“We just continue grinding and Bitcoin is just starting. Relax.”
- Michaël van de Poppe
Weekly Headline News
1. Market Wrap: Bitcoin Faces Long Odds in Bid for Sixth Straight Monthly Gain
2. Fidelity’s Head of Global Macro Says Bitcoin May Have Place in Some Portfolios
3. A South African actuary explains how you should look at investing in Bitcoin
4. JPMorgan Says Investors Can Put 1% of Their Portfolios in Bitcoin Despite Calling It a Poor Hedge
5. Where Value Is Going in Blockchain Networks
6. Bitcoin price hits $50K after bullish outlook from Citigroup and Goldman Sachs
7. What DeFi needs to do next to keep institutional players interested
8. More Institutional Investors Jumping Into Bitcoin Leaves Less to Go Around, Data Shows
● Bitcoin rose 7%, reversing the past few days’ losses, as some blockchain data turned bullish and new signs emerged of increasing cryptocurrency acceptance by Wall Street firms including Goldman Sachs, Citigroup and Fidelity Investments. BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.
● “The SOPR metric has been reliable for ‘buy the dip’ opportunities in bull markets,” Norwegian blockchain firm Arcane Research wrote in a tweet on Monday. Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday, trading around $1,520.44 and climbing 7.26% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
● The bullishness shown by Fidelity Investments’ cryptocurrency-focused arm appears to be spreading to the rest of the investment giants, with Director of Global Macro Jurrien Timmer now comparing BTC directly to gold. He told investors in a February research note that bitcoin may be emerging as a legitimate hedge against inflation and stable store of value as a form of “digital gold.” “In my view, bitcoin has gone mainstream.”
● Grappling with how to model the cryptocurrency, Timmer noted that, if evaluated against simple supply and demand metrics, demand continues to grow “exponentially” while supply remains fixed. That scenario does not apply to gold, whose annual production has remained steady over time. “Bitcoin supply, by design, is finite.”
● As the price of Bitcoin breached $50,000 (R740,000), the fear of missing out once again hit all-time highs for many investors. Lorgat has been investing in Bitcoin for the past five years. While he considers Bitcoin a breakthrough technology, he also cautions that cryptocurrencies are highly speculative digital commodities and that they will challenge investors with extreme volatility.
● While Bitcoin is arguably the world’s most volatile currency, Lorgat points out that it is important to differentiate between short-term volatility and long-term investment fundamentals. Investors take a longer-term view of Bitcoin, instead of following short-term hype. “If you decide to buy Bitcoin, make sure you can hodl,” said Lorgat.
● After saying that cryptocurrencies “rank as the poorest hedge for major drawdowns inequities, with questionable diversification benefits,” JPMorgan says investors can put 1% of their portfolios in cryptocurrencies. This can help “achieve any efficiency gain in the overall risk-adjusted returns of the portfolio,” the firm’s strategists explained.
● JPMorgan’s co-president Daniel Pinto confirmed: “If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved.” Moreover, the firm’s analysts have predicted that bitcoin’s price could reach $146,000 as the cryptocurrency’s competition with gold heats up.
● When predicting how the cryptocurrency economy will evolve, many people have looked to the start of the internet itself. They imagine certain standards or protocols becoming dominant, with value accruing in the application layers. But cryptocurrencies are different.
● Value is captured within a coin’s economy rather than just in its code and in the way an application is monetized. In addition, value (measured by price and market cap) keeps moving from layer one (L1), like Bitcoin and Ethereum, to layer two (L2) and application protocols that are being built on top of L1, such as Cosmos, Hiro and Uniswap. To understand where value is being captured and on what layer it is being created, it’s useful to review the evolution of L1 and L2 over the last decade.
● Bullish maneuvers from MicroStrategy, Goldman Sachs and Citigroup are just a few of the factors backing Bitcoin’s rally back to $50,000. On March 1 cryptocurrency investors woke up to the sight of Bitcoin (BTC) rising from its weekend correction to $44,000 as the market found its bullish momentum and altcoins rebounded from their swing lows.
● Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin increased 16.6% from its low of $43,504 on Feb. 28 to the $50,000 level which bulls are attempting to flip back to support.
● A June 2020 report by Fidelity Digital Assets found that 80% of institutions in the United States and Europe have at least an interest in investing in crypto, while more than a third have already invested in some form of digital asset, with Bitcoin being the most popular choice of investment.
● It might seem like a no-brainer when rates are in the doldrums and DeFi protocols on U.S. dollar stablecoins are yielding between 2% and 12% per annum — not to mention more exotic protocols yielding north of 250% per annum. There are many things that need to be developed — most of which are already underway — to ensure institutional interest in DeFi products, whether on the settlement layer, asset layer, application layer or aggregation layer.
● Institutions are buying more bitcoin per month than what’s being mined, and there just isn’t enough for everyone. The ever-decreasing supply of bitcoin available to buy and sell might lead to a price surge as more institutional investors embrace the largest cryptocurrency as an investment.
● According to John Willock, chief executive at digital-asset exchange Blocktane, bitcoin’s already finite supply is only more scarce to large bitcoin buyers. Fewer bitcoins are becoming available to institutions “because they have higher standards than the general market, “ Willock said. “So, as a result, these sorts of institutions can be forced to start bidding up coins on these ‘clean’ exchanges, and that drives up the price overall.”