Bitcoin's Consolidation Below Resistance Means… #49

Market Meditations | December 4, 2020

Unlock this exclusive edition to make sure you are aware of the technical and macro play in bitcoin.

Bitcoin Continues to Consolidate Below All-Time Highs

We seem to be close to a tipping point where having a bitcoin strategy is not an option, but a necessity.
Bitcoin continues to consolidate giving altcoins some room to breathe again. Meanwhile, fundamentals keep improving at a steady rate while new institutional investors enter the space on a weekly basis. Let’s briefly take a look at some technical analysis and continue with some of the fundamentally positive developments this week. 

  • Over 1 Million Eth, Worth More Than $605 Million, Has Been Staked in the Eth2 Contract. The Ethereum 2.0 (Eth2) staking contract continues to increase in value, even after the beacon chain launch this week. More than 1 million ETH has now been deposited into the contract, with a total value over $600 million. There is no closing date for the contract so ETH holders can continue to make deposits in order to earn staking rewards. Those staking rewards are relatively high, with early stakers earning around 20% per annum. As more validators (stakers) join the network, those rewards drop slightly. Read more.

  • Investors Seek Inflation Protection as Economic Optimism Rises. As we outlined on the Market Meditations twitter this morning: demand for inflation-protected securities is soaring. This comes as investors move to safeguard their portfolios against rising consumer prices given the possibility of a faster economic recovery. Funds that buy US Treasury Inflation Protected Securities (commonly referred to as Tips) recorded %1.8bn of inflows in the week ending Wednesday. This might bode well for other anti inflationary hedge securities such as bitcoin. Read more.

  • Bitcoin a ‘Potential Store of Value’ That’s Very Volatile: Fidelity Digital Assets Head. During the Reuters Global Investment Outlook Summit 2020, head of Fidelity Digital Assets (FDAS) Tom Jessop said that investors are hoping bitcoin becomes a store of value. In the interview, Jessop noted that “we use the word ‘potential store of value’ as bitcoin is still extremely volatile, and by any standard perhaps would not achieve the mantle of a true store of value.” In an earlier report in October, FDAS wrote that bitcoin’s uncorrelated nature could be a strong argument that crypto’s market cap has reason to grow. Read more

  • OMG Rallies as Genesis Block Ventures Acquires OMG Network. OMG Network, the layer 2 blockchain project aiming to help speed transactions and lower fees on the Ethereum blockchain has been acquired by Genesis Block Ventures. In their announcement on Friday, the firm said that GBV ‘is dedicated to leverage its network strength, to promote the accelerated growth of OMG Network, and further enhance the adoption of OMG blockchain in Asia and beyond.’ The token price jumped up almost 20% during Asian hours, but didn’t manage to hold its gains throughout the rest of the day. Read more.

  • Oil Price Hits 9-month High After Opec and Russia Agree Supply Boost. Oil prices hit the highest level since March after major producers agreed to a cautious increase in output that eased fears of oversupply. Brent crude has risen to $49.39 a barrel. On Thursday evening, Russia and Opec reached an agreement to boost oil supply by 500,000 barrels a day from January, which was a quarter of what they had agreed to previously. The other technical factor supporting oil price is a weaker US dollar. A weaker dollar boosts crude prices since it makes it cheaper for holders of other currencies to purchase the commodity. Read more

# 29 Sam Bankman-Fried: Altruism, Scaling a Cryptocurrency Exchange and Hiring The Right People

Unlock this section for early release. 

Sam (@SBF_Alameda) is a former quant trader, entrepreneur, philanthropist and was recently nominated in Forbes’s annual 30 Under 30 list. He is the CEO of cryptocurrency derivative exchange FTX and Alameda Research.

In this episode, we discuss…

Updating Your Trading Record

As we embark on this bitcoin roller coaster, I hope Market Meditators have a good sense of their profit and loss. Depending on what type of person you are, you will likely either remember your winning trades or only the losing trades. This is what makes it essential to keep a trading record. Numbers don’t lie and, if maintained properly, you will gain a greater appreciation for your strengths and weaknesses as a trader. Let’s explore this in more detail. 

Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. I am not a financial advisor. Every investment and trading move involves risk. Do your own research when making a decision.