Crypto analyst and YouTuber Michaël van de Poppe says he’s keeping a close watch on five altcoins that he says can potentially surge 10x against Bitcoin.
In a new video, the crypto strategist says he’s looking closely at SXP, the native token of crypto-fiat gateway Swipe. According to Van de Poppe, the SXP/BTC pair must hold a key level to ignite the next leg up.
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“You want to see Swipe hold above 0.0000053. Then, the critical resistance zone is very comparable to Bitcoin at $40,700. This level (0.000063) has to break. If that breaks for Swipe, the next real hurdle is only found around this area (0.000083). If it breaks above the 100-day MA (moving average), we are most likely moving toward this area (0.000083)… After that, we grant ourselves a new higher low by flipping the moving averages for support, and then we can start expanding and continuing the momentum.”
According to Van de Poppe, the next resistance after 0.000083 is 0.00016.
Another coin on the trader’s list is scalable smart contract platform TomoChain against Bitcoin (TOMO/BTC). According to Van de Poppe, TOMO/BTC must breach a key resistance level to ignite a strong rally.
“We are still consolidating nicely in which the critical level that it has to hold in order to sustain the upward momentum is the recent low (0.000038)… We are back above the 100-day and 200-day MA. We are slightly making a higher high and therefore, if we crack this resistance zone (0.000049)… we start a new impulse wave.”
Next is Algorand, a blockchain for decentralized finance (DeFi) applications. Van de Poppe notes that ALGO/BTC has managed to hold a key support area while keeping a bullish market structure.
“Algorand is ready to make the breaker as the critical level that ALGO had to hold onto is holding support. So most likely, this entire structure of higher highs and higher lows is going to continue moving toward the new highs.”
Van de Poppe says the immediate resistance of ALGO/BTC stands at 0.000038. A move above that level will target the next resistance area of 0.000054.
The crypto trader is also watching the price action of decentralized finance (DeFi) protocol Orion in its Bitcoin pair (ORN/BTC). According to Van de Poppe, ORN/BTC must take out a strong resistance area to launch a massive rally.
“If Orion breaks through it (0.0000025), you are going to see a big run towards the upper resistance zone (0.000043).
What is the area to hold? There are a few areas that I’m very interested in. Preferably, you want to see Orion to hold the area around 2,150 satoshis (0.0000215). If that doesn’t hold, the recent low is the second area of support that you could be looking at (0.000018).”
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The last coin is decentralized exchange Curve Finance in its Bitcoin pair (CRV/BTC). The trader highlights the key resistance area that CRV/BTC must break to start its bull market.
“But I’m suspecting that we’re going to have a nice bounce back up, creating another higher low, after which we can continue making the momentum or making the movements… Once we break above this resistance zone (0.00008), we can start running heavily as then there’s not much between these two levels (0.00018).”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Ether (ETH) price outperformed Bitcoin (BTC) by 173% from March 28 to May 15. The incredible bull caused the token to reach a $4,380 all-time high. However, as cryptocurrency markets initiated a sharp drop on May 12, the trend started to reverse, and since then, Ether has underperformed by 25%.
Some might say it is a technical adjustment after a strong rally. While this partially explains the move, it excludes some critical factors, including the fast advance of smart-contract network competitors and Bitcoin being adopted as an official currency for the first time.
Ether / Bitcoin price at Binance. Source: TradingView
Notice how the ETH/BTC ratio rallied again on June 8, reaching 0.77 despite Ether’s price remaining 36% below its all-time high and ranging near $2,800. To understand what could have been driving the ratio, analysts need to analyze Ether and Bitcoin price drivers separately.
Mike Novogratz may have been misinterpreted in his interview
Ether’s bull run potentially got an extra leg due to intense praise from institutional investors. Traders could have picked up a sense of urgency, known as FOMO, and promptly shifted their Bitcoin exposure towards the leading altcoin.
On May 13, New Yorker magazine published an interview with Mike Novogratz, the founder, and CEO of Galaxy Digital. In the conversation, Novogratz said:
“All of a sudden, you have decentralized finance and NFTs both on Ethereum at the same time roughly, with wild accelerating growth.”
Novogratz was then questioned on how much higher Ether could reach, to which he answered:
“You know, it’s dangerous to give predictions on the highs. But could it get to $5,000? Of course it could.”
While an Ethereum holder might have interpreted it as a prediction, others could have understood it as a wild guess, likely depending on general crypto market conditions.
However, roughly a week later, a report from Goldman Sachs revealed the global investment bank believed that Ether had a “high chance of overtaking Bitcoin as a dominant store of value.” Interestingly, one of the main quotes in the report was directly from Novogratz’s interview with the New Yorker.
At its peak, Binance Chain controlled 40% of DEX volume
While Ethereum has kept its 80% dominance on net value locked in decentralized finance (DeFi) applications, Binance Smart Chain (BSC) has reached a 40% market share on DEX exchanges.
PancakeSwap DEX daily volume vs. top 10. Source: DeBank
The successful growth of the DeFi industry and non fungible token (NFT) markets caused intense congestion on the Ethereum network, raising median fees to $37 in mid-May. That bottleneck triggered an activity exodus to competing networks, and PancakeSwap was best positioned to capture that flow.
Related:Here’s why one analyst says Bitcoin will outperform Ethereum in the short term
To make things worse, important DeFi projects expanded to Binance Smart Chain, including yield aggregator Harvest Finance and decentralized exchange aggregator 1inch. Investors quickly realized that the trend could continue as the competing smart-contract network provided an easy solution for dApps looking for cheaper alternatives.
No country is adopting the ‘Ethereum standard’
Bitcoin might have had a subpar performance over the past 30 days because it has failed to break the $42,000 resistance multiple times. However, a major milestone was achieved when El Salvador became the first country to make Bitcoin legal tender on June 12.
After the Central American country made the decision law, a handful of other Central and South American countries began discussing the advantages of taking a similar path.
Ethereum is undertaking a redesign that will change the issuing rate and how entities get paid to secure the network by moving away from the Proof of Work model. Meanwhile, Bitcoin is making sure that every upgrade is backward-compatible and maintaining its strict monetary policy.
That is the main reason why Ether will not outperform Bitcoin over the next 12 months, or at least until there’s a better understanding of how Ethereum network dominance of smart contracts will be.
Professional investors avoid uncertainties at all costs, and cryptocurrency markets already present plenty of that. There’s just no reason for institutional investors to ignore the risks while competing networks eat Ethereum’s lunch.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Coming every Saturday,Hodler’s Digestwill help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
Hawkish Fed comments push Bitcoin price and stocks lower again
The crypto markets had started the week with a spring in their step.
Last Sunday,Elon Musk revealedthat Tesla would be prepared to accept Bitcoin as a payment method again — once it could be proved that 50% of the energy used by miners comes from clean, renewable sources.
Traders reacted positively to the tweet, and there were green candles aplenty. Upbeat sentiment helped drive Bitcoin above$40,000for the first time in over a fortnight.Unfortunately, though, it seems prices above this level were unsustainable.
A new wave of selling reared its ugly head days later after Federal Reserve chairman Jerome Powell suggested that interest rates may rise in 2023 — a year earlier than planned.Other officials went further, indicating the first increase could happen in late 2022.
Bitcoin wasn’t alone in suffering the sell-off.Stocks and gold also fell,eating away at the narrativethat BTC is an uncorrelated asset.
With prices falling as low as$35,000, there are now fears thata “death cross” may be forming for Bitcoin.Some traders are forecasting that $32,500 could be the next stop before BTC revisits the swing low at $30,000.
World Bank refuses El Salvador’s request for help on BTC transition
As determined as El Salvador’s president may be to introduce Bitcoin as legal tender, a series of unfortunate events this week showed that it’s harder than it looks.
The World Bank has refused to assist the country in its transition, citing “the environmental and transparency shortcomings” associated with the digital asset.
Although prominent Bitcoiners weren’t pleased with the World Bank’s refusal, it’s fair to say that they weren’t surprised either.
One particularly sarcastic contribution came from Blockstream’s chief strategy officer Samson Mow, who tweeted:“BREAKING: WORLD BANK CANNOT HELP EL SALVADOR MAKE WORLD BANK OBSOLETE.”Miaow.
Elsewhere,an El Salvadorean minister denied reportsthat the country was examining the possibility of using Bitcoin for salary payments, warning such talk was “too premature.”
Economists have also been continuing to issue warnings about the potential ramifications of El Salvador’s move.Steve Hankepulled no puncheswhen he said going through with this law has the potential to “completely collapse” the country’s already fragile economy.
Striking a cheery note, he said the politicians who backed President Nayib Bukele’s Bitcoin Law were “stupid,” adding:“You’re not going to pay for your taxi ride with a Bitcoin. It’s ridiculous. […] 70% of the people in El Salvador don’t even have bank accounts.”
Mark Cuban calls for stablecoin regulation in wake of Iron Finance “bank run”
Billionaire crypto enthusiast Mark Cuban has called for stablecoins to be regulated after losing money in a dramatic “rug pull.”
Iron Finance fell victim to a “historical bank run” that detailed the price of the IRON stablecoin.Consequently, the value of its native token TITAN crashed by almost100%over two days — from all-time highs of$64.04to a mere fraction of one cent.
In an email sent to Bloomberg, Cuban wrote:“Even though I got rugged on this, it’s really on me for being lazy. The thing about DeFi plays like this is that it’s all about revenue and math and I was too lazy to do the math to determine what the key metrics were.”
Crypto Twitter, already reeling from the U-turn performed by Elon Musk, wasn’t a fan of Cuban’s remarks.
Kraken’s CEO Jesse Powell said a lack of regulation wasn’t the problem, tweeting:“Not doing your own research and YOLOing in to a terrible investment because your time was worth more than your money is your problem.”
The death of NFTs? CNN, Fox, Mila Kunis (and the U.S. Space Force) don’t think so
Earlier this month, some critics were sounding the death knell for nonfungible tokens after a Protos report suggested thatsales had slumped by90%since the peak in early May.However, things may not be as dire as they first appear.
First off, let’s not forget thatSotheby’s auctioned off a rare CryptoPunkfor$11.8 millionearlier this month… setting a new world record in the process.Also, it’s worth noting that there’s no shortage of new NFT announcements.
Here’s just a few that have emerged in recent days. CNN said that it’s planning totokenize historic moments from the news.That came as Fox, another U.S. media behemoth, revealed it’s launching a $100 million fund for NFT content creation.Sotheby’s confirmed that it is going toauction off the source code for the World Wide Webin the form of a digital collectible.And not to be outdone, A-lister Mila Kunis is wading into the “very masculine” crypto spaceby launching her very own NFT project.
Even the much-ridiculed U.S. Space Force thinks that NFTs are out of this world.Its tokens areliterallygoing to the moon— paying tribute to Neil Armstrong, the first person to set foot on the lunar surface.
Given how all of these projects have the chance to capture the public’s imagination, it may be unwise to characterize NFTs as a passing fad that’s fading away.
‘I have nothing’: Imprisoned John McAfee claims his crypto fortune is gone
Still behind bars in Spain as he battles extradition to the U.S., antivirus software pioneer John McAfee has told his one million Twitter followers that he doesn’t have hidden crypto.
He wrote:“I wish I did but it has dissolved through the many hands of Team McAfee (your belief is not required), and my remaining assets are all seized. My friends evaporated through fear of association.”
And, striking a defiant note, he added:“I have nothing. Yet, I regret nothing.”
A Spanish court is set to make a decision on whether to approve McAfee’s extradition within days. The businessman is accused of tax evasion and failing to declare income from paid crypto promotions, consultancy work, and gains from his investments.
During a court hearing earlier this week, he claimed the charges against him were politically motivated — and that he would die behind bars if he is flown to the U.S.
Winners and Losers
At the end of the week, Bitcoin is at$35,702.06, Ether at$2,228.54and XRP at$0.79. The total market cap is at$1,496,219,684,262.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week areQuant,XinFin NetworkandTheta Fuel. The top three altcoin losers of the week areKusama,Internet ComputerandDecred.
For more info on crypto prices, make sure to readCointelegraph’s market analysis.
Most Memorable Quotations
“[Crypto is] the first genuinely new asset class in about 150 years.”
Ric Edelman, Edelman Financial Engines founder
“While [El Salvador’s] government did approach us for assistance on Bitcoin, this is not something the World Bank can support, given the environmental and transparency shortcomings.”
World Bank
“For new investors, it’s best to buy when the market is well below trend. Now is one of those times.”
Dan Morehead, Pantera Capital CEO
“There’s little risk of the #dollar dropping in value vs. similarly depreciating currencies, which means that diversification into store-of-value assets like #gold and #Bitcoin is simply a prudent move, in our view.”
Mike McGlone, Bloomberg Intelligence senior commodity strategist
“Michael Saylor is clearly focused on a long-term investment strategy rather than short-term gains or losses. Putting company debt on the line is risky, but it could obviously lead to a massive return as well.”
Kadan Stadelmann, Komodo chief technology officer
“You’re not going to pay for your taxi ride with a Bitcoin. It’s ridiculous. […] You’ve got 70% of the people in El Salvador don’t even have bank accounts.”
Steve Hanke, economist
“When more people are buying cryptocurrency than investing in a stock market ISA, you have to conclude the world’s gone crypto crazy.”
Laith Khalaf, AJ Bell financial analyst
“In my view, it looks like the bottom is in.”
Jurrien Timmer, Fidelity Investments director of global macro
“Even though Musk is temporarily causing turmoil in the market, his involvement could be beneficial for crypto in the long-term, as he is attracting new people to crypto, albeit for sometimes the wrong reasons.”
Erik Nurm, CoinSwap founder
Prediction of the Week
Even Elon Musk can’t save Dogecoin from crashing another 60%, analyst asserts
A dreaded “head and shoulder” pattern has emerged in Dogecoin’s charts — and according to one analyst, this indicates the meme coin’s price could fall by another67%.
Pseudonymous trader Tyler Durden claimed in a tweet that a fall to$0.05is “programmed,” adding: “Even Elon can’t save this with his tweets. He’s tried and each time he just created another lower high.”Gulp.
With prices now dipping below$0.30, DOGE is a long way from the all-time highs of$0.73seen in the first week of May — the culmination of a jaw-dropping15,000%increase since the start of the year.Interest in the joke cryptocurrency is now falling across several metrics, indicatingDoge may have had its day.
FUD of the Week
Scammers mail out fake hardware wallets to victims of Ledger data breach
The consequences of Ledger’s major data breach continue to be felt almost a year later.
A Reddit user who was among those affected claims they received a fake Ledger Nano X wallet in the mail — wrapped in seemingly authentic packaging.
The device came with a poorly written letter purporting to be from the Ledger’s CEO that warned “you must switch to a new device to stay safe.”
Even worse, they also received a fake manual asking them to enter their private Ledger recovery phrase to connect their cryptocurrency wallet to the new hardware.
Crypto fan tokens a mixed bag for game-deprived soccer fans
Not everyone is a fan of soccer fan tokens, it seems.
Organizations representing football fans in England and Wales have accused teams of “trying to squeeze extra money out of supporters” — only to give them a cosmetic say in how clubs are run.
The value of fan tokens plunged along with the rest of the crypto market after peaking in April and May.This volatility, combined with rising matchday costs in general, has left some fans feeling priced out of having their voices heard.
Sue Watson, chair of West Ham United Independent Supporters Association, asked:“Why should you have to pay to have any sort of say in the club?”
This unknown cryptocurrency soared by 164,842% in hours, only to crash 99%
About$7.65 billionentered the cryptocurrency market in just three hours via a widely unknown altcoin on Monday.
WebDollar (WEBD) surged from $0.0003711 to $0.6121 in just three hours — a 164,842% rise in its market valuation.
Over a five-minute period, its market cap went from$1.84 millionto$1.5 billion. It had fallen back to$5.12 million40 minutes later. And, 50 minutes after that, it surged again with a vengeance — hitting a staggering$9.5 billion.
At one point, WebDollar was the 18th-largest cryptocurrency in the world by market cap, leapfrogging the likes of Stellar, VeChain and Tron.
It wasn’t to last.Two hours after topping$9.5 billion, it crashed by more than99%, with its ranking rapidly falling down to No. 873.
Best Cointelegraph Features
An asset for all classes: What to expect from Bitcoin as a legal tender
New tech that reduces costs of international payments would “be a boon for poor countries that rely on remittances” — but will BTC as legal tender fix that?
Joining the ranks: Bitcoin’s correlation with gold and stocks is growing
BTC used to be an uncorrelated asset, but that’s no longer the case. What can gold and stocks suggest about the crypto markets?
Bullish all the way? MicroStrategy doubles down on its Bitcoin bet
MicroStrategy’s latest bond offering seeks to deliver a yield of 6.25%–6.5% — significantly higher than an average junk bond yield of 4.01%.
Goldman Sachs is delving deeper into the crypto space, expanding its Bitcoin futures trading opinions and teasing the launch of Ethereum futures next.
The financial giant is tapping Galaxy Digital as a liquidity provider for its broadened BTC trading platform, reports The Record. Goldman Sachs is announcing its partnership with Galaxy Digital after successfully executing Bitcoin futures trades in early May.
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Galaxy Digital is a global digital asset investment management firm, headed by noted Bitcoin bull Mike Novogratz.
In the wake of the introduction of its BTC trading options, Goldman Sachs announced this week that it will be offering Ethereum options and futures contracts as well, according to Bloomberg.
The first Ethereum ETF (exchange-traded fund) in North America started trading this past April in Canada, just after the novel Bitcoin ETF product launched in the country as well.
Thus far, no Bitcoin or Ethereum ETF has been approved in the US, though VanEck has applied for an Ethereum ETF and Fidelity and Anthony Scaramucci’s SkyBridge Capital have applied for Bitcoin ETFs with the U.S. Securities and Exchange Commission (SEC).
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
After six months of testing, this Switzerland bank is set to offer Bitcoin trading and custody services to its clients.
BBVA Switzerland is the latest bank to enter the cryptocurrency space. Today, theyannouncethat their service will open on June 21st for its private banking clients interested in digital asset investments.
The six-month test launch stress tested the system and served as a way to gauge interest for the cryptocurrency service, according to BBVA CEO Alfonso Gomez.
“This gradual roll-out has allowed BBVA Switzerland to test the service’s operations, strengthen security and, above all, detect that there is a significant desire among investors for crypto-assets or digital assets as a way of diversifying their portfolios, despite their volatility and high risk.”
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BBVA’s Bitcoin management system is fully integrated into its app, which will allow investors to track Bitcoin’s performance alongside other assets while letting investors hold traditional and digital assets in the same investment portfolio.
The bank plans on issuing digital wallets, where users can instantly convert between Bitcoin and other currencies without delays and without the illiquidity that affects other digital wallets or independent brokers.
“We are bringing the quality of banking service to the fledgling world of crypto assets.
With this innovative offer, BBVA positions itself as a benchmark institution in the adoption of blockchain technology. Over the coming months, we will continue to enhance and expand the digital asset offering.”
Currently, Bitcoin trading is limited to only Switzerland. However, BBVA is considering extending the service to other countries based on market maturation, demand and regulation.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Crypto Livewire – Press Releases
The Explosive Growth of DeFi – Who Is at Risk?
June 17, 2021
CoinsPaid CPD Token Launch – Sharing Our Experiences, What We Do and How We Do It
June 17, 2021
Maiar, the Money App Powered by the Elrond Blockchain, Adds Bitcoin
June 17, 2021
Virtue Poker To Become Multi-Chain Compatible, Launch on BSC Imminent
June 16, 2021
AAX Reserves $10M To Bring Lucrative Opportunities to the Solana Community
June 16, 2021
How Cryptocurrency Is Breaking Traditions – Three Examples
June 16, 2021
Next-Gen DeFi Token Launchpad Lemonade Announces DePo IDO Public Sale
Sino Global Capital has been posting reports on Bitcoin, China, and the changes that are taking place within the Asian Giant. Today, most of the BTC miners in the Chinese province of Sichuan will turn off their machines. This has created another variable in the already uncertain crypto market.
At 0:00 on June 20, the mining farms in this province will be powered off. This territory host one of the largest Bitcoin mining operations in the world, 8BTCnews claimed. Thus, some miners expect a dark age for this sector to begin.
8BTCnews claims that the effect of this crackdown has started to ripple across the BTC mining sector. The top ten Bitcoin mining pools by hashrate, AntPool, Poolin, Binance, Huobi Pool, and others, record important losses in their computing power. These losses go from 16%, 21%, 25%, and even as high as 31.19% in the last day.
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Historic moment: Sichuan mining farms will all be closed in the early morning of June 20, and Chinese miners may usher in the darkest moment#Bitcoin #bitcoinmining
— 8BTCnews (@btcinchina) June 19, 2021
Overall, the Bitcoin network has an average computing power of 129.52 EH/s. Almost a 30% dropped from its all-time high. This has been reflected on BTC’s Mempool and its transaction cost, at the time of writing, sits at some of its lowest levels in 2021 with 19 sat/vB ($0.96) for a high priority transaction. The minimum fee is the elusive 1 sat/vB.
Source: Mempool Space
Bitcoin Mining Outlook, Complete Darkness?
Sino Global Capital presents an objective view of a situation that could be interpreted as only bearish for Bitcoin. The investment firm claims that although part of the BTC mining operations is shutting down, some will remain.
Get 110 USDT Futures Bonus for FREE!
Moreover, a portion of the miners with large side operations was already leaving the country, the medium and small-sized seem more likely to stay. The miners on the move expected a crackdown since March 2021. Thus, they made the necessary preparations.
As more crypto mining bans came in May from Beijing, Qinghai, Inner Mongolia & Sichuan, with the stated goal of achieving financial stability, Chinese miners accelerated their process of migration to other countries.
Sino Global Capital believes China is tackling sectors that jeopardize national economic stability, Bitcoin mining, and crypto trading with leverage. The country could also be targeting activities that enable corruption at a state level.
Miners have adopted 3 measures: they began selling their equipment, stay and see how regulations play out, migrate. The investment firm expects the distribution of the miners on the move to vary.
The overseas migration destinations of Chinese miners are diverse, evenly distributed among North America, Central Asia, Russia, Northern Europe and North Africa. This is actually positive and greatly increases the decentralisation of the bitcoin network.
Nic Carter, a partner at Castle Island Ventures, agrees that the migration of BTC’s hashrate out of China will bring more decentralization to the network. Additionally, Carter believes BTC mining activities could be moved to places where they will operate with 100% renewable energy.
Either way, MSM narratives will likely ignore climate and decentralization benefit of hashrate migration and focus on perceived “risk” to bitcoin or “loss of fundamentals” while ignoring the astonishing reality of bitcoin migrating 50% of its industrial base w/o difficulty
— nicolás carretero (@nic__carter) June 19, 2021
At the time of writing, BTC trades at $35,562 with sideways movement in the daily chart. In the 7-day and 30-day charts, BTC has 4.4% losses, respectively.
BTC moving sideways in the daily chart. Source: BTCUSD Tradingview
At the moment, there seems to be a general assumption that when the U.S. dollar value increases against other global major currencies, as measured by the DXY index, the impact on Bitcoin (BTC) is negative.
For the past few weeks, analysts and influencers have been issuing alerts about this inverse correlation, which held true until March 2021.
So I guess we’re not all obsessed with $DXY anymore? Because it’s looking super bullish & had provided an almost perfect inverse correlation for over a year. Either way we’re about to find out if $BTC has matured to the point of being uncorrelated. ️ #Banks #Brrrr #Bitcoin pic.twitter.com/gequzmr6p2
— Alex Saunders (@AlexSaundersAU) February 2, 2021
What could be the trigger of #Bitcoin top? A #DXY bottom! And we may just have that around the corner! https://t.co/1Cy03QuMgb pic.twitter.com/zKUh9CWc72
— Henrik Zeberg (@HenrikZeberg) January 2, 2021
However, no matter if you track a 20-day or 60-day correlation, the situation reversed over the past three months.
Dollar Index DXY (blue) vs. Bitcoin (orange, logarithmic). Source: TradingView
The correlation indicator (red) has been ranging above 50% since mid-March, indicating that both DXY and Bitcoin have generally followed a similar trend.
The dollar strengthened after the Fed speech
As Cointelegraph reported, May’s Consumer Price Index (CPI) report showed inflation hitting a 13-year high, and Federal Reserve Chair Jerome Powell acknowledged that inflation could run higher than planned in the short term. Still, he clarified that “longer-term inflation expectations are anchored at a place that is consistent with our goal.”
The market gave the Fed a ‘vote of confidence,’ causing the U.S. dollar to appreciate versus major global currencies. Meanwhile, Bitcoin dropped 8% to a $35,300 low on June 18, further reinforcing the inverse correlation thesis.
Related:Forget Elon, here’s why Bitcoin traders should be watching the U.S. Dollar Index instead
Correlation is a longer-term indicator, not an intraday metric
Even though pundits and influencers love to dissect those events and extrapolate 1-day movements, one should analyze a more extended timeframe to understand the potential impacts of the DXY index on the Bitcoin price.
Dollar Index DXY (blue) vs. Bitcoin (orange, logarithmic). Source: TradingView
Notice how both markers weakened during May, after a relatively flat period in late April. It seems premature, at least, to call the recent decoupling an inverse correlation. Multiple forces could be behind Bitcoin’s failure to sustain a $40,000 support on June 16 and the subsequent price correction.
For starters, Liu He, Vice Premier of China and a member of the all-powerful eight-person politburo, led a meeting on preventing and controlling financial risks on May 24. Among the decisions was a crackdown on Bitcoin mining and trading activities.
Bitcoin’s hash rate dropped to the lowest level since November 2020 as miners are starting to move away from China. Huobi temporarily suspended futures trading to Chinese users, while Futures platform Bybit revealed it would have closed accounts registered with Chinese phone numbers.
Furthermore, on May 26, the United States Securities and Exchange Commission Chair Gary Gensler said the regulators are looking forward to working with fellow regulators and Congress to fill gaps in investor protection in crypto markets.
Therefore, the potential U.S. regulation and the current China crackdown on mining and trading activities seem vital to Bitcoin’s recent underperformance. Once those issues are no longer threats, the gap that has been created from DXY’s positive move could fade away.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Upon realization of the idea of liberty, it is immediately thrust into reality, never to be forgotten by those having experienced it.
I believe that the Founding Fathers of the United States inscribed the idea that liberty is inherent to life in the Declaration of Independence. While they made an astounding first step in declaring this, there has been, since the uprising of technology, a necessity of this in monetary form.
I believe that bitcoin is the codification of monetary liberty. Like the Declaration of Independence, Bitcoin was set into existence from the very moment it was realized;
“The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.” – Satoshi Nakamoto
The mere existence of the idea now facilitated a reality in which liberty was to be demanded. Having had the taste of freedom, man had realized the fullest potential of life, in that of sovereignty.
Financial freedom is achieved the moment you begin acquiring bitcoin. Immediately, you obtain digital value — verifiably scarce and unstoppably mobile. There are no outside entities who can lay claim to your property; there are no boundaries on the transfer of your money. Each individual reclaims their inherent right to liberty, as expressed in the Declaration of Independence, and now too expressed in the form of Bitcoin’s code.
While the Declaration of Independence proclaimed the idea and theory of self sovereignty, Bitcoin created the physical implementation of such property rights, allowing the manifestation of such liberty to proliferate in reality. What the Declaration did on a theoretical level, Bitcoin achieves on a material level via monetary property rights.
It is interesting to think that such an achievement was only possible given the creation of the internet. As much as the printing press led to the proliferation of education, writing and reading — which were necessary for such a thing as the Declaration of Independence to occur — the internet enabled Bitcoin. The printing press, being the origin of worldwide mediums of content absorption, interconnected people across space and time. The internet accomplishes this feat even more so, more quickly and exponentially more effective.
And so, it is with this realization that we understand; Bitcoin, being enabled by a present global interconnectedness, is a physical manifestation of liberty.
One of the most successful Chinese crypto venture firms—perhaps the most successful—is Continue Capital. Intentionally, the name of the company, 肯定牛, is a homonym that sounds like the Chinese words for “guaranteed bull,” as in bull market.
It’s a fitting name. The recent bull market has made Continue a massive success. The two founding partners, Hongjiang Li who lives in China’s Shandong Province, and Xiahong Lin, who lives in California, are among the largest Chinese bag holders of OmiseGo, Zilliqa, Polkadot, and ICP. Their stakes were worth billions of dollars during the recent crypto peak.
Though not very well known outside the China crypto circle, Li has 10,000 followers on his Weibo account, where he is better known by his nickname, Pima, a reference to an ancient, epic poem in which an old man reminisces about his days riding a horse into battle, fighting for his country.
Continue Capital’s philosophy of aping into crypto’s foundational building blocks and holding through bear markets has earned it a solid reputation in China’s crypto circle. This week’s da bing attempts to tell the inside story of their journey. I hope you walk away knowing that some China’s crypto community is breeding a class of investors who are investing and pushing the ecosystem forward.
The dynamic duo
Pima and Lin are both early Bitcoin adopters. Pima entered the space in 2013, fascinated by the burgeoning crypto discussions on Twitter and Bitcointalk. Like many early OGs, he operated a mining farm on his balcony at home, while having a day job at one of the largest real estate development firms in China.
Lin, then a software engineer at Twitter, entered the space in 2015. Lin takes great pride in drilling into the details of blockchain and Ethereum technology. While working on Continue, he also built Bodhi, a decentralized prediction market.
The men met in 2016 and launched Continue Capital that year. “The two of us are extremely complementary,” Pima told me. “ Lin is passionate about the engineering and tech side of crypto, whereas my strength is in risk assessment and community rallying.”
No deal went through Continue’s pipeline without an endorsement from both founders. Indeed, the two worked so well together for the past 6 years that they never needed to take outside capital.
“One must conquer the bear to harvest the bull”
“We never wanted to be full-time investors,” Pima told me, “but as we got deeper into crypto, there was a need for institutional money to invest and push the ecosystem forward.” Lin added: “The crypto industry actually pushed us forward. We just need to show our belief and the rest will take care of itself.”
Around the time that the duo went all in on crypto, Ethereum took off. They realized that the blocker to crypto reaching the next billions was to either scale Ethereum or find an alternative.
“Most people think our returns are made from our recent investments,” said Pima “That’s not true. We believe that the core to our thesis and belief comes from studying and researching in 2016 and 2017, which made us realize that to grow the ecosystem, we have to bet on the solution that solves a real problem.”
So Continue decided to place heavy bets on Omisgo, an Ethereum scaling solution, and Polkadot and ICP, both alternatives to Ethereum.
These projects are now household names (at least in crypto households) but in the bear market of 2017- 2019, few people dared to invest, let alone heavily. Continue not only invested in these Ethereum-scaling or Ethereum alternatives, they doubled-down during the depths of crypto winter.
For example, Continue invested 9000 ETH Polkadot in 2017 when ETH was around $400 and DOT was $0.05. Later, in 2019, the fund further invested $5M USD when DOT was $0.8. Today, DOT’s peak was $48. I have no clue when or if the men liquidated any of their holdings, but they could have made as much as $3 billion on the 2017 investment and $300 million on the 2019 investment.
Why didn’t other China-based crypto VCs do so well? They could have had they played the long game, but most investors in China want to make a quick buck. They steer clear of projects that require multiple years of lockup, which is what most solid projects require.
“Lockups never scare us. If we have conviction in a project, we will stay in for the long term,” Lin told me.
That’s not to say that Continue always wins. One of the darlings in its portfolio is Liquidity Network, an off-chain payment network. The project’s Twitter Deeply rooted in the Chinese community
These days, Continue’s investment thesis is heavily influenced by the idea that DeFi will continue to grow and be a driving force in crypto. Lin told me that the firm is “left hand L1 protocols and right hand DeFi.” He and Pima believe that both sectors will have exponential growth and bring crypto to the masses.
Obviously, both Pima and Lin are well-respected among the Chinese crypto community. One of the key reasons is that both dedicated their time to bridge the knowledge gap between portfolios and communities.
“We want to translate our knowledge into something that everyone could understand. Right now, there is lots of information asymmetry in the community. Retails don’t understand the crypto market and are therefore prone to invest in dog coins.” Lin told me
Pima is one of the most active voices on crypto Weibo. He frequently shares research analysis with the Chinese community.Such That may be Continue’s biggest contribution to the crypto ecosystem because unlike in western countries, where capital markets are mature and well-regulated, China’s capital market is still the wild west.
“Because China’s capital market is less mature, we are seeing regular pumping and dumping,” Pima said. “Everyone is chasing after overnight wealth. In addition, the lack of institutional participation in crypto has made China’s market more volatile and reactive.”
Obviously, Continue can’t change the crypto scene by itself. However, having the duo frequently share investment theses and bringing western knowledge to the eastern community has inspired a generation of young crypto investors.
The most memorable part of my conversation with the VCs was that Lin admitted his real dream job is to be a singer who wanders around the world. It wasn’t just the singing that appealed to him, he said. It was that such a vocation would give him the freedom to chase after the most amazing innovations in the world.
But what the fund has demonstrated is that rather than wandering from one project to another, chasing quick flips, the two have strong, steady, reliable diamond hands. They are convinced that crypto is the next paradigm shift—and are willing to stay through the toughest time.
“When you have enough belief in crypto, the industry will push you forward,” Lin told me. That’s guaranteed bull.
Do you know?
“屁股决定脑袋” which kind of means “your ass thinks for your brain,” is a popular saying among China’s crypto community. It describes people who pretend to do real crypto research but are just shilling their own bags. I’m sure you’ve seen a bunch of those on Crypto Twitter.
Su Zhu, CEO of crypto investment fund Three Arrows Capital is providing his insight into what caused Bitcoin’s collapse in late May, and where the crypto markets are headed next.
In a new interview on the Uncommon Core podcast, Zhu says that a confluence between Bitcoin’s soaring price action and a series of bearish news likely triggered the big sell-off that shaved off over 50% of BTC’s value.
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Zhu references the potential Bitcoin mining shutdown in China and Tesla CEO Elon Musk’s tweets lambasting the flagship cryptocurrency for what he sees as environmentally unsustainable properties.
“I think there was a lot of news that came out around then that was a bit bearish especially out of China regarding mining, but then also in the US with Elon’s tweets about Tesla and Bitcoin energy usage… Those are not the proximate causes, but they were some of them, and I do think that the market took that as a shelling point to start taking profits. So I think that it was a culmination of that plus the fact that people who had been buying throughout kind of said ‘Okay if I just wait then I could get it at a much lower price, so I’ll just wait.’
So I think it was a culmination of those two factors that put it through, but if you look at the way that the markets have bounced, you can see those buyers are still there. It’s just a matter of what price they’re going to get. During the beginning and the mid part of this run, they kept having to buy at higher and higher prices, and this time they managed to get some at lower prices than before.
Bottom line is there is still a tremendous amount of buying demand.”
Within the interview, Zhu asserts “the bull run definitely isn’t over,” and that decentralized finance (DeFi) is about to make a huge infiltration into the financial establishment as investors discover the superior yields and instruments.
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According to the crypto veteran, the recent survey showing hedge funds are planning to dump hundreds of billions of dollars into crypto is also a mega bullish catalyst that could strengthen the digital asset markets immensely.
“The reality is that once you have this infiltration and people are used to this idea of digital scarcity and this kind of floating around, then you will have a whole new set of natural buyers that come in when there’s dips. These people are trading these assets as just like instruments like copper or another commodity. They will also find reasons to buy it and also find reasons to sell it, and so I think that whole process is something that is very, very bullish long term because it broadens the base of holders massively.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
