In markets

Bitcoin was closing in on the A$80,000 mark over the weekend before it fell almost ten grand on Monday and another three grand today. Various theories have been advanced for the correction: the usual weekend retail shenanigans, conflicting reports over the severity of a crypto ban in India, incorrect reports of $1.3B in BTC being deposited on Gemini. At the time of writing, we have ended about flat from a week ago at A$70k. Bitcoin futures open interest hit a record US$29B a few days ago suggesting bulls expect the uptrend to continue. Elsewhere it was a mixed bag: Ethereum and EOS were flat, Polkadot was up 1%, along with Litecoin (4%) and Bitcoin Cash (0.3%). Chainlink lost 10%, Stellar (-6.1%), AAVE (-11.5%) and Synthetix (-10.8%).

Cryptocurrency Market Update - 20210316

In headlines

New ATH was “inevitable”

Jason Deane, Quantum Economics analyst told Newsweek that Bitcoin’s new ATH price of US$61,556 (A$79,652) set on Sunday was “inevitable” given the institutional interest exemplified by Tesla and MicroStrategy. He added that Monday’s fall in price was also only to be expected. “Pullbacks are common – even healthy – in bull markets,” he said. “They act as a moment of pause when large or fast movements are digested and new levels of support and resistance are set. This relatively minor pullback is probably no exception.”

More money flowing into Bitcoin

A new Xangle survey of 379 accredited investors in the US found that three-quarters of them intend to invest in Bitcoin in the coming 12 months – with more than a quarter of them suggesting $500K in USD was a good amount to invest. A separate survey by Mizuho Securities of 235 average Americans found that up to US$23 billion of the latest round of stimulus money could be invested into Bitcoin, which would add 3% to the market value of BTC. Take both of these surveys with a grain of salt, however, as the margin of error with those small sample sizes is around 6-7%.

Bull run to end in September?

Crypto trader Ben Armstrong told his 635K followers that the current bull run will end in September. He derived his prediction from The Golden Bull Cycle Ratio. “51% of the bull run lasts from the bottom of the market to the Bitcoin halving that occurs every 210,000 blocks produced. Then 49% of the bull run lasts from the halving date to the very top of the market,” he said. “When you work those dates out, it is 504 days from May 11th, the day of the 2020 halving … That gives you the date of September 28th.” Meanwhile analyst Philip Swift says that the Puell Multiple, which looks at mining revenue versus historical norms, “is approaching the overbought red band.” “Historically, when the Puell Multiple (red line) breaches into the upper red band this has coincided with major macro highs for $BTC price, as miners begin to realise their gains,” he said.

Bitcoin Puell Multiple vs. BTC/USD chart. Source: LookIntoBitcoin

Bitcoin and DeFi meetup this Thursday in Sydney

This Thursday, join a panel of experts to discuss Bitcoin and DeFi at Hotel Harry’s on 40-44 Wentworth Ave, Surry Hills. This month’s topic: Is your Bitcoin getting eaten up by the Macro Hedge Funds?

South Korean crypto exchanges overtake the stockmarket

Data from Coinmarketcap suggests the volume of transactions on South Korean digital currency markets has overtaken the average volume on the country’s stock markets. On Sunday the combined crypto volume was US$14.6 billion, which was greater than Friday’s $14.5 billion volume on the Korea Composite Stock Price Index. That said, CMC volumes have been criticised for including wash trading and their numbers are higher than other data platforms like Messari.

ETH devs accelerate the move to Eth2

On March 11, developer ‘Mikhail Kalinin’ (named after a Bolshevik revolutionary) published specifications detailing the upcoming merge of Ethereum and Eth2, which would mark the switch to Proof of Stake (sharding will come later). ETH co-founder Vitalik Buterin has written about the merge here. The move comes amid a potential miner rebellion against the new fee system detailed in EIP-1559 which will cut their revenue in half. Some miners are putting on a “show of force” by redirecting their hashpower to the EIP-1559 opposed mining pool Ethermine for 51 hours on April 1. In a development on the weekend at least one of the miners Red Panda Mining accepted a compromise proposal and pulled out of the show of force.

Ethereum scaling by 100X in a month?

Vitalik Buterin says Optimism’s layer-two scaling solution for Ethereum is set to go live within a month or so. He says it’ll scale ETH 100X faster than currently and get the network through until Eth2 sharding comes online. Known as ‘rollups’ the solution processes transactions on a faster, cheaper sidechain, that then syncs up with the main chain. Synthetix has been testing Optimism for reward claiming and Uniswap’s V3 is rumoured to use the tech. “Rollups are coming very soon,” Buterin said, “we’re fully confident that by the time that we need any more scaling of that, sharding will have already been ready for a long time by then.”  Managing partner at Moonrock Capital Simon Dedic and influencer Carl Martin both predicted ETH is set to hit US$2,500 (AU$3,226) this week.

DeFi Digest

A round-up of the top news in Decentralised Finance

🌐 The Berlin Ethereum network upgrade is scheduled to happen on the mainnet on block 12,244,000 which is approximately one month away. Here is a thread on everything you need to know about the upcoming changes. 

🦇 Basic Attention Token (BAT) has been quietly making moves. They have recently acquired a search engine and revealed plans to build out a native DEX aggregator with multi-chain support and much more. 

🎴 A thread by Outlier Ventures on NFTs and what they mean for the growing creator economy. 

👻 Founder and CEO of AAVE Stani Kulechov teases an Automated Market Maker (AMM) for AAVE protocol. 

⛓️ Blockchain-based DAOs are a step closer to becoming legally recognised business entities in Wyoming as ‘Bill 28’ has passed through subcommittee review to an upcoming vote by the full Senate. 

Until next week, Happy Trading!