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First Mover: Just Another Day for Bitcoin as US Election Slides Into Discord, Division

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Bitcoin (BTC) was lower, searching for direction as uncertainty over U.S. election results hung over global markets. Prices were down about 2.2% to about $13,700, staying roughly in their range over the past week. 

With major states yet to be called in the U.S. presidential race and Republican incumbent Donald Trump accusing Democrats of trying to “STEAL” the election, the early read is that bitcoin prices are reflecting an increased likelihood of prolonged uncertainty or political gridlock that might hamper a quick economic recovery.

In traditional markets, yields on U.S. Treasury bonds fell by 0.11 percentage point, the most since April, signaling a shift toward risk aversion, or maybe a tempered expectation of outsize U.S. government borrowing. U.S. stock futures swung between gains and losses. The U.S. dollar was higher in foreign exchange markets. Gold weakened 0.7% to $1,895 an ounce. 

“With millions of votes in battleground states still being counted, it’s clear that the election is turning out to be messier and more drawn-out than Wall Street had hoped,” according to Bloomberg News.

Market moves

The U.S. presidential election is still in flux the morning after and might be for several days.  

In some ways, the prolonged uncertainty might have been entirely expected given how contentious the campaign has been, with a U.S. electorate that looks as divided as ever though apparently quite evenly split. But in other ways, the result was a short-term surprise for markets given investor expectations in recent weeks for a “blue wave” of Democratic victories that clearly did not materialize.

What’s known is that the lack of a clear verdict represents what many investors feared would be a worst-case scenario for global markets.  

Here are a few takeaways for what it means for bitcoin traders:

1) Crypto traders playing in prediction markets appear to see Democratic challenger and former Vice President Joe Biden heading for a win:  

trump-futures-2

Trading in TRUMP futures on FTX crypto exchange.
Source: TradingView

2) The “reflation trade” – where investors expected a quick economic recovery with ample government stimulus – now appears less likely. Democrats held the U.S. House of Representatives and Republicans are expected to hold the U.S. Senate, which could lead to disagreement over the size of a multitrillion-dollar coronavirus stimulus package whoever wins the presidency. That might be bad for bitcoin, since many investors see the cryptocurrency as a hedge against inflation. Ian Shepherdson, chief economist at the forecasting firm Pantheon, told clients in an email early Wednesday: “With Republicans still in charge in the Senate, we’d be surprised to see a stimulus bill early next year much in excess of $500B, far less than the $2T we expected if Democrats had won.”

3) In some ways, the status of the presidential race appears in line with what many investors viewed as the worst-case scenario: an uncertain outcome with the potential to drag on. Trump says he wants the vote counting to stop, possibly seen as an admission that he suspects the final tally might reveal him to be a loser, and says he’s going to take the matter to the U.S. Supreme Court. Given Trump’s known combativeness and willingness to press for every advantage no matter how dubious, it could get ugly. That might mean markets trade for a while in a risk-off mood. In March, bitcoin prices tanked along with traditional markets when the initial coronavirus spread led investors to hunker down. 

4) Based on election night trading, it appears that crypto traders see a Biden win as more favorable for bitcoin than a Trump win. That might be due to the expectation that Trump’s protectionist trade policies and antagonism toward China would, all things being equal, lead to a strengthening of the U.S. dollar in the short term. “There appeared to be an inverse relationship between Trump’s winning odds and bitcoin’s price,” wrote the cryptocurrency-analysis firm IntoTheBlock.  

5) Market watchers may now start looking ahead to the Federal Reserve’s regularly scheduled meeting on Thursday. No action is expected, but Chair Jerome Powell might use the occasion to stress his readiness to intervene in markets if the election uncertainty causes investors to lose nerve. That could mean more stimulus, in a year when the Fed has already expanded its balance sheet by three-quarters to more than $7T. And investor expectations that the stimulus will eventually lead to inflation has helped bitcoin prices to almost double this year.

6) As chronicled by CoinDesk’s Nikhilesh De in an election-night live blog, several key crypto-friendly or at least crypto-familiar candidates won election to U.S. legislative seats. They included Senators Cynthia Lummis of Wyoming, Tom Cotton of Arkansas and Mark Warner of Virginia, as well as Representative Darren Soto of Florida. The races could have implications for crypto laws and regulations over the next several years as the industry matures. De’s primer on races to watch is here

Bitcoin watch

godbole17-nov-4

Bitcoin’s daily price chart puts recent days’ trading action into context.
Source: TradingView

Bitcoin fell Wednesday alongside traditional markets after President Trump alleged “fraud” in the presidential election and pledged to stop vote counting.

The fall reversed a rally to $14,000 seen late on Tuesday, according to CoinDesk’s Bitcoin Price Index.

The cryptocurrency had begun losing ground during the early Asian trading hours after media reports projected a victory for Trump in key states such as Florida, dashing hopes for a Democratic sweep and a bigger fiscal stimulus package under Biden’s leadership.

But the latest assessment is that Biden likely wins if he carries two of the five states still too close to be called: Pennsylvania, Michigan, Wisconsin, Georgia and North Carolina, and prediction markets are giving him the nod. 

Bitcoin’s price sell-off accelerated as Trump’s threat to stop vote counting ramped up political uncertainty and sent a tremor through traditional markets. “We want the voting to stop,” Trump said without evidence. “This is a fraud on the American public. This is an embarrassment to our country.” 

That last statement might be one that all voters could agree on.

– Omkar Godbole

What’s hot

DeFi sell-off continues as index futures retrace to June levels (CoinDesk

Ethereum fees plumeted 65% in October, following DeFi volumes back to Earth (CoinDesk)  

Binance crypto exchange recovers $344K from scam DeFi project that launched on its platform (CoinDesk)  

Nearly $1B in bitcoin moves from wallet linked to Silk Road (CoinDesk)

Analogs

The latest on the economy and traditional finance

Cruise-industry group extends suspension of U.S. operations through Dec. 31 (Reuters

Copper miner Freeport-McMoran, based in Phoenix, Arizona, considers getting rid of headquarters, arguing that staff are “showing we can get the work done remotely” (WSJ

Chinese President Xi Jinping says in high-profile speech to Communist Party’s Central Committee that country’s economy can double in size over next 15 years (Bloomberg

Tweet of the Day

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Disclosure

Source: https://www.coindesk.com/just-another-day-for-bitcoin-as-u-s-election-slides-into-discord-division

Blockchain

$500K Bitcoin Donation Funneled to Groups Involved in US Capitol Riot: Analysis

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Blockchain intelligence firm Chainalysis has tracked simultaneous Bitcoin (BTC) donations to wallets associated with right-wing extremist groups in the U.S., which might have helped fund the recent riot at the U.S. Capitol. The news marks yet another pivot towards pseudonymous money transfer means by alt-right groups in the U.S.

Alt-Right Agitators Received $500K in Bitcoin Prior to US Capitol Riot

Publishing its findings on Thursday (Jan. 14, 2021), Chainalysis revealed that several notable alt-right personalities who were present at the Jan. 6 riot in the U.S. Capitol received substantial Bitcoin donations.

According to Chainalysis, a single donor funneled 18.15 BTC to addresses belonging to entities with right-leaning affiliations on Dec. 8, 2020. At the time, this figure was worth over $500,000.

In its report, Chainalysis also revealed that popular far-right political commentator Nick Fuentes received 13.5 BTC. There are a few photographic pieces of evidence placing Fuentes at the riot with a megaphone in hand though Fuentes has denied entering the building itself.

Apart from him, alt-right podcaster Ethan Ralph and VDARE — an anti-immigration organization — also received BTC sums from the donor. While Chainalysis did not reveal the identity of the person responsible for funneling the Bitcoin, the crypto forensics outfit did mention that there strong evidence that the donor is a French computer programmer.

An examination into the donor’s wallet shows that the person is likely an early Bitcoin adopter. Further investigation into the donor shows a history of donations to extremist causes with an alleged suicide note referencing known alt-right talking points.

Based on these findings, U.S. law enforcement officials are reportedly investigating possible links between the donations and the assault on the Capitol. Prosecutors also say that they are approaching the investigations from a counterterrorism and counterintelligence standpoint.

Financial Censorship Triggering Crypto Adoption

Alt-right groups receiving donations in Bitcoin is only the latest example of political and social groups with dissident ideologies embracing cryptocurrencies. Indeed, Bitcoin’s early history is somewhat intertwined with WikiLeaks especially after the establishment was cut off from mainstream funding sources.

Even countries facing economic sanctions are also adopting cryptocurrencies. Venezuela is a popular example, with the Maduro administration even creating its own oil-backed Petro “coin.”

Nations like Iran are actively supporting Bitcoin mining with tax breaks for BTC miners. As previously reported by CryptoPotato, the output from three power plants has been offered to miners in the country.

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Source: https://cryptopotato.com/500k-bitcoin-donation-funneled-to-groups-involved-in-us-capitol-riot-analysis/

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Blockchain

Bitcoin Faced First Major Correction In Current Bull Run: The Crypto Weekly Market Update

Republished by Plato

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This week was very intensive in the cryptocurrency market. It’s perhaps safe to say that it was among the most tumultuous ones we’ve had in the last few months.

Everything started calmly, and during the weekend, the price hit an all-time high value of $42,000. The excitement was short-lived, as immediately after that, bitcoin went in the opposite direction and started to decline. It wasn’t until Monday, however, when things took a turn for the worst.

Bitcoin’s price lost around $12,000 in what seems to be the first major correction in the ongoing bull run. The decline of around 27% came in a few brutal four-hour red candles and led to the liquidations of $2.87 billion worth of both long and short positions, indicating once again how over-leveraged the market is.

From there, the price took uphill and even reached $40,000 again on Thursday. Bears, however, weren’t done as what followed was another handful of red candles that brought the price to its current trading level of about $35,000.

With this said, the entire cryptocurrency market took a hit as the capitalization has dropped below $1 trillion. Meanwhile, Bitcoin’s dominance is also suffering, as it’s down to 67.7% during this week from its high of around 70.3%. This shows that despite the blood on the streets, altcoins have managed to take the upper hand and claim a larger portion of the market.

Meanwhile, two other projects made headlines over the past few days, mainly thanks to their incredible price performance. Despite this brutal correction, Polkadot’s DOT token is up 40% over the last seven days, while LINK is up 22%. The latter even charted a new all-time high today.

In any case, the week was particularly exciting, and even though this time it was the bears who had the upper hand, it’s very interesting to see how the next few days will shape up. Is this the beginning of a larger correction, or is it just a step back in preparation for an even bigger rally? We have yet to see.

Market Data

Market Cap: $964B | 24H Vol: 144B | BTC Dominance: 67.7%

BTC: $35,442 (-14.6%) | ETH: $1,141 (-7.5%) | XRP: $0.276 (-12.9%)

Tether (USDT) January 15th Deadline on iFinex Case: Everything You Need to Know. Today is an important date for the entire cryptocurrency industry as it marks a serious deadline on the iFinex v. NYAG case. Here is everything you need to know about it and what to expect.

FinCEN Extends Comment Window on Proposed Crypto Regulations. After receiving thousands of responses and serious criticism from industry participants, the Financial Crimes Enforcement Network (FinCEN) has decided to extend the comment window on the proposed cryptocurrency regulations.

Following Coinbase And Bakkt: Winklevoss’ Gemini Reportedly Considers Going Public. Cameron and Tyler Winklevoss are reportedly exploring the option of taking their cryptocurrency exchange, Gemini, public. This means that they could follow in the footsteps of other cryptocurrency-related companies with similar intentions – namely, Coinbase and Bakkt.

Greenlight: Anchorage Secures Crypto Banking Charter from the OCC. The United States Office of the Comptroller of the Currency (OCC) has granted a cryptocurrency custodial service company a national trust charter. This puts the firm in the position to claim the mantle of a US-based national crypto bank.

4 Possible Reasons for Bitcoin’s $12K Correction After Reaching $42,000 All-Time High. Bitcoin went through its first major correction this week, sliding by more than 27% in just a few four-hour red candles. Here are some of the potential reasons for which this happened.

Crypto Market Cap Reclaims $1 Trillion as Bitcoin Sets Sights on $40K. The cryptocurrency market sees no boring days. Just a couple of days back, it was on its way back up, recovering from a major correction, and even claimed $1 trillion in market cap again. Unfortunately, today things took a turn for the worst again.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Polkadot, and Cardano – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-faced-first-major-correction-in-current-bull-run-the-crypto-weekly-market-update/

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Report: Mt Gox Creditors Could Claim 90% Of The Owned Bitcoins After A CoinLab Deal

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Nearly $5 billion in bitcoin could make their way back to Mt. Gox users following a deal between creditors and CoinLab. Nevertheless, the agreement is still reportedly subject to creditor acceptance.

  • Bloomberg reporter Matt Leising offered a brief explanation of the story earlier today, noting that CoinLab has reached a deal with Mt. Gox creditors for 90% of the bitcoins they are owned.
  • Should the deal indeed proceed, the creditors would receive over 135,000 bitcoins out of 150,000. With today’s prices, this sizeable amount has a value of $4.8 billion. 
  • As those users have been waiting for over six years to receive their coins, whose value has appreciated significantly, the community speculated that they might dispose of the bitcoins, which could harm the market.
  • Founded in 2011, CoinLab partnered with Mt. Gox in late 2012 to handle transactions for the exchange in the North American region. However, the collaboration ended rather shortly as CoinLab took Mt. Gox to court, alleging that the trading platform had broken its contractual agreement. 
  • The Japan-based crypto exchange was the largest trading platform years ago, responsible for over 70% of the BTC transactions during its peak. However, it all crumbled after one of the largest hacks in the cryptocurrency field in which the attackers took 850,000 bitcoins – worth over $30 billion today.
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Source: https://cryptopotato.com/report-mt-gox-creditors-could-claim-90-of-the-owned-bitcoins-after-a-coinlab-deal/

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