Welcome to the 37th edition of ‘The Digital Asset Digest’. Today we go through the usual orders of business, as well as giving an idea for a novel trade that helps you short Tether.
Source: Financial Post
“Campden Wealth is thrilled to welcome blockchain conglomerate GDA Group as its newest Corporate Partner for 2021. The Toronto-based firm provides institutions and private investors with access to all verticals of the crypto capital markets. This partnership between two organizations, once operating in different verticals, signals a new era of portfolio allocation and asset diversification. As bitcoin and other digital assets become a vital component of modern investment strategies, GDA Group provides multiple avenues for digital asset exposure, including non-recourse lending up to $100M through GDA Lending, trading services through their institutional trading desk Secure Digital Markets, and private placements through their capital markets arm GDA Capital.”
“There were no cryptocurrency mining outfits listed on the stock market during the 2017 bull run in Bitcoin prices. This time around, the situation is different. In the past month alone, stock prices for bitcoin mining companies Riot Blockchain, Inc. (RIOT) and Marathon Patent Group, Inc. (MARA) have shot up by 145% and 332%, respectively. China-based Canaan Inc. (CAN) has witnessed a 91% appreciation in its price during the same time period.”
Source: Seeking Alpha
“Gold markets are trading under pressure as stock markets head for new record highs and market valuations in bitcoin surge to levels that many investors thought were impossible just a short time ago. In the process, gold has fallen under $1,900 per ounce to start 2021 and many precious metals investors are wondering about which assets are likely to outperform as safe haven assets in the event that an increase in generalized volatility re-enters the broader market.”
“There are people who prefer to exist in a cash economy for reasons other than a negative economic analysis of central bank monetary policies or an attachment to the iconography of banknotes. Criminals and corrupt politicians, for example. Cash works rather well for them, but can sometimes be quite inconvenient. Given the huge hassle of bagging the Benjamins, why didn’t these wacky baccy impresarios simply buy a few Bitcoins, drive to the drop zone and press the “giddy up” button when the goods were in place!”
“The recent price drops have failed to affect the BTC fundamentals as the mining difficulty and the hash rate have registered fresh ATHs. Although the price of bitcoin has crashed in the past 24 hours with double-digit percentages, the network’s fundamentals remain strong. Recent data indicated that BTC’s mining difficulty and the hash rate had reached new all-time highs.”
INDUSTRY WIDE SNAPSHOT
Tether has been surrounded by controversy for years now, due to the risks of it being unbacked. For a while, I’ve been looking for a way to short Tether and be cash flow positive, and it looks like there are a few simple ways to do this.
If you hold BTC, convert it to Wrapped Bitcoin and deposit it with Aave. As a lending protocol, Aave will provide you with a loan against your collateral. Get this in Tether (right now at a 12% APY).
With this Tether, there are a wealth of things you could invest it in. However, since we’re looking for more of a yield farming mechanism than an aggressive long on an altcoin portfolio, I’d recommend you swap the USDT for DAI (doable in a Uniswap pool) and take advantage of the yields currently available in KeeperDAO.
DAI currently yields 49% and USDC earns 50%. These will be subject to change, but right now, this would result in a 37% yield once you net out the cost of borrowing USDT on Aave.
We’re not investment professionals and this is not meant to be prescriptive advice, but this is a good theoretical exercise showing how one can use DeFi to short Tether and be cash flow positive.
“Ethereum is the leading platform for decentralized applications and is unmatched in ecosystem, community, and tooling. Despite some bumps in the road, the whole ecosystem along with its users are responding to the problems and maturing in multiple ways not known until this year. The building blocks on Ethereum are intrinsic to DeFi. Every additional application increases the organic usage and reliance on the established foundation.”
The price of Bitcoin has been in a decline from last Friday when it came up to just below $42,000. Since then we have seen a decrease of 26.48% as it came down to $30804 at its lowest so far. Currently, the price is sitting at $33,279 as a minor recovery has been made.
Source: Trading View
Looking at the hourly chart, you can see that the price increase that ended on Friday was the ending wave from the higher degree count. This is why now we are seeing the development of the five-wave descending move. As it might have ended the price would now be expected to recover but as this is most likely the beginning of the descending move from the downside we are to see the downtrend continuation after the recovery has been made.
If we are seeing the development of the ABC correction the price of Bitcoin could fall back to the $23,500 range before the correction ends. There could be a possibility that this would be a five-wave impulse rather than the ABC correction in which case the decrease could continue below $23,500.
In the short-term we are expecting that the price establishes support around the $30,000 area before a recovery to $37,550 which would be the 0.618 Fib level.
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.
On another note, a research report on one of our portfolio companies was recently released and we think you’ll learn a lot from it. To check out this free report, click here!