Blockchain and Cryptocurrency News Roundup

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  • January 4, 2021
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04 January 2021.

Dive into a short summary of some of the biggest headlines in Crypto this week. Ether hits $1,000 for first time since 2018, hours after crossing $800, Ripple supporters appeal to the White House to classify XRP as a digital currency, how massive Bitcoin buyer activity on Coinbase propelled BTC price past $32K & the “Everything Rally” of 2020 continues as Alt Coins boom.

Ether hits $1,000 for first time since 2018, hours after crossing $800

Taking a page out of larger sibling bitcoin’s book, the price of ether (ETH) on Sunday traded above $1,000 for the first time since January 2018, hours after breaking through $800 for the first time since March that same year. The native currency of the Ethereum network hit a nearly three-year high of $1,002.81 before falling back a bit to $995.57, up 29.4% over the last 24 hours. The second-highest cryptocurrency by market cap, the total value of ether is currently $114.2 billion. Ether’s move coincides with growing institutional interest in the cryptocurrency and the upcoming launch of ETH futures on the CME on Feb. 8. Also, ether is almost certainly getting a lift from the eye-popping price run of bitcoin over the last 24 hours. Though not as dramatic as bitcoin’s surge, the rise in the price of ether is accelerating. After breaking $600 for the first time since May 2018 in November 2020, it broke $700 for the first time since that same month in 2018 on Dec. 27, 2020, and has now notched $800 and $900 in the same morning.

While bitcoin’s surge to start the new year was one for the books, its rise has stalled in recent hours and ether has risen dramatically against the leading cryptocurrency during that time. The price of one ether in bitcoin terms is now close to 0.03, the highest it has been in nearly a month. Earlier on Sunday, it was just 0.02309 on Coinbase. That’s a rally of about 30% in just 15 hours. Ether volumes on the eight exchanges tracked by the CoinDesk 20 have been substantially higher over the past month. As of Saturday, the seven-day average of total volume for ether trades on those exchanges was $3.3 billion, according to data from CryptoCompare. One month prior, it was $1.5 billion.


Ripple supporters appeal to the White House to classify XRP as a digital currency

In a move to support Ripple, XRP advocates have decided to file a petition with the White House asking it to declare the asset a virtual currency. The movement was led by an anonymous supporter going by the initials of “J.W.” Per the petition, some individuals in the cryptocurrency industry believe that the Securities and Exchange lawsuit pursuing Ripple for XRP sales is uncalled for. In the petition, Ripple supporters argue that XRP has already previously been classified as a currency by the Financial Crimes Enforcement Network (FinCEN). They also evoke the fact that the SEC’s lawsuit alleging that XRP should be registered as a security has been damaging to the US market, wiping out billions of investments. This is criticized as the SEC not fulfilling their line of duty – to protect Americans. Per the official petition: “Billions of dollars of value is (sic) being wiped from the market in rapid succession and most critically, hundreds of thousands of ordinary Americans – the very Americans that the SEC is tasked to protect – are suffering irreparable harm and damages.” In order for the petition to go through and be reviewed by the White House, a total of 100,000 signatures need to be collected by January 28, 2021. Currently, 24,330 XRP advocates have joined the cause and signed. The petition still needs 75,670 signatures before White House executives will review it. The petition comes at the nick of time, as Ripple’s first court date is set for February 22, 2021. The pretrial between the SEC and Ripple will be held via video call and the United States District Judge Analisa Torres has demanded that both parties present arguments for the case, including potential motions and the likelihood of a settlement. The Securities and Exchange Commission slapped Ripple with a lawsuit for selling XRP as unregistered securities right before the holidays in December. Per the suit, the Commission alleges that Ripple earned $1.3 billion from selling XRP tokens and that both the company’s CEO and co-founder pocketed around $600 million each. Ripple is determined to fight this and is confident that it will win. Needless to say, the lawsuit against Ripple has served to defame XRP. However, should Ripple win, this may benefit the cryptocurrency industry as a whole. Digital currencies will not be as easily classified as securities if Ripple is able to fight the lawsuit. Additionally, for investors who have benefitted from XRP’s massive drop on the market by buying the token at a lower price, they may be able to reap a profit from XRP if they hold onto the asset on a long-term basis and wait for XRP’s price to return to “healthy levels.” Previously, before the lawsuit, XRP was trading at around $0.60, even hitting $0.90 on Coinbase.

How massive Bitcoin buyer activity on Coinbase propelled BTC price past $32K

The price of Bitcoin surged past $32,000 as buyers on Coinbase aggressively accumulated BTC. Coinbase has seen a large spike in buyer activity overnight as the price of Bitcoin (BTC) surpassed $32,500 on Jan. 2. Analysts say the trend was reminiscent of MicroStrategy’s Bitcoin accumulation, possibly fueled by institutional buy orders. As a result, BTC surpassed $31,000, reaching a new all-time high. In the last 48 hours, Coinbase has continuously seen a high premium compared to Binance. At one point, Bitcoin on the exchange was $100 more expensive than on Binance. When the price of Bitcoin surpassed $30,000, the premium reached as high as $350. For instance, when Bitcoin was trading at $30,000 on Binance, BTC was priced at $30,350 on Coinbase. Prior to the rally, CryptoQuant CEO Ki Young Ju said that low Coinbase outflows posed a risk to Bitcoin’s rally. He said that outflows would have to increase for BTC to find new momentum, which it did. He said before the rally: “We haven’t had significant Coinbase outflows since $23k, tokens transferred is decreasing, and the fund flow ratio for all exchanges is increasing. Still possible that institutional investors would join anytime soon, but we might face a correction if it continues like this.” As Bitcoin neared $29,500, Coinbase outflows began to spike. Ki said that they are possible over-the-counter (OTC) deals, which are typically bullish for BTC and exemplifies a wider trend of dwindling BTC reserves on exchanges. High-net-worth buyers use the OTC market to buy or sell large amounts of Bitcoin. Hence, when the signs of OTC deals emerged, Ki said this was positive for BTC. Merely two days after the outflows spiked, BTC surged past $30,000, reaching $31,400. Ki noted before BTC broke $30,000: “12,063 $BTC just flowed out from #Coinbase. It went to multiple cold wallets. Possibly OTC deals. Breaking 30k is going to be tough, but institutions don’t care. They just buy it more.” According to Ashwath Balakrishnan, an analyst at Delphi Digital, Bitcoin became more compelling when it surpassed its all-time high. When the price of Bitcoin was hovering at around $4,000, the risk of a significant downside was high, combined with high uncertainty around the medium-term prospect of BTC. Hence, when Bitcoin surged past $20,000, the dominant cryptocurrency became more compelling for investors. He said: “Buying $BTC post- ATH is actually superior than sniping the bottom from a risk adjusted lens If you bought at $20k you’re up 50% with minimal friction in between Bottom buyers ~$4k are up almost 8x but their risk of blowing up was much higher.” In the near term, a popular narrative that could buoy the Bitcoin price higher is the prediction that institutions might not have bought BTC in December due to potential accounting issues. As such, some analysts say that more institutions could jump into Bitcoin in the first quarter of 2021. If this happens, which would be evident through Grayscale’s assets under management and the CME Bitcoin futures market’s open interest, it would likely cause a broader BTC rally.


The “Everything Rally” of 2020 continues as Alt Coins boom

The record-breaking performance of emerging markets in 2020 looks set to continue as investors continue their search for riskier assets. Welcome back to Market Watch, readers. What a Christmas break it has been. While we’re sure you’ve been following events over the festive period, we’ll be looking at what lies ahead–and it appears it will be more of the same.  While investors saw in the new year by pushing Bitcoin’s price to eye-watering levels, there appears to be no sating the appetite of American investors looking to continue the “everything rally” of 2020. Bitcoin and cryptocurrencies more broadly were swept up in an investor fever that saw 90% of 70 different financial asset classes surge since the collapse in April 2020. This was only the third time in five decades that such a rally has ever been recorded. “Investors can’t get enough risk—whatever it is,” Emily Roland, co-chief investment strategist at John Hancock Investment Management told the Wall Street Journal. “Momentum is a powerful force, and we don’t want to fight it.” That sentiment is echoed by the American Association of Individual Investors, which reports that bullish sentiment is at its highest in several years. Fund managers are also feeling optimistic that 2021 will be a bountiful year, according to a Bank of America survey. The amount of cash being held in reserves is at its lowest level since May 2013, indicating they’re searching for opportunities to increase profits. All of which points to increased investor appetite in cryptocurrencies. While at the time of writing, Bitcoin has pulled back from its $34,000 high, Ethereum sailed past $1,000, bringing it ever closer to it’s all-time high of $1,432 set in January 2018. Traders are “looking for ‘the next BTC’,” said Nimrod Lehavi, CEO and founder of crypto payments company Simplex. It’s not difficult to see why that’s the case. When we left you in the doldrums of 2020, the global market cap of cryptocurrencies was hovering just above the $500 billion mark. Earlier today it was at $922 billion, according to data provider Nomics. Futures Markets were all up strongly over the weekend, with the S&P, Dow, Nasdaq and Russell 2000 indices all reporting upturns. The performance appears to be connected to the Senate runoff in Georgia. A neck and neck race between Democrat Raphael Warnock and Republican incumbent Kelly Loeffler has become a key indicator of what sort of Presidency Joe Biden will have. If the Republicans hold onto the seat, they retain a majority in the Senate, making Biden’s plans for increased financial stimulus and tax increases unlikely. If the Democrats take both seats, giving both parties an even 50 seats in the Senate, vice President Kamala Harris could tip decisions in Democrat’s favour thanks to her ability to cast tie-breaking votes. The markets want the Republicans to retain the seat, as a ‘light blue sweep’ “could pose some downside for equities and reintroduce risk of anti-growth policy changes (i.e. tax increases),” JPMorgan strategist Dubravko Lakos-Bujas said in a recent note. At the time of writing, it appears the market may have its wishes granted, but we won’t know for sure until tomorrow. 


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