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Mike Novogratz Maintains Optimism about Bitcoin Despite Market Selloff

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Novogratz says that the price drop is healthy for the system given that the market had spent several months in bullish mode.

The CEO of Galaxy Digital, Mike Novogratz, has stated the current trends in the cryptocurrency market are not worrisome provided Bitcoin remains above $40,000. In his interview with CNBC, the bullish investor calmed fears resulting from the latest market selloff.

Reason for the Market Selloff

Recall that there was a massive sell-off across the cryptocurrency market. Many cryptocurrencies plunged to their lowest levels in more than a month. The selloff was triggered by widespread concerns about the debt crunch of Chinese property giant Evergrande.

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Evergrande’s $300 billion debt crunch, it was feared, would affect other asset classes. This resulted in turmoil in the traditional market with global stocks declining broadly. Dow futures also tumbled down by more than 300 points.

The bearish trend of the market resulted in Bitcoin dropping by about 8% and Ethereum by about 10%. Other coins like Solana and Cardano also dropped significantly. The trend dragged the cryptocurrency market capitalization to $1.9 trillion.

Price Drop Is Healthy for the System, Says Novogratz

Novogratz argues that the price drop is healthy for the system given that the market had spent several months in bullish mode. Novogratz said, “I think the market got itself a little too long – the China news scared people.” The investor also stated his belief that the SEC regulatory clampdown on cryptocurrency was also a contributing factor to the sell-off. He however opined that as long as the value of Bitcoin held at $40,000 and Ethereum did not dip below $2,800, the market is in good shape.

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Take a bird’s eye view of the market action, Novogratz stated that there is still a growing interest by investors, retail and institutional, in digital assets. “I see nothing but engagement and activity from our investing clients and our corporate clients. The level of inquiry, the level of business hasn’t been higher,” he revealed.

On Decoupling from Other Markets and Value

On whether crypto should decouple from the wider financial market, Novogratz argued that the other assets in the market provided a better hedge against what may be the volatility of crypto assets. As such, he contended that it will take time for any such decoupling to happen.

He also commented on the Bitcoin value debate which has been a subject of discourse recently. While some assert that Bitcoin has inherent value, others like Ray Dalio of Bridgewater Associates argue that all that Bitcoin has is perceived value.

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In his response, Novogratz stated that getting into philosophical debates about what value was not necessary for him. He said,”A Matisse painting can run $100 million because a small amount of people decide they’re worth $100 million. Over 150 million people around the world have decided Bitcoin is worth something. That’s enough for me.”

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Bitcoin Senator Rallies For Support Against Powell’s Renomination As Federal Reserve Chair, Here’s Why

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Popular Bitcoin Senator, Senator Cynthia Lummis is reportedly soliciting for the support of her fellow Republicans in her stance against Jay Powell after the latter got renominated to chair the Federal Reserve.

Bitcoin Senator Wary of Crypto-unfriendly Nominees

As reported by Decrypt who first broke the news, a source in Lummis’ office says her reasons border on her belief that there is an unlawful treatment of crypto-based institutions in her home state, Wyoming.

Meanwhile, the Bitcoin senator is not only against the nomination of Powell. The source still claims that Senator Lummis is also asking her Republican colleagues to help block Leal Brainard’s nomination as well. Brainard is another nominee of President Biden’s for the Fed positions.

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Lummis’ skepticism might be as a result of the Special Purpose Depository Institutions or SPDIs as they are otherwise called. They are a new type of crypto-based bank that Wyoming lawmakers granted a special operational license to, just last year.

Two crypto-based companies that received the license in 2020 include Kraken exchange and Avanti — the stablecoin issuer. However, the Federal Reserve’s decision to not approve their applications for central bank-issued accounts has placed a hold on their banking ambitions.

Speaking about the Federal Reserve’s delay in a Wall Street Journal feature article by Lummis on Wednesday, she says it is an intentional and unlawful obstruction. She added that the Fed’s reasons are ambiguous at best. According to the Bitcoin Senator, Lummis claimed that the Wyoming entities have met all requirements for being a bank under the Federal Reserve Act.

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Lummis insists that Powell and Brainard are only avoiding their legal obligations in their continued treatment of SPDIs and like many other U.S lawmakers, she wants to know why.

Could Lummis’ Pressure Affect Powell’s Confirmation?

As Lummis continues to apply even more pressure on her colleagues, the possible extent to which this pressure can truly go in affecting the confirmation process of both Powell and Brainard, remains to be seen.

But with the chair of the Senate Banking Committee, Sherrod Brown, reportedly holding a vote on the pair sometime this month, both of them could be confirmed.

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Also, there’s a possibility of a potential tight vote now that some progressive Democrats — most notably Elizabeth Warren — are saying they will not be voting for Powell.

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PlanB’s Floor Model First Miss: Bitcoin Price Closed Way Below $98K In November

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PlanB’s floor model was wrong about BTC’s November closing price. The stock-to-flow model, though, is still on track.

Bitcoin’s closing price for November below $60,000 meant that PlanB’s floor model, which was particularly accurate until now, was finally broken.

At the same time, though, the analyst confirmed that the more popular stock-to-flow model was still valid as BTC is on track towards $100,000.

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PlanB’s Floor Model Fails

PlanB is among the most popular analysts in the cryptocurrency space, predominantly known for the Bitcoin stock-to-flow model, which he published in early 2019. However, he also posted another model, which he referred to as the “worst-case scenario,” in July this year.

Also known as the floor model, it’s based on technical aspects, such as the 200-day moving average, and saw BTC closing August at $47,000, September at $43,000, and October at $63,000.

The first two months were spot on. BTC closed in October at $61,000, which was still very near to the model’s predicted price, and PlanB said it was “good enough” for him.

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However, November’s closing actual closing price of way below $60,000 was quite different from what the model envisioned – $98,000. As such, the analyst admitted that this was the model’s first miss after nailing the previous few months.

S2F on Track

As mentioned above, the floor model works separately from the stock-to-flow model, which sees the stock as the size of existing reserves (or stockpiles) and the flow as the annual supply of new bitcoins to the market.

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It’s actually even more bullish as the original version sees bitcoin tapping $100,000 by the end of the year. The upgraded stock-to-flow cross-asset model, which introduced different phases of bitcoin’s development, predicted a price tag of $288,000 until 2024.

Although bitcoin still struggles below $60,000 at the time of this writing, PlanB believes that the original S2F hasn’t been broken as the asset is on its way towards $100,000. If BTC is indeed to go into a six-digit price territory, it would have to increase its USD value by more than 66% in the next 30 days.

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CashApp Added Bitcoin Taproot Support, Here’s Why It Is Important

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CashApp now supports the updated version of Bitcoin

The widely known Cash App mobile payment service developed by Square, which is being used to transfer money with the usage of a mobile app, now fully supports the Bitcoin taproot update.

The mobile payments service is currently available in the U.S. and the U.K. but is still reporting 70 million annual transactions between users and generating $1.8 billion in gross profit.

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The taproot upgrade was highly anticipated by the Bitcoin network and the cryptocurrency community in general. Previously, the update went into effect on Nov. 14, 2021, at block 709,632.

Previously, the announcement appeared on the app’s website that has described numerous benefits that users will experience after the implementation of the update. One of the main advantages is increased privacy and reduced transaction fees.

The two-week period has been chosen to confirm the functionality of the updated version of the currency. As for now, the update has been activated for all customers. Taproot-enabled wallets are now available for both receiving and sending.

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