CIB, HSBC and Société Générale.

As part of the trial, the participants traded government bonds and security tokens, settling them using a CBDC supplied by the central bank. The project tested use cases of a CBDC in a range of everyday activities, such as issuing new bonds, using them in repurchase agreements, as well as paying coupons and redeeming deals.

“We have together successfully been able to measure the inherent benefits of this technology, concluding that the central bank digital currencies can settle central bank money safely and securely,” Euroclear executive Isabelle Delorme said.

According to Soren Mortensen, global director of financial markets at IBM, the project “went well beyond previous blockchain initiatives” because it successfully trialed “most central securities depository and central bank processes” while cutting off existing interim steps like reconciliation between market intermediaries.

After launching an experimental CBDC program in March 2020, the central bank of France has been consistently testing various CBDC use cases. In June, Banque de France tested a CBDC to simulate the settlement and delivery of listed securities in collaboration with Swiss cryptocurrency bank SEBA. Previously, the central bank piloted a CBDC to issue $2.4 million worth of simulated shares using a private blockchain platform.

Salvadoran President Nayib Bukele Taunts Economist Steve Hanke After Bitcoin’s Price Skyrockets

October 17, 2021 Bitcoin.com

Altcoin roundup: There’s more to DeFi than just providing liquidity

September 24, 2021 Coin Telegraph

bitcoin options

Bitcoin price is down but crypto investors still have a plethora of yield opportunities thanks to DeFi.

The growth of the decentralized finance (DeFi) sector has been a recurrent headline throughout 2021 and to date, hundreds of billions of dollars in crypto assets are locked on protocols across numerous blockchain networks and earning a yield for their holders.

What started off as a simple Ethereum-based swap interface that allowed ERC-20 tokens to be exchanged in a decentralized manner, called Uniswap, has exploded into a vast ecosystem full of decentralized exchanges, yield farms, lending protocols and staking platforms.

As development continues and older protocols become more established, newer projects have emerged to incorporate more pieces from the traditional financial realm into the DeFi arena as digital technology slowly transforms the global financial system.

Here’s a look at some ways for users to get involved with DeFi outside of simply staking in liquidity pools or depositing to a lending protocol.

Decentralized derivatives trading

Cryptocurrency derivatives exchanges have long been a target for regulators, and once defiant exchanges like BitMEX and Binance have found themselves bending to the will of the law and modifying their operating practices as they seek a more legitimate standing.

This has furthered the necessity for crypto traders to have a decentralized option and led to the creation of protocols like dYdX and Hegic, which offer similar services without the target that is a centralized structure for regulators to come after.

DYdX is a non-custodial perpetuals trading platform built on a layer-two protocol that operates on the Ethereum network and offers users access to up to ten times leverage on futures contracts for more than twenty cryptocurrencies.

Hegic is an on-chain options trading protocol that utilizes hedge contracts and liquidity pools to offer options contracts that last up to 90 days and can payout in Ether (ETH), Wrapped Bitcoin (WBTC) or USD Coin (USDC).

The maximum period of holding options on Hegic has been lowered from 90 to 30 days . All previously acquired options are not affected by this change.

The max. period will be adjusted based on the current volatility in order to protect active LPs from selling vol too cheap. pic.twitter.com/JiVBVH5xD2
— Hegic (@HegicOptions) September 8, 2021

Both of these platforms offer users access to these advanced trading products without the need to divulge their identities, as is required on the centralized counterparts.

Bonding, rebase and ultra-high APY tokens

One topic that is increasingly popping up more in financial discussions is the concept of how to create a decentralized reserve currency that is free of the control of any government or centralized financial institution.

Olympus aims to address this issue through a decentralized autonomous organization (DAO) platform which offers staking and various bond offerings including the ability to bond Ether, MakerDAO (DAI), Liquidity USD (LUSD) and Frax (FRAX).

We just launched our third reserve bond, $LUSD! Welcome @LiquityProtocol to the Olympus Treasury. pic.twitter.com/34IKpTFG5l
— OlympusDAO (@OlympusDAO) September 22, 2021

The bonding process on Olympus is basically a cross between a fixed income product, a futures contract and an option. Bonders are provided with a quote outlining terms for a trade at a future date and include a predetermined amount of the protocol’s native OHM token that the bonder will receive once the vesting period is complete.

Funds that are raised by bond offerings go into the Olympus treasury as collateral to back the OHM tokens that were minted, helping to provide the underlying value behind the OHM token which allows it to be used as a reserve currency or medium of exchange.

The only other projects that have a treasury that provides the underlying value for each token are stablecoins, but as the name implies their price is fixed whereas the price of OHM can increase, offering a new avenue of yield for users.

Once bonding is complete, users can sell their OHM on the open market or stake them on the Olympus protocol for a current yield of 7,299%.

Crowd loan participation on Polkadot and Kusama

Another way crypto holders can put their assets to work while also helping the cryptocurrency ecosystem expand is through participating in the parachain auctions in the Polkadot and Kusama ecosystems through a process known as a crowd loan.

In the auction process, different projects vie for one of the limited parachain slots that connect the project directly to the main Kusma or Polkadot network, facilitating the interconnection of all parachains in the ecosystem.

With crowdloans, users who hold the native KSM and DOT tokens can “contribute” them towards the pool that a project uses to secure a parachain slot, and they will have their tokens returned after a specified lock-up or bonding period that can last for up to one year.

Current #Kusama crowdloan stats:
☛ ~995k $KSM contributed to 16 projects
☛ ~88% (~875k $KSM) contributed to the 5 leading projects which means ~175k $KSM in average so far.
☛ This 88% equals ~78% of KSM contributed to the first 5 parachains.

These auctions are a huge success!
— Fabs (@fabsbags) September 21, 2021

In exchange for their contribution and inability to earn staking rewards for the period that the tokens are locked up, users receive a specified number of tokens for the new protocol which can then be used in the ecosystem or sold on the market.

This approach offers a less risky yield opportunity for token holders, as all principal contributions are locked in a smart contract and returned after the stipulated lock-up period. And by the nature of the parachain auction process, there have been well-developed projects with larger communities that have secured parachain slots, increasing the chance that their tokens will maintain or increase in value as long development for the protocols stays active.

Aside from the threat of regulation, the DeFi ecosystem is showing few signs of slowing its integration of the best parts of the traditional financial system and developing innovative protocols that level the playing field for retail investors.

Want more information about trading and investing in crypto markets?

Three reasons why Polkadot is en-route to a new all-time high even after a 256% rally
Kusama network set to launch its next five parachain auctions
Data shows parabolic-style growth in layer-two-based DeFi and DEX platforms
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Coinbase applies to trade crypto futures

This Under-the-Radar Altcoin Is Up 34% This Week Despite the Crypto Market Correction

September 22, 2021 The Daily Hodl

3 reasons why a Bitcoin ETF approval will be a game changer for BTC price

August 31, 2021 Coin Telegraph

Amundi

A Bitcoin ETF approval will open the door for more conservative investors and this could have an irreversible impact on BTC price.

Some financial experts believe that the price of cryptocurrencies is solely driven by investors' speculation, and in the past few years detractors have suggested that fixed income instruments like treasury bills have no relation to do with digital assets. This point of view is fairly accurate because, at this time, most investors from the asset class are not allowed to invest in Bitcoin (BTC) and altcoins.

Public pension funds, retirement plans, fixed income and most non-leverage equity and multimarket mutual funds can only invest in certain asset classes. These limits arise from the fund class regulation, the fund's own bylaws, and the administrator's risk assessment.

Not every fund can invest in Grayscale's GBTC Trust

Unbeknownst to most, the mutual fund manager does not have absolute control of the investment decision. The fund administrator is a third-party company that acts as an intermediary between the fund manager and investors to verify and distribute assets tied to investments.

Therefore, the fund administrator might rule that a particular instrument poses a significant risk and either limit the exposure or deny access to it. The trust fund, in this example, is the investment vehicle used by the Grayscale Bitcoin (GBTC), and it involves an issuer credit risk.

*Amundi funds breakdown by asset class. Source:* *Amundi.com*

Global asset managers will typically have a 30% to 60% fixed income exposure, so it is very unlikely to have any exposure to cryptocurrencies. Amundi, the leading European investment firm with over $2.1 trillion of assets under management, is a good example.

According to BCG Group, the global asset industry has surpassed $100 trillion, with North America holding nearly 50% of this figure. Unfortunately, these astronomical figures cause analysts to incorrectly relate those numbers to the Bitcoin ETF instrument.

#Grayscale has partnered BNY Mellon, the world's largest custodian bank with $41 Trillion in assets in custody. In Feb 2021, #BNYMellon announced they were entering the #Crypto space. Big move by Grayscale in the battle for a #Bitcoin ETF.@Grayscale @BNYMellon #etf #bitcoinetf pic.twitter.com/RfSO7UOKGS
— Thinking Crypto - YouTube Channel & Podcast (@ThinkingCrypto1) July 13, 2021

According to Reuters, more than half of all investment-grade corporate bonds in the eurozone now trade with negative yields. This includes $7.7 trillion worth of government debt and accounts for 70.8% of the total.

Financial Times has reported that the value of the global negative-yield debt has surpassed $16.5 trillion, fueled by investors' more pessimistic outlook and bond purchases by central banks.

Investors will gradually exit fixed income strategies

There's reason to believe that investors getting negative yields will eventually move to riskier assets, although it is improbable that a total shift to cryptocurrencies will occur. However, the most likely beneficiaries are non-leverage multi-assets and alternative investments as these instruments usually carry lower risk than equities and high-yield structured assets and bonds.

Consequently, an eventual Bitcoin ETF approval by the U.S. Securities and Exchange Commission (SEC) will open the doors for a vast array of funds that are currently shut out from cryptocurrency exposure.

Even if the ETF is exclusively reserved for a part of the equities and multi-asset classes, the new instrument doesn't need to capture $500 billion to propel Bitcoin's market capitalization above $2 trillion. Less than 2.5 million coins are deposited on exchanges, equivalent to $125 billion readily available for trading.

Commodity funds are the best candidate

According to iShares, the value of global commodities exchange-traded products adds up to $263 billion. Considering not every mutual fund is listed, it is reasonable to assume that the actual number surpasses $500 billion.

This means that a mere 1% allocation from this specific asset class is equal to $5 billion, and such an investment would surely be enough to propel the Bitcoin price above its $65,000 all-time high.

If and when a BTC ETF is approved, traders will front-run the potential inflow as soon as the approval is announced, regardless of whether the products capture only $5 billion in the first couple of months.

As long as governments and central banks continue injecting liquidity, buying bonds and issuing stimulus packages, there will be a gradual inflow to riskier assets, increasing the demand for the ETF.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

bonds