Welcome back to the 19th edition of ‘The Digital Asset Digest’. Last week, we saw the market crawl back to normalcy after a week of strong gains. It seems like the bulls are back! This week, we saw the market roar back to life with Bitcoin temporarily breaking past $12,000!
With lots of exciting news across both the equity and blockchain markets, we hope you enjoy this week’s edition of the Digital Asset Digest!
The crypto market continued its rally last week as Bitcoin broke the $12,000 mark for the first time in over a year as hash rates reached a historic high. The spotlight, however, clearly shone on Ether, which rose a staggering 10.2% over the week. XRP trailed behind, rising 7.3%.
Equities were mostly green this week, led by a resurgence in value stocks and cyclicals. The S&P 500 was up 0.6%, driven by Information Technology and Consumer Discretionary, ending Monday just barely under its all-time high. Asian stocks led global equities with performance from Japanese semiconductors driving gains on the Nikkei.
Investors began to take profits in the commodity space as gold fell back below the $2,000 level again. Silver saw double digit losses while oil futures were relatively unchanged.
“Atlas, which buys and transforms distressed industrial companies, helped turn the company into a more efficient energy model. But profits were always tight. It was in 2018 that CEO Dale Irwin and CFO Tim Rainey had the idea to use excess capacity to mine Bitcoin. This was a unique idea in the United States. Rainey says, “Cryptocurrency mining was an idea that evolved following discussions with our Board and leadership team, as we explored the best way to utilize the unique assets we have at the facility. Our Board approved a plan to pursue Bitcoin mining…” Greenidge is using over 20 megawatts (MW) of power to mine Bitcoin, which makes it the largest energy company in the U.S. with this kind of strategy. In comparison, 20MW is not very big, next to other countries. There are larger Bitcoin mining facilities.”
“One of the earliest Nasdaq-listed cryptocurrency mining companies, Marathon Patent Group, announced a new agreement contract with the ASIC mining manufacturer Bitmain. According to the public company, Marathon has agreed to purchase 10,500 next-generation Antminer S-19 Pro models for $23 million. Marathon Patent Group wants to be the largest bitcoin mine in the United States and its recent acquisition of thousands of next-generation mining rigs may help fortify that goal. On Friday, Marathon announced a long term agreement with Bitmain Technologies as it has agreed to purchase 10,500 new S-19 Antminers from the company.”
“The US government says it has thwarted attempts by militant groups to raise funds using digital currency, or cryptocurrency. The campaigns involved Hamas’ military wing, the al-Qassam brigades, al-Qaeda and the Islamic State group (IS). US officials said about $2m (£1.5m) in cryptocurrency had been recovered. Hundreds of cryptocurrency accounts, four websites and four Facebook accounts were also seized, the justice department announced in a statement. “These actions represent the government’s largest-ever seizure of cryptocurrency in the terrorism context,” the department said.”
“Michael Novogratz is a veteran Wall Street fund manager and cryptocurrency maven who readily acknowledges when he earns a “black eye,” while Dave Portnoy is the brash founder of a media empire who only recently began touting stocks and has disparaged Warren Buffett. Their backgrounds and personalities may be vastly different, but both are now offering the same investment recommendation: Bitcoin is a better long-term bet than gold. In an appearance on Bloomberg Television, Novogratz — founder of Galaxy Digital Holdings Ltd. — said that although he sees gold climbing above its record highs, Bitcoin is still the more worthy investment because it’s “harder to buy” than the traditional haven. He said about 25% of his net worth is tied up in the cryptocurrency.”
Cryptocurrency Weekly Performance
Indices & Commodities
“Ethereum is not the only player in the DeFi space. It’s not even the first. This could be an unpopular opinion, but DeFi is way bigger than Ethereum. To clarify, I am not anti-ethereum. I am pro-crypto. I think through the exploration of a diversity of ideas, in a plethora of settings we will discover the cocktail of cryptos that make up DeFi. There does seem to be a market sentiment in favour of Ethereum. However, in my estimation, this is an irrational, and dangerous pile-on into Ethereum based DeFi cryptocurrencies. We must be careful not to attribute the entire phenomenon of decentralized finance to a single platform. Such a misclassification is harmful to those who are new to cryptocurrency.”
Source: Trading View
We are once again bullish on Bitcoin this week. Last week, we published a bearish stance and argued that we should watch out for an upcoming pullback. While we were certainly correct about the pullback (Bitcoin fell 4.3% the day we published), we underestimated how quickly the coin would recover. Bitcoin has successfully breached the 12,000 mark, and we believe the momentum’s just getting started.
The crypto market’s sentiment has been optimistic this month as investors look for alternative investments in a low-yield environment. One thing we have seen time and time again is that Bitcoin is driven by momentum, so once the ball starts rolling, we are likely to see performance continue. While RSI continues to remain at overbought levels, ADX suggests that the trend is strong and unlikely to halt anytime soon. For the week ahead, we see the trend as our friend and are buyers of Bitcoin.
Yesterday, our weekly research initiative continued with a compelling analysis on the DeFi sector. Unfortunately, we faced a technical issue with the landing page and some of our readers were not able to access the link.
We apologize for any inconvenience and are reattaching the link in case anyone who was unable to access it can now do so. We hope you enjoy!
That concludes today’s edition of the Digital Asset Digest. As the DeFi ecosystem continues to grow, we are encouraged by the newfound growth of institutional interest in the sector. In our view, 2020 is poised to be a catalyst-filled year as the halving and pandemic renew interest in the crypto market, and we look optimistically at the month ahead.