Crypto trading/market thread

[pmbug]

Market enthusiasts call it a “golden cross,” indicating a positive shift in asset prices, and now this marker has finally appeared on the bitcoin (BTC) weekly price chart.

The 50-week simple moving average (SMA) on bitcoin has crossed over the 200-week SMA for the first time on record, confirming the golden cross. ...

Bitcoin Sees First Ever Weekly 'Golden Cross,' a Bullish Signal to Some

The 50-week simple moving average (SMA) of bitcoin's price has crossed above the 200-week SMA for the first time on record.

www.coindesk.com

Given BTC's price history, I'm not sure how it is even possible that this has never happened before.

 

[searcher]

'The Dow' for Crypto Markets? New CoinDesk 20 Index Underpins Futures Contracts at Bullish​

• CoinDesk Indices introduced the CoinDesk 20, intended as a broad cryptocurrency market benchmark that can underpin tradeable products – akin to the S&P 500 or Dow Jones Industrial Average, which play a big role in the stock market.
• Bullish, the crypto exchange that owns CoinDesk, is offering perpetual futures contracts based on the CoinDesk 20.

Cryptocurrencies just got a new benchmark that, similar to the stock market's Dow Jones Industrial Average, explains how the market is broadly doing.

And the index has an investable product based on it, potentially giving the measure a shot at broader adoption – something previous marketwide benchmarks have failed to win.

CoinDesk Indices on Wednesday introduced the benchmark, called the CoinDesk 20 Index, that tracks the world's largest and most-liquid cryptocurrencies. The behemoths, bitcoin [BTC] and Ethereum's ether [ETH], are among its 20 members, but it goes well beyond them to give traders a diversified summary of the market's performance.

More:

MSN

 

[pmbug]

Most of the CoinDesk 20 are, as I talked about in the Crypto 102 article, the top cryptos (excluding stablecoins) by market cap. I don't understand the rationale they used in their weighting however. Why Dogecoin has a 3% weighting escapes me. I also see that they excluded Tron (TRX) - a top 10 crypto by market cap, while including Aptos and Filecoin (both around 30th by market cap).

 

[searcher]

• Santiment, an on-chain analytical firm, said Altcoins are creating separation from one another.
• Michael Van de Poppe has stated that Bitcoin is poised to consolidate within its current range.
• Coinbase has petitioned the court to dismiss the Securities and Exchange Commission's (SEC) lawsuit.

Bitcoin, Ethereum, Dogecoin Trade Mixed As Early Spot ETF Flows Fail To Meet Market Expectations: Analyst Predicts Pre-Halving Rally Before King Crypto Skyrockets To $300K

Major cryptocurrencies on Wednesday traded mixed with the bullish momentum showing signs of waning. This shift in momentum can be attributed to the early exchange-traded funds (ETF) flows, which have failed to meet the high market expectations.

www.benzinga.com

 

[JayDubya]

How a 27-Year-Old Codebreaker Busted the Myth of Bitcoin’s Anonymity​

Once, drug dealers and money launderers saw cryptocurrency as perfectly untraceable. Then a grad student named Sarah Meiklejohn proved them all wrong—and set the stage for a decade-long crackdown.

https://www.wired.com/story/27-year...ins-anonymity/?utm_source=pocket-newtab-en-us

 

[pmbug]

Market commentary on BTC and ETH...

Bitcoin [BTC) has dropped over 15% since the inaugural launch of spot exchange-traded funds (ETFs) last week with several billion in assets flowing out of Grayscale's GBTC. While a chunk of those billions has been from investors moving to lower fee ETFs and another chunk from investors taking profits on GBTC's (and bitcoin's) absolute price rise, at least some of that money is due to traders exiting what's likely been a very profitable bet that GBTC's discount to net asset value (NAV) would narrow.

“It looks like GBTC investors who over the past year had been buying the GBTC fund at a significant discount to NAV to position for its eventual ETF conversion, have been taking full profit post-ETF conversion by exiting the bitcoin space entirely rather than shifting to cheaper spot bitcoin ETFs,” analysts led by Nikolaos Panigirtzoglou wrote.

Before being uplisted to an ETF from a trust, GBTC was one of one of the only ways for stock traders in the U.S. to gain exposure to the price movements of bitcoin without the need to purchase the actual cryptocurrency. That made it the largest regulated bitcoin fund in the world by AUM. The bank had previously estimated that up to $3 billion had been invested in GBTC in the secondary market during 2023 to exploit the trust’s discount to NAV. If this estimate is correct, and given that $1.5 billion has already exited, there could be an additional $1.5 billion to exit the space via profit-taking on GBTC, which will put further pressure on bitcoin prices in the coming weeks. These outflows are also putting pressure on GBTC to lower its fees, the report said, adding that the “GBTC fee at 1.5% still looks too high compared to other spot bitcoin ETFs risking further outflows.” “A lot more capital, perhaps an additional $5 billion-$10 billion, could exit GBTC if it loses its liquidity advantage,” the bank cautioned. As of Friday, GBTC is the most expensive ETF among counterparts, with some charging zero fees for the first six months or until a certain assets under management (AUM) target is reached.

JPMorgan says other spot bitcoin ETFs, minus GBTC, attracted $3 billion of inflows in only four days, and this is comparable to the inflows seen during previous bitcoin product launches. Most of this $3 billion of inflows reflects a rotation from existing bitcoin vehicles such as futures-based ETFs, the report added.

Grayscale's GBTC Could See Another $1.5B in Sales From Arb Traders: JPMorgan

The bank estimated traders sunk about $3 billion into GBTC looking to benefit from a closing of the fund's discount to NAV.

www.coindesk.com

Somewhat ironic that GrayScale's GBTC is the negative driver on the BTC when they (GrayScale) are largely the reason the ETFs exist at all (thanks to winning a decisive court victory after almost a decade of fighting). At any rate, the selling pressure in GBTC will abate at some point and BTC will rebound. The inflows on the other ETFs are strong.

Ether (ETH), the native token of Ethereum’s blockchain, underperformed bitcoin (BTC) in 2023, as the latter’s new-found smart contract, non-fungible tokens (NFT) narrative, and spot ETF optimism drew investor money.

Per analysts, investors will likely have a relook at ether this year as Ethereum is still the world’s leading smart contract blockchain with key upgrades lined up, and ether is widely seen as the next likely candidate to get a spot-based ETF in the U.S.

“ETH could be poised for a breakout year,” Nasdaq-listed crypto exchange Coinbase said in the weekly newsletter. “Last week’s bitcoin ETF news proved to be a boon for ethereum, which briefly spiked above $2,700 — reaching its highest price since May 2022. And there are reasons to be even more optimistic about ETH’s near-term future. For one, several of the firms behind the BTC ETFs — including BlackRock and VanEck — are also plotting ether-based spot ETFs.”
...
In addition, Ethereum’s upcoming Dencun upgrade, which aims to improve the mainnet’s scalability by introducing “data blobs,” could galvanize investor interest in the cryptocurrency, according to Coinbase. The upgrade went live on Ethereum’s Goerli testnet early this week.
...

https://www.coindesk.com/markets/2024/01/19/ether-could-soar-in-2024-on-the-back-of-dencun-upgrade-etf-narrative-analysts/?utm_medium=referral&utm_source=rss&utm_campaign=headlines

 

[pmbug]

...
Investors have sold more than $2 billion worth of the Grayscale Bitcoin Trust (GBTC) since it was converted into an exchange-traded fund earlier this month.

A large chunk of that exodus was FTX's bankruptcy estate dumping 22 million shares, according to private data CoinDesk reviewed and two people familiar with the matter.
...
The data CoinDesk saw suggests FTX accounted for much of that. The 22 million shares it sold – which took FTX's GBTC ownership down to zero – were worth close to $1 billion.
...
... In theory, now that FTX is done selling its substantial holdings, the selling pressure could ease since a bankruptcy estate liquidating holdings is a relatively unique event.
...

FTX Sold About $1B of Grayscale's Bitcoin ETF, Explaining Much of Outflow: Sources

BTC's price has fallen since bitcoin ETFs were approved. In theory, now that FTX is done selling its substantial holdings, the selling pressure could ease since a bankruptcy estate liquidating holdings is a relatively unique event.

www.coindesk.com

If that is correct, the JPMorgan analysis posted previously is likely too pessimistic.

 

[pmbug]

 

[Casey Jones]

They're hedging their bets.

I'd agree that bitcoin's future is probably more-certain than the dollar's. That doesn't mean that it's assured...

 

[JayDubya]

If Bitcoin didn't exist where would they be putting that $433M each and every day?

 

[pmbug]

That $433M represent inflows into the spot BTC ETFs. It's presumably mostly institutional investors wanting BTC exposure in their portfolios. I'm going to guess if it weren't flowing into the BTC ETFs, it would likely just be distributed amongst vehicles already in their existing portfolios (stocks, bonds, etc.).

 

[Casey Jones]

If Bitcoin didn't exist where would they be putting that $433M each and every day?

I have no idea.

I can't understand the mindset of the Globalist crony-rich.

I'd say they'd probably keep on buying private homes...make more-certain that the Deplorables own nothing.

Beyond that...maybe, gold? Can a publicly-traded company put its investments into bullion? I don't know.

 

[Voodoo]

That $433M represent inflows into the spot BTC ETFs. It's presumably mostly institutional investors wanting BTC exposure in their portfolios. I'm going to guess if it weren't flowing into the BTC ETFs, it would likely just be distributed amongst vehicles already in their existing portfolios (stocks, bonds, etc.).

And you think they are actually buying Bitcoins with that money? Where are the transactions on the blockchain. Or are they instead just building a new Derivatives position to play their normal games and steal retail money.

 

[Casey Jones]

The technical aspects of bitcoin, lead to some interesting questions.

For example, who is entrusted with the key set? If a hostile takeover of BlackRock happens, maybe a Chinese "investment fund" or even a non-Woke corporation or investment pool...is there any protection against key personnel "losing" the keysets? Or even absconding with some or all of it?

 

[pmbug]

And you think they are actually buying Bitcoins with that money? ...

Yes, that is what is being reported by the Bitcoin analysts and media who study the blockchain movements.

 

[pmbug]

For example, who is entrusted with the key set? ...

...
Do spot Bitcoin ETFs have custodianship risk?

Most spot Bitcoin ETFs rely on a third-party custodian to actually store the Bitcoin they hold — much like how spot gold ETFs often keep their physical gold holdings in the vault of a third-party custodian.

Eight out of the 10 currently-trading spot Bitcoin ETFs use Coinbase (COIN) as their Bitcoin custodian. The only exceptions are the Fidelity Wise Origin Bitcoin Fund (FBTC), which uses Fidelity itself as a custodian, and the VanEck Bitcoin Trust (HODL), which uses Gemini.

Coinbase's dominance in Bitcoin ETF custodianship has created concerns about custodianship risk. If Coinbase ran into severe financial trouble in the future — for example, due to a cyberattack, a government penalty, or a decline in its revenue — would the holdings of Bitcoin ETFs be safe?

There are mechanisms by which ETFs — and investors themselves — could recover their holdings in the event of a Coinbase bankruptcy, but they wouldn't necessarily be instant or automatic. So custodianship risk may be something to consider while shopping for a spot Bitcoin ETF.
...

19 Bitcoin ETFs and Their Fees, Promotions and Holdings - NerdWallet

Learn about the 10 spot Bitcoin ETFs available today — and the 9 Bitcoin strategy ETFs that offer indirect exposure to Bitcoin.

www.nerdwallet.com

 

[Voodoo]

Yes, that is what is being reported by the Bitcoin analysts and media who study the blockchain movements.

At least the blockchain allows for that type of analysis.

 

[pmbug]

Looks like the Grayscale selling has a bit more to go...

 

[pmbug]

Grayscale selling still appears to be matching the inflows to the other ETFs. Grayscale really needs to fix their ultra high ETF fee.

 

[pmbug]

Ah.. That's where the current selling pressure is coming from....

 

[searcher]

Bruised by stock market, Chinese rush into banned bitcoin​

SHANGHAI/HONG KONG, Jan 25 (Reuters) - Dylan Run, a Shanghai-based finance sector executive, started moving a bit of his money into cryptocurrencies in early 2023, when he realized that the Chinese economy and its stock markets were going downhill.

Crypto trading and mining has been banned in China since 2021. Run used bank cards issued by small rural commercial banks to buy cryptocurrencies through grey-market dealers, and capped each transaction at 50,000 yuan ($6,978) to escape scrutiny.

"Bitcoin is a safe haven, like gold," says Run.

He now owns roughly 1 million yuan worth of cryptocurrencies, accounting for half of his investment portfolio, compared with just 40% in Chinese equities.

His crypto investments are up 45%. China's stock market, meanwhile, has been sinking for 3 years.

More:

https://www.reuters.com/technology/bruised-by-stock-market-chinese-rush-into-banned-bitcoin-2024-01-25/

 

[pmbug]

I had not considered that economic distress in China might push locals there to buy crypto. Interesting.

 

[Casey Jones]

I had not considered that economic distress in China might push locals there to buy crypto. Interesting.

China is a police state and Social-Credit-Score dystopian hell.

It will indeed be interesting to see how it fares there - and whether buying can be seen as diversified, or concentrated in state-owned banks and corporations or other shadowy fronts.

Also whether the Party tries to contain it with Internet blocking.

 

[pmbug]

On the back of GBTC selling and Mt. Gox bankruptcy liquidation, the government going to try and hammer BTC into dust. BTC is likely to go down a good bit before finding it's wings again. Might be the last great buying opportunity of a lifetime when BTC eventually bottoms.

Edit: $130M worth of BTC is a fraction of what GBTC has been selling daily since the ETFs were approved. This isn't going to affect the market as much as I initially thought it might.

 

[pmbug]

...
While many are concerned that large sell-offs could continue as Grayscale still holds more than 500,000 BTC, analysts at JPMorgan think the GBTC profit-taking is mostly concluded.

The analysts, led by Nikolaos Panigirtzoglou, previously estimated that GBTC would see $3 billion in outflows. With the total now past $4.3 billion, they said that the expected profit-taking has largely happened already. "In turn, this would imply that most of the downward pressure on Bitcoin from that channel should be largely behind us," the analysts said in a note on Thursday.
...

Crypto market consolidates as JPMorgan says GBTC profit-taking is mostly done

The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.

www.kitco.com

BTC has been rising from the lows since yesterday, but it's not clear to me when the selling pressure from Mt. Gox will begin so there may be another wave of downside before BTC begins popping for reals.

 

[pmbug]

This report seems to indicate that Mt. Gox distributions will happen over the span of months and may not equate to instant selling pressure:

Breaking: Mt Gox's Huge Bitcoin Unlock To Hit The Market, BTC Price To Crash?

Mt Gox repayments in Bitcoin in the next two months could impact crypto market, BTC price, and Bitcoin halving sentiment.

coingape.com

 

[Peter89]

I had not considered that economic distress in China might push locals there to buy crypto. Interesting.

Yes, interesting but also sad.
They don't have the antigold narrative over there, gold was even advertised by gov and media.
Banks facilitating gold accounts and offering coins in their halls.
And still taking legal risks trying crypto.

 

[pmbug]

I think the allure for crypto over gold for the Chinese is about jurisdiction. They want assets that are outside of China's control/borders.

 

[pmbug]

Web3 payments infrastructure provider Transak joined Visa Direct, making it easier for its users to convert their cryptocurrency holdings into regular currency.

Transak’s payment and onboarding services allow users to buy and sell crypto assets, handling the know-your-customer (KYC) requirements, risk monitoring and compliance on behalf of its clients, which include MetaMask and Coinbase Wallet. The Web3 startup raised $20 million last year in a Series A round to fund a global expansion. The Visa Direct program lets third-party providers connect to Visa’s network and routes payments directly onto Visa cards.
...

Web3 Payments Firm Transak Joins Visa Direct to Streamline Crypto-to-Fiat Conversion

The deal allows the Web3 payments infrastructure provider's users in over 145 countries to easily convert crypto into local currencies.

www.coindesk.com

More offramps (allowing conversion of crypto into fiat) is a good thing.

 

[pmbug]

I don't know if his numbers are correct, but continued inflows will definitely have an impact as it does mean consistent buying pressure.

 

[pmbug]

...
According to a report from Finder, a panel of 40 industry specialists predict that Bitcoin's price will rise to an average of $77,423 by year-end 2024 before rising to $122,688 in 2025.

“The halving, easing macro conditions and enhanced access through ETFs are fundamentally positive price forces for the year as a whole,” said Vetle Lunde, senior analyst at K33 Research.

Lunde said he thinks Bitcoin will peak at $79,000 in 2024, before reaching $150,000 in 2025, as it will take time for inflows into ETFs to “materialize in price effect, as it also introduces structural changes to the market.”

“Overall, the majority (58%) of panelists say now is the time to buy BTC, 38% to hold, and only 5% to sell,” Finder concluded.
...

https://www.kitco.com/news/article/2024-02-01/experts-see-bitcoin-price-hitting-77k-year-end-warn-pre-halving-volatility

 

[searcher]

Can't speak for article's veracity.

Over 2 percent of the US’s electricity generation now goes to bitcoin​

US government tracking the energy implications of booming bitcoin mining in US.​

What exactly is bitcoin mining doing to the electric grid? In the last few years, the US has seen a boom in cryptocurrency mining, and the government is now trying to track exactly what that means for the consumption of electricity. While its analysis is preliminary, the Energy Information Agency (EIA) estimates that large-scale cryptocurrency operations are now consuming over 2 percent of the US's electricity. That's roughly the equivalent of having added an additional state to the grid over just the last three years.

More:

Over 2 percent of the US’s electricity generation now goes to bitcoin

US government tracking the energy implications of booming bitcoin mining in US.

arstechnica.com

Link from article:

Cambridge Blockchain Network Sustainability Index: CBECI

The Cambridge Blockchain Network Sustainability Index (CBNSI) is created and maintained by the Cambridge Digital Assets Programme (CDAP) Team at the Cambridge Centre for Alternative Finance, an independent research institute based at Cambridge Judge Business School, University of Cambridge.

ccaf.io

 

[Casey Jones]

It all leads back to the basic question von Mises tried to answer: What is money?

Bitcoin answers many of those qualities, but not a couple. First, it needs elaborate infrastructure - AND GOVERNMENT PERMISSIONS, FREE FROM EXORBITANT FEES intended to discourage it - for it to work. Electricity; computers; a working computer network. All of which cannot be presupposed, once the government fiat and public finances collapse.

Then, it is not assured to be not-easily-duplicable. Yeah, yeah, yeah, blockchain. Who can explain it, proof-positive, that it cannot be copied or hacked? Few. We don't KNOW who wrote it, yet we are to believe the glib assurances from fanboiz. Who are mostly talking their own wallets.

I have tried to look into it. Both the knowledge required - I don't understand coding, and God knows I've tried, over the years, to learn some of it - and, the cost - to buy a secure wallet-USB storage-stick, and to arrange payment (in dollars, of course, how's that for irony?) to sellers...just tells me, no.

Gold was good enough for the Romans. It was good enough for the Spaniards. It was good enough for 19th-century British. And I can buy it, easily - all I need is the money. Six PM dealers within a 10-mile radius of me. Money, gold. Only knowledge needed is, how to secure it properly; and how to possibly redeem it for smaller currency in the future.

 

[pmbug]

It all leads back to the basic question von Mises tried to answer: What is money?

Bitcoin answers many of those qualities, but not a couple. ...

Yep.

The Seventh Characteristic of Money

This new learning amazes me, Sir Bedevere. Explain again how sheep's bladders may be employed to prevent earthquakes. The Six Characteristics of Money We are roughly a century into the grand experiment with a central bank fiat monetary world order (half a century on a pure fiat system). For...

www.pmbug.com

Who can explain it, proof-positive, that it cannot be copied or hacked? ...

The design and network/code are public domain. There is no inscrutable black box. Of course, you do need some knowledge of math and/or coding to evaluate it critically.

That said, BTC has been around for over a decade now without any network/wallet hacks. This against a backdrop where other crypto systems (DeFi systems in particular) are regularly exploited if they have vulnerabilities. I am confident that the BTC system is secure from hacking exploits (though other risks remain).

 

[pmbug]

This is worth keeping an eye on:

Crypto lender Genesis Global Capital, currently undergoing bankruptcy proceedings, has requested permission to sell trust assets worth approximately $1.6 billion.

In a motion filed with the U.S. Bankruptcy Court in the Southern District of New York, the firm sought approval to sell assets held by Genesis, a subsidiary of the Digital Currency Group.

The assets include shares of Grayscale Bitcoin Trust (GBTC) valued at around $1.4 billion, shares of Grayscale Ethereum Trust valued at about $165 million, and shares of Grayscale Ethereum Classic Trust valued at approximately $38 million
...

More:

Genesis Seeks Green Light from Bankruptcy Court for $1.4 Billion GBTC Share Sale

If approved, the GBTC selling will likely increase downside pressure on BTC for a little bit. Maybe the last good entry point / dip before it flys in 2024.

 

[pmbug]

Bitcoin might be getting a Bukele election boost today...

 

[pmbug]

 

[searcher]

This is a 43-minute documentary from DW. Some here probably already know the info presented, I found it interesting. Watched half yesterday, now watching the second half. If you watch it, take it fwiw and dyodd.

Cryptocurrencies - The future of money? | DW Documentary​

Feb 7, 2024
For some, cryptocurrencies are a dangerous bubble. For others, they represent the future of money. But what are the actual uses - and risks -- of cryptocurrencies? This documentary explores how crypto is altering global financial architecture.

Since its inception, Bitcoin has evolved into a digital global currency that is challenging the existing financial system. The international availability and rapid increase in the value of Bitcoin attracted many to join this game of chance. The President of El Salvador even adopted Bitcoin as his nation’s official currency. However, most governments have positioned themselves against cryptocurrencies that aren’t regulated by states.

The European Central Bank is predicting Bitcoin’s imminent demise. At the same time, the ECB also recognizes the need for digital money in a world that’s so reliant on the Internet. The digital Euro, for use as a payment method via Smartphone, is expected to be available soon. This documentary by Tom Ockers and Ulrich Stein explores how cryptocurrencies are altering global financial architecture. They hear from profiteers and victims, supporters and critics of the new digital currencies.

 

[pmbug]

...
The European Central Bank is predicting Bitcoin’s imminent demise. ...

I wonder if they have a citation for that. AFAIK, the ECB, Fed, et al are not in the business of making market predictions or dispensing investment advice.

 

[searcher]

I wonder if they have a citation for that.

Different pros & cons in the vid. Really well done imo. No politics or personal views, just a look at crypto. Lotta good points made for blockchain tech. Worth a watch for anyone interested.

jm2c