Hello everyone,
The purpose of this letter is to inform you about the current situation of the crypto-asset market, as well as recent news in the field. This letter is not investment advice, but merely the sharing of my personal point of view.
News
One Venezuela's international airport will accept Bitcoin payments (BTC). Faced with hyperinflation of their national currency (the Venezuelan bolivar), Venezuelan companies and citizens are turning en masse to digital currencies, especially Bitcoin. According to Chainalysis, Venezuela is the 3rd country in the world with the highest adoption of crypto-assets. Inflation in this country is estimated at 1600 % in 2021; to give you an idea, in France we are at 2.2 %.
The exodus of Chinese miners forced a rapid distribution of the hashrate of the Bitcoin network. To summarize, the computers responsible for securing the Bitcoin network moved to the United States because of the mining bans in China. Today, The United States now accounts for 35 % of the global hashrate. For information, France represents 0.20 %.
The crypto-asset exchange platform Binance has been literally harassed by various regulators around the globe for several months. To appease the financial watchdogs, Binance announced in September that it would choose a clearly defined headquarters. It would appear that his choice fell upon Ireland, alongside the FAANG (Facebook, Apple, Amazon, Netflix, and Google).
A bitcoin ETF (an investment fund whose objective is to replicate the performance of a given index, in this case BTC) could soon arrive in the next 3 weeks. Since the SEC is forced to respond to the numerous requests, here are the potential approval dates: October 18, 19, 25, and November 1st. If an ETF were to be approved, we can expect an immediate speculative rally.
The Swiss bank SEBA Bank decided to offer returns on crypto-assets held by it on behalf of its wealthy institutional clients. It is an institutional-grade solution enabling its clients to earn interest rates on their deposits in Bitcoin (BTC) and Ethereum ETH.
Will we see today's traditional banks become the custodians of their clients' crypto-assets in tomorrow's world? This is a possible alternative that seems more likely than their disappearance.
Technical & Fundamental Analysis
Bitcoin price over 1 year, since August 2020
At the time of writing, the price of Bitcoin is 57,500 $. It is approaching its all-time high of 64,804 $ per bitcoin reached on April 14.
If the 64k $ resistance is broken, we will trigger a multi-month bull run. In the meantime, if we break below the 52k $ level, this scenario could be invalidated.
- Long-term cycle: The accumulation of coins by long-term holders is at record levels, which structurally points to a strong bull rally in the coming months and into 2022. A lateral accumulation phase is expected to emerge between 52k $ and 64k $ in the meantime.
- Medium-term cycle: An accumulation phase before a bull run is expected, analyses on-chain notes a lot of speculation on prices, notably because of a potential first ETF approved by the SEC.
- Short-term cycle: Profit-taking by speculative investors could cause the price to bounce off the 58k $ resistance level several times. This period will be volatile due to a renewed surge of interest in cryptoassets among investors.
We can observe an increase in the interest rates of stablecoins deposited and borrowed on DeFi; this is a signal that «large wallets» are accumulating and borrowing on DeFi platforms.
The amount of stablecoins (USDT, USDC, DAI...) is decreasing, which is also a signal that market participants are positioning themselves in the markets.
Furthermore, more speculative assets like DOGE or SHIBA are on the rise again. A new wave of investor enthusiasm is brewing for the coming weeks and months.
All these signals are aligning and pointing us toward the long-awaited next bull leg of which we we talked about in our previous letters.
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— Warning —
This is not investment advice, no one can predict the future.
You are solely responsible for your own investment decisions.
We are not responsible for any losses resulting from a decision made based on the information in this letter.
