TODAY:

Price Point: Bitcoin surges above $15K, Biden or Trump the End of Year Rally is here officially.
Market Moves: WallStreet seems to be enjoying the incoming gridlock in the US government and the new pro-China outlook the US is expected to take under a potential Biden presidency.
Bitcoin Watch: Little resistance is seen on way to $20K, but price-chart indicators signal that a short-term pause of the recent rally might be in the offing, CoinDesk's Omkar Godbole writes.
What's Hot: Ethereum's 2.0 deposit contract goes live, Sam Bankman-Fried gives $5M to Biden campaign, Bank of England expands QE more than expected.

Price Point

Crypto is riding the WallStreet wave, as the market adjusts to upcoming weeks of litigation and public perception warfare, surrounding the uncertainty emanating from the U.S. Elections. Ripple mulls relocating away from the States, as Tezos launches a new superbaking feature.

Tezos announces superbaking feature. The new development is building on the already established "baking" mechanism, that is inherent to the protocol - it is analogous to mining or staking on other blockchains. What is different, and "super" this time, seems to be the possible reward, which could reach 20% Yearly + up to 15% immediately for the first few cohorts of participants which put up the required minimum of XTZ.

Investors are "favoring bitcoin as a hedge against political risks," Lennard Neo, head of research for the cryptocurrency-focused firm Stack Funds, told clients in a weekly newsletter.

In traditional markets, stocks rallied globally, Treasury yields dropped, the dollar declined and gold strengthened as investors reacted to the growing likelihood that a U.S. government led by Joe Biden might struggle to enact tax cuts, pushing more of the onus of financing new Treasury debt onto the Federal Reserve.

Pundits on Wednesday picked apart this week's U.S. election results as previously too-close-to-call states got called. President Donald Trump, suddenly eyeing the all-too-real prospect of being labeled a loser, started mounting legal challenges wherever possible.

And bitcoin? It took a victory lap.

Worries that election uncertainty might lead to a sell-off in the largest cryptocurrency were quickly replaced by bullish enthusiasm that some form of stimulus, whether fiscal or monetary, would ultimately push up prices for bitcoin, seen by many investors as a hedge against inflation.

The cryptocurrency has doubled this year as the Federal Reserve pumped more than $3 trillion of freshly printed money into global markets. The Standard & Poor's 500 Index of U.S. stocks, by contrast, is up just 6.6%.

The return dynamic could come into sharper focus Thursday as Fed officials release a statement on this week's two-day, closed-door monetary-policy meeting. No major actions are anticipated, but Chair Jerome Powell is expected to reiterate a pledge that the U.S. central bank stands ready to support markets if needed to kindle an economic recovery from the devastating toll of the coronavirus.

"The policy announcement tomorrow will likely affirm their accommodative stance going forward, focusing on the status quo, and avoid creating policy uncertainty in the immediate wake of the election," Denis Vinokourov, head of research for the cryptocurrency prime broker Bequant, told First Mover in an email.

On Wall Street, traditional markets staged a relief rally Wednesday as Trump's Democratic challenger, former Vice President Joe Biden, widened his lead in the race, with apparent victories called in Michigan and Wisconsin.

Bitcoin also appeared to benefit, which makes sense given that Biden has pledged to push for at least $5 trillion of new government spending on initiatives related to education, housing, health care, paid leave and infrastructure. Ostensibly the Treasury Department would have to borrow money to pay for the agenda, and the Fed would likely have to print money to finance the extra debt.

Gridlock, with a split Congress that stonewalls major legislative initiatives, is viewed by many investors as the most halcyon environment for business continuity, and perhaps a bulwark against Biden's proposed tax increases.

"Since members of Congress are the ones in charge of government spending, the puppet that sits as figurehead of the nation tends to play a side role in both fiscal and monetary policy," Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, told clients Wednesday in a note.

What's less clear is whether a spending bill, which the Fed says is needed to promote a speedy economic recovery, could get passed during the next couple months if Trump loses. The Republican-controlled U.S. Senate proved unwilling to pass a big economic stimulus package over the past month even with Trump agitating for a deal.

"If Biden ekes out a win, Trump will have little incentive to push through a deal for another round of stimulus, which could cause markets to sell off in the short term," the digital-asset analysis firm Messari wrote Wednesday in a note. "This sell-off could bleed into bitcoin."

That's if Trump agrees to go quietly – hard to imagine given his track record of combativeness.

"Trump is now tweeting about how his lead 'magically' disappeared, setting the stage for a contested election which would likely spell further volatility ahead," according to Messari.

The American electorate might be ready for respite from the drama. Bitcoin appears to have plenty of energy.

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Bitcoin Watch

Bitcoin's daily price chart puts recent days' trading action into context. (TradingView.)

Bitcoin has surged to around $14,720, the highest since January 2018, representing over 100% gains on year-to-date basis.

While Democrat Joe Biden was in the lead in the U.S. presidential race, Congress is heading toward a split, meaning the much anticipated fiscal stimulus could be smaller than previously expected.

"We may not know what a post-election stimulus may look like, but investors continue to believe that the Fed will keep printing money at a pace that favors bitcoin's finite supply," John Kramer, a trader at crypto liquidity provider GSR, told CoinDesk.

The cryptocurrency's convincing break above the June 2019 high of $13,880 has shifted the focus to the record high of $20,000 reached in December 2017. That's because there is very little resistance between $13,880 and $20,000.

That said, the rally is looking overstretched as per technical indicators such as the 14-day relative strength index. While an overbought reading does not imply a bearish reversal, it often yields a pause or a temporary pullback. The rising 10-day simple moving average (SMA) is the support to watch out for in the short-term.

- Omkar Godbole

Ethereum 2.0 deposit contract goes live, in key milestone for blockchain network's "proof-of-stake" upgrade (CoinDesk)

Coinbase crypto exchange goes on hiring spree in Japan (CoinDesk)

Unit of crypto exchange ErisX gets OK from U.S. commodity regulators to clear fully collateralized swaps (CoinDesk)

"Over the next five years, most crypto firms will become banks and bank will become crypto firms" (CoinDesk)

Sam Bankman-Fried, CEO of FTX exchange where TRUMP and BIDEN futures trade, gave $5.2M to Biden's presidential campaign, WSJ Says (CoinDesk)

Russian hydropower giant and aluminum producer En+ opens bitcoin mining farm in Siberia (CoinDesk)

Someone just paid a $9K fee for a $120 DeFi transaction (CoinDesk)

Analogs

Bank of England boosts bond-buying program by bigger-than-expected £150B ($195B) as UK central bank floods economy with cash (Bloomberg)

China could impose 200% duty on Australian wines as punishment for alleged dumping (South China Morning Post)

CoinDesk Research's latest Monthly Review covers asset performance in October, Bitcoin’s congestion problem and Ethereum’s shifting metrics as the launch of Ethereum 2.0 looms. Download the free report.

Tweet of the Day

CoinDesk's upcoming virtual event Bitcoin for Advisors, on two half days Nov. 9-10, showcases a program tailored to the financial advisor community that covers investment theses for bitcoin, why younger demographics are turning to this asset and how it fits into the current global macroeconomic picture.

We will also walk through the practicalities: how to answer client questions about bitcoin, how to talk to your compliance department about bitcoin, how can bitcoin can help grow your book. Apply for Bitcoin for Advisors, Nov. 9-10.

Webinar: How to Value Ethereum

In this 30-minute webinar, the first of the four-part series How to Value Ethereum, CoinDesk Research looks at accounts - a concept that sounds familiar to blockchain addresses, but involves novelties and complexities that are critical to understanding how Ethereum works.

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.

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