Hello as always, and welcome again to another edition of Overbit Weekly Roundup.
Today we'd like to kick off today's edition with sort of an overarching view of the cryptocurrency markets. After an incredibly volatile and unusually bearish last couple of weeks, it seems that the cryptocurrency markets have finally found some relief, at least momentarily.
Last week, Bitcoin took a big hit when President Biden announced a hefty capital gains tax, breaking the $50,000 level to the downside and falling to its lowest level since March. Coupled with the negative rumblings from prior weeks coming out of Turkey, the news cycle seemed to have created a perfect narrative for the crypto selloff.
Nevertheless, as most called for new lows at the peak of the bottom, it seems bulls have come to the rescue for now. BTCUSD rallied almost 15% on Monday back to $54,000 - the largest intraday move since February. Just like that, the narrative flipped to good news almost instantly: on that same Monday, CoinDesk reported JPMorgan was preparing an actively managed Bitcoin fund for its clients.
Heading into the weekend and into next week, we believe Bitcoin and crypto markets are not out of the woods yet, even despite this bullish price action. "Crypto bulls breathed a sigh of relief as last week's deep rout across space failed to extend," Steen Jakobsen, chief investment officer at Saxo Bank, wrote in a note. However, "it has quite a wall to climb to fully neutralize the recent selloff". It's safe to say the crypto market environment, at least for Bitcoin, appears to be in another period of "wait and see".
Closing out this week's edition of Overbit Weekly Round Up, we pivot towards the number two player in the space - Ethereum.
Although much of the past few weeks have been volatile and downright negative for Bitcoin, Ethereum seems to have landed on the other side of the fence.
Ethereum jumps to record high on a report of EIB digital bond issuance. Ethereum, the world's second-largest cryptocurrency in terms of market capitalization, touched a new peak on Wednesday, with participants citing media reports about the European Investment Bank's plans to launch a "digital bond" sale on the blockchain network.
ETH is a digital currency or token that is used to facilitate transactions on the Ethereum blockchain. The phrases ether and ethereum have become synonymous in the crypto world. Bloomberg announced on Tuesday, citing anonymous sources, that the EIB intends to issue a two-year 100-million-euro digital bond, with Goldman Sachs, Banco Santander, and Societe Generale leading the deal, according to analysts.
Following a more than 5% rally the day before, Ethereum reached a record high of $2,713.95 on Wednesday. It was last trading at $2,706.39, up 1.4 per cent. According to Danny Kim, head of sales at SFOX, a full-service cryptocurrency broker, reports on an EIB digital bond issuance have "triggered a bullish institutional use case for ethereum." He also mentioned the market's decreased supply of ethereum, which has driven up its price.
"The amount of ethereum sitting on exchanges continues to fall and has reached its lowest level in a year," Kim said. "With less exchange supply available, there is less risk of a big selloff."
That’s it for this week’s edition of Overbit’s Weekly Round Up, and we’ll see you next week.