The volatility of the cryptocurrency space was on full display again on Monday, as several altcoins experienced gigantic price rebounds following the market crash of the past week or so.
Two altcoins in particular doubled in value in just over 12 hours leading into Monday morning, as Polygon (MATIC) and Maker (MAKER) recorded over 100% growth amid a strong market bounce.
Polygon climbed from a valuation of $0.75 late on Sunday afternoon, to a peak of $1.51 by early on Monday morning — marking 101% gains in less than a day.
The rapid rebound comes shortly after Polygon suffered 72% losses in less than a week, as it fell from a valuation of $2.68 to $0.74 since May 18.
A similar pattern was observed in the governance token of the MakerDAO protocol, Maker, on Monday. The coin price rose from $1,835 on Sunday, to $3,694 by Monday morning, equating to a 101% increase.
Like Polygon, Maker’s miraculous pump follows a 71% decline since the coin hit an all-time high in early May, and a 63% decline in the past week alone.
The intensity of the rebounds experienced by coins on the day appeared to be tied to the severity of their recent market crashes. As such, the altcoin market proved to be the ripest venue for day traders on Monday, many of whom could feasibly have doubled their money between supper and breakfast.
Bitcoin (BTC) and Ether (ETH) were subject to less dramatic rebounds, with the foremost cryptocurrencies gaining 17% and 32% respectively. Both coins experienced less volatility throughout the duration of the recent market pump, and their subsequent losses proved to be less severe, with BTC and ETH losing 51% and 60% respectively since their recent all-time highs.
Many traders rejoice in such volatility, yet the harsh fact remains that day trading is a full-time job, and according to some estimates as little as 1% of day traders actually turn a profit.
Tag: crypto
ETH price reaches new all-time high
The price of ETH has hit a new all-time high of more than $2,060, according to data from TradingView.
ETH first breached $2,000 in late February. The previous all-time high $2,041, reached on Feb. 20. Since then, it’s dipped back below the $2,000 level until now.
BlackRock Has Begun Trading Bitcoin Futures
Investments giant BlackRock has indeed “started to dabble” in the bitcoin market, according to regulatory filings published Wednesday.
A source familiar with the matter told CoinDesk the asset manager held $6.5 million in CME bitcoin futures contracts earlier this year. Those contracts had appreciated $360,457 on reporting day, according to documents reviewed by CoinDesk.
The holdings represented 0.03% of BlackRock’s massive Global Allocation Fund on reporting day Jan. 31 – “very small,” the source said. (The gains represent just 0.0014%.) BlackRock’s original 37 contracts expired on March 26.
PayPal launches crypto checkout service
PayPal Holdings Inc will announce later on Tuesday that it has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally, a move that could significantly boost use of digital assets in everyday commerce.
Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.
The service, which PayPal revealed it was working on late last year, will be available at all of its 29 million merchants in the coming months, the company said.
“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” President and CEO Dan Schulman told Reuters ahead of a formal announcement.
Checkout with Crypto builds on the ability for PayPal users to buy, sell and hold cryptocurrencies, which the San Jose, California-based payments company launched in October.
The offering made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies and helped fuel a rally in virtual coin prices.
Bitcoin has nearly doubled in value since the start of this year, boosted by increased interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.
PayPal’s launch comes less than a week after Tesla Inc said it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will be receiving fiat currency, Tesla said it will hold the bitcoin used as payment.
Still, while the nascent asset is gaining traction among mainstream investors, it has yet to become a widespread form of payment, due in part to its continued volatility.
PayPal hopes its service can change that, as by settling the transaction in fiat currency, merchants will not take on the volatility risk.
“We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants,” Schulman said.
The company will charge no transaction fee to checkout with crypto and only one type of coin can be used for each purchase, it said.
Bitcoin is now ‘too important to ignore’, Deutsche Bank says
Bitcoin’s (BTC) market capitalization of $1 trillion and potential for continued growth have made the cryptocurrency “too important to ignore,” according to Deutsche Bank analysts.
Deutsche Bank Research, the financial research subsidiary of global banking giant Deutsche Bank, issued a report devoted exclusively to Bitcoin, titled “The Future of Payments: Series 2 Part III. Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?”
In the 18-page study, Deutsche Bank Research describes the basic characteristics of Bitcoin and analyzes the key drivers of its historical price growth to a $1 trillion asset.
Deutsche Bank analysts suggested that the Bitcoin price “could continue to rise” further as long as asset managers and companies continue to enter the market. The firm emphasized that central banks and governments now “understand that Bitcoin and other cryptocurrencies are here to stay” and thus are expected to start regulating them by late 2021.
Despite its rising valuation, Bitcoin’s growth as an asset class could be hampered by its “still limited” tradability and liquidity, Deutsche Bank Research warned. “The real debate is whether rising valuations alone can be reason enough for bitcoin to evolve into an asset class, or whether its illiquidity is an obstacle,” the analysts stated.
Bitcoin is expected to “remain ultravolatile” in the short term, Deutsche Bank analysts concluded, forecasting a turning point for Bitcoin in the next “two or three years” as a consensus about its future may emerge.
Germany’s financial regulator issues retail crypto investment warning
Germany’s Federal Financial Supervisory Authority, or BaFin, has warned investors about the risks involved in cryptocurrency investments.
In a consumer protection alert issued on its website on Friday, the regulator offered a cautionary tale about crypto involvement on the part of retail investors.
As part of its statement, BaFin echoed similar admonitions espoused by several European regulators including the European Securities and Markets Authority and the European Banking Authority.
According to BaFin, retail investors need to be aware of the risks of incurring 100% losses from their crypto investments.
While European Union lawmakers are still working toward creating an EU-wide set of laws for digital currencies, German regulators already have some legal framework for digital assets in the country.
Crypto custody providers, exchanges and other businesses can only operate in Germany under license from BaFin. As previously reported by Cointelegraph, the country legalized digital securities back in December 2020.
Under the somewhat clear-cut regulatory landscape for cryptocurrencies in Germany, some banks in the country have even sought approval to begin offering crypto custody solutions.
In December 2020, 224-year-old German bank Hauck & Aufhauser announced plans to establish a cryptocurrency fund.
Despite these laws, BaFin said there is no protection against losses for retail consumers in the cryptocurrency space, hence the warning.
Crypto investment warnings are a popular occurrence among financial regulators across the globe, especially against the backdrop of the current bull market. Unlike mainstream finance with its qualified investor criteria, the crypto market offers easier market participation channels to “Mom and Pop” investors.
In 2021 alone, regulators from South Africa to the United Kingdom, and even Thailand, have issued similar warnings. Back in February, Thailand’s finance minister criticized the current cryptocurrency speculative surge and warned of the potential for massive losses on the part of retail investors.
Meanwhile, the European Commission’s Markets in Crypto Assets legislative proposal is still causing some concern among industry stakeholders.
Earlier in March, the International Association for Trusted Blockchain Applications issued a detailed report based on surveys and engagements with crypto industry players indicating that some MiCA provisions were hostile to the growth of startups.
Visa Anticipates Extreme Cryptocurrency Mainstream Adoption
Visa has escalated its efforts to support digital currencies and is introducing products that help bridge the gap between traditional currencies and cryptocurrencies. In a recent podcast, Visa CEO Al Kelly suggested that he anticipates cryptocurrencies will become ‘extremely mainstream’ within five years. He further stated his desire to position Visa in the middle of this cryptocurrency boom.
Visa’s crypto ventures – In September 2020, Visa integrated the firm Cred into their program to allow issuance of crypto credit cards. In December 2020, Visa partnered with Wirex, which is able to issue Visa cards to its customers. The latest statement from its CEO confirms that it’s accelerating its efforts to facilitate easy access to cryptocurrencies to its users.
Visa’s Cryptocurrency Strategy
Visa is working towards two strategies in Bitcoin – one is to enable the purchase of Bitcoin on Visa credentials, and the second is to work with Bitcoin wallets so that Bitcoin can be translated into a fiat currency and utilized across Visa’s 70 million merchants.
In regards to cryptocurrencies, Kelly stated that Visa is working with 35 different players to facilitate users’ purchase of these digital currencies using their Visa credentials or to cash out onto Visa credentials to make a fiat purchase at any of the 70 million merchants.
Looking ahead – Visa wants its fair share of Bitcoin in case the cryptocurrency industry does take off on the scale that many anticipate.
Morgan Stanley Offers its Clients Exposure to Bitcoin
A new report reveals that Morgan Stanley is accelerating its efforts to engage in the cryptocurrency industry. A CNBC report states that the Wall Street firm is offering its high-end clients access to three funds that provide exposure to Bitcoin. The report cites an internal memo and unnamed people as the sources of the latest news.
Morgan Stanley’s crypto ventures – Last month, Cryptohopper reported that Morgan Stanley’s $150 billion investment arm, Counterpoint Global, was considering investing in Bitcoin and other cryptocurrencies. Earlier this month, the $4 trillion firm joined a $200 million investment in Bitcoin firm NYDIG. Morgan Stanley also holds a major stake in MicroStrategy, which now holds more than 72,000 Bitcoins.
Exposure to Bitcoin
CNBC’s report reveals that this latest move is due to Morgan Stanley clients’ increasing demand for exposure to Bitcoin. The report details involvement with three funds: two of the funds are from Galaxy Digital and the third is a joint effort from FS Investments and NYDIG.
Morgan Stanley has restrictions in place to limit risk – participating firms must comply with restrictions, including at least $5 million at the bank in order to qualify for exposure to these funds. Additionally, it is limiting its exposure to Bitcoin investments to 2.5% of the firms’ total net worth.
Bottom line – The move directly correlates to the rise in institutional client’s demand towards exposure to cryptocurrency investments.
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