News and analysis: Tough times for bitcoin miners and why Binance bought CoinMarketCap
Bitcoin (BTC) has returned above $7,000 for the first time in two weeks.
Joe DiPasquale – CEO of BitBull Capital, a San Francisco-based hedge fund specializing in cryptocurrencies – said he saw no clear driver of the move. Market signals show growing conviction among traders that prices won't fall below $6,000 in the short term, but rallies above $7,000 appear to be drawing sellers, he said.
"You have so many people trying to swing trade on crypto," DiPasquale told me in a phone call.
Traditional financial markets got a jolt on Thursday as Wall Street investors speculated that major oil producers including Saudi Arabia and Russia might agree on production cuts to help to stabilize prices. Oil jumped 22 percent to $24.78 a barrel, and the Standard & Poor's 500 Index rose 2.3 percent.
The S&P 500 is still down 22 percent year-to-date, while bitcoin has now trimmed its 2020 losses to just 5.5 percent.
DiPasquale said many bitcoin traders are looking ahead to May's expected inflation-busting "halving," when the supply of new units of the cryptocurrency issued by the blockchain network will drop by 50 percent.
The halving comes as the Federal Reserve is poised to inject an estimated $4 trillion of new liquidity into the global financial system to help stabilize markets, roughly equivalent to the total amount of money created on the central bank's balance sheet since its founding in 1913.
Investors including Mike Novogratz, CEO of the crypto-focused investment firm Galaxy Digital, say that such moves could "debase" the value of the dollar.
"That literally is a printing press," Novogratz told CNBC on Thursday. "I'm getting calls from real big investors whom we've never seen before, saying, 'Tell me about this bitcoin.'"
Novogratz said he expects bitcoin's price to double within the next six months and potentially climb above its previous record near $20,000 by the end of the year.
Manufacturers Mark Down Bitcoin Miners as Price Drop, Halving Change Calculus
Bitcoin mining machines are on sale. Last month’s crash in prices has prompted manufacturers to sell inventories at a discount, in some cases as steep as 20 percent, over the past few weeks. Complicating the matter is the imminent bitcoin halving in May that will reduce the network's mining reward by half, further reducing profitability.
‘They Have the Users’: Binance CEO Explains Why He Bought CoinMarketCap
Binance has acquired popular crypto data site CoinMarketCap (CMC) for an undisclosed price. Binance CEO Changpeng “CZ” Zhao told CoinDesk: “It’s a really good website and I think we can help grow it further,” Zhao. CMC will remain independent from Binance under a holding company, perhaps staving off concerns over potential conflicts of interest.
Chinese Financial Watchdog Warns of Manipulative Crypto Exchanges
The National Internet Finance Association of China (NIFA), a Chinese financial watchdog, warned investors of rising risks in crypto investments. NIFA said Thursday that foreign-based crypto exchanges have faked trading volume, according to its own data analysis.
Trend: Bitcoin is hovering around $7,000,reinforcing a pennant breakout confirmed on Thursday.
On-chain metrics with a strong history of signaling market bottoms and tops are currently indicating a bullish reversal, according to blockchain intelligence firm Glassnode.
So, the cryptocurrency looks set to re-test Thursday's high near $7,200. A violation there would open the doors to $8,000, a level last seen March 12.
If buyers again fail to keep prices above $7,000, a bigger pullback to $6,200 could be seen. It's worth noting that bitcoin has already failed twice in the last two weeks to establish a foothold above $7,000.
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Novogratz Says Bitcoin Price Could Double in Six Months