CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Bitcoin (BTC) And Crypto Began One Of The Most Aggressive Rallies In Their History On Friday - There Is Little In The Way Of Catalyst To Associate With The Move, However, We Do Think There Is A Reasonable Narrative Around Market Positioning To Explain The Activity
Around mid-day Friday, crypto began to 'gap' higher. The first move saw BTC jump from USD 7,750 to 8,500 in less than half an hour. After a brief consolidation, BTC then jumped from 8,750 to 10,500 to make for +40% in less than 24-hours. The activity marks only a handful of times that BTC has seen such a jump in less than a day. BTC consolidated between USD 9 and 10,000 for the remainder of the weekend. Some of the most heavily sold coins, such as NEO, saw even more aggressive moves with that coin rising as much as ~80% from Friday levels. Bitcoin SV (BSV) is the best performing crypto over the last 7-days, up +35% versus BTC +15%.
Crypto Takeaway: The event that has been most widely associated with the move has been Chinese President Xi Jingping's comments on Thursday where he said the country should, 'take advantage of blockchain technology' at an official event in Beijing. We believe this is misguided as Xi mentioned nothing about crypto and most politicians globally strike a clear divide between 'blockchain' and 'cryptocurrency.' Furthermore, China's Congress passed new cryptography laws for the new year. As a reminder, cryptocurrency trading remains illegal in the country and so, to associate Xi's comments with some implied support for crypto (as some commentators have done) we find disingenuous.
If there was any narrative to explain the move we believe it must center around market dynamics. Concerning Libra, Facebook essentially abandoned any near-term timeframes on the project, if it launches ever. The release of the Libra whitepaper was a clear contributor to the June crypto rally and with that story turning negative, any incremental buying relating to Libra has likely unwound. Furthermore, we appear to have seen the interim lows in exchange-stress with the worst seemingly behind Binance, Bitfinex, Coinbase and a slew of other major venues which had well-publicized issues throughout the middle of the year. Even with the aggressive rise, volumes have been relatively subdued and we'll be keeping a close eye on attention and activity in assessing the 'legs' of this impressive move.