1. Price analysis: BTC, ETH, BNB, ADA, SOL, XRP, DOT, SHIB, DOGE, LUNA
Bitcoin and Ether closed October on a strong note, increasing the possibility that the rally will pick up pace in November.
Bitcoin (BTC) and Ether (ETH) had their highest monthly close ever in October, indicating strong momentum that favors buyers. The focus now shifts to November, which has been largely bullish for Bitcoin.
Since 2013, Bitcoin has closed November in the red on only two occasions, in 2018 and 2019. Another positive impetus for Bitcoin could be the tailwinds from the United States stock markets, which also have an enviable record in November.
The S&P 500 has recorded a median rise of 2% in November, the only month of the year to achieve such impressive median returns.
Data from Glassnode also shows that Bitcoin reserves on exchanges are at their lowest level in three years. The amount of Bitcoin held on the books of exchanges has dropped from 3.1 million Bitcoin in April 2020 to 2.47 million BTC. According to analysts, this could be bullish for Bitcoin if the demand shoots up because that could create a supply shock.
Could Ether lead the altcoins higher or will Bitcoin remain in the driver’s seat? Let’s analyze the charts of the top 10 cryptocurrencies to find out.
2. JPMorgan Report Says CBDCs Can Save Firms $100B a Year in Cross-Border Costs
The report considers a network of multiple central bank digital currencies across the ASEAN region.
A central bank digital currency (CBDC) network could save global corporates over $100 billion a year in transaction costs when it comes to cross-border payments.
So says a report published Wednesday by consulting firm Oliver Wyman and megabank JPMorgan called “Unlocking $120 Billion Value in Payments.”
The report estimates that of the nearly $24 trillion in wholesale payments that move across borders each year, banks incur more than $120 billion in total transaction costs; this excludes potential hidden costs in trapped liquidity and delayed settlements.
“The case for CBDCs to address pain points in cross-border payments is very compelling,” said Oliver Wyman partner Jason Ekberg said in a statement. “The bulk of today’s wholesale cross-border payments process remains sub-optimal due to multiple intermediaries between the sending and receiving banks, often resulting in high transaction costs, long settlement times, and lack of transparency on the status of the payments.”
Conversations around CBDCs, driven by the march of cryptocurrency and blockchain technology, can be about either retail issuance or the type of wholesale transactions this report is focused on.
There have been several wholesale banking initiatives in recent years led by private firms, commercial banks, and central banks, the report points out, but nothing like a full-scale, multiple central bank digital currency (mCBDC) network.
The report uses the ASEAN region and its corridors as an example, comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, which operates across a diverse set of 10 currencies and contributes 7% of global cross-border trade.
JPMorgan and Oliver Wyman suggest a model for the ideal mCBDC that considers the process from minting and redeeming of CBDCs to FX conversion and settlement. The report also cites new opportunities for players in the correspondent banking world who might be disrupted by a full-scale CBDC rollout.
“The development of CBDCs brings new, tangible opportunities such as subscription-based mCBDC corridor access or smart contract-enabled cash management services,” said JPMorgan Global Head of Coin Systems Naveen Mallela.
Indeed, Mallela’s Onyx division was involved in one such trial connecting France and Singapore.
3. Bitcoin Whale Holdings Reach 2021 High Amid Inflation Fears
The renewed buying amid rising inflation expectations across the globe suggests investment is the primary use case for bitcoin.
Bitcoin whales or large investors with ample capital supply appear to be buying again as fears of inflation lurching out of control strengthen the case for investing in store of value assets.
Large investors, holding at least 1,000 BTC, snapped up 142,000 coins last week, taking the cumulative tally to nearly 200,000 BTC — the highest in 2021, blockchain analytics firm Chainalysis’ market intel report published on Tuesday said.
The renewed buying amid rising inflation expectations across the globe suggests investment is the primary use case for bitcoin.
“Its a confirmation of the view that bitcoin is seen as digital gold, or perhaps institutions are just making a longer term trade on the bitcoin price,” Chainalysis said.
The U.S. 10-year breakeven rate, which represents how the market foresees long-term price pressures, recently rose to a decade high of 2.64%, according to the Federal Reserve Bank of St. Louis. Bitcoin rallied nearly 40% in October, hitting a record high of $66,975.
Analysts at JPMorgan have attributed the rally to the perception that bitcoin is an inflation hedge contrary. The perception stems from bitcoin’s mining reward halving. This programmed code reduces the pace of supply expansion by 50% every four years, putting the cryptocurrency’s monetary policy at odds with the Federal Reserve’s decades of money printing.
However, bitcoin needs to expand its footprint into crypto sub-sectors like Web3 and decentralized finance to remain relevant relative to ether in the long run, according to Chainalysis, .
“Bitcoin usage has not reached the sophistication of Ethereum or other Layer 1 assets,” Chainalysis said. “A decentralized way of wrapping bitcoin is needed to unlock the use of bitcoin as high-quality capital in DeFi.”
“If bitcoin can be used as capital in Web 3.0 then it will have a future as both a scarce fungible asset and as a useful asset in the more innovative side of crypto,” Chainalysis added.
The uptick in whale holdings suggests the recent rally is backed by strong hands and is sustainable. Bitcoin’s bullish momentum lost steam in the first quarter as whale holdings started declining. The market crashed in May.
The cryptocurrency was last seen changing hands near $62,900, representing a 0.5% drop on the day.
4. Soaring Crypto Investment Calls for Regulation: India’s Top Finance Newspaper
“This is India’s crypto moment,” the newspaper declared.
The Economic Times, one of India’s top finance newspaper, dedicated its entire front page to call on the government to provide regulatory guidance to the crypto industry.
The Indian government has been sitting on a crypto regulation bill for at least a year. Meanwhile, since the Supreme Court lifted the Reserve Bank of India’s two-year banking ban on crypto exchanges in March 2020, investment in crypto has soared.
Tens of millions of Indians have invested $80 billion (INR 6 trillion) in crypto, the newspaper wrote. Given these “staggering” numbers and “massive” growth potential, India needs a “transparent and regulated environment,” the newspaper wrote on its front page.
“The huge amount of Indian investor exposure to cryptocurrencies warrants quick action by the government on the regulatory front,” Prasad Rane, partner at Legaligence Strategic Consulting LLP, told us.
“The global anti-money laundering agency the Financial Action Task Force [FATF] has already identified crypto assets as a source of risk and recently published guidance to regulate the industry like banks. Our government is behind the curve.”
Rane stressed that most terrorist organisations accept donations and process funding through crypto assets, and it is challenging to keep track of their flow. Hence, regulation is the need of the hour.
Lacking any regulatory guidance, Indian crypto exchanges have committed to comply by a code of conduct drafted by the Blockchain and Crypto Assets Council (BACC) of the Internet and Mobile Association of India (IAMAI), an industry association, the ET wrote.
The code of conduct includes know-your-customer verification for all customers, checking for fraud and market manipulation, providing an audit trail for transactions, total compliance with tax and law enforcement requirements, investor education, and matrix for addressing user grievances, ET wrote.
Indian investment in crypto has ballooned to $6.6 billion this year from $923 million last year, intelligence firm Chainalysis found in July.
5. Thailand’s Oldest Bank Acquires Majority Stake in Country’s Largest Crypto Exchange
SCB paid $536.6 million for a 51% stake in Bitkub.
Siam Commercial Bank (SCB) has acquired a 51% stake in Thai cryptocurrency exchange Bitkub.
Thailand’s oldest bank SCB paid 17.85 billion baht ($536.6 million) for the majority stake in the exchange, according to an announcement Tuesday.
The transaction is expected to be completed by the first quarter of 2022, subject to regulatory approval.
Bitkub, which is licensed by Thailand’s Securities and Exchange Commission (SEC), has reported trading volume of over $30 billion from January to September 2021, making it comfortably the country’s largest crypto exchange, with a market share of over 90%.
However, the exchange fell afoul of the regulator earlier this year over issues on its platform causing severe outages, one of which lasted 16 hours amid increased trading activity. The SEC ordered Bitkub to shut down for five days to iron out the bugs.
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November 3, 2021
