Good morning!
It’s a new week and one which brings a great deal of fear to the markets. As previously mentioned in last week’s newsletter, the fear and greed index was on the rise and as seen on Friday, we reached peak ‘fear’ heading into the weekend.
The index today shows that there is ‘extreme fear’ - this doesn’t necessarily mean that we cant go lower but many suggest that we have found a local bottom over the past couple of days. Fear cycles can last for weeks or months and just because we touched the higher end of the index doesn’t suggest that we see a bounce back in positive price action.
In June and July, we saw the total crypto market had a 10 and 30 fear rating for two months. BTC is the driving force of this greed index. What really counts for how this index changes over time comes down to where BTC closes on a daily and weekly basis. At the time of writing, Bitcoin is changing hands at around $47,000 - if the world’s largest cryptocurrency can stay above this level on both the daily and weekly charts then we can be a little more assured that we won’t see lower lows. This is not a given and as I always stress in this newsletter, crypto markets are incredibly volatile and unpredictable.
Last week’s price action events are drawing a comparison to those seen during March 2020. As COVID-19 drove the main reason for instability back in March, with a sell off totalling almost 60% in a week, this time around COVID can’t take all the blame and in a good case scenario would suggest there might be a mini return this month.
Danny Scott, CEO of exchange CoinCorner suggests that the dip was not driven by market sentiment, it was driven by gamblers leveraging and being liquidated. March 2020 saw a phased recovery from the lows, but then price action rocketed almost eight months later.
As price predictions for the remainder of the year become less obvious, the focus now turns into 2022. It is likely that we continue to see consolidation in the market until the EOY before a potential bullish Q1.
Markets
As of 6th December 2021
(source: coinmarketcap)
Headline roundup
Square changes its name to Block. Its role in future payments (LI)
BitMart hacked with losses estimated at $196m (CD)
Premier League to investigate football club crypto deals (LI)
Goldman looking into Bitcoin-backed lending as jobs report disappoints (CD)
Novi, Diem co-founder, David Marcus steps down (LI)
Ex-bankers to launch $1.5bn crypto fund (BI)
Binance hires in UK, plans to seek FCA approval for launch (CD)
Coinbase acquires Goldman-backed security from Unbound (LI)
Stablecoins’ Tenuous relationship with banks (CD)
CBDC
Raiffeisen, Erste Bank in Austrain wholesale CBDC simulations (LI)
EU progresses sandbox for blockchain-based tokenised securitiies (LI)
Indian to regulate, not ban, crypto (CT)
CBDC is a tool to combat Bitcoin, says Bank of Indonesia exec (CT)
Tanzania reportedly makes plans to launch CBDC (CT)
VC
Blockchain security firm Certik raises $80m round led by Sequoia (LI)
VCs in talks to invest $50-150m in Polygon (CD)
Digital asset custody firm Fireblocks raises $400m at $8bn valuation (LI)
Binance and Animoca brands set up $200m fund for blockchain gaming (CD)
Real estate blockchain platform Coadjute raises $8m (LI)
FTX to seek $1.5bn in new funding round at $32bn valuation (CD)
Softbank’s $150m investment in Zepeto has an NFT angle (LI)
AAG ventures raises $12.5m to launch new ‘Learn-to-Earn’ platform (CD)
Meme of the week
About Me
My name is Michael Burke, and I started working in the blockchain space about 5 years ago, firstly with Deloitte, now with R3, where I help our customers build enterprise solutions utilising the Corda platform. My interest in blockchain and cryptocurrency stems from the sheer potential of the technology to completely transform industries and value chains for the better.