Nickel News Roundup - Week 48

Market Overview:

Bullish sentiment across the market reversed hard into the Thanksgiving holiday.

• Bitcoin’s price growth continued, breaching $19,000 resistance on Tuesday en route to a high at $19,390, before dramatic selling across the crypto complex to lows of $16,225 on Thursday. At the time of writing, the price had recovered to $16,870.
• Bitcoin has only traded at a higher price than this week’s high for 1 day in its entire existence, and is still experiencing a strong month (having traded at below $14,000 at the beginning of November), on the back of more sustainable growth and more long-term holders than in 2017’s speculative run up.
• Ethereum had a strong week, outperforming BTC, crossing $600, for a 20% increase on the previous week, topping out at $620 on Tuesday before falling back to $480. At the time of writing, it has recovered to $509.
• The greatest growth in the top three came from XRP, up more than 140% on the weekly candle; its highest level since May 2018, before a 25% fall on Thursday.
• The overall cryptocurrency market cap continued growing, hitting its highest level since January 29th 2018, at over $580bn, around $70bn above the previous week’s high. Thursday’s market-wide retrace took value as low as $484bn, before rallying to a current value of $509bn.
• DeFi grew alongside the market, achieving a new ATH of $14.4bn Total Value Locked on the 22nd, approximately $400m above the previous week’s high.

Bullish momentum was overturned as Bitcoin retreated hard from within touching distance of its ATH. Other coins strengthened in parallel, before falling even harder in many cases in a coordinated correction across the cryptocurrency complex.

News:

What happened: Ethereum surpassed 100% of required deposits required to launch the upgrade of its chain

How is this significant?: 

• As the leading smart contract platform, Ethereum has by far the most engagement with blockchain developers and enterprises, but a significant upgrade is needed to enable scaling and a move to the more efficient Proof of Stake protocol.
• The upgrade required deposits of at least 540,000 ETH to the Ethereum 2.0 launch contract, a threshold which was easily surpassed by the deadline on Monday.
• Ethereum developers are now able to offer a specific date for the start of the upgrade to Ethereum 2.0. December 1st 2020 will be its Genesis Day.
• At current deposit levels, this means launching the beaconchain (to run in parallel with Ethereum’s existing infrastructure) with over 22,650 validators, meaning high levels of decentralisation, and high levels of network security.

What happened: Public interest in cryptocurrency is rising significantly, as per app store metrics and Google Search results

How is this significant?: 

• Searches for “Bitcoin” on Google have reached a 2020 high, as the market rally continued. More people searching means more potential buyers.
• In addition, data from social analytics company TheTie reveals that social sentiment around Bitcoin has been positive, and continues to remain positive when comparing the last 24h vs a rolling 20 day window; meaning sentiment is growing more positive overall.
• In addition, the Coinbase app (the first point of contact with crypto for most retail investors) surged into the top 100 of the iOS App Store’s free app charts, and as high as 5th in the finance section, another indication of increasing awareness and appetite for cryptocurrency.
• The Wall Street Journal struck a bullish tone, declaring the recent crypto market performance “a spectacular rally driven by a new group of buyers”.

What happened: Report finds that PayPal and Square are buying up the majority of newly-minted Bitcoin, with plans to bolster cryptocurrency utility 

How is this significant?:

• As pointed out by the WSJ, access to crypto on a retail investor level has been greatly simplified by existing financial service providers like PayPal, Venmo, and Square adding to their offerings.
• PayPal and Square are collectively buying a vast majority of newly-minted Bitcoin, raking up large amounts of the supply of the finite asset.
• PayPal’s CEO Dan Schulman is bullish on crypto, noting in a CNBC interview that the pandemic has caused a steep decline in the use of cash, and that digital payments and digital forms of currency stand to benefit, with “more and more utility happening with cryptocurrencies”, enabling crypto as a funding source for any transaction with all of PayPal’s 28 million merchants.

What happened: Binance daily trading volume hits all-time high, at $40.6bn

How is this significant?:

• As the largest cryptocurrency exchange in the world, Binance’s volume serves as a barometer for the market in general. When volume hits record highs, it serves as a strong indicator of future interest.
• Driven by the strong performance of major coins such as BTC, ETH, and XRP, Binance posted a 24h volume of $40.6bn on Thursday, up more than 60% on the previous day.
• This volume is despite a minimal number of US customers, who are instead served by binance.us (the #23 global exchange by volume, which also saw record trading on Tuesday). Binance this week issued a 14 day ultimatum for any American traders to leave the original .com site, at which point their accounts will be locked.