Image Source: Pixabay

Bitcoin and peers endured further selling for much of the weekend before a rally overnight halted the downturn.

Both Bitcoin and Ethereum have experienced technical bear markets in the last week, coming off the back of major gains since the start of the year.

Bitcoin fell as low as $43,000 over the weekend, while Ethereum dropped to a one-month low of $1,300 before both recovered somewhat to $45,000 and $1,400 respectively. The drops from recent highs came after technical indicators such as the RSI (Relative Strength Index) and Stochastics across numerous chart timeframes indicated that the cryptoassets were overbought.

Nonetheless, even accounting for the falls, bitcoin remains some 50% higher than the $30,000 level it started the year at, while Ethereum has doubled from the $700 level it was trading at on 1st January.

Looking further out, lower prices in the short-term do not detract from the long-term potential for cryptoassets, nor change the fact that these assets represent an alternative to fiat currencies which have been devalued by a decade of accommodative monetary policy. It is little wonder so many investors are looking for alternative stores of value.

As we have seen from whipsawing prices in the last few weeks, and on previous occasions, many of the sell-offs are actually acting as buying opportunities for investors keen to get into cryptoassets for the first time.

Google Finance adds a crypto tab

Google Finance, one of the most trafficked finance hubs globally, has added a new dedicated tab exclusively for cryptoassets.

Covering major tokens including Bitcoin, Ethereum, and Litecoin, the new functionality allows users to check live prices in their home currencies.

The section, titled “Crypto,” now appears in the “Compare Markets” category alongside conventional stock and currency markets, amid cryptoassets’ growing importance and widespread use.

Coinbase announces its long-awaited IPO

Coinbase, the largest crypto exchange in the U.S., has announced its plans to go public. Very much on brand, it’s avoiding the traditional IPO route by opting to post its shares straight onto the exchange via a direct listing. Considering it plays host to the next generation of finance, taking this new and disruptive approach is perhaps not surprising. This technique has already been successfully used by Spotify and Palantir in recent years and precludes the hiring of investment banks to drum up interest and finance the deal. 

Whilst there were some discussions about Coinbase’s motivation for opting to list directly, and thereby avoiding certain scrutinization, it did manage to troll the Federal Reserve – much to the delight of some journalists.

David Derhy

Bitcoin should be "1% of multi-asset portfolios", says JPMorgan

Bitcoin should be used in multi-asset portfolios to help improve portfolio efficiency, a new note by strategists at JPMorgan has said.

Strategists Joyce Chang and Amy Ho said an allocation of 1% would provide a boost to the "overall risk-adjusted returns" of the portfolio. "In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio," they reportedly said.

JPMorgan is the latest investment giant to suggest clients should have exposure to the asset class. BNY Mellon has already announced plans to hold, transfer and issue bitcoin for clients, and institutional investors have also endorsed the crypto asset, pumping billions into investments such as the Grayscale Bitcoin Trust.

Simon Peters

Market correction starts to take hold, leading to more big brands buying in

As predicted in our previous newsletter, the beginning of last week saw the crypto markets dip as a correction seemed to be taking place. In what some regarded as an overdue retracement, prices tumbled over 10% on Tuesday, but the drop subsided relatively quickly as news broke that Square, the payments business run by Twitter co-founder Jack Dorsey, had invested another $170m in the crypto asset. This followed October’s $50m purchase, meaning that Square now has some 5% of its total assets invested in bitcoin. Following yet another landmark investment in bitcoin, prices recovered quickly, and by Wednesday morning in London, it was trading back at the $50k mark. 

Mary set to launch on the mainnet today

Cardano’s Mary update will be applied to the mainnet today, following a hard fork. This move is seen as another key milestone in the Goguen rollout, and perhaps what is exciting to investors most is the update introducing native tokens and multi-asset support, which brings new use cases to the network.
The price of ADA has also reacted positively, reaching a new all-time high of $1.4536 (on eToro) on Saturday.