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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis: The Weekender

October 11, 2021

Matt Blom

Welcome to the Weekender: Your weekly round up of all the top stories in the crypto space, as decided by you, our readers. With the crypto bulls back in control, this week’s rich list report from Forbes magazine took the top spot: who are the seven crypto billionaires making all those gains?

The appearance of the seven crypto tycoons in the Forbes list is a first. The seven billionaires are collectively estimated to be worth about $55.1 billion. The wealthiest among these is the Chief Executive Officer of FTX, Sam Bankman-Fried, whose net worth is almost half of this aggregate at $22.5 billion.

Besides Sam Bankman-Fried, new contenders in the game include Tyler and Cameron Winklevoss, whose wealth is estimated at $4.3 billion each. Fred Ehsram and Brian Armstrong, Coinbase’s founders, also appear on the list with values of $3.5 billion and $11.5 billion, respectively. The last name on the elite list is Jed McCaleb, another of Ripple’s co-founders. His wealth stands at $3 billion. This year has been monumental for cryptocurrency and blockchain use at a global level, with Institutional investors across the globe joining the party.

Bank of America officially launched its cryptocurrency research division with a new 140-page report titled, “Digital Assets Primer: Only the first inning,’ that covers bitcoin, NFTs, DeFi, central bank digital currencies (CBDCs) and more.

Led by Alkesh Shah, head of global cryptocurrency and digital asset strategy, the report reveals that 221 million people have purchased or sold a cryptocurrency as of June 2021, up from 66 million in May 2020.

“It’s difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralized apps that have yet to be created could potentially be,” the report states.

Perhaps the greatest threat to Bank of America’s business model is decentralized finance (DeFi), where users can carry out many of the functions of a traditional bank such as borrowing, lending, earning attractive yields and many other activities.

Contrary to expectations of apprehension toward embracing DeFi, the report sounds optomistic about its future:

“The SEC is investigating DeFi applications and companies to determine if and how they should bring them into the current regulatory framework. We are optimistic about the long-term growth of this segment as it matures and regulatory uncertainty is clarified.”

U.S. Bank announced Tuesday that its cryptocurrency custody services are now live and available to its Global Fund Services clients.

U.S. Bancorp, with nearly 70,000 employees and $559 billion in assets as of June 30, is the parent company of U.S. Bank, the fifth-largest bank in the country. The Minneapolis-based company serves millions of customers locally, nationally, and globally. U.S. Bank Wealth Management and Investment Services has more than $8.6 trillion in assets under custody and administration and $282 billion in assets under management globally as of June 30.

The services are intended for institutional investment managers with private funds in the U.S. or Cayman Islands who would like a safekeeping solution for bitcoin – with additional coin support coming soon.

Invesco Ltd.’s newly formed partnership with crypto billionaire Michael Novogratz’s Galaxy Digital Holdings Ltd. is already bearing fruit in the form of two new exchange-traded funds.

The Invesco Alerian Galaxy Crypto Economy ETF (ticker SATO, in a nod to Bitcoin’s mysterious founder, Satoshi Nakamoto) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) begins trading Thursday on Cboe Global Markets.

Roughly 80% of SATO’s portfolio is dedicated to companies that derive more than 50% of their performance from cryptocurrency activities, such as mining companies, crypto infrastructure builders and crypto-buying companies. BLKC invests in largely the same companies, but also tracks firms engaged in blockchain technology that aren’t necessarily tied to cryptocurrency. 

Additionally, both firms have 15% of their holdings in shares of the Grayscale Bitcoin Trust, the largest allocation to a physically-backed Bitcoin vehicle among U.S. exchange-traded products.

Aureo Ribeiro, a federal deputy in Brazil, stated that bitcoin might become a recognized currency in Brazil soon, during an interview with local media. The politician stated that Brazilians may be able to purchase houses, cars, and even fast food at McDonald’s with cryptocurrency in the near future.

The Brazilian “Bitcoin Law” will be presented in the Plenary of the Chamber of Deputies. Ribeiro also stated that, by its design, this law could be a reference for other countries wishing to regulate digital assets, saying its text is “innovative.” In this sense, Ribeiro stressed:

“We debated a few years there to arrive at a text that recognizes this asset… which will be regulated by a government agency, because we will work with the Central Bank and the CVM, depending on how this asset will be recognized, such as real estate value or currency of daily use.”

Have a great Sunday!

Words of the Week

 

Technical Analysis

 

30 Mins

Bitcoin price has seen a high of $56,070 and a low of $54,080 in the last 24 hrs.

A test towards a minor support at $53,600 has held 3 times and it appears a

mini upward channel is forming as bitcoin makes higher lows.


Support:      $53,615, $52,900, and $51,775

Resistance: $57,500 and $61,200

Daily

The bitcoin price has consolidated across the weekend with noticeably shallow pullbacks. The price target remains $57,500 on the daily chart, with a potential to extend to $61,200.

The MACD and RSI oscillators remain in the bullish control zone.

The 100-day MA is rising quickly towards the 200-day, with potential for a “Golden Cross” to form.  


Support:      $52,900, $51,075, and $49,500   

Resistance: $57,500, and $61,200

MA:              50-day $47,600, 100-day $43,136, 200-day $45,013

RSI:              69% - bullish

MACD:         positive momentum - bullish

Weekly

On the longer timeframe, the bitcoin price target is $87,000: See the below A-B-C-D Harmonic.

Oscillators: the RSI and the MACD are both bullish.  


Support:      $52,900 and $43,000

Resistance: $57,500 and $61,200

RSI:              62% - bullish

MACD:         positive momentum - bullish

The Market in Numbers

 

Crypto and pension funds: Like oil and water, or maybe not?


Pension funds, the most cautious of institutional investors, are now giving the booming crypto and blockchain sector a closer look.

There are good reasons why pension funds should not invest in the crypto and blockchain space. The industry is too new, too volatile, and stultifyingly technical. Moreover, the rules and regulations to govern the sector have yet to be settled.

But the fixed-income financial instruments that pension funds typically favor — like long-term government bonds — are scarcely paying anything these days, so the traditional caretakers of employees’ retirement funds have a dilemma: Where to find investment yield in a world where inflation is looming?

It may not be entirely surprising, then, that pension funds — the most cautious of institutional investors — are now giving the booming crypto/blockchain sector a closer look.

“Family offices led the charge into crypto funds several years ago, but we’ve seen increasing interest from pensions, and there are many pensions that now have exposure to crypto,” Stephen McKeon, a finance professor at the University of Oregon and a partner at Collab+Currency, told Cointelegraph.

“We’ve seen increased interest from pensions” in the past year, added Christine Sandler, head of sales, marketing and research at Fidelity Digital Assets — part of an uptick among all institutional segments — “which we believe reflects the growing sophistication and institutionalization of the digital assets ecosystem, combined with a strong macro narrative driven by response to the pandemic.”

Pension funds tend to be “more conservative, risk-averse investors relative to other segments,” according to Sandler, and they mostly favor investments that have exhibited long-term growth and low volatility, which might arguably make them leery of the crypto/blockchain space.

An early adopter

One of the first United States-based pension funds to invest in blockchain firms was the Fairfax County Police Officers Retirement System, based in Fairfax, Virginia. It tested the waters back in 2018 with an 0.5% allocation in a fund that was investing in blockchain-related enterprises, Katherine Molnar, the fund’s chief investment officer, told Cointelegraph at the recent SALT conference in New York City.

The fund raised its allocation to 1% in 2019, and in spring 2021, it added two new blockchain-related investment funds. The current target allocation is 2%, but because crypto and crypto-based companies have been rising in value, 7% of overall fund assets are now crypto-related — again, mostly “pick-and-shovel” type enterprises that support the industry — like crypto exchanges and custodians.

The pension fund can’t rebalance because it is invested in venture capital funds, Molnar explained, but in mid-September, Fairfax signalled its intent to invest $50 million with Parataxis Capital, a crypto hedge fund that invests in digital tokens and cryptocurrency derivatives. “It’s not a directional bet, but it’s not totally illiquid either,” she told Cointelegraph.

The fact that the police officers’ pension fund has invested until recently in crypto-related companies as opposed to cryptocurrencies — Coinbase rather than, say, Bitcoin (BTC) — isn’t uncommon either. U.S. institutional investors surveyed by Fidelity Digital indicated a greater propensity for digital asset investment products rather than direct ownership of cryptocurrencies, Sandler told Cointelegraph, adding:

“From our study, we also know that pension funds and defined benefit plans, like many other institutional investor segments surveyed, favor active management of an investment product containing digital assets.”


You can access the full report by clicking here.


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