1. Market Wrap: Bitcoin Gains for Fifth Day, the Longest Streak This Year
Analysts who track price-chart patterns said bitcoin’s climb to about $54,000 could position the largest cryptocurrency for a fresh ascent toward last month’s record price above $58,000.
Bitcoin (BTC) trading around $54,368.84 as of 21:00 UTC (4 p.m. ET). Climbing 5.02% over the previous 24 hours.
Bitcoin’s 24-hour range: $51,428.66-$54,813.03
BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.
Bitcoin headed for its fifth straight daily gain, the longest winning streak this year, as a pullback in U.S. government-bond yields rekindled demand for risky assets like technology stocks and cryptocurrencies.
Analysts who track price-chart patterns said bitcoin’s climb to about $54,000 could position the largest cryptocurrency for a fresh ascent toward last month’s record price above $58,000, and from there potentially to $60,000 or higher.
“Bitcoin is recovering after having logged a short-term oversold reading in late February above its rising 10-week moving average,” Katie Stockton, a technical analyst for Fairlead Strategies, wrote in her newsletter on Tuesday. “Short-term momentum is positive and there is room to initial and final resistance near $58,000.”
2. Inflation Rate, Closely Tracked by Bitcoin Traders, Probably Accelerated in February
The CPI for February probably rose 1.7%, accelerating from the January pace of 1.4%, based on economists’ projections.
When Federal Reserve Chairman Jerome Powell downplayed the threat of rising inflation last week, market participants saw the opposite: The recent rise in 10-year U.S. Treasury-bond yields and so-called breakeven rates — a gauge of inflation expectations — reflects growing enthusiasm over economic growth prospects but also anxiety over the potential for accelerating price increases.
The matter is crucial to bitcoin traders, since the largest cryptocurrency is seen by a growing number of investors as a potential hedge against higher prices after the Fed pumped trillions of dollars of freshly created money into financial markets over the past year, a form of monetary stimulus for the coronavirus-racked economy.
On Wednesday investors will get the latest reading on price pressures when the U.S. Bureau of Labor Statistics publishes its February Consumer Price Index (CPI) report.
Economists and analysts on average project that the headline CPI probably rose 1.7% over the past 12 months, accelerating from the 1.4% pace reported last month January, according to FactSet.
The core CPI, which excludes food and energy prices, probably rose 1.4% from a year earlier, the same pace as in January.
While those rates are still considered low, expectations for future inflation have been on the rise. Consumer inflation expectations for the year ahead have edged up to 3%, the highest since July 2014, based on a February household survey conducted by the Federal Reserve Bank of New York.
“Inflation risks are skewed to the upside,” according to a Deutsche Bank research report published March 7.
The rapid rise in inflation-adjusted yields on U.S. Treasury bonds presents risk of an unwanted tightening of financial conditions, which might present a challenge to markets, according to Deutsche Bank: “We see limited scope for the market to further accelerate the timing of monetary tightening for the time being.”
3. JPMorgan to Launch ‘Cryptocurrency Exposure Basket’ of Bitcoin Proxy Stocks
The debt instrument would lean heavily on MicroStrategy, Square and Riot Blockchain stocks.
Just weeks after JPMorgan Chase published a report warning that traditional financial companies are at risk of falling behind in digital finance, the largest U.S. bank is looking to issue debt linked to cryptocurrency-focused companies.
J.P. Morgan Cryptocurrency Exposure Basket, the incoming debt instrument, is long on MicroStrategy (20%) Square (18%), Riot Blockchain (15%) and chipmaker NVIDIA (15%) with positions in 11 companies total. It does not invest directly in cryptos, according to the prospectus.
The filing reveals yet another way Wall Street players are looking to give their clients access to the upside of a booming crypto market, which CoinGecko now estimates at $1.7 trillion.
4. Muhammad Ali NFT Minted 50 Years After ‘Fight of the Century’ With Joe Frazier
“The Ali Collection” is designed to commemorate the boxer’s life and legacy as the sports world reflects on the anniversary of a historic fight.
Muhammad Ali is being memorialized in non-fungible token (NFT) form 50 years on from “The Fight of the Century” in which the boxing icon faced Joe Frazier in New York City. Ali lost the fight to “Smokin’ Joe” on March 8, 1971, but went on to win two subsequent bouts in 1974 and 1975.
The digital collectible is hitting the market as NFT mania reaches fever pitch. NFTs are digital assets that represent a wide range of unique tangible and intangible items, from sports cards to virtual real estate. Unlike bitcoin and other cryptocurrencies, whose units are meant to be interchangeable, each NFT contains distinguishing information that makes it distinct from any other NFT.
Underscoring their current popularity, last week a bidding war over an NFT of an early tweet by Jack Dorsey reached seven figures.
The legendary pugilist’s NFT is coming thanks to a partnership between Ethernity Chain and the Muhammad Ali Center, the museum dedicated to Ali’s life and career located in his hometown of Louisville, Ky.
“The Ali Collection” is designed to celebrate the boxer’s life and legacy, featuring famous photographs of Ali and Frazier taken in 1971 by Sports Illustrated photographer Neil Leifer.
5. US Lawmakers Introduce Bill to Clarify Crypto Regulations
The proposed bill would create a working group to evaluate U.S. cryptocurrency regulations with input from the SEC and CFTC.
Congress may soon try to clarify digital asset regulation in the U.S.
Reps. Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) introduced legislation Tuesday to create a working group composed of industry experts and representatives from the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to evaluate the current legal and regulatory framework around digital assets in the U.S.
The three other co-sponsors of the bill are Glenn Thompson (R-Pa.), Ted Budd (R-N.C.) and Warren Davidson (R-Ohio).
The ultimate goal of the legislation, called the “Eliminate Barriers to Innovation Act of 2021,” would be to clarify when the SEC has jurisdiction over a particular token or cryptocurrency (i.e., when it is a security) and when the CFTC has jurisdiction (i.e., when it’s a commodity).
U.S. regulations can often appear lacking, with no clear rules on when a certain cryptocurrency is treated as a security or not, with SEC enforcement actions providing much of the guidance in this area. SEC Commissioner Hester Peirce, who is outspoken on the issue, tried tackling it in 2020 by proposing a three-year safe harbor for projects to get off the ground.
Under the terms of the bill, Congress would create a working group within 90 days of the bill’s passage composed of SEC and CFTC representatives.
Non-governmental representatives would come from a financial technology company, a financial services institution, small businesses using financial technology, investor protection groups, organizations that support investments in underserved businesses and at least one academic researcher.
Within a year, this group would be required to file a report analyzing current regulations, the impact they have on primary and secondary markets and how the regime impacts the U.S.’ competitive position.
The report would also look at how custody, private key management and cybersecurity are currently treated under law, and what future best practices for fraud prevention, investor protection and other issues could look like.
The report would also include recommendations for improving primary and secondary digital asset markets, including their “fairness, orderliness, integrity, efficiency, transparency, availability and efficacy.”
Amy Davine Kim, chief policy officer at the Chamber of Digital Commerce, told us the legislation aims to establish an organized, comprehensive regulatory framework for digital assets in the U.S.
“It brings together both the SEC and CFTC in a formal way, to work through some of the key issues that have impacted legal clarity in the space for years,” Kim said. “Now we have an opportunity to start addressing them in a methodical way with a number of stakeholders.”
The bill was originally supposed to be introduced Monday and considered under a voice vote by the full House of Representatives, indicating broad bipartisan support, according to Rep. Don Beyer (D-Va.), but was pulled due to procedural actions taken by the Freedom Caucus.
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March 10, 2021