Let's look at the premium between several different exchanges – Bitfinex, Coinbase and Bitstamp – since Jan. 1, 2019, calculated by daily close prices on a 30-day rolling average.
The first thing that stands out is the yellow line representing the difference in pricing between Coinbase and Bitstamp. What gives? Well, Coinbase and Bitstamp have consistently similar bitcoin pricing despite one domiciled in the U.S. (Coinbase) and the other in Europe (Bitstamp).
The main thing Coinbase and Bitstamp have in common is fairly good access to the traditional banking system. So let's eliminate that comparison in the chart:
Bitstamp and Coinbase are pretty much in lockstep, whatever's going on. Over at Bitfinex, bitcoin prices are always more expensive than these two. But compared to the first half of 2019, when Bitfinex began having legal problems, things have got much better.
March 2020 seems to be signaling a change between Coinbase and Bitstamp's relationship to Bitfinex's price premium:
While not as pronounced as it once was in 2019, the Bitfinex premium has reared its head in 2020 as markets have experienced a good amount of turmoil.
Once the crypto price crash occurred on March 12, prices between Bitfinex, Coinbase and Bitstamp diverged. This is good for arbitrage traders in tumultuous markets like this.
But trader beware: The premium on Bitfinex likely comes from its inability to process enough actual cash withdrawals. It hasn't been a very friendly customer to banks – the exchange even tried suing Wells Fargo at one point. Negative news about Bitfinex can raise the spread, whereas positive news has the ability to lower it, which is likely a signal of how many fiat withdrawals are being requested at a given time.
The Bitfinex premium may signal some kind of eventual problem on the exchange around the bend. But for the time being, traders are loving this price discrepancy.
How Long Will Bitcoin and Stock Markets be in Lockstep?
"Bitcoin is still largely correlated with financial markets overall it seems,” said Jack Tan, founding partner of Taiwan-based crypto trading firm Kronos Research. “And from what I can tell, we are still headed lower in stocks so bitcoin will presumably follow. Also since bitcoin is priced mostly in USD, I suspect the dollar rally is also adding some pressure." Low expectations for equities come from a number of factors, traders say. Energy consumption, for example, is way down.
Crypto Fund Saw 1,332% Gains If Investors Stomached Dips
Polychain Capital’s hedge fund lock-up period is at least six months, a time horizon that yields wildly conflicting snapshots due to monthly volatility and spells danger for short-term investors who run on lower liquidity. Whether returns are realized depends on when Polychain Capital’s investors – which include distinguished venture capital firms Andreessen-Horowitz, Founders Fund, Sequoia Capital and Union Square Ventures – deposit and withdraw their funds.
Bitcoin Diverges From Falling Equities With $500 Price Rise
Bitcoin found takers Monday even though stocks in Asia dipped alongside losses in S&P 500 futures, possibly over renewed fears of a prolonged coronavirus-led lockdown across the globe. However, it's still too early to say the cryptocurrency has now decoupled from equities. After all, the 90-day correlation between bitcoin's price and the S&P 500 rose to 0.52 earlier this month, the highest level on record. Another liquidity crisis, similar to the one seen a few weeks ago, cannot be ruled out.
Binance Cuts Leveraged Tokens
The exchange had decided to remove all FTX leveraged tokens in order to safeguard users, just over two months after first listing the tokens. "The main reason for delisting is we find many users don't understand them. Even with pop-ups warning users each time, people still don't read it," Binance CEO Changpang Zhao said. "Given they are some of the most actively traded token, it is bad for business to delist them. Not an easy choice. But ... Protecting users comes first."
US Cash in Circulation Sees Biggest Increase Since Y2K Bug
From March 11 to March 18, dollar banknotes in circulation shot up from around 1.809 trillion to 1.843 trillion, an increase of almost 2 percent, Fed Reserve data shows. The increase was noted Sunday by economist John Paul Koning. The data is the first strong signal, beyond scattered anecdotes, that U.S. citizens are now withdrawing more cash than usual from banks and ATMs amid concerns over the effects of the coronavirus pandemic.
Celsius Taps Chainlink for Interest Rate ‘Decentralization’
Celsius has subscribed to Chainlink, which connects smart contracts with real-world data, as a middle pathway to decentralization. Celsius offers above-market interest rate returns for cryptocurrencies such as bitcoin and ether, and has some $600 million in assets under management. Under the new arrangement, Chainlink will also place a portion of its bitcoin and ether crypto holdings under Celsius' treasury management service.
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Change the color all you want @tradermayne – but those tall sell candles certainly still look like, well ... sell candles.
Trend: Despite recent gains, bitcoin is eyeing its biggest monthly loss in over a year. The cryptocurrency is currently down nearly 25 percent from the monthly opening price. A bigger single-month decline was last observed in November 2018, when the cryptocurrency had tanked 37 percent.
From a technical perspective, the focus is on where prices close (UTC) Tuesday. The bears may feel emboldened if prices end March beneath support at $6,425 (December 2019 low). That would validate the bearish lower high established at $10,500 in February and could yield a re-test of the 50-month average at $5,200.
On the higher side, $7,000 is the level to beat for the bulls. A weekly close above that level would invalidate the bearish bias signaled by the previous two weekly candles and open the doors to resistance at $9,220.
The Number Zero and Bitcoin (Hedge fund CEO Robert Breedlove on Medium) Satoshi gave the world Bitcoin, a true “something for nothing.” His discovery of absolute scarcity for money is an unstoppable idea that is changing the world tremendously, just like its digital ancestor: the number zero.
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.
About That Bitfinex Premium...