Monday, February 08, 2021
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Your Weekly Update On All Things Crypto |
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Bitcoin For Corporations: The Institutional Swarm is Here |
Last week, Microstrategy, the corporations that invested their entire balance sheet into Bitcoin last year hosted one of the most important Bitcoin conferences we have ever had. They hosted an online event with over 1,400 high ranking executives from major corporations, as a way to open source their process for putting Bitcoin on their corporate balance sheet.
There were notable presentations from cryptocurrency powerhouses like NYDIG, Coinbase, Fidelity Digital Assets, Binance, Gemini, Galaxy Digital, Kraken, Paxos, and more. An important theme to note is that most of the presentations over the course of the three days were focused on walking through how to make the allocation to Bitcoin, not why it is important to allocate to Bitcoin. This means that most of the companies that attended this conference have done their homework on the importance of Bitcoin, now they are trying to understand how to make the next step.
Some notable attendees at the conference include executives from:
- SalesForce
- Macario Libre
- Smucker
- GMG Grand Texas Trust
- University of Maryland Endowment
- New York Life
- SpaceX
While this event has clearly caused some tailwinds for Bitcoin, it is likely that the move in Bitcoin's price thus far is not reflective of the actual allocations that will come from this conference. Institutions have complexity, and cannot decide to make investments at this scale overnight. Some may take up to 6 months to complete their allocations. While these positions may take some time to build, it is clear that we will start to see a flurry of news over the next few months from corporations announcing their newfound positions in Bitcoin.
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There's A Bitcoiner on the Senate Banking Committee |
- Banks
- Banking & financial institutions
- Deposit Insurance
- Prices of commodities, rent's & services
- Federal monetary policy
- Financial aid to commerce & industry
- Issuance and redemption of notes and more...
Lummis has been vocally pro-digital assets in both her candidacy and since taking office. She plans on forming a Financial Innovation Caucus to educate her fellow senators on emerging financial technologies. In her brief remarks about the appointment, she said, “Through my role on the Banking Committee, I hope to shine a light on many of these pioneering efforts and work with federal regulators to ensure that regulation of digital assets is structured to encourage innovation, instead of stifling it." She followed her previous statement by saying, "I also look forward to providing regulatory relief to our community banks and ensuring that we have vibrant safe financial markets.”
What this means for Crypto:
This is a massive win for the cryptocurrency space as a whole. It is an amazing accomplishment to have elected an OG Bitcoiner into the senate, but it is even more important that she is sitting on the committee that she does. She will now have a say in exact policy decisions that will affect Bitcoiners most.
For more on this story, listen to Nathaniel Whittemore's coverage on the Breakdown.
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0x Labs closes $15M Series A Equity Round |
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0x labs, the firm behind a decentralized exchange protocol and ZRX token, closed a $15 million Series A equity round this past Friday. The round was led by the well-known Pantera Capital and received support from other major industry leaders like Jump Capital, Coinbase Ventures, Blockchain.com, and the DeFi Alliance. 0x labs also stated that a variety of “operators, market makers, and DeFi builders” took part.
This will be 0x Labs first equity round after the $24 million ZRX token sale in 2017. The round follows 0x’s successful launch of their proprietary software, Matcha, a DEX router that came to fruition in June and has processed $2.7 billion in orders since. Matcha is a consumer-facing protocol that leverages aggregated liquidity and price information from the likes of Kyber, Uniswap, and more. In short, Matcha will aggregate buy and sell orders from a multitude of different DEX’s to ensure their users get the best price on trades.
The funding comes at an emerging, somewhat exploding, time in the decentralized finance space. Decentralized exchanges recorded more than $60 billion in January of 2021 - their highest-ever monthly volume. The ecosystem of non-custodial exchange protocols captures a small but increasingly growing, segment of the broader cryptocurrencies market. 0x labs plan to use the funding to re-invest into and expand Matcha.
The firm, whose goal is to create an open and globally accessible financial system, saw elevated market activity after the announcement of Friday’s news. On Thursday, its native ZRX token was trading below $0.80. The following day, it peaked at $2.18. You can view the trajectory here.
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Bitcoin: Flirting With New All-Time High's |
Bitcoin has taken a few weeks to cool off after its explosive rally to end 2020 and kick-off 2021. However, over the past week, Bitcoin has decided it's ready for more. With a helpful boost from Microstrategy's Bitcoin for Corporations conference last week, Bitcoin is now flirting again with new all-time highs. We will see if the news of a few new corporate investors will be enough to catalyze a new parabolic run, but for the time being, Bitcoin remains below its Jan 8th high of $42,000. As we mentioned in our first story, it is important to note that the lead time for these corporations be complete their allocations can be up to 6 months. So we may need to practice delayed gratification before seeing the true value of these corporate inflows.
Although the price has been choppy for the past few weeks, we have remained within the ascending megaphone pattern that has been forming since October of 2020. If $42K proves to be a major level of resistance, there is a possibility Bitcoin continues to chop around between $30-40K until late March - however, we at CryptoWeekly believe it will break $42K much sooner than that. You can view the chart here.
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Alt-Coins Continue To Gain Market Share |
"Money always goes where it is best treated." This statement is not only true in the traditional world, but holds true in the world of cryptocurrencies as well. The alt-coin market is very much dependent on the price of Bitcoin. When Bitcoin pushes sideways, investors look for other coins that can provide a higher yield, and liquidity flows into smaller cap alt-coins. When Bitcoin goes parabolic, investors shift their liquidity back into the King Coin. These ebbs and flows create market cycles we call Bitcoin cycles and Alt-coin cycles.
As Bitcoin has chopped sideways for a few weeks now, alt-coins have had the opportunity to build market share against Bitcoin, but now that Bitcoin is pushing towards all-time highs, the market has a decision to make. Will Bitcoin break all-time highs and suck liquidity from the rest of the market? Or will it get rejected, and offer alt-coins another opportunity to gain market share. The $42K level for Bitcoin is one that should be watched intently as it will inform your decision on how to allocate your portfolio.
If Bitcoin takes off and breaks through $42K, alt-coin dominance may start to retrace and approach the ascending green line of support, if Bitcoin gets rejected again at $42K the alt-coin rally may continue to the upper horizontal line of resistance. We remain confident that as we continue this alt-coin season, dominance will remain above the ascending green line of support. You can view the chart here.
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iExec is a decentralized cloud computing network giving applications access to trusted off-chain computation and data. They are building the next generation of IT infrastructure and introducing a new paradigm to the centralized and monopolistic cloud computing space. The iExec are focused on driving enterprise blockchain adoption and have built a scalable, secure, and easy access protocol for services, data-sets, and computing resources they need.
This project has been a long time favourite of the CryptoWeekly team and is still relatively close to its all-time low valuation vs. Bitcoin. With the stampede of corporations barreling towards Bitcoin, a logical next step would be for them to start adopting enterprise blockchain solutions for their companies. iExec is well-positioned to be a key player in the decentralized cloud computing space.
You can view the RLC chart here.
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Kyber is a blockchain-based liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application. Kyber is the liquidity infrastructure for decentralized finance. Kyber aggregates liquidity from diverse sources into a single pool, which provides the best rates for takers such as DApps, Wallets, DEXs, and End-users. As decentralized finance continues to explode, the need to easily swap coins across blockchains with low fees will continue to increase. Kyber also enables a wide range of financial applications to be built on top of it which will increase its use case and its pervasiveness across Defi.
Similar to iExec, Kyber has not had its moment yet this alt-coin cycle. It is still near its relative low vs. Bitcoin but is trending in the right direction.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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