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| December 14, 2020 Everything you need to make sense of the crypto markets and beyond Sponsored By: By the CoinDesk Markets Team Edited by Bradley Keoun If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) -0.6% $19,042 Ether (ETH) -2.2% $577 (Price data as of Dec. 14 @12:20 UTC) TODAY: Price Point: Bitcoin was lower, holding just above $19K after a two-day rally. Market Moves: In 2020, bitcoin went from fringe investment to the talk of Wall Street, as the coronavirus-induced recession led to an economic-recovery strategy built around government stimulus checks and Federal Reserve money-printing. Bitcoin Watch: Any breakout above $20K could quickly be capped by holders looking to take profits close to record high prices, CoinDesk's Omkar Godbole writes. What's Hot: Fidelity's Abby Johnson says she can barely keep up with crypto news, DoubleLine's Jeff Gundlach talks bitcoin, China aims for gradual consumer adoption of digital yuan, Swiss bank Sygnum tokenizes own shares.
Price Point Bitcoin was lower on Monday, holding just above $19,000 after rallying about $1,000 over the weekend.
"There is an element of fatigue, with the market unable to drum up the momentum needed to spur us to new highs," Matt Blom, head of sales and trading for the cryptocurrency firm Diginex, told clients in an email.
In traditional markets, European shares rose the U.K. and European Union agreed to extend talks over a Brexit-related trade deal. U.S. stock futures pointed to a higher open as lawmakers in Washington continued negotiating a new stimulus stimulus package.
Market Moves For so many reasons, 2020 will go down in history books. For many of those same reasons, it could go down in economics textbooks.
This year saw the biggest dropoff in economic activity since the Great Depression, the biggest money-printing episode in the Federal Reserve's 107-year history, an epochal shift toward remote working, negative prices for crude-oil futures and the first real signs that the global financial system might be migrating toward fast-growing markets for cryptocurrencies and digital assets.
Bitcoin was invented just 11 years ago as the first and original cryptocurrency, intended for use in an electronic peer-to-peer payment system that wouldn't be controlled by any person, business or government. At the start of the year, bitcoin was still considered a fringe investment, disparaged by the likes of the billionaire investor Warren Buffett as having "no value."
By the end of the year, bitcoin had pushed to the center of conversations among big investors and Wall Street firms — cast by proponents as a hedge against the potential currency debasement that might come from trillions of dollars of coronavirus-related stimulus money emanating from central banks and governments around the world. Others saw growing mainstream acceptance of the cryptocurrency and its underlying blockchain network as validation of a landmark technology that might forever change finance.
Whatever the case, the bitcoin market in 2020 offered as good a prism as any through which to view the year's monumental economic developments – and the responses to the crisis from national authorities and monetary policymakers. Over the course of the next several days, First Mover will provide a recap of how the bitcoin market evolved over the course of the year, with prices for the cryptocurrency nearly tripling, attracting bullish commentary from big traditional-finance players including JPMorgan Chase, BlackRock, AllianceBernstein, Morgan Stanley and Tudor Investment.
That story might really represent another way of recounting the broader narrative in which low interest rates and the dollar's reign as the global reserve currency allowed the U.S. government and its corporations to amass a heavy debt load in the years before the coronavirus hit. Once it did, the response was to invoke what one leading economist described as the "war machine" – the Federal Reserve financing U.S. government emergency-relief packages costing trillions of dollars.
Eventually markets from stocks to bonds became hooked on the expectation that stimulus would be provided in amounts needed to keep investors from suffering losses deep enough to impair confidence and derail the economic recovery.
All the while China pushed forward with its plan to roll out a digital version of its yuan, raising the specter that a virtual currency from the world's second-biggest economy might eventually challenge the U.S. dollar's dominance in payments for global trade. In the U.S. and elsewhere, billions of dollars of venture capital and trader money flowed into an array of obscure digital tokens on blockchain-based, semi-autonomous trading and lending systems — collectively known as "decentralized finance," or DeFi; the fast-paced growth suggested that digital-asset markets might represent a haven of innovation in an otherwise stagnant global banking system.
Whether due to causation or correlation or merely wishful thinking, the bitcoin market, long viewed as a hotbed of volatility and unfettered speculation, suddenly seemed to rise with nearly every new twist.
Coming Tuesday: Even before the coronavirus hit, bitcoin traders and mainstream economists alike were growing increasingly concerned about the slowing U.S. economy, rapid growth in corporate debt and whether the dollar faced growing threats to its global monetary hegemony. - Bradley Keoun
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Bitcoin Watch Bitcoin daily price chart shows profit-taking in the week after the cryptocurrency's ascent to a new all-time high, followed by a recovery in recent days. (TradingView/CoinDesk) Bitcoin’s revived uptrend could soon lead to a much-anticipated breakout above the $20,000 mark.
“We have witnessed a large move up over the weekend, with MicroStrategy’s efforts to increase bitcoin holdings from several large players bringing with it fresh optimism,” Matthew Dibb, CEO of Stack Funds, told CoinDesk. “Our belief is that we will see a breach of $20,000 in the coming weeks.”
On Friday, business-intelligence firm MicroStrategy raised $650 million through a convertible senior note sale to fund bitcoin purchases; the deal was upsized from $550 million. Since then, the cryptocurrency has rallied by over $1,000 and was last seen trading near $19,100, according to CoinDesk 20 data.
The cryptocurrency nearly doubled from $10,000 to a new record high of $19,920 in the 12 weeks to Dec. 1, before falling to $17,700 last week amid a bout of profit taking. Pullbacks are a normal element of bull markets and often recharge the engines for a bigger ascent.
Kenetic Capital’s CEO Jehan Chu also foresees bitcoin marching onward with “two steps forward, one step back” price action. The breakout, however, may remain elusive until the new year, as some investors are still looking to sell around record highs.
“The topside is still kept with lots of selling orders, possibly from miners,” Patrick Heusser, head of trading at Zurich-based Crypto Broker AG, told CoinDesk over Twitter. - Omkar Godbole
Read More: Bitcoin Still on Track to Breach $20K in Coming Weeks
Looking to make someone (or just yourself) happy this Yuletide holiday? Give the gift of crypto art.
As part of the launch of Most Influential 2020 list, CoinDesk is auctioning off 12 original artworks that accompany this year’s list of honorees.
The NFTs were created by leading digital artists including Alotta Money, XCopy, Osinachi, Matt Kane, Sarah Zucker, Yonat Vaks, and Olive Allen. They are available at Nifty Gateway and Super Rare (Matt Kane). The artists will donate 50% of the proceeds to charities of their choice, under an arrangement with cryptocurrency donations company The Giving Block.
Learn more about the Most Influential 2020 NFT art auction, running to Dec. 31.
What's Hot Fidelity's Abigail Johnson says cryptocurrency industry is moving so quickly that "trying to keep up with it is very hard" (CryptoSlate)Bitcoin is a "fascinating representation of animal spirits and speculation," DoubleLine's Jeff Gundlach says (Business Insider) An additional $600B of bitcoin demand could materialize if pension funds and insurance companies in the U.S., euro area, U.K. and Japan allocate 1% of portfolios to the asset, compared with the cryptocurrency's current market capitalization of about $350B, JPMorgan analysts write in new report (Bloomberg)Wall Street heavyweights moving into bitcoin are the enemy to many who hail from the cryptocurrency's cypherpunk roots, CoinDesk's Michael Casey writes in Money Reimagined newsletter (CoinDesk) China aims for gradual consumer adoption of digital yuan, former central bank governor Zhao says (South China Morning Post) 19-year-old Ukrainian lawmaker discloses ownership of $24.5M of cryptocurrency monero (CoinDesk)Sygnum, a digital-asset firm with a Swiss banking license, claims to be first bank in world to tokenize its own shares (CoinDesk) Aegis Custody clears hurdle in bid for South Dakota trust charter (CoinDesk) CEO of DeFi insurer Nexus Mutual hacked for $8M in NXM tokens (CoinDesk) Bitcoin exchanges flood London's Metro with ads (CoinDesk)
Analogs The latest on the economy and traditional finance Morgan Stanley says there's a chance a no-deal Brexit could prompt Bank of England to cut benchmark interest rates below zero (Reuters) Remote-working shift loosens Silicon Valley's tight grip on tech industry (WSJ), and Google opens door to "flexible workweek" (NYT) Shandong Ruyi Technology Group, once considered the "LVMH of China," cancels bondholder meeting over possible debt-maturity extension as coronavirus exacerbates "liquidity pressure" and interest payment looms this week (Nikkei Asia Review) Suspected Russian hackers are believed to have broken into the U.S. Treasury and Commerce departments and have been monitoring internal email traffic (Reuters)
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Mastering Blockchain: A Virtual Book Launch in a Physically Distant Yet Still-Connected World "Mastering Blockchain: Unlocking the Power of Cryptocurrencies, Smart Contracts, and Decentralized Applications" by Daniel Cawrey and Lorne Lantz from O’Reilly Media is a masterful guide on the essentials of blockchain technology, presenting history, breaking down fundamentals, and providing real-life implementations covering the space with clarity and precision based on years of research and conversations with the space's leading minds.
In partnership with the Silicon Valley Bitcoin and Silicon Valley Ethereum meetup groups, CoinDesk celebrates Cawrey and Lantz's book launch with a fireside chat with the authors and CoinDesk's first-ever VR event on Dec. 15, 2020, at 7 p.m. ET.
Join us for the CoinDesk Live event streaming on CoinDesk.com, YouTube and Twitter as we chat about the book, socialize in VR and discuss the future of IRL and virtual events. Learn more.
Introducing the Most Influential 2020 Who moved the needle on crypto this year? What were the projects that mattered? Who shattered the glass ceiling and broke the mold? From DeFi to bitcoin's late year surge, 2020 was full of big stories, trends and personalities. We've unveiled CoinDesk’s 2020 Most Influential list, a selection of 12 people who helped push the industry forward this year. See who made the list.
The latest CoinDesk Monthly Review compares bitcoin’s November 2020 rally with the asset’s market and network performance three years ago and looks at some metrics on the progress toward the launch of Ethereum 2.0. Download the free CoinDesk Research November 2020 Review.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.
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