Crypto Corner - Summary of the Week 01/06


*Data taken at 09:48 am (UK) 05/06/2020
Written by: Yves, Head of Trading at Wirex

The BTC/USD price held its bullish trend this week with another peak recorded on June 1st. The price reached a high of $10,429, which is the highest level seen since mid-february this year, only to drop back again the next day with prices as low as $8800 on Bitmex.

Taking the opposite view of Goldman Sachs the week before, Bloomberg issues a refreshingly positive report on the Bitcoin market, predicting a price at $20,000 in 2020. Far from the tulip crisis parallel exposed by Goldman Sachs, Bloomberg holds a positive comparison of Bitcoin with Gold, or Bitcoin with early cash adoption. Their view:“ Among the few assets up in this tumultuous year, gold and Bitcoin are building foundations for further price appreciation ”

The report draws a bullish parallel with the 2016 post-halvening price movement. As the market’s volume keeps growing, driven by the growing derivatives market, the average volatility would slowly decrease and get under control. With a lower volatility, the positive trend should be slower paced but more importantly, the market direction would stay on the positive side.

Among the positive indicators of growing interest that are highlighted in the Bloomberg study, the Grayscale trust AUM in BTC doubled over the past two years. It is the largest crypto trust by far. They now own 2% of all the bitcoin circulation for their trustees. Holdings are fairly distributed with wealth managers and institutionals jumping on the band-wagon (IFP Advisors, Statestone Wealth, …).

The Coinmetrics analysis brings some perspective to the optimistic view that we layed out so far. On June 2nd Coinmetrics reported that Bitcoin’s trading volume is still (no surprise) very small compared to traditional markets… but growing. The spot volume represents a little more than 1% of the U.S. Equity Spot Markets volume, and it is highly concentrated among four exchanges: Coinbase, Bitstamp, Bitfinex and Kraken. That is of course if we believe the volume metrics reported by these exchanges.

Back to positives this week again, it is hard to imagine growing interest without growing practical adoption of Bitcoin and cryptos in the Real world: Main Street. At the same time this statement seems to be completely obliterated by the growing gap between Wall Street and Main Street these past few months… Still… Even though Bitcoin’s supply is structurally limited, in sharp contrast to the Greenback, the real intrinsic value of Bitcoin must find support in Main Street’s adoption. Confidence is key. Companies that chose to open their payment system to cryptos are likely to take the laurels of a Bitcoin price rally this year.

Travala doubled its revenues already. Nike, after its CryptoKicks shoes launched last year, partnered this week with Plutus to offer rebates on online purchases using the Plutus Visa Card.

The fundamentals are moving in the right direction to give a better answer to the same essential question: What can I do with my Bitcoins?

From the retail side, the Buyer/Seller interest in the Wirex community was balanced this week (ratio near 1.0 versus 1.16 the previous week). The interest from retail is still on the buy side for Ethereum as an excess of 17% ETH buys versus sales was recorded (ratio at 1.17 versus 1.30 the week before). Overall there seems to be no serious profit-taking so far and the upside potential remains intact.

The above is an opinion piece and therefore should not be taken as financial advice. Please do your own research thoroughly when looking at Cryptocurrency.

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This is such a helpful overview for people like me who have the interest but not the time to do the research - thanks for the post Wirex!

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