Wall Street's New Fear Is That the Economy Has Already Peaked


Bloomberg 19 July, 2021 - 10:43am 10 views

When is the grayscale unlock?

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

Despite the pick-up in demand for $22K puts, the options market remains biased bullish for the long term.

The leading cryptocurrency was trading at a three-week low of $30,700 at press time, representing a 3.5% drop on the day. The decline has flipped the crucial 50-week simple moving average (SMA) support of $32,250 into resistance.

On Sunday, 500 contracts of the $22,000 put option expiring on Dec. 31 changed hands via the institution-focused over-the-counter (OTC) desk Paradigm. Similar volume crossed the tape for the $20,000 put expiring on Dec. 31.

“There was interest to buy BTC puts for December in a significant size,” Darius Sit, CEO of the Singapore-based QCP Capital, said. “We made the market for most of the large block trades over the weekend. There was decent interest to sell September BTC puts as well.”

Market makers are always on the opposite side of traders/investors and run a direction-neutral portfolio. That essentially means buyers of the $20,000 and $22,000 puts expiring on Dec. 31 were investors, most likely adding downside hedges against long positions in the spot/futures market.

A put option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A put buyer is implicitly bearish on the underlying asset, in this case, bitcoin.

Overall the options market is still biased bullish for the long term. The six-month put-call skew, which measures the cost of puts relative to calls, remains entrenched below zero. In plain English, longer duration calls or bullish bets are priced higher than puts.

Bitcoin is currently changing hands near the lower end of the two-month-long trading range of $30,000 to $40,000.

If the support at $30,000 gives away, traders who sold puts at $30,000 over the past few weeks may resort to hedging – taking a short position in the futures or spot market – leading to a deeper decline.

Read full article at Bloomberg

Bearish Crypto Trading Trends: Overdue Consolidation Or Sign Of What's Ahead

Investing.com 19 July, 2021 - 11:10am

This article was written exclusively for Investing.com. 

Parabolic price action can be like shooting stars. It is virtually impossible to pick tops or bottoms in any market as prices often rise or fall to levels that defy logic, reason, and rationality. Trading with trends therefore tends to be an optimal approach as it respects market trajectories, price paths driven by sentiment, a powerful force.

And of course, sentiment can run contrary to supply and demand fundamentals.

This means therefore that at any time, the price of an asset is always the correct price because it is the level where buyers and sellers meet in a transparent environment, the market. Traders and investors often get into trouble when they believe the market price is wrong.

Invariably, emotion leads to this conclusion as it is a psychological, feelings-driven response to being on the wrong side of a trend. I have experienced the most significant losses in markets, which provided the most valuable lessons when I let my ego get in the way of understanding that my only friend in markets is the price trend.

Eliminating emotion and reacting to market price action instead of overthinking price levels has made me a better trader and investor. Refining the process increased my ability to ride a trend higher or lower.

Starting in 2020, the cryptocurrency asset class embarked on one of the most aggressive bull markets I've ever witnessed. Bitcoin rose to over $65,500 per token, Ethereum eclipsed the $4,400 level, and many other nearly 11,000 tokens experienced parabolic price gains.

In April and May, the asset class peaked at a combined market cap of over $2.4 trillion when gravity caused them to come back down to earth. After halving in value, Bitcoin and Ethereum have entered into a sleepy period, with price consolidation near the recent lows.

As the daily chart highlights, since June 22, Bitcoin’s range has been from $28,840 to $36,650 per token. At the $32,000 level at the end of last week, Bitcoin was sitting just below the middle of its trading band.

Meanwhile, the two leading cryptocurrencies that account for 63.2% of the asset class’s market cap have gone to sleep near their recent lows. 

The incredible trajectories of the rallies that took Bitcoin and Ethereum to highs in April and May were unsustainable. Many market participants knew this, but stepping in front of the wildly bullish trend was like trying to stop a freight train; it was dangerous.

The decline that has more than halved Bitcoin, Ethereum, and many other cryptocurrencies over the past weeks could be the healthiest factor for the asset class. Markets that experience parabolic moves need time to digest the price appreciation.

While some continue to see a parallel with the tulip bulb frenzy in Holland in the 1600s, cryptos are far different. They reflect the deteriorating trust in central banks and governments when it comes to money. They are a libertarian asset class that removed the power of the money supply from rulers and returned it to individuals.

The limited supplies of the tokens are a statement that supporters strive for austerity and are a free market concept as their prices are determined only by bids and offers in the market.

Aside from criticism that their anonymity affords nefarious users the ability to hide from the clutches of tax, regulatory, and prosecutorial agencies, proponents believe they are stores of wealth that will protect their assets while inhibiting individual governments and supranational forces from manipulating the money supply for a political agenda.

The rise of the crypto asset class is an ideological wave that rejects the global financial status quo. In many ways, the evolution of cryptocurrencies is the beginning of an economic revolution that has been brewing for years, if not decades. 

Technically, price consolidation at the bottom end of a trading range can be a dangerous sign for markets. After moving to lows in late June, Bitcoin and Ethereum have not experienced significant recoveries.

Time will tell if the current consolidation period is building a cause for another push to the downside or if prices will experience another sudden surge that takes them to higher highs. Whichever direction the cryptos may move, the price action will be solely the result of the market’s sentiment.

More sellers or more buyers will determine if the digital currencies will recover or continue to decline. We still hear calls that Bitcoin will move to the $100,000 per token level by the end of 2021. Others say they are on the way to zero.

The growing number of supporters and those rejecting the financial status quo are a sign that the asset class remains in its early days. The violent price action is a function of liquidity. As of July 16, Apple's (NASDAQ:AAPL) market cap stood at the $2.478 trillion level. Cryptocurrencies’ market cap was $1.306 trillion spread across 10,933 tokens. 

A trend that developed over the past years has been that Bitcoin and Ethereum have reached new peaks on events. The first move to over the $20,000 per token level came in late 2017 when the CME rolled out Bitcoin futures, giving the cryptocurrency a new trading platform that pushed the asset class into the mainstream. Ethereum soared in February 2021 when the CME introduced the first futures contract for that token.

High-profile purchases and acceptance of the cryptos also pushed prices higher. In late 2020 and early 2021, Square (NYSE:SQ) and Tesla (NASDAQ:TSLA) made strategic Bitcoin purchases. Tesla went as far as accepting Bitcoin for EV purchases before doing an about-face over mining’s carbon footprint.

The most compelling case comes from a continuation of the rising acceptance of cryptocurrencies as a means of exchange. Square is working on the custody issue, which could further the acceptance.

Other market products in the form of ETF and ETN funds and derivatives would increase the addressable market, leading to higher prices. Meanwhile, rising inflationary pressures, political upheaval, and the growing distrust of governments would increase the demand and send prices higher over the coming months and years.

The higher prices rise, the more the speculative demand will grow. The greed factor is a powerful force during bull markets. 

The cryptocurrency asset class continues to face challenges. Government regulation is one of the primary concerns.

While officials cite nefarious uses of the asset class to launder money, the control of the money supply is the underlying issue. Governments maintain control by issuing and controlling legal tender. When they surrender that function to the free market, they lose power. Regulatory efforts are likely to enhance supervision and transparency to keep control of the purse strings.

Custody and security are two other issues facing the asset class. Until a larger addressable market feels comfortable owning cryptocurrencies with a reduced risk of hacking and improvements in storing the assets, they will remain a niche market class.

Elon Musk highlighted the carbon footprint of mining activities. A greener path of mining the tokens is necessary for widespread acceptance. These and other issues continue to provide a case for lower lows.

The debate will continue over the coming months and years. I believe we will see a bifurcation of the asset class into cryptos on one side and government-issued digital currencies and stable coins tied to assets on the other.

The parabolic rise in cryptocurrencies gave way to a long-overdue correction. Now prices are sitting near the recent lows.

We will soon find out if they are bargains or sitting ducks waiting to be shot. I believe the trend is always your best friend in markets. On July 19, the trend remains bearish from a short-term perspective. 

Crowdfunding for the feature-length documentary Ethereum: The Infinite Garden has ended, raising just under 1,036 ETH over two days. The amount raised has surpassed the 750 ETH...

Bitcoin outlook remains negative as we head towards the target of 31000/30500. Ripple barely moving as we hold below strong resistance last week at 0.6300/6400 targeting...

There is an almost perfect symmetry in the 2021 Bitcoin chart. If history is a guide, longs will have some issues as soon as this year’s lows are violated. Original Post

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Grayscale ‘100% committed’ to turning GBTC into Bitcoin ETF — CEO

Cointelegraph 19 July, 2021 - 11:10am

Bitcoin is just a “couple of points of maturation” away from getting an approved ETF in the U.S., says Grayscale CEO.

Speaking to CNBC on July 19, Michael Sonnenshein reiterated that a U.S. ETF is a matter of “not ‘if,’ but ‘when.’”

Regulators currently have 13 ETF applications under consideration, and the U.S. lags behind neighboring Canada when it comes to giving them the green light.

Years of applications and rejections have gone by, and some believe that an ETF would ultimately create bearish price pressure for Bitcoin in the long term.

Nonetheless, Grayscale CEO Sonnenshein says the firm is “100% committed” to transforming its Bitcoin product, the Grayscale Bitcoin Trust ($GBTC), to ETFs once conditions are right.

“I think in our seat, from our view of the world, we’re really looking for a couple of different points of maturation in the underlying market, and that’s really the final stages of what we think regulators need to approve those types of products and give investors the protections that they’re looking for,” he told the network.

Last week, Grayscale announced a partnership with U.S. banking giant BNY Mellon, which will now provide services for GBTC when it undergoes its metamorphosis.

GBTC is already in the headlines in crypto circles over its unlocking events, the largest of which occurred Sunday, with opinions mixed over their potential price impact.

Institutional advances continue to surface this month despite low volumes and overall lack of direction on the market.

As Cointelegraph reported, Bank of America reportedly gave the green light for Bitcoin futures trading last week.

A survey meanwhile showed that existing institutional BTC investors are far from done with the asset, with 40% saying they plan to buy more in future.

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