Daily BTC Analysis: The Weekender

Welcome to the Weekender: The weekly round-up of all the crypto news, as voted by our readers' clicks! This week, it must have been a bullish market, as the top spot goes to a JP Morgan clickbait article suggesting Bitcoin will compete with gold and reach $146,000.

Nikolaos Panigirtzoglou – a strategist with the financial giant – explained in an interview:

“The re-emergence of inflation concerns among investors during September/ October 2021 appears to have renewed interest in the usage of bitcoin as an inflation hedge. Bitcoin’s allure as an inflation hedge has perhaps been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation.”

One of the big factors contributing to bitcoin’s expansion over gold is that millennials are becoming more knowledgeable of the investing world. They seemingly prefer cryptocurrencies over gold, which has given digital assets a nice boost in recent years. Overall, JPMorgan believes that bitcoin’s competitive streak will only rise in the coming years.

Panigirtzoglou mentioned: “Considering how big the financial investment into gold is, any such crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term.”

This story will undoubtedly be adjusted this week, after the United States Securities and Exchange Commission (SEC) announced that it has rejected a bitcoin exchange-traded fund run by VanEck. The ETF sought to track the spot movement of Bitcoin’s price.

The application was filed in March by the Cboe BZX Exchange, which wanted the SEC to make a rule change allowing it to list the VanEck bitcoin fund. The SEC said the Cboe had not done enough to demonstrate it could prevent fraudulent trading to protect investors. But obviously, you are all free to go trade a Bitcoin ETF based on the price of Bitcoin Futures, which is in no-way related to the price of spot Bitcoin. Oh, wait.

It has been our opinion that we will have to wait to Q2 2022 before we see a spot ETF, and that’s an optimistic view.

Grayscale, who have stated they wish to become an ETF, would have been in the top 20 largest this week, as Bitcoin hit a new ATH. (Eclipsing the world’s largest gold ETF, SPDR Gold Shares).

Launched in 2013, Grayscale is the largest cryptocurrency asset manager with an AUM of over $60 billion. To have a clear view of this meteoric rise, one should keep in mind that just two years ago – at the end of 2019 – the AUM stood at roughly $2 billion. It increased by ten-fold in 2020 and is now 200% up 2021.

Payments giant Mastercard is launching crypto-linked payment cards for the Asia-Pacific region in partnership with three crypto service providers. “For the first time, consumers and businesses in the Asia Pacific region will be able to apply for crypto-linked Mastercard credit, debit, or prepaid cards,” Mastercard said.

The three partners are Amber Group, Bitkub in Thailand, and Coinjar in Australia. All three companies offer cryptocurrency exchange services in their respective domestic markets. In partnership with Mastercard, they “will be launching crypto-funded Mastercard payment cards,”

The cards “will enable them to instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted around the world.”

And finally, cryptocurrency exchange Coinbase revealed its third-quarter financials and reported making $1.23 billion in net revenue for the period. This is down 39% from the previous quarter, which saw the company rake in a record $2 billion in revenue. According to the report, net income was just $406 million, down almost 75% from the second quarter, which netted a whopping $1.6 billion in profits.

Coinbase described the period as having “softer crypto market conditions, driven by low volatility and declining crypto asset prices,” but still managed to notch up a tidy profit. Coinbase is known for having some of the highest transaction fees in the industry, and they remain the primary source of income for the company. It reported that of the total revenue, $1.08 billion came from retail and institutional transaction fees. This equates to 88.25% of the total revenue but was a decrease of 44% from the previous quarter.

Have a great Sunday!

Words of the Week

  Technical Analysis

We got the new ATH, but we didn't get the Spot ETF, and we were also reminded that Evergrande is still teetering on the brink of bankruptcy. The new ATH of $69,000 was quickly forgotten as the market fell to $62,000 within the same trading day. The pivotal level of $64,890 is back in play, and we are currently seeing Bitcoin bulls struggling to recapture the momentum that lead to the total market cap of crypto crossing $3T. 

With $64,890 acting as resistance, the market has room to explore the downside and seek interest from dip buyers. We look for $61,750 to be that area, with $58,500 the key support level the bulls must defend. 

On the upside, a close above $64,890 will lead to further gains. $67,000 will be the first test, as the bulls look to challenge $70,000. Our upside target remains intact at $88,000.