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| March 9, 2021 Everything you need to make sense of the crypto markets and beyond Sponsored By: By the CoinDesk Markets Team Edited by Lawrence Lewitinn If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) +7.4% $54,240 Ether (ETH) +5.9% $1,827 (Price data as of Mar. 9 @12:00 UTC) Good morning. Here's what we're writing about: Market Moves by Omkar Godbole: Bitcoin Eyes Record Highs as Market Cap Bounces Back Over $1T Damanick Dantes: Bitcoin's 2021 Returns Destroy Everything on Wall Street, Goldman Sachs SaysCheck out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker, at 9 a.m. U.S. Eastern time. Today the show will feature guests: Matt Hougan, CIO of Bitwise Kyle Hauptman, vice chairman of NCUA
MARKET MOVES by OMKAR GODBOLE Bitcoin Eyes Record Highs as Market Cap Bounces Back Over $1T Bitcoin is marching north once more, having shown resilience in the face of a rallying U.S. dollar in recent days.
“While many were concerned about the USD strength and a turbulent macro market, BTC has continued to break recent highs,” Matthew Dibb, COO and co-founder of Stack Funds, told Coindesk. “We believe the risk-off correlation between these markets is slowly unwinding, and the cryptocurrency could challenge record highs.”
The Dollar Index, which tracks the greenback’s value against major currencies, jumped 1.21% last week, as rising U.S. Treasury yields and losses in the stock market boosted haven demand.
However, despite the dollar charting its biggest weekly gain since October, bitcoin jumped over 12% in the same period. The top cryptocurrency was last seen trading above $54,170, representing an 8% gain over 24 hours, and with a market capitalization tat has now returned over $1 trillion, according to CoinDesk 20 data.
A convincing move above resistance at $52,666 has exposed the record high of $58,332 reached on Feb. 22.
Bitcoin prices (Source: TradingView, Patrick Heusser)
“There are other positive signs on the technical chart,” Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, said, while drawing attention to a breakout above the Ichimoku cloud red line – a technical-analysis tool used to help identify support and resistance levels and other essential information such as trend direction and momentum.
According to Hessuer, the bitcoin market has witnessed positive structural changes over the recent weeks, that would pave the way for a more sustainable move to lifetime highs. The futures premium has dropped, alongside continuously increasing futures open interest, and spot and futures trading volumes, he told CoinDesk in a Telegram chat.
Bitcoin 3-month futures premium (Source: Skew)
Futures listed on major exchanges are trading at a considerably lower premium to spot market prices compared to the record spread seen in mid-February when bitcoin reached new highs above $58,000. The peak premium represented excess bullish leverage, which has been cleared by the pullback to sub-$50,000 seen at the end of last month.
Bitcoin futures open interest, in bitcoin terms (Source: Glassnode)
Futures open interest, or the number of open positions, jumped to 334,328 BTC on Monday – the highest level since Feb. 19 – having dropped along with prices in the second half of February.
A rise in prices alongside an uptick in open interest is said to validate an uptrend. Meanwhile, a price drop is said to be temporary if it is accompanied by a decline in open interest. That’s what happened during bitcoin’s recent correction to $43,000.
And lastly, blockchain data shows holding sentiment remains strong as ever, with the balance held on exchanges continuing its uninterrupted decline last week with an outflow of 35,200 BTC.
Turbulence ahead?
With key events such as Federal Reserve’s rate decision due next week, Dibb foresees some price turbulence ahead of a possible breakout above $60,000.
At the Federal Reserve’s policy meeting on March 16-17, Chairman Jerome Powell is expected to reaffirm his pro-stimulus stance. Traders, however, will have an ear out for his comments on rising bond yields. Powell recently refrained from sounding too worried about the turmoil in the bond market, however, an unchecked rise in yields may force him into action.
Heusser, meanwhile, has some concerns that the bitcoin order books are currently skewed to the sell-side. However, he remains confident that these offers will be absorbed by strong inflows.
Bitcoin's order book shows sell-side bias (red shaded area) (Source: okotoki.com, Patrick Heusser)
“We have seen this before, and continuous market spot buying (mainly on Coinbase) made it possible for the price to go up,” Heusser said.
The cryptocurrency may still see losses if the stock market suffers a big drawdown on a continued rise in yields, if any. Heusser, however, does not expect a drop below $47,000.
“During consolidation, we built a solid liquidity pool at around $47K, which I believe should be the local bottom until we reach a new all-time high,” he noted.
--Omkar Godbole
Read the original story here: Bitcoin Eyes Record Highs as Market Cap Bounces Back Over $1T
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DAMANICK DANTES Goldman Sachs, the storied Wall Street firm, didn't start including bitcoin in its weekly ranking of global asset-class returns until late January, when the largest cryptocurrency quietly appeared atop the chart.
But since then, bitcoin's lead over assets from stocks to bonds, oil, banks, gold and tech stocks and the euro has widened.
As of March 4, bitcoin's year-to-date return, at about 70%, was roughly double that for the next-closest competitor, the energy sector, at about 35%, according to Goldman Sachs's latest "US Weekly Kickstart" report.
The comparisons could become even more flattering to bitcoin now that a recent bout of selling in U.S. stocks has taken the Standard & Poor's 500 Index's year-to-date return to roughly zero – flat on the year. Chart from Goldman Sachs research report shows how drastically bitcoin is beating all major traditional asset classes so far this year (Source: Goldman Sachs) The recovery in oil prices and real yields has boosted year-to-date returns for cyclical sectors such as energy and financials, which are nevertheless underperforming bitcoin.Crude oil and energy have a higher risk-adjusted return (Sharpe ratio) than bitcoin so far this year. Gold is the worst performing asset class year-to-date, as rising yields have punished traditionally defensive sectors such as consumer staples and utilities. Based on prior CoinDesk reporting, bitcoin is viewed by many investors both in crypto and traditional markets as a potential inflation hedge, especially in an era where central banks around the world are pumping trillions of dollars of freshly created money into financial markets to stimulate coronavirus-racked economies. Even so, gold has lost about 10% on the year, prompting some market observers to argue that bitcoin is stealing market share from the yellow metal. According to a survey, some 40% of Goldman clients have exposure to cryptocurrencies. That's the case even though, as recently as May 2020, Goldman's money-management division argued in a presentation that cryptocurrencies were "not a suitable investments for our clients," merely a beneficiary of a "mania" worse than the infamous run on Dutch tulips in the 1600s.
--Damanick Dantes Original story found here: Bitcoin's 2021 Returns Destroy Everything on Wall Street, Goldman Sachs Says
BIGGEST MOVERS These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: Orchid (OXT): +15.4% OMG Network (OMG): +8.3% Litecoin: (LTC): +8.2%
No free-floating asset in the CoinDesk 20 is down today.
The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.
ICYMI In case you missed it, here is yesterday's episode of First Mover: The Latest Crypto Market Moves, Can Bitcoin Be Shut down, Cipher Mining’s Plans to Go Public and Tory Lanez’s Big NFT Sale Markets Analysis from Quantum Economics' Jason Deane who explains why he's convinced bitcoin cannot be shut down. Also, Cipher Mining CEO Tyler Page on going public and the NFT craze in music industry.
BOLO Be on the lookout for this event today:
15:00 UTC (10:00 a.m. ET): Senate Banking hearing on GameStop. Description: Full committee hearing: “Who Wins on Wall Street? GameStop, Robinhood, and the State of Retail Investing” Witnesses: Professor Gina-Gail S. Fletcher, Professor of Law, Duke University School of Law Ms. Rachel J. Robasciotti, Founder & CEO, Adasina Social Capital Dr. Teresa Ghilarducci, Bernard L. and Irene Schwartz Professor of Economics, The New School The Honorable Michael S. Piwowar, Executive Director, Milken Institute Center for Financial Markets Mr. Andrew N. Vollmer, Senior Affiliated Scholar, Mercatus Center.Where to watch it: Streaming live on www.banking.senate.gov
LATEST HEADLINES Ripple, MoneyGram to ‘Wind Down’ Partnership This ends an agreement the two companies had put on hold in February. How the NFT Boom Explains Square’s Tidal Buy Why on earth would a payments company buy a music streaming service? Winklevoss-Owned Gemini Sponsors 2021 Oxford-Cambridge Boat Race The Winklevoss twins, who founded Gemini in 2014, rowed for Oxford at the Boat Race in 2010.
Next Step for Institutional DeFi? Institutional NFTs Ethereum-friendly custody firm Trustology is now supporting NFTs for lending and collateralizing.
Coinbase Valuation Nears $100B Ahead of March Nasdaq Listing: Bloomberg The offering will become the first large-scale direct listing on the Nasdaq – an alternative to the IPO.
First Insured Bitcoin Fund Opens for Southeast Asian Markets The fund, based in Labuan, Malaysia, aims to open up access to digital assets for Southeast Asian institutional investors.
Hedge fund Manager Alan Howard Leads $25M Raise for Crypto Custodian Komainu Galaxy Digital, NOIA Capital and Nomura Research Institute also joined the round, becoming strategic partners. Binance Leads $2M Funding Round for Crypto Exchange Aggregator OpenOcean Multicoin Capital, LD Capital, CMS, Kenetic and Altonomy also participated in the round.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.
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