Price Point: Bitcoin was lower, holding above $11K after its best week since late July.
Market Moves: The FCA's ban on retail investors trading futures contracts on bitcoin and other cryptocurrencies could have limited impact, CoinDesk's Muyao Shen writes, but the new rules might be ill-synchronized with regulators' risk tolerance for traditional markets.
Bitcoin Watch: It looks bullish that bitcoin prices are holding near current levels even as miners appear to be selling, CoinDesk's Omkar Godbole writes.
What's Hot: Yearn.Finance creator Cronje is in, then out, and maybe now back in again; China pushes to accelerate digital yuan rollout; BitMEX hires anti-money-laundering expert; Bank of England asks British lenders to prepare for negative interest rates.
PRICE POINT
Bitcoin was lower after rising for five straight days.
The largest cryptocurrency surged 6.6% last week, the most since late July. And prices now appear to be holding above the $11,000 psychological threshold.
In traditional markets, European stocks rose and U.S. equity futures pointed to a higher open. Gold weakened 0.4% to $1,922 an ounce.
MARKET MOVES
Not everyone is happy with the U.K. Financial Conduct Authority’s decision to ban individual investors from speculating on bitcoin and other cryptocurrencies, and there's an argument to be made that the agency's rationale was hollow.
But the ban is likely to have a minimal impact, partly because the market is so small, CoinDesk's Muyao Shen reported Monday, citing analysts and industry executives who track the trading business.
Some U.K.-based brokerages that had offered the crypto derivative products to retail traders could see a drop-off in revenue, though big cryptocurrency exchanges including Kraken say the impact is likely to be minimal. While U.K. individuals can still trade the actual cryptocurrencies, there may be some traders who will seek to skirt the rules by trading on offshore exchanges.
The ban is set to take effect in January. Professional investors weren’t barred from trading cryptocurrency derivatives partly because they “have greater understanding of the risks and greater capacity to absorb potential investment losses,” according to an FCA report this month.
“Those still keen on trading crypto derivatives will just find ways to open accounts in unaffected regions,” Don Guo, CEO of Broctagon Fintech Group, told CoinDesk in an email. “There is a stark risk that retail traders will simply trade on unregulated exchanges, which in fact puts them at more risk.”
Among those affected, the proposal does appear to be quite unpopular: The FCA report indicated that some 97% of comments submitted in connection with the rulemaking were opposed to agency’s proposed ban.
CoinDesk Research Director Noelle Acheson argued in her weekly Crypto Long & Short newsletter that the agency overstepped, since its "job includes protecting investors, not passing judgment on new asset groups." One of the agency's reasons for the ban was the "extreme volatility" in cryptocurrency prices, but bitcoin is far less volatile than many stocks, including Tesla.
Bitcoin's volatility is less than Tesla's. (CoinDesk Research)
Ethereum is now part of the Flipside Data Cooperative - a transparency initiative that provides public and shareable views of networks’ on-chain activity in real time. Flipside Crypto transformed Ethereum’s blockchain data by labeling every stakeholder and transaction that has ever taken place on the network. The labeled data now powers public interactive dashboards, so anyone can watch what is happening between users, contracts, exchanges, DEXes, DeFi protocols, NFTS and all other Dapps.
Table showing MRI readings above 100% over recent timeframes, indicating bitcoin miners are selling more units of the cryptocurrency than they’re producing. (ByteTree)
Bitcoin is struggling to extend the preceding week's 6.6% gain, the biggest percentage rise since the last week of July.
The cryptocurrency is currently trading in the red near $11,250, having printed highs near $11,500 over the weekend.
The decline could be short-lived, as the global equity markets are trading in the green despite the resurgence of the coronavirus concerns across Europe.
Besides, the bitcoin market looks strong – the cryptocurrency rallied last week even though miners ran down inventory by 1,000 BTC by selling more than they mined, according to the MRI figure provided by data source Bytetree.com.
The miner’s rolling inventory (MRI) figure, which tracks the changes in miners' inventory levels, held well above 100% last week, as those responsible for generating coins boosted supply. The five- and 12-week MRIs are also holding above 100%.
In other words, the buying pressure has been strong enough to absorb extra supplies from those responsible for generating the cryptocurrencies. That's a bullish sign.
Also, the payment company Square's recent disclosure of their bitcoin investments has given market players a fresh shot of confidence, and technical bias has turned bullish with the cryptocurrency's weekly close above $11,200.
As per charts, resistances are located at $11,500 and $12,000. On the downside, support is seen at $11,000, which, if breached, could cause some short-term technical traders to exit the market.
The move to ETH 2.0 will bring the Ethereum network ever closer to fulfilling its original vision: that of a "world computer" that plays host to a parallel, decentralized financial system. Will it be the rocket fuel that takes Ethereum's financial engine mainstream?
CoinDesk's invest: ethereum economy virtual event Oct. 14 will address the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem.
Keynote speakers and panelists including Ethereum founder Vitalik Buterin and Commodity Futures Trading Commission Chairman and CEO Heath P. Tarbert will offer deep dives into Ethereum’s adoption of a proof-of-stake consensus mechanism, sharding and other elements of its impending 2.0 upgrade, as well how the new framework impacts the rapidly advancing business of DeFi, stablecoins and decentralized exchanges.
The latest quarterly review from CoinDesk Research is out! In this 24-chart report, we look at major developments in crypto markets over the third quarter, focusing on growth in stablecoin liquidity, surging interest in decentralized finance applications, and the notable uptick in crypto derivatives volumes.
At invest: ethereum economy on Oct. 14, we will address the ramifications for investors as decentralized finance takes the crypto world by storm.
In a run-up to the event, our two-part CoinDesk Live: Inside the Ethereum Economy virtual miniseries introduces trending narratives we will break down at the main event: Why all the hype behind yield farming and food-inspired tokens? Should investors take them seriously or are they a fading trend?
Whether it’s wBTC, renBTC or tBTC, tokenized bitcoin is the hottest thing on Ethereum right now. A phenomenon that hardly existed at the beginning of this year has pushed the total value locked in bitcoin past $1.3 billion.
On Oct. 12, CoinDesk markets reporter Zack Voell discusses the yield farming phenomenon with Matt Luongo of Thesis, Jeff Garzik of Bloq, Loong Wang of Ren Project and Kiarash Mosayeri of BitGo.
In the run up to our invest: ethereum economy event Oct. 14, get up to speed on recent developments in the Ethereum ecosystem. CoinDesk Research's recent note covers ETH's performance, the impact of decentralized finance and stablecoins, and an update on the launch of Ethereum 2.0.
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First Mover: Bitcoin's Best Week Since July Shows Limited Toll of U.K. Retail Crypto Futures Ban