Welcome to the 29th edition of ‘The Digital Asset Digest’. This issue is the beginning of our new high standard of technical analysis. We think you’ll enjoy the extra effort we put in, but let us know what changes you’d like made. Additionally, we go deeper on the crypto lending trend – something we definitely think you should be looking at. Enjoy!
Source: News Bitcoin
“Spain’s Finance Minister and the government’s spokesperson, Maria Jesus Montero, said at a press conference following the weekly cabinet meeting that this bill is part of broader legislation to crack down on tax fraud, several Spanish news outlets have reported. The bill was sent to the Spanish Congress of Deputies on Tuesday and will now go to parliament for discussion and final approval.”
“PayPal’s new service eliminates two hurdles regarding the use of cryptocurrencies for retail purchases: 1) Getting cryptocurrency into a form that’s usable for retail purchases, and 2) Merchant acceptance of cryptocurrency as a form of payment.”
“At the moment, with China establishing a V-shaped recovery in their uniquely post-covid economy (the only G20 country to achieve this), they are cocky and blind to what will happen if the U.S. and others go Full Bitcoin. It’s similar to the 1980s-1990s when Japan was set to take over the global economy but failed to embrace the Internet fast enough and the US quickly reasserted global dominance again. China thinks they hold all the cards, but without going Full Bitcoin they leave themselves vulnerable to countries that do.”
Source: BNN Bloomberg
“ ‘I don’t think Bitcoin is going to be used as a transactional currency anytime in the next five years,’ Novogratz, founder and chief executive officer of Galaxy Investment Partners, said in an interview with Bloomberg TV and Radio. ‘Bitcoin is being used as a store of value.’ ”
In our most recent article on the Global Digital Assets blog, we discussed Dash and how they’re changing the way digital payments function. The article explains its benefits over Bitcoin and other payments platforms, how it’s changing the crypto landscape, and gives some of our thoughts on its future.
Read it here!
INDUSTRY WIDE SNAPSHOT
I set out to write a post about some more complicated methods of making money with DeFi, but then I realized I hadn’t addressed a very simple point yet: collateralizing your crypto.
You can actually use your crypto… to buy more crypto! This is something that might sound crazy from the outside, but actually makes perfect sense if you look at the mechanics.
We’re going to avoid talking about specific companies too much in this post, but look out for our longer blog post coming next week on Secure Digital Markets, where we’ll talk about 3 of the best companies to look at for borrowing against your crypto.
Let’s get into an example. The basic idea is that you take any cryptocurrency you’re invested in – be it BTC or ETH or something far more obscure – and give it to a lending protocol. When you put it up as collateral, they’re comfortable giving you a portion of the worth of your assets in liquid funds.
For example, you may be able to store 4 BTC in this protocol and get the USD equivalent of 1 BTC. This then allows you to invest in whatever you want (even more crypto) or cover current expenses.
The benefits of this should be clear to you right away: you get liquid funds without having to sell your crypto. This way, you can participate in the upside on your funds without experiencing a cash crunch.
The lender is well-covered on their loan (in the example above, Bitcoin would have to drop 75% before they got worried), and everyone’s happy. This is a lot like how real estate debt works, but with a more volatile asset.
Generally, you’ll see longer-term loans have higher interest rates, as well as loans with a lower collateralization ratio. The minimum rates of collateralization range from 130% to 200%, depending on the platform you’re using.
Bear in mind these are live markets and rates will constantly be fluctuating. This is an opportunity as well as a risk, and every investor should be aware of the inherent risks of dealing with newly established lenders who hold collateral.
Source: Collaborative Fund
Amos Tversky, the late collaborator of Nobel-winning psychologist Daniel Kahneman, once said “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.” The same is true for a lot of jobs. The traditional eight-hour work schedule is great if your job is repetitive, customer-facing, or physically constraining. But for the large and growing number of “knowledge jobs,” it might not be. It’s not about working less. It’s the opposite: A lot of knowledge jobs basically never stop, and without structuring time to think and be curious you wind up less efficient during the hours that are devoted to sitting at your desk cranking out work.
The price of Bitcoin has increased by 16.7% from Monday. It was sitting on its lowest at around $11,423 and from there came up to $13,332 at its highest point yesterday. Since then we have seen a minor pullback, but overall it managed to maintain above the $13k mark and is in an upward trajectory.
Source: Trading View
As you can see by looking at the hourly chart, an interaction with the 1.272 Fibonacci level was made. The price found resistance there which is why we have seen a rejection around last Thursday’s open and yesterday another attempt for a breakout to the upside has failed.
This was most likely the completion of the 3rd wave from the Minute count which is why we are seeing the price in a consolidative manner but its still showing signs of bullishness, as indicated by the ascending price action from the first interaction with the Fib level. However now as it appears that the 3rd wave of the higher degree ended a pullback to some of the support levels could be expected before further growth.
Since a higher high was made compared to the one in August when the price reached $12,500 we could see the retest of its vicinity for support. This would correlate with the 1 Fib level and could be the ending points of the presumed 4th wave.
Another possibility could be that the 4th wave which has already started developing, gets completed as a shallow triangle and the price immediately starts breaking the current resistance. In either way further price appreciation would be expected in the upcoming period after the current consolidative range ends.
This concludes another issue of the ‘Digital Asset Digest’. We hope you enjoyed this week’s edition. We are constantly making changes and are always open to feedback, so please let us know if there’s something else you’d like to see in the newsletter that you’re not seeing now.
And as always, thanks for reading and we hope to hear from you soon.