Approach number 1: Narrative and conversational
The cryptocurrency market never sleeps, and is always eventful…. but it’s safe to say that these past few days have been more eventful than most!
The Market:
BTC surged from $11.5k to over $13k in the last week, breaking a long-term resistance at 12k and posting its strongest since June 2019 (when it hit $14,000).
In fact, Bitcoin’s price (currently fluctuating between $12.7k and $13.2k) is at its second highest level since the long-distant past of February 2018.
It’s not just Bitcoin; if we look at the broader crypto market to understand how dramatic a trend reversal we’re experiencing, we can see that the overall crypto marketcap is more than $150b above where it was when BTC last peaked in June 2019.
The whole market is currently experiencing explosive growth, with Ethereum rising from $380 to $420 over the last week, and 9 out of the top 10 coins by marketcap in the green over 7 days. As the old saying goes, the trend is your friend.
The News:
Why has the market had such an upswing? To put it simply, there’s been a couple pieces of big news that have driven strong bullish sentiment.
On Monday, the IMF published a paper recognising the potential of Central Bank Digital Currencies (CBDCs) and hosted a panel on CBDCs in cross-border payments.
Why was this bullish for crypto? Regulatory bodies have traditionally been wary of endorsing cryptocurrencies and digital currencies (an FCA seal of approval isn’t easy to get!), but Monday saw the IMF (including Fed chairman Jerome Powell) recognise the benefits of digital currencies in a variety of usecases related to international trade and units of account. The accessibility of digital currency could be the killer app that leads it to full adoption from (inter)national bodies.
Positive sentiment from a regulatory perspective was followed on Wednesday by perhaps the biggest piece of news ever regarding consumer adoption of cryptocurrency. PayPal (and Venmo) will allow users to buy, sell, and pay with cryptocurrency. Not only that, they’re aiming to acquire crypto-native companies to help expand their digital asset offerings.
PayPal said it aimed to “increase consumer understanding and adoption of cryptocurrency”. With over 26 million merchants currently accepting PayPal, that represents a potential exponential increase in adoption.
Finally, value creation within the wider usecases of blockchain continues to surge, with the average price of NFTs sold on the Ethereum blockchain currently representing a 7-fold increase over the historical average, including sold-out NFTs from major licensed properties like the NBA.
Fair to say that as Halloween approaches, it’s been a week full of treats!
Approach number 2: Punchy bullet points
As we head into late October, we’ve seen a week about as far from a Halloween horror show as any trader could wish for. Here’s a quick roundup from us on the most significant events of the week (and what the market response has been)
What happened?: IMF Recognised the Potential of CBDCs for Cross-Border Payments
Why does this matter?:
- Regulatory bodies were previously reluctant to endorse crypto or digital currencies.
- The IMF paper and panel on Central Bank Digital Currencies (CBCDs), officially recognised the benefits of digital currencies across several areas, including cross-border payments and currency substitution.
- Federal Reserve chairman Jerome Powell acknowledged “there are a number of ways that CBCDs could improve the payments system”
If you’re ever worried about regulatory approval for trading of cryptocurrencies, then don’t worry; we’ve got you covered.
What happened?: PayPal and Venmo Enabled Users to Buy, Trade, and Pay with Crypto
Why does it matter?:
- Consumer Adoption: PayPal and Venmo are immensely trusted names with massive userbases, casting a wide net for new cryptocurrency adopters.
- Merchant Reach: PayPal accounts for over 1/5th of online transactions in the United States, and counts 26 million merchants as adopters.
- Scale: The transactional volume on PayPal alone is massive, reaching a new high of over $220b dollars in Q2 2020.
Having one of the world’s largest payment processors accept crypto as payment? October 21st 2020 could go down in cryptocurrency history.
Anything else? NFTs continue to surge, selling at 7 times the historical average value; verifiable digital scarcity is genuinely compelling.
Market Overview
With such major news, it’s no surprise that the crypto market has had a strong week with bullish sentiment across the board:
- Bitcoin hit a new yearly high at $13,200 (its highest price since $14k in June 2019), crossing its 2020 resistance of $12.4k, currently ranging between $12.7k and $13.2k.
- Overall cryptocurrency marketcap is at its highest level since Q2 2018.
- 9 of the top 10 have been green this week, including Ethereum increasing from $380 to $420.
That’s all for this week (and what a week it’s been!)