Bitcoin investment product volumes fall to 38% of YTD average

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Cointelegraph 19 July, 2021 - 09:12pm 14 views

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On July 18, the Grayscale Bitcoin Trust (GBTC) will be unlocking shares valued at 16,240 BTC. Economic TimesCrypto Week at a Glance: Crypto market feels the blues as GBTC shares unlock

Institutional Bitcoin products have recorded outflows for nine of the past ten weeks, suggesting many investors remain bearish.

According to CoinShares’ July 19 Digital Asset Fund Flow Weekly report, Bitcoin investment products generated roughly $3.9 billion worth of daily trade from July 12 to July 16, down substantially from 2021’s average of nearly $10 billion.

However, the report’s authors do not conclude the decline in trade activity is cause for alarm, with CoinShares noting that Bitcoin has experienced “similar seasonal dips in volumes during the summer months in recent years.”

Institutional Bitcoin products also saw outflows of $10.4 million for the week, with investors now having net reduced their BTC exposure for nine of the past 10 weeks. Despite such, the volume of outflows witnessed during July have dwindled compared to recent months.

The largest outflow from Bitcoin products on record occurred between May 10 and May 14 — when institutional investors pulled $98 million from the markets.

While institutional investors have continued to reduce exposure to BTC, Ether (ETH) investment products posted a third consecutive week of inflows this past week.

Roughly $11.7 million flowed into Ether products, bringing YTD inflows up to $973 million for 2021 so far. However, Bitcoin products dominate the institutional digital asset products sector by YTD flows, receiving $4.1 billion from investors since the start of the year.

Related: Ethereum documentary featuring Vitalik Buterin raises $1.9M in 3 days

Cardano (ADA) products saw the second-largest inflows behind Ether, with investors increasing ADA exposure by $400,000. Ripple (XRP) and Polkadot (DOT)-tracking products also saw inflows of $300,000 each, followed by Stellar (XLM) with $200,000.

Despite recent bullishness, inflows to multi-asset products dwindled down to just $100,000 for the week.

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2 Bitcoin Stocks I'd Buy Right Now

The Motley Fool 20 July, 2021 - 02:00am

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I suggested that Bitcoin (CRYPTO:BTC) was a worthwhile buy two months ago, as long as you were prepared for some uncomfortable volatility. The leading cryptocurrency is 23% cheaper today, and it still strikes me as a reasonable investment, with the usual reminders to back up the truck very slowly and always be prepared for more volatility.

Maybe you're not quite ready to take the Bitcoin plunge. Still, you're interested in the cryptocurrency market and curious enough to dip your toes into the waters through more-traditional investment tools. Here are a couple of high-quality stocks with significant ties to Bitcoin.

These stocks will be fine if the Bitcoin bubble pops. Image source: Getty Images.

Buying shares of Coinbase Global (NASDAQ:COIN) is just about the most direct bet you can make on the cryptocurrency market without directly owning Bitcoin and other leading digital currencies. And the front-runner among American crypto exchanges has some unique attributes that make it a much safer investment than any individual cryptocurrency in the current market.

You are not putting all your digital eggs in one basket. Let's imagine that some unknown or not-yet-invented cryptocurrency comes along that does everything Bitcoin does, but better. The coin's first-mover advantage could melt away in a hurry, leaving Bitcoin owners disappointed. But I would bet a pretty penny that the new top dog will trade on Coinbase's platform, keeping the cryptocurrency exchange happy and healthy while the crypto market evolves around it.

Therefore, Coinbase shares are a good way to get started in the cryptocurrency sector without picking long-term winners among different digital tokens. As long as the broader crypto market is headed upward (working through slow patches and terrifying drops on the way but always getting back on track again), this stock should serve you well.

On top of all that, Coinbase shares are nearly 50% below their all-time high on April 14, the stock's first day of trading. Admittedly, the stock isn't exactly lounging in Wall Street's bargain bin -- it trades at 98 times trailing earnings and 16 times sales -- but that's still a strong discount from the heady market debut.

Electric vehicle giant Tesla (NASDAQ:TSLA) has a rocky Bitcoin history. The company spent $1.5 billion on the leading cryptocurrency over the last year, and Tesla used to accept it as payment for a new car. Now, CEO Elon Musk has paused that payment option until Bitcoin miners can prove that they use at least 50% renewable energy in their operations. That would presumably open the door for further cash investments as well.

Now, $1.5 billion is a serious chunk of change; Tesla's investment is one of the largest cash bets on Bitcoin so far. But it's pocket change in the context of Tesla's massive market presence. The cryptocurrency accounts for roughly 0.2% of Tesla's current market capitalization, or 7% of the company's cash equivalents.

The reasonably small scale of Musk's real-world Bitcoin investment limits both the potential returns and the downside risks. That's good enough for me. Tesla is one of the largest holdings in my portfolio, and I expect big things from this stock in the long run. The Bitcoin exposure is just an interesting wrinkle in the automaker's bigger picture. But the bears have pushed Tesla's stock price nearly 30% below January's all-time highs, so this looks like a decent entry point for new investors.

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Bitcoin Sees Outflows Amid Inflows For Ethereum, Cardano, XRP

Forkast News 19 July, 2021 - 10:16pm

The cryptocurrency market remains quiet, with net inflows of just US$2.9 million last week, according to digital asset investment firm CoinShares’ weekly digital asset fund flows report.

Michelle is a Producer at Forkast. Prior to joining the team, she wrote for CNN and served with the Singapore Foreign Service. She holds a Master of Journalism from the University of Hong Kong and a Bachelor of Business Administration from the National University of Singapore.

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Charted Territory: The True Value Of One Bitcoin

Bitcoin Magazine 19 July, 2021 - 05:18pm

While bitcoin seems to be aiming for a dip below $30,000 soon, the last week has remained relatively quiet in the market. One major bit of news, however, was the announcement that the inflation rate in the U.S. increased to 5.4%, its highest since the 2008 financial crisis; while the U.K. also saw its inflation rise to the highest level in three years. The inflation debate spurred a lot of discussion focusing on bitcoin’s use as a hedge against inflation and that this would lead to the next bull run.

Along comes bitcoin. Instead of theoretically being able to create more money wherever and whenever indefinitely, Satoshi Nakamoto decides there will be a limit to the amount of bitcoin created over time, with the supply capped at 21 million. We all know the story. What this in turn meant was that many believed that bitcoin would be an ideal hedge against inflation and the devaluation of fiat currencies by the governments that control them.

The chart above shows the value of a single bitcoin over the last 13 years, ever since it was first introduced, and eventually hit the market. Notice how the value of one bitcoin remains the same — where its value differs is in the currencies it is meant to replace, like the U.S. dollar, British pound, euro and other currencies.

One of the major drawbacks to the entire bitcoin ecosystem at the moment is the global community’s obsession with its value in fiat currencies and how it’s affected by news, influencers and more. But if you’re an actual believer in bitcoin, you’ll know it’s meant to replace the fiat system that currently drives a lot of its value and, thus, its price in fiat is irrelevant.

If you think bitcoin’s value has grown over the last decade, imagine what will happen in the decades to come when it becomes the de facto currency of the world.

Besides the increase in inflation in both the U.S. and U.K., there has been quite a bit of bullish news. Thanks to trailblazers such as Russell Okung, New York Giants running back Saquon Barkley announced last week that he would accept all future marketing endorsements in bitcoin, which is likely to lead to more athletes following in his footsteps.

The Grayscale Bitcoin Trust has added BNY Mellon as a service provider in its hopes to launch a bitcoin ETF, it remains to be seen, however, if it drives growth in the market as well as in its own products as the GBT remains undervalued in comparison to the value of the bitcoin it currently holds.

Then there’s mining news. Compass has partnered with Oklo in order to power their mining rigs, meaning bitcoin is going nuclear, so to speak. Additionally, Greenidge will acquire 8,300 bitcoin mining rigs and join the Foundry USA mining pool, further driving growth in the North American bitcoin mining market, as mining firms continue to set up in new territories after China’s bitcoin mining crackdown caused a slump in the network hash rate.

Although we hoped Paraguay would follow in El Salvador’s footsteps, the nation has introduced a bill that would regulate bitcoin and related activities in the country, counting bitcoin as an asset instead of a currency and pushing tough laws on miners. It’s both bearish and bullish as regulatory certainty is usually a good sign and brings clarity.

More bearish news, that may turn bullish, is the upcoming B Word event on July 21, 2021, featuring Jack Dorsey and Elon Musk. The duo will be discussing bitcoin and, in particular, bitcoin mining and its effect on the market. It is likely Musk will continue his anti-bitcoin campaign, despite Dorsey’s likely support for bitcoin and attempts to prove that bitcoin mining is much greener than Musk would have the world believe. It could go either way.

Overall, I remain bullish. High inflation rates from different nations is likely to push an increase in bitcoin’s price in the short term, coupled with an increase in both institutional and individual adoption, El Salvador’s official bitcoin rollout in September, and the recent drop in mining difficulty leading to miners holding onto their rewards. Bitcoin is poised to have a decent run in the months ahead. Of course, the future remains uncertain, especially when it comes to the likes of Musk pushing an anti-bitcoin narrative.

If bitcoin does indeed dip below $30,000, then it will be an ideal opportunity to stack up, despite the likely bottom remaining uncertain. Of course, bitcoin could end up surging suddenly like in the past, perhaps if Musk admits that bitcoin mining is greener than he let on and that Tesla would start accepting bitcoin payments again. Otherwise the unlikely rumours of Apple investing in bitcoin in the near future could prove right and act as another catalyst for a bull run.

Whatever happens, the fiat value of bitcoin remains relatively irrelevant if you understand that it’s supposed to replace the very currencies it’s currently valued in. Just remember, one bitcoin is still equal to one bitcoin.

Ethereum Fund Inflows Rise as Investors Exit Bitcoin Products - CoinDesk

CoinDesk 19 July, 2021 - 10:13am

Increasing altcoin flows impliy investors are starting to diversify across their digital asset holdings.

Digital-asset funds have attracted capital over the past two weeks, albeit at a slower pace as investors remain cautious after the crypto crash in May. It appears that investors are warming up ether, which saw a third consecutive week of inflows totaling $11.7 million, according to a report by CoinShares.

Overall, net inflows to digital asset funds totaled $2.9 million for the week ending July 9, down from $4 million during the previous week. Fund flows have weakened following a period of strong investor demand during bitcoin’s rally in Q4 2020.

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