1. Market Wrap: Bitcoin Back Above $48K, Expect Consolidation
Cryptos gain alongside stocks.
Bitcoin is back above $48,000 as buyers responded to intraday oversold signals. The world’s largest cryptocurrency is up about 9% over the past week, compared with a 7% rise in ether and a 30% rise in Cardano’s ADA. The bounce in cryptocurrencies occurred alongside gains in stocks on Wednesday.
Despite lower trading volume, analysts expect cryptocurrencies to consolidate near highs before buyers return for the next leg up.
EToro, a multi-asset brokerage, released second-quarter earnings Wednesday, reporting $362 million in trading commissions, a 125% year-over-year increase. Yoni Assia, eToro’s co-founder and CEO, told that traders have been diversifying across cryptos and stocks this year.
The platform’s retail customers never really dropped out of the market during the price correction a few months ago, Assia said. “The majority held through and continued to hold/add to cryptos,” he said.
Bitcoin (BTC) $48,820, +1.32%
Ether (ETH) $3,222, +0.55%
S&P 500: 4496.2, +0.22%
Gold: $1790.8, -0.67%
10-year Treasury yield closed 1.347%, compared with 1.289% on Tuesday
Bearish bitcoin bets
Hedge funds and other large traders continued to pile into bearish bets on bitcoin last week. The tally of short positions has increased by 6,000 since July 20 to hit the highest in three months. But the data doesn’t necessarily indicate that the traders are betting on outright price declines.
2. Can Avalanche Keep It Up? DeFi Users Rush In as Incentives Roll Out
The total value locked in Avalanche’s DeFi ecosystem has swelled to $1.8 billion in the last month. Here’s why.
In an explosive move reminiscent of the growth of Binance Smart Chain (BSC) and Polygon earlier this year, the Avalanche blockchain is attracting a flood of new deposits into its decentralized finance (DeFi) ecosystem.
Despite the signs of strength, however, not all analysts are convinced the Ethereum competitor has staying power.
At the end of July, Avalanche’s DeFi ecosystem accounted for just $180 million in total value locked (TVL) — a figure that has since ballooned 1,000% to over $1.8 billion at the time of writing. Likewise, Avalanche’s native token, AVAX, has rallied from $13.41 to a high of $55.42 earlier this week.
3. Bitcoin Miners Hold Onto Rigs, Betting the Bull Run Will Continue
Supply has dried up despite a glut of available bitcoin mining rigs since China’s crackdown in May.
Some bitcoin (BTC, +1.69%) miners are sitting on their mining rigs in the hopes of selling them at a higher price as bitcoin’s rally continues.
“I know there is supply available,” said Vincent Vuong, director of sales and procurement at bitcoin mining and hosting company Compass Mining. “I talked to a lot of people. They all have thousands of units but nobody is willing to sell them.”
China’s crackdown on crypto mining sent mining rigs’ prices plummeting a few months ago, but the machines are now trading at a premium thanks to bitcoin’s recent bull run.
In recent weeks, bitcoin has seen some of its largest gains this year, boosting sellers’ confidence in the machines’ prices in the future.
Mining machines manufacturers like Bitmain and MicroBT allow their clients to pre-order the rigs and hold futures contracts for batches of machines that will be delivered on a predetermined future date. This practice has become more common as the coronavirus pandemic has slowed global logistics and created a crunch on the supply chain for materials to make the machines.
4. Recently Hacked Exchange Liquid Global Secures $120M Loan From FTX
Liquid Global lost $90 million in the cyberattack.
FTX, the crypto exchange founded and led by billionaire Sam Bankman-Fried, will lend $120 million to Liquid Global, the Japanese crypto exchange that was hacked last week.
Last week, Liquid Global saw more than $90 million stolen in the hack. At the time, the exchange said the attack targeted its multiparty computation (MPC) system of custody.
The debt financing secured from FTX will be used for Liquid Global’s capital position and to speed up capital generation projects, as well as provide liquidity, Liquid Global said in a press release.
“The financing will also improve Liquid’s balance sheet and, in turn, its key regulatory metrics, which further corroborates its ongoing licensing opportunities in the key jurisdictions of Japan and Singapore,” Liquid Global said.
“This opportunity with Liquid allows both organizations to strengthen and reinforce the belief that regulation in crypto and knowing your customer is an important part of the future of our industry,” Bankman-Fried said.
Liquid Global’s parent company, Quoine, was one of the first exchanges to receive a crypto asset operating license under Japan’s Payment Services Act.
Liquid’s Singapore subsidiary, Quoine Pte, has applied to the Monetary Authority of Singapore (MAS) for a license under Singapore’s Payment Services Act.
5. ADA, SOL Lead the Way as Crypto Market Sees Price Pullback
“It is normal for investors to reduce exposure to enter at a lower price,” one observer said.
The crypto market is a sea of red, with Solana’s SOL, Cardano’s ADA (+0.2%) tokens and other alternative cryptocurrencies taking a bigger hit than bitcoin (BTC, +1.87%) and ether (ETH, +1.04%). The move seems typical of a breather often observed after notable rallies.
ADA was trading at $2.67 at 10:53 UTC, representing a 7.6% drop on a 24-hour basis, and SOL was nursing a 13% loss at $68, according to data source Messari. ADA debuted on Japanese cryptocurrency exchanges today. Earlier this month, Sebastien Guillemot, CTO at dcSpark and a former executive of Cardano-founding entity EMURGO, hailed ADA’s entry to Japan as being similar to a listing on Coinbase, the U.S.-based, Nasdaq-listed crypto exchange and institutions’ preferred avenue to accumulate bitcoin.
XRP (+1.68%), polkadot (DOT, +1.5%) and dogecoin (DOGE, +0.13%) were also down more than 8%. Meanwhile, bitcoin was changing hands at $47,500, down 3.7%, and ether traded 5.5% lower at $3,100, CoinDesk 20 data show. All sub-sectors, including decentralized finance and non-fungible tokens, were flashing red.
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August 26, 2021