Connect with us

Bitcoin

AFTER POWELL POURS COLD WATER ON INFLATION EXPECTATIONS

Published

on

A dramatically heightened inflation makes up the strongest bullish case for Bitcoin, a cryptocurrency that poses itself as the safest insurance against a potential rise in consumer prices and fiat devaluation caused by central banks’ quantitative easing programs and the government’s trillions of dollars worth of stimulus packages.

But on Tuesday, Bitcoin faced a headwind as it attempted to continue its yearlong upside rally higher. The cryptocurrency slid amid Jerome Powell’s testimony to Congress, wherein the Federal Reserve chairman emphasized that the $1.9 trillion stimulus package will not lead to an unwelcomed spike in inflation.

“We might see some upward pressure on prices. Our best view is that the effect on inflation will be neither particularly large nor persistent,” Mr. Powell told lawmakers.

Advertisement

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
Bitcoin attempts a rebound move off its intraday low. Source: BTCUSD on TradingView.com

BITCOIN…
…was trading just shy of $56,000 ahead of Mr. Powell’s testimony. But the cryptocurrency came under pressure after the governor’s comments about inflation, pointing to a short-term jitteriness among traders that based their upside theories on higher inflation.

That is due to Bitcoin’s core characteristics. The cryptocurrency comes with a limited supply cap of 21 million tokens, which gets halved every four years owing to a pre-programmed algorithm in its source code.

Advertisement

That makes Bitcoin provably scarcer than gold, its top rival in the safe-haven market, and the US dollar, the global store of value, which weakened by about 12 percent from its March 2020 high in response to the Federal Reserve’s ultra-loose monetary policies and the US government’s trillions of dollars worth stimulus packages.

BTC/USD surged by more than 600 percent in the same period. Meanwhile, the pair’s climb also coincided with a spike in the 10-year breakeven inflation rate — from 0.63 percent in March 2020 to 2.29 percent on March 23, 2021. The reading was above the Fed’s inflation target of 2 percent, a point at which it would unwind its loose monetary policies by raising benchmark rates.

breakeven inflation, bitcoin, federal reserve
The breakeven inflation rate represents a measure of expected inflation derived from 10-Year Treasury Constant Maturity Securities and 10-Year Treasury Inflation-Indexed Constant Maturity Securities. Source: FRED

Advertisement

Last week, the Fed officials stated at the end of their monthly policy meeting that they would tolerate interest rates near zero until 2024. That, coupled with Mr. Powell’s commitment to control inflation, indicated a lower probability of dramatic consumer price spikes, which may turn the US dollar stronger and reduce appetite for bitcoin among investors in the US.

DISSENTING OPINIONS
The Stock-to-Flow model creator, known by his pseudonym PlanB, referred to a European Central Bank quote. It said that central banks have room to expand their asset purchasing programs (aka more quantitative easing) because their inflation rates are already too low.

“It means more pandemic emergency purchase programs,” noted PlanB. “This is good for Bitcoin.”

Advertisement

The analyst expects the cryptocurrency to hit $100,000-288,000 in 2021. Other inflation-hit countries (read Turkey) could also add to the global demand for Bitcoin against its declining supply.

Bitcoin

BTC Records a New ATH Amid Bitcoin Fut

Published

on

Bitcoin recorded a new ATH of $66,930 on Wednesday, October 20, as ProShares’ Bitcoin futures ETF makes an astonishing debut on New York Stock Exchange (NYSE).

As Crypto Economy reported, Tuesday, October 19, was a historic day for Bitcoin (BTC) as the world’s first Bitcoin Futures ETF by ProShares, under the ticker symbol BITO, went live on NYSE that generated an astonishing $1 billion in volume and over 24 million shares traded on its very first day. According to some reports, this first Bitcoin-linked exchange-traded fund listed in the US debuted as the second-most heavily traded fund on the record.

As expected, this historic moment has helped the world’s largest crypto asset by market cap to achieve its new all-time high (ATH) on Wednesday, October 20. According to crypto market tracker CoinMarketCap, the coin crossed its previous ATH of $64,895 on Wednesday evening and then continued to post a new ATH of $66,930. The price has corrected a little and the coin is now changing hands at around $65,000 at the time of writing.

Advertisement

TVL on Ethereum DeFi tops $100 Billion

This watershed moment is positively impacting the overall cryptocurrency market. As the confidence in crypto is growing, so does the DeFi activity. With this recent crypto rally, the total value locked (TVL) on Ethereum-based DeFi protocols has also crossed $100 billion for the first time, according to the data provided by DeFi Pulse. Aave is leading the DeFi by having more than $17 billion in TVL on its platform.

According to DeFi Llama, the TVL on all DeFi platforms is $219 billion.

VanEck ETF is Coming Next Week

A Bitcoin ETF has been long-awaited by both the crypto community and investors on Wall Street, many of whom have argued for years that approval by regulators would open up digital currencies to more mainstream investors. Some thought that the US might ban cryptocurrency altogether like China, but the government’s approval of Bitcoin Futures ETF is an indication that regulatory headwinds may not be as strong as some expect.

Advertisement

As the first Bitcoin-linked ETF has gotten the regulatory green light, many more are waiting in line. VanEck will be the second asset manager to share its part in this new era of Bitcoin. A document filed with the US SEC on October 20 indicates that the regulator has given the company permission to launch its fund after Saturday, October 23. The company has announced that its Bitcoin Strategy ETF, under the ticker symbol XBTF, will go live on Monday, October 25.

News Source

Advertisement
Continue Reading

Bitcoin

Bitcoin Price Analysis: BTC breaks above $65,000 all-time high, further upside to follow today?

Published

on

  • Bitcoin price analysis is bullish.
  • BTC/USD set a new all-time high at $67,000 yesterday.
  • Slight retracement to retest $65,000 as support overnight.

Bitcoin price analysis is bullish today as a higher low has been set after a retest of $65,000 as support. Therefore, we expect BTC/USD to continue higher over the next 24 hours.

Bitcoin Price Analysis: BTC breaks above $65,000 all-time high, further upside to follow today? 1
Cryptocurrency heat map. Source: Coin360

The cryptocurrency market traded with strong bullish momentum over the last 24 hours. Bitcoin gained 3.12 percent, while Ethereum gained 12.35 percent. Meanwhile, Solana (SOL) continues to dominate the market, with a gain of 20 percent.

Bitcoin price movement in the last 24 hours: Bitcoin sets new all-time high at $67,000

BTC/USD traded in a range of $63,807.96 – $66,930.39, indicating substantial volatility over the last 24 hours. Trading volume has increased by 34.33 percent and totals $49.2 billion, while the total market cap trades around $1.24 trillion, resulting in the market dominance of 46.29 percent.

BTC/USD 4-hour chart: BTC to reach $68,000 today?

On the 4-hour chart, we can see Bitcoin price slightly retracing overnight as bulls prepare for another push higher today.

Bitcoin Price Analysis: BTC breaks above $65,000 all-time high, further upside to follow today?
BTC/USD 4-hour chart. Source: TradingView

Bitcoin price action has seen steady growth so far in October. After a several-week consolidation above $41,000 at the end of September, a strong push higher was seen on the 1st of October.

Since then, BTC/USD has seen steady growth with several higher highs and lows set. From the previous major swing low of $41,000 to the current swing high of $67,000, BTC has gained around 63 percent.

Advertisement

Yesterday, the previous all-time high of $65.000 was broken clearly, further indicating strength for the momentum. Overnight a slight retracement back to the $65,000 mark was seen as bears looked to retest it as support, likely before further upside is seen today.

Bitcoin Price Analysis: Conclusion 

Bitcoin price analysis is bullish as a slightly higher low has been set after a retest of $65,000 previous resistance as support. Therefore, we expect BTC/USD to continue higher over the next 24 hours.

While waiting for Fantom to move further, read our guides on LTC wallets, Gero wallets, and  DeFi wallets.

Advertisement
Continue Reading

PayPal

PayPal co-founder suggests he’s underinvested in Bitcoin while it records new ATH

Published

on

Bitcoin [BTC] did it once again. The asset broke its own record and caught the attention of the entire globe. Amidst this, PayPal’s co-founder, Peter Thiel expressed his angst over being “underinvested” in the world’s largest cryptocurrency.

The crypto industry as a whole garnered immense popularity over the last couple of years. From being closely regarded as an instrument that carries out illicit activities, to being adopted by governments across the globe, Bitcoin has certainly come a long way. Now, with a market cap of $1.2 trillion, Bitcoin stands as one of the most prominent currencies in the world.

Earlier today, BTC pushed past its previous all-time high of $64,899 and managed to hit a new high of $66,930.39. While BTC HODLers rejoiced this surge, an array of people were rather disappointed that they hadn’t poured in their money into the king coin. One of them was PayPal’s co-founder Peter Thiel.

Advertisement

PayPal’s co-founder talks crypto

During a recent interview, PayPal’s Thiel revealed why he felt underinvested in the asset. He added,

“You’re supposed to just buy Bitcoin. I feel like I’ve been underinvested in it.”

The latest move of Bitcoin was lauded by the entire market. Speaking about the effects of BTC’s ongoing rally, the PayPal co-founder suggested that “we are at a complete bankruptcy moment for the central banks.”

An array of people took to Twitter and made their own predictions about Bitcoin. While some suggested that BTC was slated to endure a major fall, a few others noted that the coin could be aiming for $70K. Tesla’s Elon Musk had a rather bizarre prediction for the coin.

Advertisement

The Tesla CEO’s latest tweet read,

Bitcoin’s rally certainly paved the way for several altcoins hitting new highs. Ethereum PETH], the second-largest cryptocurrency followed the footsteps of BTC and managed to hit an all-time high of $4,366.

Advertisement

PayPal has played a major role in the crypto-verse in the last year. From opening doors to crypto and constantly remaining bullish about it, has pushed several assets to a new level.

News Source

Advertisement
Continue Reading