Most equity indexes pulled back from record highs, yesterday. It sounds more dramatic than it is. After positive jobs data, the Dow and S&P had gained on Friday but now, with stronger fears on the covid variant, investors turned risk-off again.
Another explanation would be the dollar rising, as it has for the past few sessions, which would put pressure on equities, on gold which has fallen, and commodities which are also down.
Against it all, BTC continues to rise. For any diversified crypto investor who’s been in the market for a while, you’re a lot richer today than you were, say, last week. On the session, BTC gained almost 6%, currently hovering around $46,300. The 45K mark has been a support / resistance and it’ll be interesting to see if we power through and stay above.
As this is happening, alts are underperforming and you can see the BTC dominance rise further. Interestingly enough, the outperformers of this session are BCH and LTC, older and proof-of-work coins, while the rest of the crypto space is in the green but lags behind BTC.
Looking at onchain data, there is reason to be bullish. Glassnode published a series of charts including two which hint at a clear shift and also a radical difference with the last bear cycle. Essentially, short-term holders are leading most of the market activity while long-term holders well…. Hodl. And the second chart shows that actually the proportion of coins held by long-term holders is growing, suggesting that a good chunk of the market isn’t ready to sell.
The noise about the infrastructure bill worries me. Cryptocurrencies are decentralised and open networks but politicians in the US don’t seem to understand that and want to implement a blanket set of regulations for KYC and taxation on anybody linked to transactions on a given network. This would be a serious hit to the space but also to the US itself, as it will probably hinder operations of its own crypto participation.
Right now, we’re also seeing regulators take action with the SEC charging Poloniex $10m for operating an unregistered digital asset exchange.
On the other hand, companies that endure on the more compliant path can benefit. For example Circle intends to become a full-reserve national commercial bank, which would be tremendously helpful and significant for the space.
Oh, and as a last information nugget, AMC Entertainment announced it should enable bitcoin payments by year-end. One more company in.
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