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Leading crypto hedge fund managers expect Bitcoin to fall as the SEC sheds light on Bitcoin-backed ETFs. This is the reason.

Hello there: Welcome to the most important movements of cryptocurrencies and news updates and the short-term outlook for digital assets. I’m Frances Yue, a MarketWatch crypto reporter. Need to Know Crypto Edition will be published as a prelude to the new weekly crypto newsletter “Distributed Ledger” for three weeks from October 10th to 24th. It will start in November.

click This link to subscribe We’re moving to a distributed ledger, but until then, enjoy Need to Know Crypto Edition.

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Crypt with snap

Bitcoin
BTCUSD

According to FactSet data, this week saw a significant increase, up 12.7% from last Friday. By Wednesday, cryptocurrencies recorded a 7-day increase of 33.5%, according to a Dow Jones market data research team. This is the best 7-day performance since February this year.

Ethereum
ETHUSD

It also recorded a weekly 9.7% increase as of Friday, but Dogecoin
DOGEUSD

It increased by 13% in a week.

Cryptographic metrics
Biggest winner

price

% 7 days return

Shiba inu

$ 0.00002697

262.53%

phantom

$ 2.35

73.99%

Axie Infinity

$ 135.21

43.47%

Harmony

$ 0.227

42.5%

Irweave

$ 66.3

38.46%

Source: CoinMarketCap.com As of October 8

Largest decliner

price

% 7 days return

eCash

$$ 0.0002233

-10.05%

Huobi token

$ 7.8

-9.07%

avalanche

$ 62.58

-6.96%

Amplifier

$ 0.04746

-6.17%

dYdX

$ 21.53

-5.71%

Source: CoinMarketCap.com As of October 8

Bitcoin-Will Futures Bounce?

The fourth quarter has historically been good for Bitcoin. Bitcoin rose about 170% from about $ 10,780 to $ 28,980 in the fourth quarter of 2020, according to CoinDesk data.

Bitcoin is off to a good start as a cryptocurrency on Wednesday in October of this year. Rise above $ 55,000, For the first time since May.

Traders and analysts say the rally is partly due to an institutional influx, as established players expect the SEC to approve the first Bitcoin futures exchange-traded fund in the coming weeks. I thought.

Recently, SEC Chairman Gary Gensler Repeated his support For Bitcoin-backed futures ETFs, we invest in Bitcoin-based futures contracts rather than the crypto itself. The SEC has not yet approved Bitcoin-backed ETFs or Bitcoin derivatives-backed ETFs.

Bitcoin futures contract with CME Group
CME

According to data analysis tool Skew, it was trading at a premium of up to 17% of Wednesday’s spot price. This is the highest price since April when Bitcoin reached a record high. This indicator usually reflects the flow of a financial institution, as CME is the preferred means of exposing a financial institution to Bitcoin.

“The extraordinarily high premium indicates an overwhelming amount of full purchases,” crypto trading firm QCP Capital wrote in Telegram Thursday.

The liquidation of leveraged short positions has also spurred the recent rise in Bitcoin prices, analysts said. A leveraged short position is when a trader uses the borrowed money to bet that the price of an asset will fall.

“We were ready for a short squeeze this week as the bear shorted the $ 50,000 resistance,” NYDIG, a Bitcoin-focused financial services firm, said in a report Wednesday.

Déjàvu Q4 2020?

Some analysts expect the rise to continue. Anto Paroian, chief operating officer of crypto hedge fund ARK36, said the uptrend this week is different from the uptrend a month ago when Bitcoin exceeded $ 50,000. “The market wasn’t strong enough to sustain further backlash,” Paloian told MarketWatch in an email.

“Currently, after a long integration in the $ 40,000 range, Bitcoin seems to be much more prepared for a bigger rise,” Paloian wrote. “If that happens, Bitcoin is likely to continue testing its ATH (the highest ever) and is likely to break it.”

However, some are wary that the crypto market could fall further, as it did in the fourth quarter of 2020.

Dunmore Head, CEO of asset management firm Panthera Capital, warned that if the SEC approves a Bitcoin-backed futures ETF, the “buy rumors and sell news” pattern could apply. ..

“Can someone remind me? [me] The day before the Bitcoin ETF officially launches? You may want to remove the chips from the table, “Morehead wrote. report..

Bitcoin rose 2,440% about a year before CME listed Bitcoin futures in December 2017.Cryptocurrency recovered 822% in 12 months prior to crypto exchange coinbase
coin

Direct listing on NASDAQ. But after both events, the market fell, Morehead said in a report.

Meanwhile, Morehead speculates that price volatility should ease as the crypto market becomes wider and more institutional.

Cryptographic briefs

Bloomberg Businessweek Publish cover story This week we’re talking about the mystery of Tether’s $ 69 billion in assets, the world’s largest stablecoin issuer. With exponential growth in recent years, tethers are being increasingly scrutinized by regulators and some investors. The stablecoin USDT is fixed at 1: 1 to the US dollar.

According to Bloomberg, Tether has invested some of its reserves in Chinese commercial paper, citing a document detailing Tether’s reserves before the recent predicament of Chinese real estate developer Evergrande. was.

Tether representatives did not answer the question of whether Tether holds Chinese commercial paper, but USDT is always backed by reserves such as cash, cash equivalents, other short-term deposits and commercial paper. I wrote in an email that it was done.

Bloomberg also reported that Tether has created billions of dollars in cryptocurrency support loans, one of which has been provided to the cryptocurrency lending platform Celsius Network Ltd.

A tether representative wrote on MarketWatch: These loans are secured by collateral owned by Tether, which is well over 100% of the loan income and earns Tether’s monthly interest. “

Bankman Fried Bean Bag?

Sambankman Fried, Founder and CEO of Cryptographic Exchange FTX, is the wealthiest person under the age of 30 in the world. Forbes.. Thanks to the crypto boom, Bankman Fried is worth $ 8.7 billion to $ 22.5 billion in April.

The 29-year-old homebrew millionaire is known to sleep in a bean bag in the office most nights. “One advantage of bean bags: if you’re sleeping in the office, your mind stays in work mode and you don’t have to reload everything the next day,” Bankman Fried Once said. Written on twitter..

This practice seems to have been adopted by Ryan Salame, who has been appointed CEO of FTX Digital Markets, a newly launched subsidiary of FTX in the Bahamas. FTX has also relocated its headquarters from Hong Kong to the Bahamas. In the Bahamas, the regulatory environment is better suited for cryptocurrencies.

Coin quarterable

Dawn Fitzpatrick, CEO and Chief Investment Officer of Soros Fund Management, said the family office founded by Billionaire investor George Soros owns several bitcoins.

“We own some coins, but not many,” Fitzpatrick said. interview At the Bloomberg event on October 5th. “And the coin itself is less interesting than the DeFi (decentralized finance) use case.”

“I don’t know if Bitcoin is only seen as an inflation hedge,” Fitzpatrick said. “I think it has crossed the ditch to mainstream.”

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Leading crypto hedge fund managers expect Bitcoin to fall as the SEC sheds light on Bitcoin-backed ETFs. This is the reason.

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