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First Mover: Biden’s $1.9T Plan Shows ‘Blue Wave’ Bitcoiners Saw Coming

Republished by Plato

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(EDITOR’S NOTE: First Mover will not publish Monday, Jan. 18, in honor of Martin Luther King Jr. Day in the U.S., a CoinDesk company holiday. The cryptocurrency market will be open, as it always is.) 

Bitcoin (BTC) was lower, trading around the $38,000 level where prices have gravitated for the past week.  

The market faces price resistance around $41,000, with support seen around $34,000, Mark Warner, head of trading for London-based BCB Group, a financial firm focused on digital assets, said in comments emailed by a spokeswoman. 

“A move above $42,000 will likely see a resumption of the heady gains we saw last week,” Warner said. Prices are up 29% so far in 2021, versus a 0.4% year-to-date loss for the Standard & Poor’s 500 Index of large U.S. stocks. 

In traditional markets, Asian and European shares fell and U.S. stock futures pointed lower on Friday, as anticipation of President-elect Joe Biden’s $1.9 trillion relief proposal, rolled out late Thursday, yielded to sober assessments of the state of the economy. Gold was little changed at $1,847 an ounce. 

Market moves

First Mover wrote last October how a “blue wave” in then-upcoming U.S. elections – full control of the government by Joe Biden’s Democratic Party – could lead to trillions of dollars of new government spending on coronavirus relief and economic stimulus. 

That wave has arrived, in the form of a $1.9 trillion coronavirus-relief package proposed late Thursday by U.S. President-elect Biden. And some Wall Street analysts are now wondering openly if the economy and markets are becoming hooked on stimulus. 

“The market is back to an expectation that more fiscal stimulus is all but inevitable,” Ed Mills, of the stock-brokerage firm Raymond James, wrote early Friday in a note to clients.  

Cryptocurrency investors could jump straight to the implication: The Federal Reserve might need to print trillions of new dollars to help finance any extra borrowing by the U.S. Treasury Department. That in turn could spur more demand for bitcoin, seen by a growing number of investors as a hedge against inflation. 

“Stimulus targets could steadily increase on any setbacks with the coronavirus pandemic, and that has been one of the fundamental reasons why many continue to pile into bitcoin,” Edward Moya, a New York-based senior market analyst for the London-based foreign-exchange broker Oanda, wrote in an emailed note.  

Biden’s proposal, announced in a speech, earmarks $1 trillion for families and individuals and more than $400 billion to combat the pandemic directly, including money to accelerate vaccine deployment and safely reopen schools, according to the New York Times. There’s also $350 billion of aid for state and local governments.

Democrats, set to become the majority party in both chambers of Congress, might use a “budget reconciliation” process to push the legislation through with a simple majority of votes, according to Mills at Raymond James. 

“We would note that it would not prevent them from a second reconciliation package later this year,” Mills wrote. 

During the 2020 fiscal year that ended in September, the U.S. budget deficit hit a record $3.1 trillion, swollen from government relief packages signed by President Donald Trump as the coronavirus-related lockdowns devastated the economy.

Ian Shepherdson, chief economist for the forecasting firm Pantheon, predicts the U.S. budget deficit could reach $4 trillion during the current fiscal year. 

With the economy now suffering from the recent uptick in coronavirus-related cases and a vaccine rollout still months away, fiscal discipline looks unlikely. A government report Thursday revealed a bigger-then-expected increase in weekly unemployment claims to 965,000, the highest since August. The past year’s shift toward remote working represents another potential source of widespread dislocation. 

Not to fear. As Scott Anderson, chief economist at San Francisco-based Bank of the West, a unit of the giant French bank BNP Paribas, told clients Thursday: “While the latest jobless claims report is sobering, the $900 billion coronavirus aid package recently passed and the promise of more fiscal aid coming shortly from the Biden administration should deliver some much-needed support to the unemployed and businesses in the current quarter until service-sector businesses are allowed to reopen as more Americans receive the vaccine.”  

The U.S. government’s public debt, which stood at about $5.7 trillion in 2000, is now hurtling toward $30 trillion.
Source: Federal Reserve Bank of St. Louis

The U.S. national public debt stands at an already-elevated $27.7 trillion, and analysts say the Fed would likely have to help finance any extra goverment borrowings with more purchases of Treasury bonds, once considered an emergency measure. 

“Taxes will go up, but they are unlikely to rise by what could be an incremental $4 trillion in one year,” Dick Bove, a longtime bank analyst who now works for the brokerage firm Odeon, told clients Thursday. “Thus, the Fed must step in. This can cause the dollar to decline meaningfully, inflation to rise and interest rates to become a problem. It is a worrisome situation that a President Biden may be unable to control.”

Earlier this week, Federal Reserve Bank of Dallas President Robert Kaplan, who sits on the U.S. central bank’s monetary-policy committee, suggested that officials later this year might consider whether to taper their ongoing $120 billion-a-month of bond purchases, initially implemented as an emergency measure.  

But the drama was short-lived, with Fed Chair Jerome Powell on Thursday squashing speculation of an imminent tapering. “Now is not the time,” he said during a virtual discussion

Bank of America estimates the Fed’s balance sheet will end 2021 at $8.8 trillion, up from about $7.4 trillion as of Wednesday. Before the pandemic hit at the start of 2020, the level was $4.2 trillion

But even those estimates might be subject to change. 

“Depending on the extent of U.S. fiscal expansion and deficits in coming years, there is a risk the Fed might not be able to withdraw themselves completely from the U.S. Treasury market for fear of disorderly market conditions,” Bank of America’s economists wrote this week. 

The upshot for crypto traders and investors? If bitcoin is a hedge against Federal Reserve money printing, the use case doesn’t appear to be going away anytime soon.  

– Bradley Keoun

Bitcoin watch

Bitcoin’s two-day rally has stalled as the U.S. dollar gains ground in the wake of President-elect Joe Biden’s $1.9 trillion fiscal-stimulus proposal.

The cryptocurrency was changing hands around $39,600 when Biden spoke at around 00:15 coordinated universal time (UTC), and prices have since traded down to about $38,000, based on CoinDesk 20 pricing.

The pullback marks a weak follow-through to the two-day rise, which saw prices revisit $40,000 resistance. The lack of a bullish response by the bitcoin market is perhaps surprising, given that fiscal and monetary stimulus is seen as inflationary, and bitcoin is seen by a growing number of investors as a store of value.

The strength of the U.S. dollar against major currencies could be playing spoilsport, with the greenback gaining in foreign-exchange markets early Friday. Over the past year, bitcoin prices have shown an increasingly negative correlation with the U.S. dollar, meaning they typically move in opposite directions.

– Omkar Godbole

Read More: Biden’s $1.9T Relief Package Proposal Fails to Stir Bitcoin Market

What’s hot

Paxos teams up with Chainlink in fresh push to make its asset-backed tokens paxos standard (PAX) and paxos gold (PAXG) more widely available across DeFi (CoinDesk

Some Asian traders are using Polkadot to predict bitcoin’s future (CoinDesk

Fed Chair Jerome Powell sees “years rather than months” before digital dollar is released (CoinDesk)

Grayscale raises $3.3B in 4Q 2020, most ever (CoinDesk), adds 2K+ BTC to reserves in first day back after three-week pause on new investment; reserves addition is 2.4x number of new bitcoins minted by the blockchain (Decrypt) (EDITOR’S NOTE: Grayscale is owned by Digital Currency Group, which also owns CoinDesk.) 

Trading in the BTCEetc Bitcoin Exchange Traded Crypto (BTCE) on Germany’s Deutsche Borse has climbed to levels typically only seen in the most popular European ETFs (FT

Lido Protocol, a new DeFi and staking protcol, lets users stake ether in Ethereum 2.0 while receiving “tokenized staked ether” of a similar value (CoinDesk)  

Bahamas-based Deltec, bank to Tether, says it invests customer funds in bitcoin, renewing questions on whether the USDT dollar-linked stablecoin might be backed by bitcoin (CoinDesk

Galaxy Digital launches proprietary mining, miner financial services (CoinDesk

Some analysts (and data) cast doubt on narrative that bitcoin miners were responsible for recent price dips (CoinDesk

Analogs

The latest on the economy and traditional finance

Jobless claims surge more than expected to 965K, highest weekly total since August (CNBC

Retail arm of Thailand’s state-owned energy giant PTT plans initial public stock offering with fund-raising goal of 54B baht ($1.8B), potentially sign of booming year (Nikkei Asia Review)

Australian fintech firm AfterPay becomes 13th largest stock by market cap on ASX following coronavirus pandemic (Australian Financial Review)

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Disclosure

Source: https://www.coindesk.com/first-mover-biden-plan-shows-blue-wave-bitcoin

Blockchain

Bitcoin Exchange Outflow Continues as On-Chain Support Settles at $47K

Republished by Plato

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On-chain analytics provider, Glassnode, has revealed that there is solid support at the $47,000 level for Bitcoin. It came to this conclusion in its latest ‘Week on Chain’ report using analysis from chart guru Willy Woo and data scientist Rafael Schultze-Kraft (@n3ocortex).

It added that Woo noted a significant volume of BTC was transacted on-chain around $45,000, forming an on-chain support level late last week.

Schultze-Kraft highlighted that this support level has actually strengthened to rest above $46.6k, with 1.2 million BTC, or 6.5% of circulating supply, transacting in this zone.

Is BTC Accumulation Increasing?

Glassnode pointed out that the patterns suggest an increase in accumulation interest at these levels:

“When a large volume of coins move on-chain and an on-chain support level holds, it suggests that there is significant accumulation interest and buyers see it as a ‘value’ entry point.”

However, it also noted that should price fall below this support level, it would become a level where overhead supply may form equally strong resistance.

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Using the UTXO Realized Price Distribution metric, which shows which prices the current set of Bitcoin unspent transaction outputs were created, the on-chain support level at $47k is the largest since prices were $11k, it added.

“This range now represents one of the largest on-chain BTC accumulation levels in history, certainly the largest since the last cycle’s $20k ATH was breached.”

The balance of Bitcoin on exchanges also continues to decline which could indicate readying to sell or hodling in cold wallets. The report added that throughout February the rate of miner sales was declining, whereas today, it is almost net neutral meaning that miners could be accumulating also.

Bitcoin Price Update

At the time of press, Bitcoin was changing hands for $54,150 according to Tradingview which has reported a 24 hour gain of almost 7%.

It is the highest the asset has traded since Feb. 22 when it was falling back from the all-time high of $58,250 the previous day. Bitcoin is currently facing resistance here and needs to break above $55,900 to make a move towards a new ATH.

On the downside, support can be found in the $48,000 region however BTC is currently in the process of forming its fifth green candle in a row so the bulls are running the show at the moment.

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Source: https://cryptopotato.com/bitcoin-exchange-outflow-continues-as-on-chain-support-settles-at-47k/

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Blockchain

Coinbase is Valued at $100 Billion Before Direct Listing on the Nasdaq

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Coinbase has yet to go public, and the markets are already on fire in anticipation of the most awaited direct listing in the cryptocurrency world and the what will be the first major listing ever recorded on the Nasdaq.

An independent valuation based on the price of its shares in private markets determined that Coinbase has a potential valuation of between $90 billion and $100 billion before its direct listing.

During its Pre-Listing Days, Coinbase Went Up

According to activity in late February, this price would far exceed a previous valuation of $77 billion. At the time, confidential sources told Coindek that as the “big day” approached, speculators were bidding higher and higher on the stock.

“The third weekly transaction closed on Friday and the clearing price was $303 a share. The first week it was 200 bucks a share, the second week it was $301 a share, and the third week it was $303 a share. So you can kind of see price discovery happening.”

Bloomberg reported that, during the last day of private trading before the direct listing, investors traded Coinbase stocks at a range between $350 to $375, which would raise Coinbase’s valuation by as much as 33% in a matter of weeks, and over 300% higher than what analysts expected for its IPO (priced at just $28 million).

Before going public, credited investors could trade Coinbase shares on the Nasdaq Private Market, a restricted market with low volume and high volatility, where a limited number of participants can speculate on the price of some shares of companies that are not yet publicly traded.

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The numbers, however, do add up to its expected performance. After registering a bad year during the bear period of the crypto markets back in 2018, Coinbase grew to become the colossus it is today.

A Small Step for a Crypto Exchange, a Giant Leap for the Crypto Industry

Due to its characteristics, the private market is not necessarily an accurate indicator to determine what will happen when Coinbase becomes publicly available; however, it is an excellent reference to see what the markets expect to happen… And the future looks promising.

And we’re not just talking about Coinbase, but almost the entire cryptocurrency ecosystem. Coinbase going public is one of the most significant supports for the crypto industry in recent times.

The United States is one of the countries with the highest volume of exchange trading, has one of the world’s largest GDPs, concentrates a significant number of cryptocurrency startups, and yet is known for having strict laws when it comes to digital assets.

A stock exchange listing could provide an additional layer of legitimacy in the eyes of potential new users, stimulating the growth of its customer base. This would simply accelerate a trend that has been growing over time, especially in the aftermath of the COVID-19 market crisis.

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Source: https://cryptopotato.com/coinbase-valuation-100-billion-usd-before-direct-listing-nasdaq/

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Bitcoin price cracks major resistance as analyst eyes $70K ‘destiny’

Republished by Plato

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Bitcoin (BTC) tackled pivotal $52,000 resistance overnight on March 9 to come within 6% of historical all-time highs.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

BTC price hits 2-week highs

Data from Cointelegraph Markets and Tradingview showed BTC/USD hitting local highs of $54,500 on Tuesday.

The latest attempt to break out of its sideways trading corridor, the move was still consolidating at the time of writing. Amid heavy volatility, a retracement on the day targeted $53,500 — still above crucial resistance.

As Cointelegraph reported, analysts were eyeing $52,000 as a line in the sand for securing the next stage of the Bitcoin bull run.

While the weekend produced healthy upside, Bitcoin had still to cement even $50,000 as strong support as the week’s trading began.

On the back of 24-hour gains topping 8%, however, the picture on Tuesday was fast improving, after evidence showed that $47,000 had become conspicuously strong support.

“Bitcoin jumps >$54k aided by more signs of institutional interest in the largest cryptocurrency,” markets commentator and contributor to German news daily Die Welt, Holger Zschaepitz, summarized to Twitter followers.

“Institutional interest sets the latest bull run apart from 2017’s retail-driven surge, Goldman says. Much of the institutional demand has been driven by fears around asset devaluation.”

Zschaepitz was referencing findings from Goldman Sachs, which among other things also revealed that 40% of its own clients already have exposure to cryptocurrencies.

Analyst on $70,000 Bitcoin: “Destiny awaits”

The institutional picture became even more bullish on Monday after one of Norway’s richest people launched a Bitcoin-focused spin-off firm using BTC as its sole treasury asset.

“Bit­coin can be ver­i­fied, di­vid­ed, re-as­sem­bled, stored, and trans­port­ed at vir­tu­al­ly no cost. It’s the per­fect scarce digi­tal as­set. By de­sign,” Kjell Inge Røkke wrote in a widely-circulated shareholder letter.

“All that’s re­quired to keep the net­work run­ning, is al­lo­cat­ing the cheap­est elec­tric­i­ty in the world. Elec­tric­i­ty se­cures the net­work. No trust­ed par­ties or peo­ple with guns are need­ed. I call that progress.”

Elsewhere, hodlers were watching a bullish setup unfold in Bitcoin’s daily moving average convergence/ divergence (MACD) indicator, which on Monday was primed to repeat behavior which previously resulted in February’s march to $58,300 record highs.

BTC/USD 1-day candle chart (Bitstamp) with Fibonacci levels. Source: filbfilb

“Destiny awaits,” Cointelegraph Markets analyst filbfilb added in an update to Telegram channel subscribers, highlighting a target area of $70,000 and higher using Fibonacci levels.

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Source: https://cointelegraph.com/news/bitcoin-price-cracks-major-resistance-as-analyst-eyes-70k-destiny

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