It happened last weekend. Bitcoin managed to close above $40,000 for the third time since January 8. But again, the benchmark cryptocurrency got bull-trapped by daytraders who sold off the said level to secure short-term profits.
As a result, Bitcoin opens the new week in a negative area, with traders still assessing its short-term market bias against a basket of macro fundamentals, primarily a recent uptick in the US 10-year yields above its January 11th peak. Sell-off in bond markets typically weigh negatively on safe-haven assets—like Bitcoin and gold, generally non-yielding.
But traders in the cryptocurrency space expect larger upsides. That is due to the Federal Reserve’s decision to keep its benchmark interest rate near zero until 2023 and buying government and corporate debts at a rate of $120 billion per month until the economy achieves maximum employment.
Meanwhile, analysts note that US President Joe Biden’s $1.9 trillion coronavirus package would put downside pressure on the US dollar. In turn, the aid would push investors seeking protection against the greenback-led consumer price inflation, thus pushing the Bitcoin prices higher.
The stimulus package of $1.9 Trillion is 3 times larger than the entire #Bitcoin market capitalization.
We’re still early.
— Michaël van de Poppe (@CryptoMichNL) January 30, 2021
So far, inflation expectations have poured cold water on the safe-haven rallies.
Economic Recovery Offsets Bitcoin’s Bullish Bias
A rise in benchmark yields pressured gold prices lower as it marked a renewed risk-on optimism in the market.
Investors instead poured capital into the risk-on assets, sending the US benchmark S&P 500, blue-chip Dow Jones, and tech-savvy Nasdaq Composite up by 4.65, 3.89, and 6.01 percent last week, respectively, following a stronger economic recovery projection for the US.
Bitcoin too surged in the same timeframe, but its rally took cues from a speculative mania triggered by Tesla and SpaceX founder Elon Musk’s open endorsements. The cryptocurrency reached $40,000—as discussed above—but only briefly, pointing to bullish uncertainties that lie above the said resistance level.
The cryptocurrency enters the new weekly session carrying a similar bias conflict. What will be the key to watch ahead is the performance of longer-dated Treasury yields, which have been trading upwards. Last week, the 30-year rate finished at its highest level since February 20, 2020. Meanwhile, a US dollar further poses downside risks for Bitcoin.
Event-wise, the week ahead looks quiet, with the Chinese new year taking exchanges offline starting Thursday. Meanwhile, the US will release its inflation figures on Wednesday (a higher reading expects to send bond yields further higher). That will be followed by the University of Michigan’s consumer sentiment report on Friday.
Fed Chair Jerome Powell, ECB Chief Christine Lagarde, and BoC’s Deputy Governor Timothy will also speak this week on their economic outlook.
Price analysis 3/3: BTC, ETH, ADA, BNB, DOT, XRP, LTC, LINK, BCH, XLM
Evolve Fund Files for Ethereum ETF after Bitcoin Approval in Canada
Just weeks after opening a Bitcoin (BTC) exchange-traded fund, Evolve Fund has opted to file for a similar ETF product based on Ethereum (ETH). With $1.7 billion assets under management, Evolve is a Canadian-based ETF provider that specializes in “bringing disruptive innovation ETFs to Canadian investors.”
Just a month prior, Evolve Funds scored an approval from the Canadian government to proceed with listing their Bitcoin ETF on the Toronto Stock Exchange. Found under ticker EBIT.TO, the fund is down approximately 15% since its listing date.
“As a leader in disruptive innovation, we look forward to providing Canadian investors with access to another leading cryptocurrency through an ETF structure,” said Raj Lala, President and CEO at Evolve Fund. As Ethereum is the second biggest cryptocurrency by market cap, the digital asset has enjoyed similar levels of attention to Bitcoin from financial institutions.
Moreover, the Ethereum-based ETF would give potential investors exposure to the daily movements of Ether. Thanks to the “creation and redemption” processes offered by ETF structures, there would be minimal tracking errors between spot price and the ETF. Its portfolio will be based on ETHUSD_RR, a daily benchmark index price for Ethereum denominated in U.S. dollars.
The proposed fund would work similarly to its pre-existing Bitcoin counterpart. If approved, both ETFs would contract Cidel Trust Company and Gemini as their custodian and sub-custodian. This means that these two firms will hold client’s securities in electronic form, most likely through digital wallets.
Institutional Interest in Crypto, From Bitcoin to Ethereum, Continues to Grow
There is no doubt that institutions will continue to bring crypto-based investment products to the traditional financial markets. Just days ago, Goldman Sachs, one of the largest investment banks in America, reopened its Bitcoin-futures trading desk.
As public demand soars and financial institutions rush to join in, the future of cryptos looks brighter than ever.
Featured Image from Unsplash
You can now buy a used Hyundai, not just a Lambo, with Bitcoin
Cointelegraph By Sam Bourgi
HGreg, a Quebec-based vehicle superstore with 30 North American locations, will begin accepting cryptocurrency payments for new or preowned vehicles this month.
The auto dealer, which has locations in Quebec and Florida, is becoming one of the first large automotive groups to accept digital asset payments in its day-to-day operations. The company claims to have sold 500,000 vehicles over the past 25 years and maintains a warehouse in Miami that’s stocked with over 1,000 cars.
“A portion of the revenue from sales made in cryptocurrency will be kept in this format by the company,” HGreg said, indicating that it plans to hold digital assets like Bitcoin (BTC) on its balance sheet.
In terms of accepting crypto payments, the dealership said:
“We’re pleased today to be at the forefront of technology, giving our customers another payment option. We also believe it will be advantageous to keep some of our assets in cryptocurrency.”
The dealership sells a wide variety of used cars, from Hyundais to Lamborghinis. Crypto users can therefore use their funds to buy practical cars in addition to luxury vehicles. HGreg claims to have the largest inventory of vehicles in Canada.
HGreg’s decision to accept cryptocurrency payments comes on the heels of Tesla’s entry into the Bitcoin market. As Cointelegraph reported last month, the electric vehicle maker allocated 7.7% of its gross cash position to Bitcoin. In the process, the company announced it will begin accepting BTC for payment.
While cryptocurrencies remain largely within the domain of investments, payment infrastructure is increasingly integrating digital assets. OLB Group recently enabled crypto payments for thousands of United States merchants, allowing businesses to accept Bitcoin, Ether (ETH), USD Coin (USDC) and Dai.
A car enthusiast who spent 37 BTC on two used Hondas in 2017 might wish he had waited…
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