The digital asset market made a return to bullish momentum this week, as Bitcoin surged to several new all-time highs, Ethereum also advanced strongly, and more institutional investors announced positions in cryptocurrency.
After beginning the week below $24,000, it picked up bullish momentum, breaking the $25,000 level on Saturday and consistently gaining value since, to a new all-time high of $29,330. Heading into the New Year, Bitcoin’s price is $29,140, representing a weekly increase of 25%
Ethereum also bounced back strongly from a pre-Christmas dip below $600, increasing from $633 to over $700 on Sunday, and hit a high of $754 late on Wednesday; currently trading at $750, for an overall weekly gain of 29%
XRP continued to decline due to the uncertainty surrounding the SEC’s lawsuit against Ripple, losing 17% in value over the week
Apart from XRP, all of the top 10 cryptocurrencies experienced growth in the last week
The overall cryptocurrency market cap recovered value strongly, rising from a low of $613bn on the 24th, to a high of $768bn on Thursday; its highest level since January 2018—and within $60bn of its all-time high
The DeFi sector reached another new Total Value Locked all-time high, non-Bitcoin DeFi value was measured at $14.9bn this week, whilst Bitcoin implemented in DeFi applications had a value of $3.9bn, for a combined value of $18.8bn
The year ended on a high for the cryptocurrency market, as most major cryptocurrencies (with the exception of XRP) posted strong growth coming out of the festive period. Bitcoin posted several new all-time highs en route to a new record value of over $29,000 per Bitcoin (and over $500m market cap), but Ethereum saw similar growth over the last week, breaking through $750 and also gaining over 20% in value.
BlackRock is the world’s largest asset manager, with approximately $7.81trn in asset value—more than 10 times the current market cap of all cryptocurrency
The New York-based job posting indicates that they have identified the potential value that digital assets can bring to their business, with the VP’s role involving an expectation to “create and implement strategies designed to drive demand for the firm's offerings and enhance the value proposition to clients of the firm’s investments and technology offerings”
What happened: Major exchanges delist XRP in wake of SEC lawsuit against ripple
How is this significant?
Despite XRP being one of the largest cryptocurrencies, exchanges are unwilling to risk regulatory ambiguity whilst the SEC’s case against Ripple is ongoing
Microstrategy were one of the first in the institutional investment space to recognise the potential of cryptocurrency, and the results of that move have delivered them their best performance in almost two decades
Buoyed by Bitcoin’s performance, Microstrategy shares rose to over $375 on Monday; their highest level since June 2001
This growth comes just over a week after Microstrategy invested an additional $650m into Bitcoin, after exceeding their original $400m fund raising target from the issuance of convertible senior notes
As the world’s largest cryptocurrency exchange, Binance has significant opportunities to shape the behavior of retail investors
Introducing European-style (i.e. fixed term expiry) options could allow Binance to grow its presence in the options space, where it is still lagging behind Deribit, OKex, and Bit.com
An advantage over the current American options is that users will be able to write the options themselves, with Binance announcing "Users can both buy the options for hedging and trading, as well as write and sell options as an issuer”
Following the departure of Jay Clayton, the SEC has appointed Elad Roisman as acting chairman
Unlike Clayton, who denied every application for cryptocurrency ETFs, Roisman is viewed as favourably inclined towards cryptocurrency
Roisman noted the need to be open to cryptocurrency in the past, writing in 2018 that “the SEC must examine and re-examine its rules, regulations and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission. This is most recently manifested in areas such as data protection and cybersecurity, as well as the emergence of new investments and technologies such as initial coin offerings and blockchain”
Although his tenure could be a short one depending on decisions by the incoming administration, it nonetheless evidences potential acceptance of cryptocurrency within the financial administration of US government
In a year as socially and financially turbulent as 2020, the traditional hedge of gold may have been expected as top performer—instead, Bitcoin led in terms of return on investment
The Independent noted that Bitcoin in fact performed significantly better than gold in 2020, “outperforming the combined gains of gold and the Dow Jones stock market by a factor of 10”
This outperformance has been particularly striking in the fourth quarter, usually a strong time of year for precious metals, with Bitcoin outperforming Gold by over 170% over the three months from 1st October
Bitcoin’s positioning as “digital gold” appears to be reinforced by these statistics, with the newspaper calling it a “safe-haven asset”, and writing “bitcoin’s bull-run has largely been the result of massive institutional investment moving into cryptocurrency.”
Investing in cryptocurrency mining infrastructure demonstrates a belief in increasing demand; spending money on more optimised mining hardware in order to benefit from increased retail and institutional demand
NASDAQ-listed Marathon Patent is betting big on this potential, buying $170m worth of miners from producer Bitmain, tripling the scale of their mining operation, and representing “the largest order in dollar terms as well as the single largest order for S-19 ASIC miners that Bitmain has ever received”
Cryptocurrency mining company Riot Blockchain surpassed $1bn in market cap for the first time this week, after its share value increased 1,250% in 2020. Before pivoting from biotech to Bitcoin mining in 2017, the company’s value was $50m
The Nordic region is increasing its presence in the cryptocurrency mining sector thanks to cheap (and carbon-neutral) electricity, with Philip Salter of Genesis Mining noting that “during the last year our profitability has more than tripled… There is a very important strategic shift away from mining in China to mining in western countries like Sweden as Bitcoin investors become more public and want more stability and critical safety”
Although Japan is a significant presence in the digital assets field, a lack of locally-pegged stablecoin has complicated trading somewhat
Now, the New York Department of Financial Services has granted permission to Tokyo-based internet conglomerate GMO-Z to “issue, administer and redeem” stablecoins pegged to both the Japanese Yen and US Dollar
A JPY stablecoin can simplify the process of conversion to fiat for Japanese traders and investors, with GMO-Z president Ken Nakamura saying in a statement that “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe-haven asset”
Many countries have already announced or conducted reviews on the feasibility of digital currencies or CBDCs, but Sweden is doing so from the context of widespread acceptance of digital payments already
According to the Bank for International Settlements, Sweden is the world’s most cashless society, with a Swedish Riksbank report from October revealing that cash usage is at its lowest levels ever; under 10% of all payments