Price Point: Bitcoin was little changed amid speculation that Trump's back-and-forth stimulus tweets may simply end up putting the aid onus back on the Federal Reserve.
Market Moves: Neo's better-than-expected launch of its new platform, Flamingo, has rejuvenated speculation over whether rivals to the DeFi-friendly Ethereum blockchain can successfully gain market share.
Bitcoin Watch: In price-chart patterns, contracting triangle is still contracting, portending breakout soon, CoinDesk's Omkar Godbole writes.
What's Hot: Ripple exec threatens exodus from U.S., KuCoin tiptoes back into market after $281M, MIT tops CoinDesk's 2020 Blockchain University rankings.
PRICE POINT
Bitcoin was little changed after falling alongside stocks on Tuesday, when U.S. President Donald Trump tweeted that he would halt talks with Democratic lawmakers on a new multitrillion-dollar stimulus package. By evening, Trump was whipsawing global markets again as he tweeted out support for new measures, including aid for airlines and an emergency lending program for companies.
In recent weeks, optimism for a new U.S. stimulus package likely had helped to support prices for bitcoin, seen by many cryptocurrency investors as a hedge against inflation.
The irony is that if lawmakers don’t allocate more aid, the Federal Reserve may again step into the breach to provide any stimulus that’s needed. Fed Chair Jerome Powell said in a speech Tuesday that more aid is needed, and that fiscal and monetary policy need to work “side by side to provide support to the economy until it is clearly out of the woods.”
Sarah Bianchi, head of U.S. public policy at the Wall Street firm Evercore ISI, told Bloomberg that the Fed could increase its pace of monthly asset purchases — a form of monetary stimulus — by as much as 50% from the current pace of $120 billion a month.
MARKET MOVES
Chinese tech companies were once seen as copycats of their Western peers: Alibaba was a knockoff of eBay and Baidu imitated Google. More recently, Chinese firms like TikTok and Huawei have established such dominant international positions that U.S. authorities have tried to hold them back.
Now, the technological arms race is playing out in the cryptocurrency industry, where one Chinese company is taking on Ethereum, the world’s second-largest blockchain, which U.S.-based developers have used to build semi-automated trading and lending networks under the rubric of decentralized finance, or DeFi.
Neo took aim at DeFi in late September with its launch of a new platform called Flamingo. Da Hongfei, a Neo co-founder, told CoinDesk in an interview that the protocol will eventually provide users with features found on popular Ethereum-based projects like Uniswap, Curve Finance, yearn.finance, and Synthetix.
Flamingo is not simply a product of “copy and paste,” the co-founder said in an interview. “It’s like rebuilding a parallel universe.”
Prices for the NEO tokens have slipped since the mint rush in late September. (CoinGecko)
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Bitcoin defended the psychological support of $10,500 early Wednesday as Asian stocks shrugged off overnight weakness on Wall Street, reducing haven demand for the U.S. dollar.
The European stocks, too, are trading higher at press time alongside gains in the S&P 500 futures.
Risk sentiment, which weakened Tuesday following Trump's decision to abort the fiscal stimulus negotiations, was restored earlier today after the president reversed course and urged Congress to approve a series of coronavirus relief measures, including a new round of $1,200 stimulus checks.
That said, a large-scale stimulus is unlikely to come through any time soon. As such, both bitcoin and stocks may have a tough time scoring significant gains.
Indeed, minutes of the latest Federal Reserve meeting, due at 18:00 GMT, are expected to reiterate tolerance for high inflation. That dovish message, however, has already been priced in by markets.
For now, the cryptocurrency remains trapped in a narrowing price range. Contracting triangles usually end with violent moves on either side.
Growth in the new bitcoin addresses has recently picked up. According to blockchain analyst Cole Garner, that has bullish implications for price. However, according to Alex Melikhov, CEO and founder of Equilibrium & EOSDT stablecoin, the address growth has been fueled, at least in part, by the recent mass exodus of bitcoins from controversial crypto derivatives exchange BitMEX to other major exchanges like Kraken, Binance, and Gemini.
The move to ETH 2.0 will bring the Ethereum network ever closer to fulfilling its original vision: that of a "world computer" that plays host to a parallel, decentralized financial system. Will it be the rocket fuel that takes Ethereum's financial engine mainstream?
CoinDesk's invest: ethereum economy virtual event Oct. 14 will address the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem.
Keynote speakers and panelists including Ethereum founder Vitalik Buterin and Commodity Futures Trading Commission Chairman and CEO Heath P. Tarbert will offer deep dives into Ethereum’s adoption of a proof-of-stake consensus mechanism, sharding and other elements of its impending 2.0 upgrade, as well how the new framework impacts the rapidly advancing business of DeFi, stablecoins and decentralized exchanges.
XRP (XRP): With Ripple executives threatening relocation out of the U.S., volatility could be expected for the world's fourth largest crypto by market cap.
Uniswap (UNI): Uniswap's big correction from Oct. 1 heights of $4.46 has some investors worried but that hasn't fazed users of the Ethereum-based wallet, MetaMask, as it registered 1 million active users per month hinting at continual growth in the DeFi sector.
Top 10 blockchain universities, from CoinDesk 2020 rankings (CoinDesk)
The latest quarterly review from CoinDesk Research is out! In this 24-chart report, we look at major developments in crypto markets over the third quarter, focusing on growth in stablecoin liquidity, surging interest in decentralized finance applications, and the notable uptick in crypto derivatives volumes.
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