1. Market Wrap: Bitcoin Drops Briefly Below $33.5K While Ether Calls Dominate Options
Bitcoin is recovering from a steady price decline while ether options traders anticipate another high-water mark after it hit an all-time high of $1,439.
Bitcoin (BTC) trading around $35,023 as of 21:00 UTC (4 p.m. ET). Slipping 4.1% over the previous 24 hours.
Bitcoin’s 24-hour range: $33,430-$36,794 (CoinDesk 20)
BTC above the 10-hour but way below the 50-hour moving averages on the hourly chart, a sideways signal for market technicians.
2. The Relationship Between US Government Debt and Bitcoin, Explained
The kind of inflation outbreak that might prove bitcoin’s power as a hedge asset isn’t coming in the near term, according to some economists.
“Right now, low interest rates tell us there’s no evidence that we’re borrowing too much money,” Stanford economist Erik Brynjolfsson said. “Separately, but related, inflation is also very low. The [Federal Reserve] has set a target of about 2% for inflation, and it’s consistently been missing that target on the low side. We don’t see any evidence that inflation is taking off.”
In fact, future economic growth could be in danger if the U.S. doesn’t embrace new stimulus, former Treasury Secretary Lawrence Summers told CoinDesk. He said the potential for inflation isn’t as concerning as the potential for economic growth coming to a halt.
3. BlackRock Gives 2 Funds Go-Ahead to Invest in Bitcoin Futures
BlackRock, the world’s largest asset manager with $7.81 trillion under management, appears to have granted at least two of its funds the ability to invest in bitcoin futures.
Prospectus documents filed with the U.S. Securities and Exchange Commission Wednesday indicate that BlackRock Global Allocation Fund Inc. and BlackRock Funds V are at least eyeing bitcoin. They both include the world’s oldest cryptocurrency on their lists of derivative products cleared for use.
BlackRock did not state which commodity exchange it will choose to execute these crypto futures buys. However, the funds may only invest in cash-settled bitcoin futures. CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) that offers similar futures products at this time.
4. Tether Use on Tron Passes Ethereum as Low Fees Attract Small Transactions
The number of tether transactions on the Tron blockchain have passed Ethereum’s count for three consecutive weeks as fees on the number two blockchain remain high.
Total weekly tether (USDT, +0.06%) transactions on Ethereum have held steady at around 1.5 million for the past four weeks. But on Tron, transactions per week have grown from roughly 900,000 in mid December to nearly 2 million the second week in January, per Coin Metrics data.
This recent trend is “primarily because of fees,” said Coin Metrics analyst Nate Maddrey in a message to CoinDesk.
5. Ether’s Rise to Record Highs May Propel Cryptocurrency to $10.5K: Fundstrat Global
Even after setting a new record high of $1,439 on Monday, the rally for Ethereum’s ether cryptocurrency may have only just begun, according to Fundstrat Global Advisors strategist David Grider.
Basing his prediction partly on use cases for Ethereum’s blockchain technology, Grider wrote in a note Tuesday that ether (ETH, -4.1%) has scope for a rally to $10,500, according to Bloomberg. That’s an over seven-fold rise from the current price of $1,320.
“Ether is the best risk/reward investment play in crypto,” Grider said, adding that “blockchain computing may be the future of the cloud.”
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January 21, 2021