- Bitcoin prices have started ranging around US$35,000 as the weekend selloff seems to have abated
- Bitcoin bounced back with other assets in a broader market rally that may have been inspired by future COVID stimulus
- ICE’s lagging Bitcoin company Bakkt is proposing a $2.1 billion public offering while Kentucky state reps are exploring Bitcoin mining
Bitcoin has rebounded from declines earlier this week and is now stabilising around the mid-$30,000 level. Bitcoin is now at $34,339 and the difference between today’s high and low was 10.8 percent with a high of $36,544 and a short trade as low as $32,566.
The sector for altcoins followed Bitcoin’s example with 48 of the top 50 cryptocurrencies in positive territories. Four of the main champions are Stellar Lumens (+19.5 per cent), Synthetix (+20.3 per cent) and the privacy coin Zcash (+20 per cent).
Bitcoin, US treasury rates, stocks and gold have all been lifted by the new Biden government, which looks likely to extend COVID stimulus steps over the coming year with crude oil being one of the few resources to slip in price in recent days.
Bitcoin whales accumulating
Bitcoin whales with wallets made up of over 1000 Bitcoin rose to a new record of 2,140 on Monday 11 January, according to data from the Chainanalysis. This is amid the fact that Bitcoin was well on the way to losing nearly 30 percent of its worth reaching nearly as low as $30,000.
The abrupt selling that ended the biggest cryptocurrency rally in 12 years was driven by a strong resistance of $40,000. However, with bitcoin still stable in the middle of $30,000, there might be enough hope to stem more declines at least for now. The continued demand for Bitcoin, and in particular from financial firms, indicates that those on the market agree that the recent contraction in Bitcoin’s price is most likely a temporary.
Any well-known high nett wealth investors started to diversify their investments with Bitcoin in 2020. With the money market awash in treasury bonds, the drive to diversify with Bitcoin was pioneered by hedge fund billionaire Paul Tudor-Jones calling Bitcoin as the “fastest horse” beating inflation risk.
Shark Tank investor Mark Cuban also added some thoughts on emerging space, comparing it to a dot com bubble in which most cryptocurrencies will die while a few survive.
Watching the cryptos trade, it’s EXACTLY like the internet stock bubble. EXACTLY. I think btc, eth , a few others will be analogous to those that were built during the dot-com era, survived the bubble bursting and thrived, like AMZN, EBay, and Priceline. Many won’t
— Mark Cuban (@mcuban) January 11, 2021
He added: “all the narratives about debasement, fiat, etc are just sales pitches. The biggest sales pitch is scarcity vs demand. That’s it.”
In that regard, it is worth noting that, aside from a couple of leading stocks such as Tesla and Moderna, Bitcoin far outperformed any asset or index, even though Bitcoin was the strongest in the fourth quarter.
Speaking more generally regarding the financial markets, Barclays analyst Jason Goldberg said: “You can look at Q4 as a transition quarter as you put some of the 2020 challenges in the rear-view mirror and look forwards to an improved 2021.”
Bakkt exchange goes public in $2.1 billion M&A deal
A significant change in the digital asset sector was revealed on Monday, 13 January. Bakkt, a cryptocurrency exchange located in Atlanta, will be merged with a “special purpose acquisition company” estimated at $2.1 billion for the new publicly listed company.
Bakkt was founded in 2018 by the Intercontinental Exchange (ICE), majority stakeholder of the New York Stock Exchange, and will result in a cash balance of $500 million of which over $200 million is being added to Bakkt Holdings as a result of the merger.
Bakkt’s equity investors, including former Bakkt CEO Kelly Loeffler, who recently lost her re-election bid to the US Senate, will control 78 per cent of the new company and ICE will own about 12 per cent, according to the media brief.
All the fanfare, analysts were swift to find out that it’s a bit of a joke that Bakkt, whose bitcoin trading site floated after a much-hyped debut last year, is bringing himself back to the table with a self-described $2.1 billion valuation that seems to be focused on sheer hope and over-generous expectations.
Meanwhile, in Kentucky, lawmakers proposed a bill aimed at making the state a sanctuary for blockchain mining outfits. The proposed bill would exclude future businesses from paying more than 6% on sales and energy taxes.
Due to low-cost energy in the state of Kentucky, the members say that Kentucky has the potential to become a national pioneer in blockchain engineering.
Like the Bakkt pitch deck, the claims of the members can include forward-looking statements.
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