After what seemed to be a never-ending slide for cryptocurrencies, prices seem to have bottomed out. Are these developments enough to sustain a recovery?
First up, check out this snapshot of how bitcoin and its buddies have fared in the past seven days as of November 30, 01:14 am GMT. Still plenty of red but some losses have been trimmed already.
Bloodbath = Bargains?
Thanks to the selloff over the past couple of weeks, bitcoin’s drop to its 13-month lows puts it on track to chalk up one of its worst months for the year.
But as that line in The Dark Knight goes, the night is darkest just before dawn, and buyers may have started scooping up these bargains in the past few days. By the middle of this week, bitcoin posted its strongest 24-hour run since July as institutional investment hopes were revived.
You see, this expected surge in institutional moolah flowing into the industry is widely anticipated to usher in the rebound of rebounds for cryptocurrencies. However, the bear market cast doubts that big banks and hedge funds might still be willing to place their bets.
Fundstrat’s Tom Lee, who is a major crypto bull, said in his speech during this week’s BlockShow Asia 2018:
“[We] have a price correction taking place, which has caused the price to fall even below its 200-day [a popular technical indicator used by investors to analyze price trends], but if you’ve got time, it will arise. It will not happen within three months, or one year, but in two to three years, and this is the golden time to be in crypto. As soon as Bitcoin crosses its 200-day, we know there will be a flood of money coming.”
Still a go for institutions
Although SEC Chairman Clayton admitted that the lack of consumer protection measures means that it will take a long time before the regulator approves bitcoin ETFs, this negative update was overshadowed by reports that Nasdaq will still carry on with its bitcoin futures offering.
A report from Bloomberg revealed that the exchange plans on introducing bitcoin futures contracts by the first quarter of next year. Sources revealed that Nasdaq is working hard to meet the requirements of CFTC before launching the product.
Prices for these futures contracts will be compiled from numerous exchanges (versus four by CME and one by Cboe) by partner VanEck Associates Corp. Sound familiar? They’re also the fellas who tried to win SEC approval for bitcoin ETFs!
This was confirmed by a tweet from VanEck’s director of digital asset strategy Gabor Gurbacs:
@Nasdaq and VanEck’s @MVISIndices announces #index #partnership and intention to bring to market transparent, regulated and surveilled #DigitalAssets products, such as #Bitcoin futures contracts. More info to come. Share & follow us. #crypto #futures #SMARTS #ConsensusInvest pic.twitter.com/Q2oCZx4pp1
— Gabor Gurbacs (@gaborgurbacs) November 27, 2018
Meanwhile, crypto exchange Coinbase launched OTC trading for institutional clients, which will allow them to directly trade between each other. Head of Sales Christine Sandler said:
“We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading.”
Oh and remember the ICE Bakkt bitcoin futures initially eyeing to launch this month? They’ve pushed back their target date to January 24, 2019 as the “volume of interest” in the company and the “work required to get all the pieces in place” sparked a delay.
Ripple keeps making waves
The recent crypto rout allowed XRP to overtake ethereum to snag the second top spot in rankings based on market cap. That may explain why it’s looking like one of the more resilient digital assets out there, but recent updates also signal that the company keeps making big strides.
Earlier in the week, Ripple shared that it’s rolling out a new version of xCurrent that would make it easier for customers to use XRP. Version 4.0 of xCurrent was described by Ripple SVP of product Asheesh Birla:
“What this release enables you to do is that in countries where you think it’s appropriate and xRapid’s available, using your xCurrent software, you can now plug into on-demand liquidity using xRapid.”
Most of its banking and institutional partners already on the xCurrent platform are expected to transition to xRapid at some point, leading to stronger volumes for XRP as it is used to settle even more cross-border transactions.
Just be warned, there is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!