1. Market Wrap: Bitcoin Near $53K After Major Drop as Ether Tops $2,800 for First Time
Bitcoin’s dominance is less than half of the crypto market as assets like ether and binance coin captivate traders.
Traders and analysts continue to talk up ether and alternative cryptocurrencies as bitcoin struggles to regain the $64,000 record price level attained weeks ago.
Bitcoin (BTC) trading around $52,964 as of 21:00 UTC (4 p.m. ET). Slipping 3.6% over the previous 24 hours.
Bitcoin’s 24-hour range: $52,622-$55,851
BTC below the 10-hour and the 50-hour moving averages on the hourly chart, a bearish signal for market technicians.
The price of bitcoin was dropping Thursday, going as low as $52,622 and settling at $52,964 as of press time. There’s been an almost $3,000 price change over the past 24 hours for the world’s oldest cryptocurrency, ranging from $55,851 down to $52,622.
It’s the season for alternative cryptocurrencies, or “alts,” according to Rich Rosenblum, president of crypto market maker GSR. This might help explain why bitcoin has suddenly lost some of the momentum seen earlier this week.
“When new money flows into BTC, people are less focused on alts,” Rosenblum told us. “Once it feels like the bullish pattern for BTC breaks down, people roll some of those profits into alts.”
2. As Ether Pushes Ever Higher, Crypto Traders Plot Price in Bitcoin Terms
The implication is the ongoing capital rotation out of bitcoin and into ether is likely to continue over the coming months.
Ether (ETH, +0.77%) (ETH), the native cryptocurrency of the Ethereum blockchain and the second-biggest overall, reached a fresh record high early Wednesday, widening its lead over market leader bitcoin (BTC, -2.18%) (BTC).
The trend looks set to continue, with ETH/BTC (the ether-bitcoin price ratio) breaking out to a multi-year high in a sign of increased capital flow into ether.
Ether rose to $2,800, surpassing the peak price of $2,762 reached Wednesday.
The cryptocurrency has rallied by 43% so far this month, decoupling from bitcoin, down 7%. The ETH/BTC ratio has jumped to 2.5-year highs above 0.050, confirming a major bullish breakout on technical charts.
3. Fed’s Powell Says Market, as Exemplified by Dogecoin, Is ‘a Bit Frothy’
“You are seeing things in the capital markets that are a bit frothy, that’s a fact,” said Powell. “I won’t say it has nothing to do with monetary policy.”
U.S. Federal Reserve Chairman Jerome Powell said Wednesday he thinks capital markets, as typified by the dogecoin craze, are a “bit frothy” and admitted that the central bank’s easy-money policy may have had something to do with that.
In a press conference that followed the Fed’s two-day meeting, Powell was asked whether he believed there was a risk to financial stability in trends such as the meme-inspired cryptocurrency. The Shiba Inu-represented crypto, which was started as a joke, is up more than 6,000% year to date.
The question was framed amid the backdrop of low interest rates and easy monetary policy that has sparked interest in speculative investnments such as GameStop’s stock and dogecoin.
4. Coinbase Debuts ‘Buy With PayPal’ Feature (but Read the Fine Print)
The integration could lead to massive, and avoidable, costs for users who don’t pay attention to Coinbase’s fee schedule.
Coinbase is allowing U.S. users to buy cryptocurrency with their PayPal accounts in a major expansion of the exchange’s funding rails.
The option, announced Thursday, could cost unwitting users substantial sums in fees.
It is also another sign of crypto’s increasing mainstream acceptance. PayPal, long coy and standoffish about the sector, began allowing users to buy crypto on its own platform last year and has gradually expanded this service. Coinbase, one of the crypto industry’s oldest startups, recently listed its shares on the Nasdaq.
Coinbase users can now buy up to $25,000 in crypto daily using PayPal, according to the exchange’s settings page. They’ll lose nearly 4% of such purchases to PayPal-specific fees.
The PayPal integration is the third big-spender option alongside bank buys via automated clearing house (ACH), also capped at $25,000 daily, and wire transfers, which have no cap. Needing only the PayPal login to set up, it could offer users a workaround to Coinbase’s cumbersome linking process for credit and debit cards ($5,000 weekly maximum) and bank accounts.
5. DeFi Is Now a $100B Sector
…by at least two measures, that is. Decentralized finance users probably top 1 million.
As the Coinbase public listing approached, many analysts were looking for a $100 billion valuation. The cryptocurrency exchange, founded by Brian Armstrong and Fred Ehrsam, hit that mark briefly after listing, but COIN has settled down to a less-rarified valuation.
Meanwhile, CoinGecko calculates a total market capitalization of $128 billion for decentralized finance (DeFi), the corner of the cryptocurrency industry that represents a wide range of lending, trading and betting activities carried out almost entirely on blockchain networks using tokens as proceeds and collateral. The top five tokens on CoinGecko’s list are UNI (-8.23%), LINK (+0.01%), LUNA, AAVE (-3.98%) and CAKE.
Coinbase, it should be noted, listed DeFi as a potential competitor when it filed for a public listing, but for whatever reason, market caps aren’t how we usually talk about the DeFi market. We usually talk about the value of assets people have deposited in DeFi apps to earn yield.
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April 30, 2021