Market Update 22nd – 28th July 2020

In Markets

Fundstrat’s Tom Lee likes to point out the majority of Bitcoin’s gains come in the “ten best days” each year. Today may well be one of those ten, with Bitcoin up 11.23 percent in the past 24 hours to trade around $15,600 at the time of writing. Bitcoin blew right past the psychological US$10,000 barrier yesterday and topped US$11,250 this morning for a new year-to-date high. The total market cap is at $284 billion with dominance at 63%. The price spike followed Ethereum’s big move earlier in the week which has led to 36.5% gains on seven days ago to trade around $450. The DeFi coins that led this cycle have pulled back, including LINK, which is down 4.6% this week. Most of the top ten were green though with XRP up 14.5%, Bitcoin Cash (20.5%), Bitcoin SV (22.5%), Litecoin (27.2%) and EOS (11). Stellar pulled back 1.4%.

BTC A$15.5k. Markets surge, US Banks to hold crypto, VISA jumping on board
Source: Independent Reserve Bitcoin/AUD chart

In Headlines

Bitcoin smashes through long term resistance

Bitcoin has broken a long-term downtrend in place since the all-time high. The last five times BTC crossed the US$10,000 level – stretching back to February 2018 – it failed to sustain the price after ninety days. But having spent two months trading in a narrow range, a new price floor looks to have been established, and for the first time since January, more Bitcoin is flowing into exchanges than flowing out according to Glassnode. Veteran trader Peter Brandt tweeted a few days ago that a “Massive symmetrical triangle in $BTC points to ATHs, then $50K”.

US banks can hold crypto now

US banking regulator, the Office of the Comptroller of the Currency, has given permission to federally chartered banks to both custody crypto for customers and provide banking services for crypto-oriented businesses. Acting Comptroller Brian Brooks said it was part of modernising banking in the U.S. “From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today,” he said.

Digital gold and gold

Gold hit a record high of US $1,976 ($2,760) this week suggesting fears over rampant money printing in the US are seeing a flight to safety from some investors. Quantum Economics Mati Greenspan says that in the crypto sphere: “The narrative is about to shift from ‘funding exciting new tech’ to ‘digital scarcity‘.

Smells like 2017

There’s been much talk on social media of current events recalling the heady bull run of 2017 – and the astonishing rise of yEarn Finance’s token YFI is a case in point. The token began trading a week ago on decentralised exchanges and increased around 10,000% (or possibly 100,000% depending on who’s counting) to US$4,500 ($6,250) in a few days. The project is the first to leave governance entirely up to token holders and YFI is distributed to those who supply liquidity for the yEarn platform.Smells like 2017

Visa and Mastercard love crypto

Visa and Mastercard have been talking up cryptocurrency this week. In a blog, Visa said it wants to “provide a bridge between digital currencies and our existing global network of 61 million merchants.” Mastercard invited crypto firms to launch their own credit cards via its “Accelerate” program and unveiled a deal with London’s Wirex that will see it become the first native crypto platform to directly issue cards on Mastercard’s network.

Ethereum looks to the future

The Ethereum price is at levels last seen more than a year ago and gas fees have increased 550% so far in 2020. The ‘final’ ETH 2 (phase 0) multi-client testnet has also been announced. Medella will launch on August 4, provided they can find 16,384 users willing to stake 32 ETH each. Co-founder Vitalik Buterin is already pushing for some of the client team to work on phase 1, which will mark the point ETH 2.0 becomes a fully-fledged network.

DeFi fundamentals

There was much excitement on Twitter about the funds locked in DeFi hitting US$4 billion ($5.56B), just five days after it hit $3 billion for the first time. Although the DeFi Pulse Twitter account made the claim, if you head to the site now the increase looks like it’s *only* US$590 ($820M) million in a week. Maker has become the first protocol with more than US$1 billion ($1.39B) locked. Good news also for the Lightning Network which helps Bitcoin scale for payments, with 1000 BTC now locked in the protocol.

DeFi fundamentals
Until next week, happy trading!

Independent Reserve Trading Desk