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Weekly Crypto Brief 23rd March

The week just gone!

To say the last couple of weeks have been strange is a bit of an understatement and there really is no need to explain why! Suffice to say, while the rest of the world took the threat of Coronavirus seriously, BoJo initially thought we could just get through it with stoicism in the UK, with Trump preferring his usual tried and tested formula of blind ignorance and “fake news” agenda to things he doesn’t like.  Now however,  there is a real sense of urgency and fast escalation surrounding the pandemic both in the UK and the US to match the rest of the world, and it’s now time to strap ourselves in for a testing and unprecedented few months!

Turning to digital asset markets, the Bitcoin and cryptocurrency community are feeling the pain this month as the price fell 60% to levels not seen since April 2019, shedding half its value as fear takes a hold of markets worldwide. Earlier this month many cheered on India’s decision to permit banks in the country to trade cryptocurrency, which was seen as a turning point for the price of Bitcoin, with hopes of this driving the price further towards $20,000 and taking it through the virus turmoil. This however was cut short when a flash crash happened on March 12th with the sell-off squeezing long positions worth around $1 billion, raising serious concerns about the long-term viability of leveraged and derivative trading in crypto markets. We saw some exchanges take control of this risk with Huobi DM, introducing a partial liquidation feature aimed at providing a circuit breaker to limit trading losses when the market corrects sharply.

Have a great week and stay safe out there.

 

 

The Past Week in Crypto

Russia’s call to ban crypto

Now as potential crypto investors are deciding whether it is time to jump back into the market, reports have come out of Russia that a senior official has warned its delayed bill on digital assets will include a ban on issuing and selling cryptocurrencies. “We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention and consumer protection,” Russia’s central bank head of legal, Alexey Guznov, told Russia news agency Interfax. A move like this replicates China’s stance on cryptocurrencies, with Beijing banning companies from raising funds by ICO’s and shutting down crypto trading platforms in recent years. It seems that many crypto analysts were expecting such an announcement by Russia and that it should not come as a surprise. Although Russia would not be able to completely ban bitcoin and other cryptocurrencies, Guznov also said that people will not be punished for owning crypto, “if they made their deal in a jurisdiction that does not prohibit that”. The bill, which is meant to clarify rules on digital assets more broadly could be passed as soon as this spring.

 

Binance CEO talks on Black Thursday

It makes sense to associate the coronavirus with the flash crash across the board in cryptos, but Changpeng Zhao, the CEO of Binance, disagrees. He believes the pandemic did in fact trigger the current global meltdown but added that the mass sell-offs over recent weeks have proved the world’s economy is far too weak. Many investors are holding cash as the uncertainty through the markets continues to spread. But Zhao believes they will begin to broaden their portfolios in time. But as fear still looms over the general markets, investors are being cautious on where they place their money, and with the recent crash in Bitcoin’s price it looks like it will take time again for the price to heal and with that the faith investors will put back into crypto will follow.

 

Bakkt collaboration with Starbucks

I think it’s only suitable we change onto a more bullish note during this current situation!  Bakkt, a platform best known for offering crypto derivatives is diversifying amongst the market by moving into retail applications for digital assets. The company’s new app, Bakkt Cash, has recently been added as a payment method to the Starbucks app on a trial basis. Alongside this Bakkt successfully raised $300 million in a Series C funding round that was backed by Microsofts venture capital arm and the Intercontinental Exchange. The app will allow cash, crypto and loyalty points to be stored in one place and used from there to make purchases around your daily life.

 

 

Past Week Quotes

“In 2008, there wasn’t a pandemic pausing the global economy. But I believe the coronavirus is just a trigger, not the root cause. Our economy should be stronger, at least strong enough to survive some shocks.”

  • Changpeng Zhao, Binance CEO

 

“We are stepping into the next generation. The next generation is happening right now with national bank-issued stablecoins, I believe. I would say it will grow the cryptocurrency user base like 10 times or more.”

  • Lennix Lai, director of financial markets, OKEx

 

“With this pandemic, we are obviously seeing very similar movements in tandem as the coronavirus justifiably has investors in virtually every sector in a similar state of cautiousness.”

  • Unknown analyst
BTC Price: $5,840

Last 7 Days: +18.28%  1month: -39.58%  12months: +48.70%

BTC Technicals:

Resistance Levels: $6,260 / $6,350

Support Levels: $5,795 / $5,270

BTC Volume:

16th March: $45,368,026,430 (BTC Price of $5,014)

23rd March: $40,694,105,061 (BTC Price of $5,877)

10% decrease in trading volume in the last 7 days

 

 

Market Cap. Dominance:

BTC: 65.1%

XRP: 4.03%

ETH: 8.27%

Other ALT-Coins: 22.6%

 

This newsletter is not intended and should not be construed as an offer, solicitation or recommendation to buy or sell any specific investments  or participate in any investment (or other) strategy.