1. Market Wrap: Bitcoin Heads to $61K Ahead of Options Expiry
Analysts expect short-term choppiness ahead of the next leg higher.
Bitcoin rose toward $61,000 on Thursday, albeit within a choppy trading range. Analysts have mixed views about the short-term direction of BTC’s price, which is up about 2% over the past 24 hours.
On Wednesday, El Salvadorian President Nayib Bukele tweeted that his government had “bought the dip,” adding an additional 420 BTC to the treasury, the equivalent of around $25 million. That purchase was one reason behind today’s price bounce. Bitcoin’s price has whipsawed over the past few days after failing to sustain the all-time high around $66,900 last week.
“Some believe what is happening is a quick balancing process and preparation before the push for new highs, while others think it’s the beginning of a broader correction that will take BTC to $45K-$50K,” FxPro analyst Alex Kuptsikevich told. Kuptsikevich also mentioned that technical price indicators are retreating from overbought levels, which could lower the odds of a sustained correction.
Latest prices
Bitcoin (BTC): $61,471, +3.82%
Ether (ETH): $4,274, +6.64%
S&P 500: $4,596, +0.98%
Gold: $1,798, +0.09%
10-year Treasury yield closed at 1.56%
Other analysts are cautiously optimistic and expect the current pullback to attract greater buying interest for the remainder of the year. “We think the risk-on trade is going to be accelerating in the fourth quarter … [B]ecause crypto has the most volatility, we are extremely bullish on what crypto will do,” Eddie Ghabour, managing partner at Key Advisors Group said.
“Despite this quick dip from the highs, the market feels relatively calm and perhaps even slightly optimistic that this is just a dip before a larger rally into year end,” crypto trading firm QCP Capital wrote in a Telegram announcement.
Bitcoin option expiry
A full $3.1 billion of BTC options are set to mature on Friday, which could be a source of volatility. Currently, the top volume contracts have been around the $60,000 strike price, with calls outweighing puts.
Calls (bullish position) give the options buyer the right to purchase the underlying asset in the future at a predetermined price, whereas puts (bearish position) provides the right to sell.
“Long [traders] stand to benefit should BTC maintain current levels [around $60K] and put option volume remains subdued,” FundStrat wrote in a Thursday newsletter.
2. Ether Reaches Record High of Over $4.4K as Shiba Inu Becomes a Leading ETH Burner
Coin burning refers to the process of removing tokens from circulation and is the crypto market’s equivalent of a stock buyback.
Ether (ETH) clocked a new all-time high on Friday as blockchain data showed that smart contract blockchain Ethereum burned more tokens than it emitted in the last 24 hours, thanks partly to strong action in Shiba Inu (SHIB).
The native token of Ethereum’s blockchain rose to $4,402 during Asian hours, topping the previous record high of $4,379 reached in May.
At the going price of $4,370, the cryptocurrency is up 45% on a month-to-date basis versus bitcoin’s 40% gain. The ether-bitcoin implied volatility spread is rising in a sign that the market expects ether to continue leading the price action in the coming weeks, as Thursday’s First Mover newsletter mentioned.
Data tracked by Tokenview shows Ethereum produced 15,109.34 ETH and burned 16,710.2 ETH in the past 24 hours. That’s a net supply reduction of 1,600 ETH.
SHIB, the self-proclaimed dogecoin killer, burnt 770.12 ETH, becoming the third-largest ETH destroyer. Uniswap V2 and Tether destroyed 2729.22 and 1248.72 ETH, respectively.
SHIB has rallied a staggering 800% this month, hitting a record high of $0.00008870. According to Defi Llama, the total value locked in ShibaSwap, a decentralized exchange that allows users to stake SHIB, has doubled to $512 million this month.
Coin burning refers to the process of removing tokens from circulation and is the crypto market’s equivalent of a stock buyback.
The Ethereum Improvement Proposal (EIP) — 1559 implemented on Aug. 5 EIP 1559, burns a portion of fees paid to the miners, removing a notable chunk of coins from circulation. The upgrade has tied the amount of ether burned with the network usage.
Since activation, the upgrade has destroyed 668,339 ETH, representing over 50% of the new coins issued over the same period.
Some options traders are betting that U.S. regulators would soon approve a futures-based exchange-traded fund (ETF) and are buying cheap out-of-the-money calls in anticipation of a price rally. Data tracked by Laevitas shows the ETH $15,000 call expiring in March has drawn strong demand in recent days.
3. Play-to-Earn SQUID Token Rockets 35,000% in Three Days
The token buys entry to an online game inspired by Netflix’s hit show, Squid Game.
The price of SQUID, a play-to-earn crypto token, has shot up 35,000% since Oct. 26, according to CoinMarketCap data.
The token buys entry to an online game inspired by hit Korean Netflix show Squid Game, one of the streaming platform’s most successful shows of all time, according to the white paper.
SQUID was at $0.012 on Oct. 26, and is quoted above $4.20 on CoinMarketCap at the time of writing, up more than 270% in 24 hours.
In the online game, as in the show, competitors take part in six contests, with players eliminated in each round. An fee is required to enter each game, starting at SQUID 456 for the first and increasing as the tournament progresses. The majority of the fees are pooled together to make up the winner’s reward, while 10% of the funds go to the development team.
Unlike the 456 debt-ridden players in the TV show, “everyone here in crypto world can participate,” by buying the token the white paper said. On the game’s website, the “Play” button says it’s “COMING SOON.”
Speculators looking to trade the token, however, may face challenges. CoinMarketCap warns that users have been unable to sell the token on decentralized exchange PancakeSwap.
Play-to-earn gaming has surged in popularity in recent months, with Axie Infinity among the most well-known. In some countries players have been able to earn more than in their regular jobs, to the extent that local authorities are said to be looking to tax player’s revenue.
4. Australia’s Securities Regulator Issues Criteria for Crypto-Asset ETPs
Bitcoin and ether are likely to satisfy the regulator’s criteria for underlying assets for exchange-traded products (ETPs).
Australia’s securities regulator has determined that bitcoin and ether are likely to satisfy its criteria as appropriate underlying assets for exchange-traded products (ETPs).
The Australian Securities and Investments Commission (ASIC) published on Friday its guidance for providers wishing to offer ETPs linked to the performance of cryptocurrency, following a request from market participants for feedback in June.
For crypto to be a permissible asset for to back an ETP or other structured product, it must meet five criteria: A high level of institutional support and acceptance; reputable and experienced service providers to support the products; a mature spot market; regulated futures markets for trading derivatives and robust and transparent pricing mechanisms.
On this basis, bitcoin and ether “appear likely to satisfy all five factors … to determine appropriate underlying assets for an ETP,” the ASIC said.
An exchanged-traded fund (ETF) offering exposure to crypto-focused companies provided by ETF manager BetaShares is expecting to start trading in Australia in the near future. The ASIC findings suggest it could be followed by products offering more direct exposure to crypto in the months ahead.
5. India Likely to Regulate Crypto, Not Ban It, in Upcoming Budget
The government is likely to opt for regulating cryptocurrencies as an asset class, similar to commodities, with appropriate taxation of transactions and gains.
The Indian government is likely to regulate cryptocurrencies in its upcoming budget in February, moving away from its earlier approach of seeking to impose an outright ban, according to a Business Today report.
A law covering cryptocurrencies will most likely be discussed in the country’s next general budget, the report said, citing Indian Finance Ministry officials.
The government is likely to opt for regulating cryptocurrencies as an asset class, similar to commodities, with appropriate taxation of transactions and gains.
India’s Finance Ministry and the Reserve Bank of India (RBI) officials are currently engaged in “fine-tuning the conceptual framework and the necessary regulations,” according to Business Today.
In June, the New Indian Express reported the government was leaning towards classifying bitcoin as an asset class, citing industry sources, and that the Securities and Exchange Board of India (SEBI) would regulate the cryptocurrency sector.
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