JP Morgan Sees Problems With El Salvador Adopting Bitcoin

PLUS: Bad signs in bitcoin's chart

Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets July 12, 2021 Sponsored by     Bitcoin (BTC) +0.1%  $33,732 Ether (ETH)  -0.5%  $2,108 (Price data as of July 12 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: El Salvador Could Face 'Limitation' on Bitcoin's Use as Medium of Exchange: JPMorgan Technician's Take: Bitcoin Listless as New 'Bearish Crossover' Looms And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and me at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Asheesh Birla, GM of Ripple & Head of RippleNet Mukaya (Tai) Panich, SCB 10x Chief Venture and Investment Officer Jim Rogers, Legendary Investor  – Lawrence Lewitinn Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: EOS (EOS): +6.4% Aave (AAVE): +5.8% XRP (XRP): +2.8% Losers: The Graph (GRT): -4.9% Algorand (ALGO): -3.4% NuCypher (NU): -2.0% The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. A message from ByBit Earn up to $600 in rewards when you sign up with Bybit!    Top crypto exchange featured on Bloomberg. Trade Bitcoin, Ethereum, Doge, and more!   Check out all our exciting promotions just for you! Lots of attractive bonuses available when you sign up with us.    Spot, derivatives trading and other options available.    Sign Up Now!    Market Moves by Sebastian Sinclair El Salvador Could Face 'Limitation' on Bitcoin's Use as Medium of Exchange: JPMorgan Global investment bank JPMorgan says bitcoin (BTC)'s use in El Salvador's economy faces headwinds, suggesting a potential "limitation" on its use case as a medium of exchange may emerge.   In a report by the bank on Thursday and reported by Bloomberg Sunday, JPMorgan said problems could arise due to the fact that much bitcoin is tied up in illiquid entities, 90% of which hasn't changed hands in over a year.   The bank points to daily payment activity in the country which would represent around 4% of recent on-chain transaction volume and over 1% of the total value of tokens that have transferred between wallets in 12 months. Bitcoin prices since Pres. Bukele announced his intentions to make it legal tender in El Salvador (source: CoinDesk) This represents "potentially a significant limitation on its potential as a medium of exchange," JPMorgan said.   El Salvador's legislature voted and passed its Bitcoin Law on June 8 that will see the country formally adopting the crypto as legal tender on Sept. 7.   Some critics are questioning the move by the country's President Nayib Bukele, who initiated the bill, while others argue it violates their constitutional rights.   Read the original story here: El Salvador Could Face 'Limitation' on Bitcoin's Use as Medium of Exchange: JPMorgan The CoinDesk Quarterly Review 2021 Q2 After two consecutive quarters of strong price gains for most of the top crypto assets, Q2 2021 finally brought an end to market euphoria with a resounding crash. Most CoinDesk 20 assets, which constitute 99% of the crypto market by verifiable volume, ended the quarter with negative returns. Meanwhile, protocol development for the world's largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, reached new milestones. CoinDesk Research's latest Quarterly Review dives into the trends, developments and technological progress that shaped the crypto markets from April to June 2021. The full report is now available from the CoinDesk Research Hub. Technician's Take by Omkar Godbole Bitcoin Listless as New 'Bearish Crossover' Looms Bitcoin continues to be in a lull, with prices locked in the narrow range of $32,000 to $35,000 for over two weeks. Due to prolonged consolidation, popular indicators like the relative strength index are no longer suggesting directional bias.   However, a chart analysis of long-term moving price averages suggests more bearishness ahead. The cryptocurrency's 100-day simple moving average (SMA) is about to cross below the 200-day SMA for the first time since May 2020.   The so-called bearish crossover comes weeks after the 50-and 200-day SMAs charted the "death cross." Bearish crossovers of longer duration averages often lag price action and trap traders on the wrong side of the market.   For instance, bitcoin (BTC) barely saw any bearish move following the previous bear cross of 100- and 200-day SMAs in May 2020. A similar bear cross was observed in April 2018, October 2014, and April 2014, coinciding with interim price bottoms. The one observed in November 2019 was followed by a deeper price decline.   Bitcoin's daily chart (Source: TradingView) That said, the absence of solid follow-through to the repeated defense of the $30,000 support in the past few weeks is a cause for concern.   According to Katie Stockton, founder, and managing partner of Fairlead Strategies, a move above the 50-day SMA resistance at $35,621 may bring more buyers, lifting prices above $40,000.   The immediate support is seen at $32,100 (July 8 low) followed by $30,000. At press time, bitcoin was trading near $33,700, representing a 1.5% drop on the day, according to CoinDesk 20 data.   Read the original story here: Bitcoin Listless as New 'Bearish Crossover' Looms A message from Exeno Spending  cryptocurrencies without FIAT conversions   The number of crypto transactions reached its peak in 2020-2021. Many credible investors are looking for new opportunities to realize profits. Especially without the extra costs of high taxes and large fees.   Exeno is the first e-commerce platform that allows customers to make purchases using cryptocurrencies only (BTC, ETH, BTCV). The key Exeno's features are no FIAT conversions and low commission: 1.8% per purchase.    Learn more BOLO Be on the look out for some of these upcoming events: No major data releases today The cryptocurrency movement has never been so sprawling, reaching every corner of the planet. Crypto State by CoinDesk aims to connect with local communities to explore this movement of financial disruption and how it trickles down to every corner of the globe, from DeFi investment opportunities to alternative ways to transact and store wealth. We're making virtual stops with audiences in Nigeria, the Middle East and Southeast Asia this year. Register for the Crypto State virtual tour. ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:   Jeremy Allaire on Circle Going Public, Providing Transparency and More "First Mover" discusses a major milestone in the history of cryptocurrencies with the stablecoin leader in the spotlight, Circle CEO Jeremy Allaire. Also joining the show, crypto markets commentator and popular YouTuber Nicholas Merten and Bill Barhydt of Abra. The Investor's Perspective on the Bitcoin Taproot Upgrade   Taproot is a bundle of three upgrades to Bitcoin aimed at improving network security, privacy and scalability. At the same time, it poses some potential drawbacks to Bitcoin including risks of low adoption, unintended privacy shortcomings and Bitcoin community disappointment and fracturing. CoinDesk Research's newest report dives into the economic impact and investment implications of the Taproot upgrade.   Download the full report. Latest Headlines   Australia-Listed Non-Bank Broker SelfWealth to Add Crypto to Its Platform Cath Whitaker, CEO of the online broker with 95,000 investors, said the ability to buy crypto and stocks in one place will be an "Australian first." Venture Arm of Thailand's Oldest Bank Says DeFi Will Disrupt Traditional Finance "I think traditional financial companies like us should actively explore, invest and adopt DeFi," said SCB 10X's Mukaya Tai Panich. Ghana's Central Bank to Pilot CBDC in September, Calls It 'Cash on Its Own': Report While no date has been given for the launch of a digital cedi, the deputy governor said its success would determine the next steps. Power Ledger to Move to Solana From Ethereum The firm cited higher speed and scalability as motivations for the shift. Hive to Increase Hashrate Almost 50% With 3,000 New Miners Hive predicts that the purchase will generate an additional $80,000 in daily income. Compute North to Expand Bitcoin Mining Colocation Capacity by 1.2GW: Report CEO Dave Perrill says it could take until Q3 2022 for mining capacity to recover from China's recent crackdown. Synthetix Rallies as DeFi Protocol Announces Layer 2 Launch "SNX's upside is in part supported by the latest update from the team in relation to the planned collaboration with Optimism," one analyst said. OK Group to Work With Nanjing Police on Anti-Money Laundering Blockchain Despite a crackdown on crypto mining, Chinese authorities are still bullish on blockchain technology. Which Crypto Firms Will Follow Coinbase, Circle Into the Public Markets? Last week saw two crypto SPACs in two days. We asked stock analysts, "Who's next?" 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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