1. Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops
Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge.
Bitcoin (BTC (-9.04%)) trading around $48,204 as of 21:15 UTC (4:15 p.m. ET). Declining 4.5% over the previous 24 hours.
Bitcoin’s 24-hour range: $47,578-$51,781
Bitcoin’s price fell by the most in a week after U.S. Federal Reserve Chair Jerome Powell acknowledged he “would be concerned” by tightening financial conditions because rising U.S. government-bond yields put upward pressure on borrowing costs.
The comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge in the face of trillions of dollars of money printing by central banks around the world.
As of press time, bitcoin was changing hands around $48,204, down about 4.5% over the past 24 hours.
Federal Reserve Chair Jerome Powell speaks Thursday with the Wall Street Journal. (Wall Street Journal)
Powell said in a question-and-answer session with the Wall Street Journal he doesn’t expect higher inflation to persist and that the central bank is still “a long way from our goals” of an economic recovery and lower unemployment.
2. Grayscale Discount Might Signal Start of Fresh Bitcoin Rally, Bloomberg’s McGlone Says
Far from a signal of distress, a negative level on the “Grayscale premium” might signal a market reset for a fresh bitcoin rally.
Bloomberg Intelligence analyst Mike McGlone, who correctly predicted bitcoin (BTC, -9.01%)’s ascent this year to a price above $50,000, says recent market indicators suggest $100,000 could be the next threshold.
McGlone wrote in a March outlook report that a recent drop below zero in the so-called Grayscale premium — a closely watched metric in cryptocurrency markets — could signal that last week’s swift 21% sell-off to about $43,000 might have reset the market for a fresh run. As of Thursday, prices had rebounded to about $50,000.
The Grayscale premium refers to the difference between price of bitcoin as implied by cost of shares in the publicly traded Grayscale Bitcoin Trust (GBTC), and the price of bitcoin as traded on cryptocurrency exchanges. Historically, it’s been positive. For a story on the Grayscale premium flipping negative, go here.
“Bitcoin’s end-of-February price disparities on U.S. regulated exchanges portend a firming price foundation, if history is a guide,” McGlone wrote.“Indicating capitulation selling, the Grayscale Bitcoin Trust closed at its steepest discount ever, while December CME-traded bitcoin futures settled about 20% higher.
“Normal maturation and increasing market depth will narrow wide price disparities, and we view the end-of-February extremes as an indication of just how nascent bitcoin still is.”
3. DOGE Adoption on the Rise. Dallas Mavericks to Accept Dogecoin for Tickets, Merchandise
The team will soon be accepting the crypto as part of a deal with payment services provider BitPay.
Dogecoin (DOGE (-4.4%)), the Shiba Inu-represented cryptocurrency, is heading to the National Basketball Association.
The Dallas Mavericks will soon be accepting the meme-based cryptocurrency as part of an agreement with crypto payment services provider BitPay, which is rolling out the coin as a payment option for merchants and consumers.
It’s the second big piece of news for the canine cryptocurrency this week. On Tuesday, ATM provider CoinFlip announced DOGE can now be purchased with cash across its 1,800-machine network.
And while one would be forgiven for thinking the deal might not be as big a deal for the Mavericks, which began accepting bitcoin (BTC, -9.16%) as a method of payment for almost two years, you wouldn’t know it from the tone of the announcement:
“The Mavericks have decided to accept dogecoin as payment for Mavs tickets and merchandise for one very important, earth-shattering reason: Because we can!” Mark Cuban, the team’s billionaire owner, barked in the press release.
It’s not Cuban’s first DOGE show, either. Early last month, Cuban tweeted he’d bought some DOGE in order for his son to teach him about the crypto markets.
“For those of you who would like to learn more about dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you,” Cuban said.
That BitPay, the largest provider of crypto payment services in the world, is now offering it as a form of payment continues the remarkable resurgence of DOGE, which had basically played dead for all of 2020, trading at times for less than half a cent.
In just a few short months, the meme-based crypto has gone from mutt to best in show.
The interest in the cryptocurrency began when people ranging from Tesla CEO Elon Musk to Snoop Dogg adopted DOGE as a pet cause.
Soon the coin captured the imagination of the crypto-buying public and occasionally has surpassed vastly larger bitcoin as the most mentioned cryptocurrency on Twitter.
Year to date, DOGE has risen about 1,000%, trading about five cents at press time and now has a market cap of more than $6 billion. Earlier in the year, it was above $10 billion.
Overall, it’s been quite the tale and judging by the day’s BitPay news, DOGE still may have a ways to run.
4. Blockchain Sleuth Says OKEx, Huobi Stonewalled Him in Child Porn Investigation
Fed up with what he sees as cryptocurrency firms stalling his investigations of one of the most heinous crimes imaginable, Rich Sanders is going on the record — and naming names.
The lead investigator and principal of blockchain analytics provider CipherBlade said he’s used to being fobbed off by exchanges when trying to trace funds from hacks and scams. But his frustration boiled over recently when conducting an investigation into wallets linked to child sexual exploitation material (CSEM).
Firms like Sanders’ are hired by law enforcement agencies, regulators and crypto businesses trying to follow the money on nefarious cryptocurrency transactions. However, in the case of CSEM-related crypto, Sanders is conducting his investigation on a pro bono basis, that is to say, not on anyone’s behalf.
In regards to this investigation, he’s publicly calling out Huobi, OKEx, both high-ranking exchanges, and a smaller outfit called MorphToken for being unresponsive and unhelpful when presented with evidence of CSEM flowing in from the dark web.
“Why would an exchange or any service in this industry that’s claiming to want to do the right thing refuse to speak at all?” Sanders said. “Whether it’s OKEx, Huobi, MorphToken or whoever, they’re placing these barriers that are not designed to bolster data privacy nor anti-money laundering. These things are put in place to frustrate investigators’ efforts or police efforts.”
Huobi and OKEx said they employ their own blockchain analytics tools and take a proactive approach with things like CSEM. MorphToken did not respond to requests for comment.
Around the world, a new breed of forensic investigator is illuminating the darker side of cryptocurrency using the underlying record of transactions, the blockchain, to track flows of funds — a science far less-well defined with cash.
5. NFTs, DAOs and the New Creator Economy
Decentralized autonomous organizations, non-fungible tokens: Building blocks for a new media owned by talent.
Media companies are talent companies. As that becomes increasingly obvious to the media industry at large, there has been an acceleration of development by both challengers and incumbents to position themselves to capture media’s most critical natural resource: people.
The creator economy served as a catalyst to disrupt legacy structures by introducing platforms and products that enable individuals to build a business around themselves. Top talent wants more control and ownership over their work, having options to transcend their reputation and financial success from a parent brand.
Independence is really hard. The creator economy has invited criticism of creator burnout, lack of necessary support and an absence of strategic and educational resources for individuals to better guide themselves in isolation. While there is accelerated development in the creator economy to fulfill those needs, there’s another economy being built that is positioned to extend the promise of the new media structure even further.
The ownership economy — by way of decentralized autonomous organizations (aka DAO) and non-fungible tokens (aka NFT) — builds a business on top of the creator economy that encourages creators, operators and the community to collaborate together under a new, interdependent ownership mechanism that combines the best of both (legacy and creator economy) worlds and then some.
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March 5, 2021
