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The Vaccine, The Election, and High Volatility: Digital Asset Digest Volume #31

Welcome to the 31st edition of ‘The Digital Asset Digest’. We’re in some mighty unstable times, and with the announcement of the COVID vaccine and a contested election, things are only going to get more exciting as we go on. Let’s jump right in!

Virtual gold? Bitcoin’s rise sparks new debate amid pandemic

Source: CTV news

“LONDON — Bitcoin’s rally above US$15,000 has reignited debate over whether the cryptocurrency is so-called digital gold or a perilously risky bet as investors grapple with the coronavirus pandemic. The world’s most popular virtual unit has gained over 30 percent in value in almost three weeks up to Friday, taking it close to its December 2017 peak when it reached nearly $20,000. After a rollercoaster ride on markets since then, it began its latest meteoric rise on Oct. 21, after U.S. online payments provider PayPal announced that it would enable account holders to use cryptocurrency.” 

Binance Predicts that Centralized Crypto Exchanges will Eventually be Replaced by More Decentralized or Non-Custodial Trading Platforms

Source: Crowdfund Insider

“Binance, the world’s largest digital asset exchange, has noted in its weekly crypto market report that for most of the past week, Bitcoin (BTC) had been trading between the relatively tight $13,300 and $13,900 range. But then, over the span of just 48 hours, the flagship cryptocurrency rallied, first surging past the $14,000 threshold on Thursday (November 5, 2020).”

Blockchain & financial inclusion: Digital lending reaches the farm gate

Source: Financial Express

“Blockchain-powered digital lending by fintech startup Whrrl is helping raise farmers’ incomes and reduce their dependence on moneylenders. Warehouse receipt financing was created to help farmers get working capital against their stocks lying in warehouses but it has been plagued by fake receipts, multiple collateral use and frauds such as the Rs 5,600-crore NSEL commodity exchange scam. More than 90% of warehouse receipt finance is cornered by traders and farmers are yet to be part of this in a big way.”

39 Firms Have Applied to Offer Crypto Services Under New Regulation, Says Dutch Central Bank

Source: News Bitcoin

“Thirty-nine companies have applied for registration with the Dutch central bank to provide cryptocurrency services, the regulator told news.Bitcoin.com. They include crypto exchanges and custodial wallet providers. De Nederlandsche Bank NV (DNB), the Dutch central bank, has started actively registering companies to provide cryptocurrency services.

In our most recent article on the Global Digital Assets blog, we discussed EOS and their dream of making enterprise-grade decentralized applications scalable and highly-efficient. 

Read it here!




This week, I had a friend ask me what my planned investment strategy was going forward, and if I’d continue to dollar-cost-average into the market or go a different direction. What prompted this? Well with Bitcoin pumping, he wasn’t sure about the way forward. 

And although we don’t give investment advice in this column for various regulatory reasons, this brings up an interesting observation: the market acts differently as soon as Bitcoin goes through massive price movement. 

Sounds obvious, but not everyone is going to notice market dynamic changes until it’s too late. For example, last week we saw Ethereum fees continue to go down as DeFi lost momentum and traders moved their funds into Bitcoin. It’s not clear which came first – the election chaos or the DeFi drop – but it was certainly the perfect opportunity for a sector rotation.

And since then, we’ve seen BTC transaction prices go up massively as the hash rate suffered and a higher transaction volume occurred. 

Unlike other asset classes, cryptocurrency experiences massive fluctuations in trading fees. It’s actually a pretty good measure of how much “interest” there is in the space and could even be used as a proxy for volatility. 

And then today we saw the Bitcoin rally stall out. AAVE, a major DeFi protocol, hit a 3-week high largely because of this stall out. This leads us to the conclusion that crypto is currently functioning as a zero-sum game where the funds are flowing in-between sectors and new funds flowing into the ecosystem are insufficient for an “across the board” bull run.

So rather than thinking in terms of “what DeFi protocol is going to do well?” maybe reframe it as “if crypto is currently functioning as a zero-sum game, where do I need to be to benefit from it?”

Goodbye USA

Source: Larry Salibra

“A few weeks ago, when I was trying to open an account at a financial institution here in Hong Kong, someone noticed I was born in the USA and my account was denied. They wrote “I regret to inform you at this time we are unable to accept bank wire deposits/withdrawals from US citizens. For more information, please refer to our article: Restricted nationalities and countries.” While this is a common experience for Americans living abroad, one I’ve experienced many times before, it was a mistake, a mistake that reminded me to write this blog post.” 

The price of Bitcoin made its highest point last Friday when it came to $15,983. From there we have seen a decrease of 10.24% with the price falling back to $14346 on Saturday’s low. Since then we have seen a recovery, but the price failed to exceed the prior high, only coming to $15,809 before making another minor pullback. Currently it’s being traded around $15,370 and is moving sideways.

Source: Trading View

Looking at the hourly chart, we can see that the increase made from Saturday’s low is likely the continuation of the impulsive move from the 3rd of November when the price started increasing from the $13,320 area. 

This was most likely the start of another five-wave impulse to the upside after the price found resistance at the last year’s high made in June and fell to the levels of its retest made in July 2019. After establishing support there it made an impulsive increase and broke out from the horizontal level, making a new yearly high on Friday. 

As we most likely saw the 3rd wave out of that five-wave impulse the retracement made until Saturday was the 4th wave, which means that now the 5th one to the upside would be expected. If that is true then the price has already started developing that wave which is set to push the price of Bitcoin into another higher high. In that case the price would be expected to go somewhere from $16,800 to $17,200 before the increase develops fully. 

After this, a downturn of a more significant amount would be expected as the price is to enter its corrective stage. This decrease would be expected to at least bring the price back to its last year’s high for a retest of support.  

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.

But more importantly, we just released a research report on how blockchain is being used to change the sports gambling industry. As usual, we include general use cases and specific companies. You can download the report here.

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