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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis: The Weekender

June 7, 2021
Welcome to the Weekender: Your weekly round-up of all the top stories in the crypto world, as voted by our readers clicks. This week we have seen a strong theme of scaling business services, and leading the pack is BNY Mellon, the world’s largest custodian bank.

The Bank of New York Mellon Corporation (BNY Mellon), the oldest bank in America, recently set up a cryptocurrency custodian framework in Dublin, Ireland. The unit of BNY Mellon, dubbed the ‘Digital Innovation Hub,’ will provide users with a variety of services including storing, transferring, and issuing digital assets.

The Hub is regulated by the Central Bank and will deal in assets such as Bitcoin, central bank digital currencies, and non-fungible tokens (NFT's), among others. Digital currencies will therefore use the conventional financial network used by equities and bonds.

Next up: Standard Chartered Plc. is setting up a brokerage for digital assets.

The U.K. bank is embarking on the venture with BC Technology Ltd., a Hong Kong firm specializing in digital assets. It’s Standard Chartered’s first foray into the world of blockchains and cryptocurrencies.

Alex Manson, head of SC Ventures, told Bloomberg that he had a “strong conviction that digital assets are here to stay and will be adopted by the institutional market as a highly relevant asset class.”

Due to launch this fall, the new project will be based in the U.K. and will initially target the European market.

JPMorgan Chase & Co. is on the hunt for crypto-savvy candidates to fill a growing number of digital asset crossover jobs.

The planned compliance, regulatory affairs, and payments positions appear to stretch beyond JPMorgan’s well-documented (and aggressively hiring) Onyx blockchain project, an effort mostly concerned with wholesale banking.

Instead, the six positions, which have been hitting JPMorgan’s jobs board since at least April, speak to a financial services giant bolstering its crypto readiness on multiple fronts.

As Chinese authorities take tough measures by introducing a ban on crypto trading, local brokerage firms see a massive opportunity in the global crypto trading market. China’s two biggest online brokerage firms – Beijing-based Tiger Brokers and Shenzhen-based Futu – are looking ahead to set up a footprint in the global crypto trading marketing citing big opportunity.

As reported by the South China Morning Post (SCMP), these two players will be competing straight away with global players like Robinhood and eToro. Both Tiger Brokers and Futu unveiled this plan last month during the company’s earnings call. These companies have also applied for local licenses in Singapore and the U.S.

ETC Group is launching the first bitcoin exchange-traded product (ETP) in the U.K. on the Aquis Exchange Multilateral Trading Facility (MTF) in London on June 7.

In an announcement, the ETC Group said this is the first time a cryptocurrency ETP will be made available for trading on the U.K. market or any European MTF.

Trading of the ETP will take place in four different currencies, GBP, CHF, euro, and U.S. dollar. The clearing will be carried out by Switzerland-based central counterparty clearing house SIX x-clear.

Finally, the European Union has plans to release a digital wallet that would allow its citizens to make payments across all member states with minimal friction. The wallet would be launched next year and integrate private and public services under just one app, according to a report from Reuters.

The wallet would work as a payments and ID vault, and would allow users to store digital equivalents of their physical permits, such as passports or driver’s licenses, integrating other state-dependent services too. Due to its character, the wallet will be authenticated using biometric data, such as fingerprint verification and retina scans using computational power and sensors that mobile devices already have on board.

While the European Central Bank has not decided to issue a digital euro and is still in the process of exploring the effects of Central Bank Digital Currencies, this wallet could be useful for the implementation of such currency. Combined with the app, the digital euro could give the European Union leverage to regulate the rise of other, uncontrolled digital currencies.

Have a great weekend.

Words of the week

Technical analysis

Bitcoin continues to track in a sideways pattern. $40,000 has capped the upside, and with $33,800 holding the lower end of the range, the market is in stalemate. 

It's likely this range trading persists this week. $38,600 will act as a brake on price gains, with direction largely controlled by which side of $36,400 Bitcoin is trading. The lower end of the range, at $33,800, will see good buying support.

The picture only changes if we trade above $42,400 or below $30,000. The market will likely continue to feel strong at the top and weak at the bottom, but a follow-through at either level will take a news event or a substantial liquidation. Look for $47,500 to cap any break out to the upside, and $27,000 to hold any break to the downside.

The market in numbers

This Weekend's Coffee Reading!

To understand where the value of Bitcoin is headed, we need to study the adoption rate of cryptocurrencies in the world.

The rate of adoption

If more and more people desire a certain good, and the same amount of units are in circulation, the price will obviously have a tendency to rise. It’s the supply-and-demand rule that governs any market in the world.

If one year, a hailstorm destroys the tomato crop and there are fewer edible tomatoes than expected, it makes sense for the price of tomatoes on the market to rise, considering that the demand has remained the same. However, imagine for a moment that suddenly, people want to buy tomatoes much more than in previous years. The demand goes up and the availability of tomatoes goes down, therefore the price will go up a lot more than in the former case.

Demand can grow due to two factors: participants are stable and the amount of requests increases or the amount of requests is stable but the number of participants increases. Even a combination of these two is possible.

In the example that follows, we’ve only assumed that the number of participants goes up for the same amount of goods. So, on the one hand, we have Satoshi Nakamoto who defined that Bitcoin (BTC) must become increasingly scarce over time, and on the other, there is a possible boost in the price of Bitcoin coming from new people who progressively enter the market.

It is therefore a question of studying the adoption rate of cryptocurrencies in the world’s markets to understand where the value of Bitcoin is headed and, overall, where the cryptocurrency asset class can go in the future.

Read the rest of the review here.

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