Good morning. Here's what we're writing about:

Bitcoin climbs overnight to a new all-time-high price above $51K.
Cryptocurrency market experts (and one Federal Reserve official) offer outlooks for bitcoin after the price tops $50K for the first time.
Bitcoin Watch: Weak spot-market volume might be cause for concern, CoinDesk's Omkar Godbole writes.
Token Watch: Coinbase opens waitlist for Ethereum 2.0 staking deposits. PLUS: All things dogecoin, explained.

Check 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:

Erik Voorhees, CEO and founder, ShapeShift.io
James Putra, head of product strategy, TradeStation
Greg King, CEO, Osprey Funds

PRICE POINT

Bitcoin's momentum carried through overnight, pushing upward to a new all-time high above $51,000 just a day after passing $50,000 for the first time.

"It's not exactly soaring, as it has with other major technical breakouts, but another 3% gain isn't to be sniffed at," Craig Erlam, senior market analyst for the foreign exchange broker OANDA, wrote in an email.

In traditional markets, investors were focused on the recent rise in the U.S. Treasury yields to a 12-month high around 1.3% – taken as a sign that bond traders are growing more concerned about future inflation as the economy makes a fuller recovery. Bond yields sometimes rise when there's a greater chance of inflation, since investors want the extra income as compensation for the extra risk.

It's also a key focus for cryptocurrency traders, since bitcoin has become a popular way for many big investors to bet on faster inflation and a reduction in the U.S. dollar's purchasing power.

A fresh concern this week is that the winter storm hitting the (usually warm) state of Texas might drive up gasoline prices, contributing to inflation. Crude oil held at over $60 a barrel, near highs not seen in more than a year.

Some investors also see the potential for a growing supply of Treasury bonds, given President Joe Biden's push for a $1.9 trillion stimulus plan, which would likely have to be financed through extra borrowing. Theoretically, an increase in the supply of bonds causes yields to rise, since more investors have to be enticed to buy the securities.

All things being equal, rising yields, while potentially a sign of heightened inflation fears, could make bitcoin incrementally less attractive on a relative basis compared with bonds: ”Momentum funds who bought bitcoin as a hedge against inflation might sell if real yields rise,” Avi Felman, head of trading at BlockTower Capital, told CoinDesk.

On the other hand, a rise in yields might prompt the Federal Reserve to expand its monetary stimulus. The U.S. central bank has been buying $120 billion of bonds a month for most of the past year to help keep interest rates low.

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THE NEWS

BITCOIN AS A STOCK: As asset managers continue to push for a U.S. exchange-traded fund tied to bitcoin, while prices keep rising, the pressure is growing on the Securities and Exchange Commission to clarify its regulatory stance.

NYDIG, a big digital-asset manager, has filed a new application for a bitcoin ETF, CoinDesk reported Tuesday. (VanEck and Valkyrie also have recently applied.)
So far, the SEC has rejected all applications for bitcoin-based ETFs. In August 2018, it rejected nine such proposals on the same day.
The main question is whether the market has matured enough to meet the requirements listed under the Securities Exchange Act, the federal law that oversees securities trading within the U.S., CoinDesk's Nikhilesh De wrote Tuesday in his "State of Crypto" newsletter on policy and regulation.
Another question is what stance Gary Gensler, nominated as SEC chair, will take on the matter – if he even has time to make it a priority. Competing priorities include "likely having to form a response to the market volatility seen last month with the GameStop stock pump," De wrote.
Canadian regulators on Tuesday approved the country's second bitcoin exchange-traded fund. Evolve's bitcoin ETF was conditionally approved to trade on the Toronto Stock Exchange, following approval of Purpose Investment's offering last week. “It’s a promising sign if there are no issues with launching a bitcoin ETF in Canada," said James Seyffart, ETF research analyst at Bloomberg Intelligence.
“So much work has been done in the backend of this, the plumbing, to effectively allow something like this," Purpose Investments CEO Som Seif said Tuesday on CoinDesk TV's "First Mover" show.
Osprey Funds said its bitcoin trust is now available to retail investors via over-the-counter markets, joining a crop of new bitcoin funds aimed squarely at the market-leading Grayscale Bitcoin Trust (GBTC) before a bitcoin ETF is approved by the SEC.

TEXAS WINTER STORM HITS CRYPTO: Bitcoin mining farms in Texas go offline as an unusually harsh winter storm and cold spell in the southern U.S. strains the electricity grid.

MARKET MOVES

What comes next now that bitcoin has passed $50K?

Chart of daily price moves for bitcoin. (TradingView/CoinDesk)

The next key milestone for bitcoin would come when the cryptocurrency's market capitalization tops $1 trillion, a threshold that would signal a new level of maturity for the asset. Based on the outstanding number of bitcoins, currently about 18.63 million, that would happen when bitcoin's price clears $53,677.

In the meantime, here's a sampling of commentary from analysts and other observers on what's next for the bitcoin market:

QCP Capital: Options market "is pricing a 10% chance of $400,000 by year’s end, 15% chance of $300,000, 30% chance of $160,000 and close to a 50/50 chance of higher than $100,000."
Alessandro Andreotti, bitcoin over-the-counter broker: “In my opinion we are going to keep reaching fresh new highs soon.”
Arcane Research: "Another test of the $50,000 level seems very likely right now, and we would not be surprised to see bitcoin trading above this level later this week."
Matt Blom, head of sales and trading, EQUOS: "Should we fail to close above $49,700 today, then we will again see prices slide down to support, with $48,125 the first level that buyers will be waiting for. If the market remains strong and holds above $50,000, then we see momentum building and the race to a $1T market cap is well and truly on. $54,000 is still the target, and looking ahead, with very little to stop this trend, thoughts of $60,000 will not be far from traders' minds."
Edward Moya, senior market analyst, OANDA: "Every day, it seems there are fresh catalysts for Bitcoin."
Denis Vinokourov, head of research at digital assets prime broker Bequant: "Yesterday's news that MicroStrategy is to buy another round of Bitcoin using the proceeds from their announced $600 million note offering should be a net-positive for the price action. But there is a risk that, similar to QE announcements, that market participants will be demanding larger and larger ticket sizes or push prices lower." (EDITOR'S NOTE: MicroStrategy has increased the size of the note offering to $900 million.)
Mati Greenspan, founder, Quantum Economics: "At this point, people have to be asking just how much longer the party might last? The sheer interest in the space and new money that is reportedly being pumped into bitcoin as a hedge against copious amounts of brrrrrrr from J-POW and the Biden administration could well send bitcoin right past the $50,000 mark and into the stratosphere."
JPMorgan: Bitcoin’s charge to a record north of $50,000 isn’t sustainable unless the cryptocurrency’s price swings cool down quickly, according to a research note published Tuesday.
Wedbush Securities: “We believe the trend of transactions, bitcoin investments, and blockchain-driven initiatives could surge over the coming years as this bitcoin mania is not a fad in our opinion, but rather the start of a new age on the digital currency front.”
Joel Kruger, cryptocurrency strategist, LMAX Digital: "Now that we’ve finally pushed through this next great barrier, we recommend exercising extreme caution over the short-term. The market has gone parabolic since breaking through $20,000, and technical studies are warning of the need for a healthy pullback in the days and weeks ahead to allow for severely stretched readings to unwind and normalize."
James Bullard, president of the Federal Reserve Bank of St. Louis: “I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see – a dollar global economy really as far as the eye can see – and whether the gold price goes up or down, or the bitcoin price goes up or down, doesn’t really affect that."
Eric Demuth, CEO, Bitpanda: "In my opinion, it is just a matter of time until bitcoin becomes the new gold and will be added to the balance sheet of central banks."

BITCOIN WATCH

Weak spot-market volume might be cause for concern

Bitcoin's daily chart shows bearish volume divergence on Coinbase Pro. (TradingView/CoinDesk)

Another day, another record high for bitcoin. The top cryptocurrency rose above $51,000 early Wednesday, taking the month-to-date gain to 54% amid a wave of institutional adoption.

The options market is biased bullish, with both short-term and long-term call options drawing higher prices than puts or bearish bets, CoinDesk's Omkar Godbole writes.
The only cause for concern is the weak spot market volume on institution-focused exchanges such as Coinbase Pro. As seen in the chart above, the 10-day average of daily trading volume is trending south, putting a question mark on the sustainability of the breakout above $50,000.
As such, a sudden pullback, possibly to the 10-day average of bitcoin's price, currently at $47,700, cannot be ruled out.

ALSO:

Pricing in futures market looks bullish, with the March contract on Chicago-based CME trading at 2.57% above the spot bitcoin price, representing an annualized premium of 24%, well above the average around 15%, the Norwegian cryptocurrency-analysis firm Arcane Research noted Tuesday in a weekly report. "The market is heavily tilted towards the upside, which can trigger brutal liquidations as we advance," the analysts wrote.
Most financial executives, including CFOs, are not planning to invest in bitcoin as a corporate asset this year, according to a new survey by consultant Gartner. Eighty-four percent of polled executives (representing 77 firms) told Gartner in February they were spooked by "financial risk due to volatility of Bitcoin" when considering whether to invest in the crypto.

TOKEN WATCH

Ether (ETH): Customers of the Coinbase cryptocurrency exchange can now sign up to stake ether into the Beacon Chain smart contract, which was set up to help facilitate the Ethereum blockchain's planned "2.0" transition to a "proof-of-stake" system from the current "proof-of-work" system, which is what the Bitcoin blockchain uses.

Dogecoin (DOGE):

The Shiba Inu-themed token started off as a joke cryptocurrency but now has a market capitalization of $7 billion and a huge global following. How did it all happen? CoinDesk's Ollie Leach explains.
"DOGE is indeed relatively concentrated," the blockchain analytics firm Coin Metrics wrote Tuesday in a report. "The top 100 largest DOGE addresses hold 68.1% of total supply. Comparatively, the top 100 largest BTC addresses only hold 13.7% of total supply."

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