1. Bitcoin Back Above $40K as Institutions Lead the Way
The price of bitcoin (BTC) rose above $40,000 Saturday as the leading cryptocurrency has nearly regained all its losses suffered since reaching an all-time high in early January.
BTC hit $40,538.66 before falling back to $40,272.56, up 4.91% in the last 24 hours, putting it back within striking distance of the all-time high of $41.962.36 set on Jan. 8.
After hitting that high-water mark, BTC lost nearly a third (31.25%) of its value and all its spectacular year-to-date gains, bottoming out at $28,845.31 on Jan. 22.
After moving sideways for a week or so, over the last seven days BTC has made a string of upward moves, culminating in today’s rise. Year-to-date BTC’s gain is 36.91% and it’s up 39.72% from Jan. 22.
Helping to drive this latest run is fresh interest on the part of institutional money such as Ray Dalio’s Bridgewater Associates, which manages $150 billion in investor money, and the Miller Opportunity Trust. It may also be getting a boost from MicroStrategy’s WORLD.NOW BTC-themed conference this past week.
“Bridgewater’s piece out last week had a sensitivity analysis which showed their estimates of BTC price, should private holders of gold switch to BTC,” states a weekly investor note Friday from quantitative trading firm QCP Capital.
“They forecasted that should 50% of capital in gold move into BTC, that would result in a price of $85,000 per 1 BTC.”
2. Money Reimagined: Enterprise Blockchain Isn’t Dead
A snowy week has left New Yorkers chilly. But ether investors must be feeling cosy. Ethereum’s native token has risen more than 25% on the week to clock new record highs and far outpace bitcoin’s gain, while Ethereum-centric decentralized finance (DeFi) data showed new records for total value locked in DeFi. The numbers speak volumes about the symbiotic relationship between DeFi and ether but also show how much pressure is on developers to execute on the Ethereum 2.0 upgrade. The congested network is grappling with sky-high transaction fees (as I discuss below).
3. Bill Miller’s Flagship Fund May Now Buy GBTC to Gain Bitcoin Exposure of Up to 15%
Miller Value Funds–run by veteran hedge fund manager and bitcoin bull Bill Miller–may invest in the Grayscale Bitcoin Trust through its flagship fund, the Miller Opportunity Trust.
“The Fund may seek investment exposure to bitcoin indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds bitcoin,” the fund wrote in a filing with the U.S. Securities and Exchange Commission. “The Grayscale Bitcoin Trust invests principally in bitcoin. The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.”
Miller Opportunity Trust had assets under management of $2.25 billion as of Dec. 31, 2020, making the fund’s potential maximum investment in GBTC $337 million. The fund is co-managed by MIller and Samantha McLemore.
4. If Whales Move the Market, UniWhales Is the Whale Whisperer
When Elon Musk changed his Twitter bio to “#bitcoin” last week it moved the market, but not just for bitcoin itself.
Users of UniWhales could see big holders making moves in real-time. Matt Aaron, the CEO of UniWhales, sent CoinDesk screenshots showing three big moves of liquidity providers exiting USDC/ETH and USDT/ETH positions on Uniswap. In 11 minutes, $47 million worth of liquidity had exited the Uniswap system right after Musk told the world:”In retrospect, it was inevitable”.
“Our thesis is that whales control the market,” Aaron told CoinDesk in a phone call. “People with more money tend to have better information.”
5. Digital Gold: How Should Financial Advisors Be Thinking About Bitcoin?
Is Bitcoin digital gold? In this episode of ‘On Purpose, With Tyrone Ross’, we dig into bitcoin narratives as financial advisors see them and explore the concept of bitcoin as a store of value.
“Saying ‘Internet Money’… What else in my portfolio is like Internet Money? Hmmm….” said independent investment advisor and ‘On Purpose’ host Tyrone Ross, “but when you say ‘Digital Gold’, alright… Clients can wrap their heads around the digital part, they can wrap their heads around the gold part. They probably own gold in a portfolio already, and then you can get into asymmetric returns and uncorrelated to other assets in the portfolio… Bitcoin is mined and there’s gold mining…. You can start these basic frameworks for the advisor to understand and also make it accessible to clients.”
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February 07, 2021