Crypto Prices

Crypto Market Roundup — CORE and WIF Outshine in a Week of Market Volatility

April 1, 2024 Bitcoin.com

Russia’s Yandex Search Engine Adds Cryptocurrencies to Its Converter

February 20, 2023 Bitcoin.com

Crypto needs ‘adult supervision’ and turmoil to ‘grow up’ — Microstrategy co-founder

February 6, 2023 Coin Telegraph

Bear Market

The bankruptcies of once high-profile crypto players are “painful” but helpful said Michael Saylor but added industry oversight is still needed.

High-profile crypto bankruptcies and a hearty price crash are necessary evils to help the industry grow, while greater regulation is a must, according to Microstrategy co-founder Michael Saylor.

In a Feb. 3 interview on CNBC’s Squawk on the Street, Saylor opined on potential incoming United States crypto regulation after the bankruptcy of FTX, saying:

“The crypto meltdown was painful in the short term, but it's necessary over the long term for the industry to grow up.”

He added the industry “has some good ideas” — implying the Bitcoin (BTC) Lightning network — but added some in the space “implemented those good ideas in an irresponsible fashion.”

Today’s interview with @MorganLBrennan covered the success of @MicroStrategy, global adoption of #Bitcoin and #Lightning⚡️, the evolution of the crypto industry, and the digital transformation of money. pic.twitter.com/bEnLOVbpiJ
— Michael Saylor⚡️ (@saylor) February 3, 2023

Saylor said the crypto space needs direction from entities long-involved in the traditional financial markets and input from regulators — in particular the Securities and Exchange Commission (SEC).

“What [the industry] needs is adult supervision. It needs the Goldman Sachs’ and the Morgan Stanley's and the BlackRock’s to come into the industry. It needs clear guidelines from Congress. It needs clear rules of the road from the SEC.”

This “meltdown,” according to Saylor, educated many on crypto while simultaneously revealing that it’s “time for the world to provide a constructive, transparent framework for digital assets” so the financial system can move “into the 21st century.”

Saylor on Munger’s crypto criticism

Saylor also responded to criticisms leveled by Charlie Munger, the vice chair of insurance and investment firm Berkshire Hathaway, saying the 99-year-old investment veteran should take time to study Bitcoin.

On Feb. 1, Munger opined that crypto is “not a currency, not a commodity, and not a security” instead calling it “gambling” and believing the U.S. should “obviously” bring in laws to ban crypto.

Saylor agreed Mungers crypto-criticism wasn’t “totally off” but there are “10,000 crypto tokens which aren’t gambling,” adding:

“Charlie and the other critics, they're members of the Western elite and they're continually prodded for an opinion on Bitcoin and they haven't had the time to study it.”

He added if Munger “spent 100 hours studying” Bitcoin then “he would be more bullish on Bitcoin than I am.”

Saylor pointed to emerging markets such as Lebanon, Argentina and Nigeria which have high crypto-use rates and use cases spanning from inflation hedging to remittances.

“I've never really met someone [...] that spent some time to think about it that wasn't enthusiastic about Bitcoin.”

Crypto Winter No Longer Has Big Impact on Long-Term Industry Growth, EY Executive Says

November 26, 2022 Bitcoin.com

3 emerging crypto trends to keep an eye on while Bitcoin price consolidates

October 14, 2022 Coin Telegraph

Coin Telegraph

BTC’s price is range-bound, giving other assets room to gain a foothold in an otherwise down market.

This week, Bitcoin’s (BTC) price took a tumble as a hotter-than-expected consumer price index (CPI) report showed high inflation remains a persistent challenge despite a wave of interest rate hikes from the United States Federal Reserve. Interestingly, the market’s negative reaction to a high CPI print seemed priced in by investors, and BTC’s and Ether’s (ETH) prices reclaimed all of their intraday losses to close the day in the black.

A quick look at Bitcoin’s market structure shows that even with the post-CPI print drop, the price continues to trade in the same price range it has been in for the past 122 days. Adding to this dynamic, Cointelegraph market analyst Ray Salmond reported on a unique situation where Bitcoin’s futures open interest is at a record high, while its volatility is also near record lows.

These factors, along with other indicators, have historically preceded explosive price movements, but history will also show that predicting the direction of these moves is nearly impossible.

So, aside from multiple metrics hinting that a decisive price move is brewing, Bitcoin is still doing more of the same thing it’s done for the past 4.5 months. With that being the case, it is perhaps time to start looking elsewhere for emerging trends and possible opportunities.

Here are a few data points that I’ve continued to be intrigued by.

New rotations will emerge

ETH’s price has lost its luster in the now post-Merge era, and the asset now reflects the bearish trend that dominates the rest of the market. Since the Merge, ETH’s price is down 30% from its $2,000 high, and it’s likely that a good deal of the speculative capital that backed the bullish Merge narrative is now in stablecoins looking for the next investment opportunity.

Aside from ETH being an asymmetrical performer in the last four months, Cosmos (ATOM) also defied the market downtrend by posting a monster rally from $5.40 to $16.85. As covered thoroughly by Cointelegraph, oversold conditions, along with the hype of Cosmos 2.0, backed the bullish price action seen in the altcoin, but this chart continues to capture my imagination.

*ATOM emissions schedule (old vs. new). Source: Cosmos Hub*

According to the revised Cosmos white paper, the current supply of ATOM will dynamically adjust based on the supply and demand of its staking. As shown in the chart above, when Cosmos 2.0 “kicks in” for the first 10 months, issuance of new ATOM tokens is high, but after the 36th month, the asset becomes deflationary.

*ATOM/USDT 3-day chart. Source: TradingView*

From the vantage point of technical analysis, ATOM’s price appears to have hit a local top as the months leading up to Cosmos 2.0 were a “buy the rumor, sell the news” type of event, but it will be interesting to see what transpires with ATOM’s price as the market approaches month 20 in the diagram above.

Keep an eye on Ethereum Network activity

*Ether emissions plummet post Merge. Source: Delphi Digital*

Since the Ethereum Merge, Ether emissions have dropped by 97%, and while the price has pulled back significantly, over the coming months, investors might keep an eye on Ethereum network activity, developments with ETH staking across decentralized finance (DeFi) and institutional products, along with any spikes in gas (connected to network activity).

*Ether supply dynamics. Source: Delphi Digital*

While the price could succumb to bearish pressure in the short term, if the market begins to turn around if new trends trigger increased use of DeFi products, it’s possible that ETH’s price could react positively to those developments.

Post-Merge, BTC price action will likely remain king

While new trends across various altcoins may emerge, it’s important to remember the wider context in which crypto assets exist. Global economies are on the rocks, and persistently high inflation remains an issue in the United States and many other countries. Bond prices are whipsawing, and a looming debt crisis makes its presence known on a daily basis. Risk-on assets like cryptocurrencies are incredibly volatile, and even the strongest price trends in crypto (whether backed by fundamentals or not) are subject to the whimsy of macro factors such as equities markets, geopolitics and other market events that impact investors’ sentiment.

Keeping this in mind, Bitcoin remains the largest asset by market capitalization within the crypto sector, and any sharp moves from BTC’s price are bound to support or suppress the micro trends that might be gaining traction in the market. There is still the possibility of a sharp downside in Bitcoin’s price, so traders are encouraged to calculate investment size according to their own appetite for risk, and while multiple metrics might support opening long positions in various crypto assets, it still seems too early to fully ape in.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.

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.

Pro traders don’t expect Bitcoin to break and hold $20,000 anytime soon

September 29, 2022 Coin Telegraph

Pro traders don’t expect Bitcoin to break and hold ,000 anytime soon

bitcoin crash

Bears have controlled BTC price by forcing 111 daily closes below $25,000 and derivatives data shows a reversal of this trend is highly unlikely.

One hundred and eleven days have passed since Bitcoin (BTC) posted a close above $25,000 and this led some investors to feel less sure that the asset had found a confirmed bottom. At the moment, global financial markets remain uneasy due to the increased tension in Ukraine after this week’s Nord Stream gas pipeline incident.

The Bank of England's emergency intervention in government bond markets on Sept. 28 also shed some light on how extremely fragile fund managers and financial institutions are right now. The movement marked a stark shift from the previous intention to tighten economies as inflationary pressures mounted.

Currently, the S&P 500 is on pace for a consecutive third negative quarter, a first since 2009. Additionally, Bank of America analysts downgraded Apple to neutral, due to the tech giant’s decision to scale back iPhone production due to "weaker consumer demand." Lastly, according to Fortune, the real estate market has shown its first signs of reversion after housing prices decreased in 77% of United States metropolitan areas.

Let's have a look at Bitcoin derivatives data to understand if the worsening global economy is having any impact on crypto investors.

Pro traders were not excited by the rally to $20,000

Retail traders usually avoid quarterly futures due to their price difference from spot markets but they are professional traders' preferred instruments because they prevent the fluctuation of funding rates that often occurs in a perpetual futures contract.

*Bitcoin 3-month futures annualized premium. Source: Laevitas*

The indicator should trade at a 4% to 8% annualized premium in healthy markets to cover costs and associated risks. The chart above shows that derivatives traders have been neutral to bearish for the past 30 days while the Bitcoin futures premium remained below 2% the entire time.

More importantly, the metric did not improve after BTC rallied 21% between Sept. 7 and 13, similar to the failed $20,000 resistance test on Sept. 27. The data basically reflects professional traders' unwillingness to add leveraged long (bull) positions.

One must also analyze the Bitcoin options markets to exclude externalities specific to the futures instrument. For example, the 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 12%. On the other hand, bullish markets tend to drive the skew indicator below negative 12%, meaning the bearish put options are discounted.

*Bitcoin 30-day options 25% delta skew: Source: Laevitas*

The 30-day delta skew has been above the 12% threshold since Sept. 21 and it's signaling that options traders were less inclined to offer downside protection. As a comparison, between Sept. 10 and 13, the associated risk was somewhat balanced, according to call (buy) and put (sell) options, indicating a neutral sentiment.

The small number of futures liquidations confirm traders’ lack of surprise

The futures and options metrics suggest that the Bitcoin price crash on Sept. 27 was more expected than not. This explains the low impact on liquidations. Despite the 9.2% correction from $20,300 to $18,500, a mere $22 million of futures contracts were forcefully liquidated. A similar price crash on Sept. 19 caused a total of $97 million in leverage futures liquidations.

From one side, there's a positive attitude since the 111-day long bear market was not enough to instill bearishness in Bitcoin investors according to the derivatives metrics. However, bears still have unused firepower, considering the futures premium stands near zero. Had traders been confident with a price decline, the indicator would have been in backwardation.

US Treasury yields are soaring, but what does it mean for markets and crypto?

September 29, 2022 Coin Telegraph

bonds

The 10-year U.S. Treasury yield recently hit its highest level in 12 years, but how might this impact investors’ sentiment toward stocks and cryptocurrencies?

Across all tradeable markets and currencies, U.S. Treasuries — government bonds — have significant influence. In finance, any risk measurement is relative, meaning, if one insures a house, the maximum liability is set in some form of money.

Similarly, if a loan is taken from a bank, the creditor has to calculate the odds of the money not being returned and the risk of the amount being devalued by inflation.

In a worst-case scenario, let’s imagine what would happen to the costs associated with issuing debt if the U.S. government temporarily suspended payments to specific regions or countries. Currently, there is over $7.6 trillion worth of bonds held by foreign entities and multiple banks and governments depend on this cash flow.

The potential cascading effect from countries and financial institutions would immediately impact their ability to settle imports and exports, leading to further carnage in the lending markets because every participant will rush to reduce risk exposure.

There are over $24 trillion in U.S. Treasuries held by the general public, so participants generally assume that the lowest risk in existence is a government-backed debt title.

Treasury yield is nominal, so mind the inflation

The yield that is widely covered by the media is not what professional investors trade, because each bond has its own price. However, based on the contract maturity, traders can calculate the equivalent annualized yield, making it easier for the general public to understand the benefit of holding bonds. For example, buying the U.S. 10-year Treasury at 90 entices the owner with an equivalent 4% yield until the contract matures.

*U.S. Government Bonds 10-year yield. Source: TradingView*

If the investor thinks that the inflation will not be contained anytime soon, the tendency is for those participants to demand a higher yield when trading the 10-year bond. On the other hand, if other governments are running the risk of becoming insolvent or hyperinflating their currencies, odds are those investors will seek shelter in U.S. Treasuries.

A delicate balance allows the U.S. government bonds to trade lower than competing assets and even run below the expected inflation. Although inconceivable a few years ago, negative yields became quite common after central banks slashed interest rates to zero to boost their economies in 2020 and 2021.

Investors are paying for the privilege of having the security of government-backed bonds instead of facing the risk from bank deposits. As crazy as it might sound, over $2.5 trillion worth of negative-yield bonds still exist, which does not consider the inflation impact.

Regular bonds are pricing higher inflation

To understand how disconnected from reality the U.S. government bond has become, one needs to realize that the 3-year note's yield stands at 4.38%. Meanwhile, consumer inflation is running at 8.3%, so either investors think the Federal Reserve will successfully ease the metric, or they are willing to lose purchasing power in exchange for the lowest risk asset in the world.

In modern history, the U.S. has never defaulted on its debt. In simple terms, the debt ceiling is a self-imposed limit. Thus, the Congress decides how much debt the federal government can issue.

As a comparison, an HSBC Holdings bond maturing in August 2025 is trading at a 5.90% yield. Essentially, one should not interpret the U.S. Treasury yields as a reliable indicator for inflation expectation. Moreover, the fact that it reached the highest level since 2008 holds less significance because data shows investors are willing to sacrifice earnings for the security of owning the lowest risk asset.

Consequently, the U.S. Treasury yields are a great instrument to measure against other countries and corporate debt, but not in absolute terms. Those government bonds will reflect inflation expectations, but could also be severely capped if the generalized risk on other issuers increases.