1. Market Wrap: Bitcoin’s Winning Streak Ends as Prices Struggle to Break Record
Bitcoin is struggling to break above its current all-time high set in mid February.
Bitcoin (BTC) trading around $56,700 as of 21:00 UTC (4 p.m. ET), slipping 1.3% over the previous 24 hours.
Bitcoin’s 24-hour range: $55,116 to $58,150.
Continuing a strong start to the month, bitcoin bulls pushed all the way to $58,000 on Friday, but they’re still struggling to pass the record high set in mid February.
Bitcoin was down 2.2% on Friday, poised to end its longest winning streak this year, after prices failed to break though the all-time-high above $58,300 set last month.
As of 21:00 UTC (4 p.m. ET), bitcoin was changing hands just above $56,000 on Coinbase. The seven straight days of gains allowed the largest cryptocurrency to recover nearly all of its losses from late February, but bulls were unable to push the market to new highs.
2. Why the NFT Frenzy Won’t Drive Up Prices for Bitcoin Just Yet
The relative sizes of the markets means it’s effectively impossible for NFTs to have a price impact on bitcoin. That may change in future.
The white-hot market for non-fungible tokens has become so big, NFTs are even showing up in the headlines of mainstream publications like the New York Times and on cable news programs. But can the craze have much of an effect on bitcoin (BTC, -1.67%)? Probably not, at least for now.
The oldest and largest cryptocurrency, which, at around $57,000, ended a weeklong winning streak Friday, sits at the center of digital-asset markets, accounting for some 62% of the overall industry’s $1.7 trillion market capitalization.
So it would stand to reason there might be some spillover into the bitcoin universe from NFTs, which work atop mainly Ethereum-based blockchain networks, even if the connection might be indirect.
3. SushiSwap’s SUSHI Seen at $100 Value, Up Fivefold From Current Level
SUSHI’s near 3,000% rise isn’t over, and could be valued at $100 using a traditional dividend discount model.
SushiSwap’s governance token, SUSHI, could be worth $100, up fivefold from current price levels, according to John Todaro, head of business development at TradeBlock, a provider of institutional cryptocurrency trading tools and CoinDesk subsidiary.
SushiSwap is a decentralized cryptocurrency exchange built on the Ethereum blockchain. Its price has skyrocketed to about $19, representing a 30-fold gain from a November 2020 low. The protocol has proven one of the biggest success stories of decentralized finance, or DeFi, generating over $100 million in cumulative revenue since launch, Todaro wrote Thursday in the newsletter Bankless.
And similar to the way stockholders might receive a dividend, holders of the SUSHI get a share of the SushiSwap platform’s fees. “Recently, SushiSwap initiated a process whereby a portion of trading fees across the platform are paid out to token holders,” Todaro wrote.
This ownership stake is essentially a dividend, which can be used to value SUSHI, similar to the way a bond’s price is a function of the yield.
“In traditional equity markets, dividend paying stocks are often valued by discounting future cash flows to the present by and expected discount rate,” Todaro wrote.
Todaro used historical trading volumes and fees to calculate cash flows.
Based on his assumptions, Todaro estimates SushiSwap’s intrinsice market value at around $12.6 billion, which equates to a token value of about $100.
Despite the lofty valuation, Todaro cautioned investors about considerable risks in the market, including a slump in DeFi cryptocurrency trading.
This industrywide risk could “severely impact SushiSwap’s volumes and hence trading fees,” Todaro wrote.
4. Binance Faces CFTC Probe Over US Customers Trading Derivatives
The agency hasn’t accused Binance of any wrongdoing, according to the Bloomberg report.
Binance is being investigated by the Commodity Futures Trading Commission to determine if U.S. residents traded derivatives on the cryptocurrency exchange in violation of U.S. rules, Bloomberg reported.
Binance hasn’t been accused of any wrongdoing and the CFTC may not bring an enforcement action, according to the report, which cited people familiar with the matter. Bloomberg also did not outline a time period for this alleged trading.
Spokespeople for Binance and the CFTC did not immediately return requests for comment. However, in a tweet posted after Bloomberg’s report ran, the exchange’s founder and CEO, Changpeng Zhao, appeared to call the report “FUD,” using an acronym for “fear, uncertainty and doubt” that is often used to refer to unwelcome news in the crypto industry.
The news comes a day after Binance announced it has hired Max Baucus, a former U.S. senator and ambassador to China, as a policy adviser who would be able to navigate the exchange’s relationship with U.S. regulators. Baucus currently operates a consulting business.
5. Bitcoin Not a Long-Term Allocation, Says Man Group CEO
Ellis said he “dabbled” in bitcoin but sees himself as a trader rather than a hodler.
Luke Ellis, CEO of U.K. hedge fund Man Group, sees bitcoin (BTC, -1.87%) as a trading instrument rather than a long-term asset allocation.
Appearing on CNBC’s “Squawk Box” on Friday, Ellis revealed that he had “dabbled” in bitcoin but sees himself as a trader rather than a HODler.
“I see it as a trading instrument, so we trade around it and try to provide some liquidity into the market,” he told CNBC’s Andrew Ross Sorkin.
Ellis also said he did not think it was necessary for companies to hold bitcoin on their balance sheets, describing this as “confusing” considering the business use case relative to the inherent speculation.
“I don’t think companies are supposed to be speculate with their cash balances,” he added.
Large companies such as Tesla and MicroStrategy have disclosed large treasury investments in bitcoin in recent months.
Man Group is a London-based hedge fund, managing around $123.6 billion for its mostly institutional clients.
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March 13, 2021