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Insights, news and analysis for the professional investor By Lawrence Lewitinn, Managing Editor for Global Capital Markets November 21, 2021 Sponsored by Bitcoin (BTC) - $58,792.81 Ether (ETH) - $4,342.55 Prices as of 11/21/21 @ 8:00 a.m. UTC If you were forwarded this newsletter and would like to receive it, sign up here.
Thirteen years ago, crypto was nothing more than a white paper. This past week, the community that has been built around it came close to buying the earliest copy of the U.S. Constitution. That’s quite an achievement for an industry that can’t even get Congress to strike out a provision that would heavily tax it.
It’s still the early innings of the industry, we’ve been told. Maybe our obsession with dog-related memecoins will go somewhere. Maybe not. Maybe countries will embrace the metaverse. Maybe not. It all remains to be seen.
Lucky for us – and humanity – there’s a market for people to stake out their position. And in that market, right now, some of the hotter enthusiasm we saw for crypto, particularly bitcoin, has tamped down a little bit. Perhaps it’s a temporary pullback, but investors aren’t taking on new leveraged long positions the way they were a few days ago. Yet they are still holding on to what levered positions they have now. Will they be liquidated, causing a massive sell-off? Or will the bulls jump in again? That, too, remains to be seen.
– Lawrence
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The Briefing Bananarama may have sung about a cruel summer, but November is turning out to be no great shakes for cryptocurrency investors, either. There are just six weeks left in 2021 and the CoinDesk Bitcoin Price Index (XBX) dipped nearly 20% off an all-time high set Nov. 10.
So it could be that the latest decline in bitcoin prices may be due not to deleveraging so much as just a lack of demand for leveraged-long positions.
– Lawrence
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Chain Links KKR, the second-largest private equity firm by assets under management, plans to lead a Series D in Anchorage Bank. TAKEAWAY: Anchorage Bank is a frontrunner in offering institutional crypto custody and services, opening the industry up to larger clients that currently lack access. The investment further shows KKR’s interest in crypto, with previous investments into ParaFi for decentralized finance (DeFi) exposure.
OpenSea and Gemini look to raise at $10 billion and $7 billion valuations, respectively. TAKEAWAY: Crypto company raises continue to give multiple companies billion dollar valuations each week, showing a continuation of institutional interest in the industry. It will be interesting to see if the technology maintains investment interest during a period of sustained downtrend in the crypto markets.
Bitcoin’s slide to $57,000 from $69,000 was likely the result of short positions in the derivatives market. TAKEAWAY: Data analysis and market professionals hinted that spot holders have largely been holding bitcoin, with no significant jump in selling pressure. The market might be wary of the upcoming Mt. Gox settlement or Hillary Clinton’s call to regulate the cryptocurrency industry.
– Teddy Oosterbaan
Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12, 2022. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems, and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price.
Podcast episodes worth listening to: “On Purpose, With Tyrone Ross”
“The Breakdown, With NLW”
“Money Reimagined”
“Opinionated”
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