12 November 2021: With blockchain & cryptocurrency adoption on the rise, the city of Miami has radically positioned itself to be the future home of blockchain. Multiple exchanges, startups, and chains are moving to the city while citizens are seeing their cryto & web3 options expand substantially. This week's updates features the latest news on Miami, inflation, stocks, and more.
Weekly Markets 1.13
This week we have gotten a true glimpse into the reach of cryptocurrencies over the past two years, with millions of people being exposed to the space for the first time. China's exodus of Bitcoin miners has set up hubs in the United States - like Miami, FL - as future blockchain capitals. Fueling adoption even more are the lastest reports on inflation in the United States, with the consumer price index rising faster than expected.
The main news stories of the week are available below:
Synthesis of the Tether (USDT) allegations now avaiable (RekTimes)
City of Miami to give Bitcoin yield from MiamiCoin gains to citizens (CoinDesk)
Pew Research shows that 86% of Americans have at least heard of cryptocurrencies (Decrypt)
CPI inflation rises 6.2% for October, fastest rate in 30 years (NY Times)
Elon Musk sells over $5 billion worth of Tesla stock (CNBC)
$1 trillion US infrastructure bill looks to boost economy (AP News)
- China's Evergrande officially defaults on $148 million worth of bonds (SWFI)
Crypto Economy & Markets
The city of Miami is demonstrating what the future of blockchain adoption & development might look like. The latest reports of a Bitcoin yield on their MiamiCoin could provide an extremely unique economic model in which taxes become a thing of the past and citizens all benefit from gains via dividends or city investments.
It has been reported that Miami has already made an estimated $7 million on their MiamiCoin. Even better for the city, a numerous amount of projects & exchanges - including FTX - are relocating to the city. Miami is becoming a hub for the crypto economy and could serve as a model for other locations to follow suit.
The report from Pew Research as well as recent reports that companies like AMC Entertainment are generating upwards of 15% of their revenue from cryptocurrencies points towards an increasing rate of adoption AND utility for cryptocurrencies.
In the past week, the total cryptocurrency market cap has mostly been stagnate, down a mere 0.5% after rising to over $3 trillion earlier in the week. Declines in many of the largest coins by market cap have kept total market gains relatively even so far in early November.
After hitting $69,000, Bitcoin has declined from its peak back down to around $63,000 where it currently resides as of 12 November. If Bitcoin closes below support as it currently stands, a decline back down to the rising 50 day moving average should not come as a surprise. This should be considered a short term development.
We mentioned last week that Bitcoin could potentially fall into the mid $50ks in the event of a pullback. Based on the price action now, a minor pullback is growing in probability. A decline to the 50 day MA at $57,000 would be a healthy pullback for a larger move up past $70,000 later into November.
For new entrants or those wishing to add to or increase their overall Bitcoin holdings, watch for a potential move down this weekend into early next week that you could take advantage of. Once again, Bitcoin is still in a trend that could see it hit an $80,000 usd valuation by the end of the year.
Circled in green above is our chosen pullback target area.
After a volatile week of trading, gains have been slow for much of the top ten in crypto. Binance Coin (+8.9%), Bitcoin (+3.2%), and Cardano (2.3%) have been the only ones with relatively positive gains. Every other coin has seen either small gains or declines with the exception of Polkadot's decline off its all time high (-17.3%) and Solana's decline (-8.5%).
The main winners of the past week that will be highlighted here is Litecoin (LTC) and Algorand (ALGO) - both of which are situated within the top 20 coins by market cap currently.
Litecoin has had a fantastic week, rising by as much as 37% at one point before settling at its current weekly gain of 22%.
The Litecoin YTD chart is shown below:
The other top performer of the week - Algorand - has also had a sizable rise in the past week with half of its 21% gains on the week actually coming in the last 24 hours.
The Algorand YTD chart is shown below:
After numerous major breakouts last week - with many coins reaching all time highs - a quiet week should not be of concern. These minor pullbacks were expected and is overall a healthy development for the market to continue its rise up. Volatility should be expected over the next few days as Bitcoin finds its floor.
It won't be surprising for alts with setups like Algorand's to mint new all time highs in the coming days. It is worth monitoring the greed index for changes in sentiment as well as we push further into November. For reference, the fear/greed index, because of the recent pullback, has declined from extreme greed to just greed.
The index can be found here - Crypto Fear / Greed Index
World Economy & Markets
The main focus here this week is going to be on the economic status of both the United States and China. Combined, the two countires effectively dominate the global economy through GDP, economic power, and overall development.
To reiterate, the key notes here are:
- Inflation rate has risen to a 30 year high
- US has passed the $1 trillion infrastructure bill
- China's Evergrande has officially defaulted
The inflation rate rising at the pace it is should be viewed as a bullish development for the cryptocurrency market. The notion being pushed by major players throughout crypto has been to utilize assets like Bitcoin as a hedge against the rising inflation.
Of course, in terms of adoption, less purchasing power means less money for investments for the average person. This could delay widespread adoption through normal populations but should speed up institutional adoption over the short term.
The really important story to watch is Evergrande. It has also been reported that many of China's largest businesses are also experiencing possible solvency issues. The unraveling of the Chinese economy would pose a significant threat to both the world economy and the cryptocurrency economy. The findings within the Tether allegations indicate that ties within commercial paper from China may create a bubble in the cryptocurrency space.
Overall, for now there is no a low probability of a short term risk to major markets. We do reccommend paying attention to the latest developments out of China however as it is impossible to accurately predict the large scale effects of something like Evergrande defaulting in a major economy like China.
An overall quiet week within the cryptocurrency market has seen small declines and has reduced the extreme greed sentiment for the markets. This should overwhelmingly be viewed as a short term positive for the health of the market. While the global economy - specifically China - should be watched closely, we see only a low probability of any negative affects to the cryptocurrency market from these events at this time.
Coming within the next week from RekTimes includes:
- Article on MiamiCoin / Miami blockchain startups (Monday)
- Article on Bitcoin's Taproot (Wednesday)
- RekTimes Weekly Markets 1.14 (Friday)
Best of luck over the next week and have a great weekend! We will be back with out next weekly release Friday, 19 November.
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