Bitcoin (BTC) rose for the third year in a row, hitting a new all-time high of over $ 38,000 early Thursday, pushing bullish traders to $ 40,000.
“The momentum has increased over time, and it is unclear where or when we will eventually achieve the top result,” Mati Greenspan, founder of forex and cryptocurrency analysis company Quantum Economics, told clients in a newsletter.
The gains came after a day of turmoil in Washington, DC when US President Donald Trump’s supporters stormed the Capitol and disrupted a Congressional vote to formalize challenger Joe Biden’s victory in last November’s presidential election. The shocking images prompted Condemn world leaders from Great Britain, the European Union and Canada what they characterized as an unacceptable attack on democracy. US lawmakers re-convened and confirmed the election result later early Thursday.
The result, according to Bloomberg Newsis that global investors are now focusing on the likelihood of a White House in Biden being backed by a legislature controlled by its Democratic Party in both chamberscould more easily adopt new US stimulus measures. Bitcoin prices quadrupled in 2020 as a growing number of large Wall Street investors said the cryptocurrency could serve as a hedge against the possible negative impact of trillions of dollars in fiscal and monetary stimulus on the value of the dollar.
in the traditional markets, European and Asian stocks rose on Thursday and US stock futures pointed to a higher open. Gold weakened 0.1% to $ 1,916 an ounce.
Earlier this week, First Mover pointed out the possibility that the total market capitalization of all cryptocurrencies combined could exceed $ 1 trillion within a few months.
It turned out that it only took a few days. The total market value of Bitcoin and all other digital tokens and stablecoins surged into the trillion dollar zone for the first time late Wednesday. As Zack Voell from CoinDesk reported, the industry had reached a high of 760 billion US dollars in the last big bull run in late 2017.
The milestone could prove to be another catalyst for large Wall Street funds to study cryptocurrencies more seriously for possible portfolio allocation. It is becoming increasingly difficult to argue, as the big bank and brokerage firm Goldman Sachs did last May, that cryptocurrencies are “not an asset class”. The sums are getting too big to ignore.
“Is it frothy? A bit in the short term, ”Qiao Wang, co-founder of the DeFi Alliance, an accelerator company for decentralized finance (DeFi), told Voell. But is it ridiculous? “Nah.”
One of the greatest financial stories of the last decade was the fast (and about) Growth in so-called leveraged loans, which are large loans arranged by Wall Street companies on behalf of junk-grade or even unrated companies and then usually split between other banks, sold to investors, or even will be converted into new triple-A loans over the rating bonds Structured Finance Alchemy.
Cryptocurrencies have now overcome this gap in just a few months.
“The $ 1 trillion mark cemented cryptocurrency as an investable asset class that is no longer on the fringes of traditional finance as a toy for private investors,” Jack Purdy of crypto market analyst Messari told Voell. “It shows that this asset class is big enough to take on large orders, as we recently saw at a large number of institutions that have come in over the past few months.”
Bitcoin, the original cryptocurrency and by far the largest, makes up around 70% of the industry’s total market capitalization. So the push to the $ 1 trillion milestone largely followed last year’s Bitcoin rally.
Bitcoin now has a market cap of around $ 700 billion, up from around $ 130 billion at the beginning of 2020. According to the website fiatmarketcap.comBitcoin’s outstanding value would rank it as the 16th largest global currency, just ahead of the Mexican peso and one rung below the Russian ruble.
And if Bitcoin were a publicly traded company, it would be the eighth largest in the world, according to another website. AssetDash, way behind Apple’s valuation of $ 2.1 trillion, Amazon of $ 1.6 trillion, and Facebook of $ 751 billion, but way above major U.S. financial institutions like Visa ($ 468 billion), JPMorgan Chase ($ 401 billion) and Citigroup ($ 135 billion).
If the recent trend is any indication, Bitcoin could further improve these ranks.
Options traders are signaling an emerging shift in the digital asset markets – from a focus on Bitcoin to a relatively undervalued ether (ETH) and alternative cryptocurrencies.
The spread between the six-month implied volatility (IV) for Ether and Bitcoin – a measure of the expected relative price volatility between the two – has risen to a record high of 46%. According to the data provider, this exceeds the previous high of 45% on February 21, 2020 Aslant. The three- and six-month spreads have risen to 11-month highs of 32% and 23%, respectively.
The widening of IV spreads suggests that the market expects ether and other alternative coins to see larger percentage moves than Bitcoin in the short term.
“Traders expect increased volatility for ether compared to Bitcoin,” Emmanuel Goh, CEO of Skew, told CoinDesk. “This is in line with a decreasing correlation and an increase in interest in alternative cryptocurrencies.”
Some may argue that the implied volatility reflects investors’ expectations of the price turmoil and may not be reflected on future charts. However, historical data shows that implied volatility spreads are reliable indicators of impending market shifts. For example, the Ether-Bitcoin IV spread plummeted in the second half of September 2020, indicating a major shift towards Bitcoin. And the largest cryptocurrency shipped, significantly outperforming most other cryptocurrencies in the final quarter of last year, rallying 168%.
Read More: Expected Increase In Ether Bitcoin Volatility Points On Altcoin Season Ahead
What is hot?
With increasing institutional interest, CME becomes the largest Bitcoin futures exchange (CoinDesk)
The Maker Governance Token MKR climbs 44% in 24 hours to its highest level in two years as the issue of Stablecoin Dai (DAI) rises along with the rapid growth of DeFi (CoinDesk).
Crypto Brokerage Voyager suspends trading in XRP tokens after SEC lawsuit against Ripple Labs (CoinDesk)
Bitcoin investments make sense in the current economic climate, former Fed Governor Kevin Warsh told CNBC (CoinDesk).
Kraken users are putting more than $ 1 billion in crypto, including Ether (ETH), Tezos (XTZ), and Polkadot (DOT) (CoinDesk).
Eric Vorhees’ ShapeShift plans to exit the centralized trading activity and forwards orders via DeFi applications, whereby “users no longer have to provide personal, private information” (CoinDesk).
Iranian Authorities Shut Down 1,620 Illegal Cryptocurrency Mining Farms, According To Financial Tribune (CoinDesk)
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