First Mover: Bitcoins Hit Exchanges as Bloomberg Touts Crypto and DeFi Hedge Fund Seeks $50M

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The upcoming U.S. presidential election has become one of the most contentious in history, fraught with searing divisions over everything from the economy to race to the continued health of democracy itself.  

So it’s not surprising that Wall Street options traders are now pricing in expectations of elevated market volatility around the November election. Analysts for the investment banking giant Goldman Sachs noted earlier this month that price swings of nearly 3% are implied around election day in the Standard & Poor’s 500 Index of U.S. stocks. 

What’s surprising is that options trading on notoriously volatile bitcoin prices, which often trade in sync with stocks, implies a stretch of uncanny calm come November, CoinDesk’s Omkar Godbole reported Tuesday.  

Godbole writes that ample technical factors might explain the discrepancy, from the influence of certain hedging strategies to the reality that the nascent bitcoin-options market is still quite small in relative terms, with most action concentrated in “front-month” contracts that expire in September.  

Another possibility, according to Godbole, is that bitcoin, as a globally traded asset, might actually be less susceptible to the U.S. outcome, even though the cryptocurrency is priced in dollars. The implication could be that bitcoin decouples at that point from the U.S. market. 

“The U.S. elections will have relatively less impact on bitcoin compared to the U.S. equities,” Richard Rosenblum, head of trading at the digital-asset firm GSR, told Godbole. 

Bitcoin’s expected volatility over the next few months, as implied by the options market, has been falling.

Source: Skew.

Crypto investment firm Panxora seeks $50M for new hedge fund to buy DeFi tokens

There’s been a months-long string of astonishing developments and ridiculous twists in the fast growing arena of decentralized finance, or DeFi. Digital tokens with names like YAM and SUSHI have appeared overnight, exploding in value, dominating crypto headlines and sparking serious conversations about the far-reaching potential of digital-asset markets and financial technologies. 

With total collateral locked into automated, blockchain-based DeFi trading and lending platforms surging more than 20-fold this year to $13 billion as of last week, big centralized cryptocurrency exchanges like Binance, Coinbase and OKEx have rushed to list the tokens and roll out DeFi offerings to avoid missing out. 

Now, one cryptocurrency money manager, Panxora, seeks to raise up to $50 million for a new hedge fund to buy digital tokens associated with the fast-growing decentralized finance (DeFi) sector. 

“This has got the potential to really change the way finance is carried out,” Panxora CEO Gavin Smith said in an interview. 

In an ironic twist, Panxora’s announcement comes just as the DeFi market appears to be cooling. Just in the past week, total collateral in the systems has declined to about $9.5 billion, according to data tracker DeFi Pulse. Aave, a decentralized lender, saw its LEND tokens fall by 12% during the seven days through Tuesday, according to Messari, a cryptocurrency data firm.

Smith suggests that a correction was bound to come at some point. “We expect the market to be volatile in the early years,” Smith said. “While there is great potential there will inevitably be setbacks along the way.”  

Read More: Crypto Hedge Fund Looks for $50M to Buy DeFi Tokens Amid Market Pullback

Bitcoin Watch

change-in-btc-held-on-exchanges

Change in BTC held on exchanges.

Source: Chainalysis

Key bitcoin (BTC) on-chain metrics have flipped bearish this week, suggesting the top cryptocurrency by market value may remain under pressure in the short-term. 

On Tuesday, the net inflow of bitcoin to exchanges (measured by the total change in exchange balances) was 36,800 BTC – the biggest single-day rise since the markets crash on March 13, according to data source Chainalysis.

“Since Sept. 20, the net daily inflow of bitcoins to exchanges have been increasing and trade intensity has been declining,” Philip Gradwell, an economist at Chainalysis, told CoinDesk.

The data point “indicates a weakening market,” he said. 

Read More: Bitcoin Market Weakening After Macro-Based Sell-Off, On-Chain Data Suggests

Token Watch

Ether (ETH): Ether in parked in smart contracts rises to four-year high

Wrapped Bitcoin (WBTC), Ren’s rBTC (RBTC): Supply of tokenized bitcoin on Ethereum passes $1.1B.

TBTC (TBTC): Thesis-built protocol relaunches after bitcoin-on-Ethereum project suffered smart-contract bug in May.

Aavegotchi (GHST): Aave-themed game revolving around value-staked NFTs serves as meta trip through DeFi ecosystem, Delphi Digital says. 

What’s Hot

Bloomberg says “DeFi mania” pushes crypto to top-performing asset class of 2020, beating stocks, bonds, gold (Bloomberg)

Currency cold-war prognosticators mapping out scenarios from “Rainbow” to “Red,” dominated by the U.S., China or bitcoin (CoinDesk)

Bermuda Stock Exchange announces listing of exchange-traded fund to track digital-asset market (CoinDesk)

Peer-to-peer commerce company Origin’s new OUSD stablecoin uses yield farming to automatically grow holders’ balances (CoinDesk)

Trump’s former White House chief of staff Mick Mulvaney joins blockchain advisory group Chamber of Digital Commerce; Goldman Sachs and Visa join as executive committee members (CoinDesk)

Analogs

The latest on the economy and traditional finance

Bank of England governor won’t say no to negative interest rates; it’s “in the tool bag” (FT)

Federal Reserve Chair Jerome Powell says U.S. central bank will continue providing aid “for as long as it takes” (CNBC)

Trump Fed nominee Shelton draws scrutiny for reversal of earlier stance that U.S. should raise interest rates and return to the gold standard (NYT)

Iconic clothing retailer Ralph Lauren to cut 15% of workforce after steep revenue drop (WSJ)

Blackstone closes $8B fund for real-estate lending just as remote-working trend casts clouds over commercial office market (WSJ)

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How the Dollar’s Fall from the Top Could Fuel the Future of Bitcoin

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Bitcoin was built and designed to be directly opposed to the dollar in every way. In a sense, it is its destiny to trade against the dollar until it meets its untimely demise. That demise could very well be beginning thanks to the pandemic, and its fall from glory could also fuel a future where Bitcoin takes its throne.

Here’s what that could look like from a technical analysis perspective.

DXY Dollar Currency Index Short-Term Reversal Failure Could Lead To Devastating Breakdown

The dollar is one half of every most dominant Bitcoin trading pair on every top crypto exchange. The same goes for nearly every other asset globally, from stocks to gold, and even other nations’ currencies.

The dollar has been the global reserve currency over the last 100 years. It is the currency in which all exchange rates are based on.

RELATED READING | BLOOMBERG: BITCOIN “SHOULD BE A PRIMARY BENEFICIARY” POST PANDEMIC

Bitcoin has been pitched as someday having the potential to take that role away from the almighty dollar, but such a scenario seems incredibly far off.

The two assets are at an important junction. Bitcoin is retesting support at $10,000 just as the DXY Dollar Currency Index appears to be staging a reversal. A rounding bottom formation and a complex inverse head and shoulders pattern suggest that the dollar is due for a rebound.

DXY Dollar Currency Index BTCUSD Short-Term Reversals | Source: TradingView

But just as the dollar begins to bounce on daily timeframes, its touching downtrend resistance, and Bitcoin is retesting its “meme” downtrend line.

The DXY chart above with Bitcoin price action superimposed shows how the two assets move in inverse. If, for some reason, DXY gets rejected at this red, dotted downtrend line, Bitcoin could soon soar.

Zooming out further shows that the dollar’s downhill decent could be a lot deeper than most are expecting, and it could also provide the fuel for the crypto asset to begin its next bull run.

bitcoin dollar btcusd dxy monthly wedges

DXY Dollar Currency Index Rising Wedge Breakdown and Retest | Source: TradingView

The Greenback’s Downside Target Lays Path To Bitcoin’s Next All-Time High

The DXY Dollar Currency Index is a weighted basket of top forex currencies trading against the dollar, but it does a great job depicting the overall health of the dollar long term.

Zoomed out to monthly timeframes, the dollar’s “rebound” looks to be a bearish retest of a lost support line, now acting as resistance. The massive, two-decade-long pattern is breaking down, similarly to the previous, two-decade-long rising wedge that broke down at the turn of the millennium.

A drastic collapse in the dollar from here could lead to a future where Bitcoin is king.

bitcoin dollar btcusd dxy born ath

DXY BTCUSD All-Time High Correlation Chart | Source: TradingView

Examining the current rising wedge pattern on monthly DXY price charts and comparing it with Bitcoin’s lifecycle, the results are shocking.

Bitcoin was born just as the dollar was getting its footing from the Great Recession fallout, then the crypto asset’s next two major peaks coincided perfectly with each significant plunge in the DXY.

Measuring the distance between each significant crash in the DXY and top in Bitcoin projects the next top in the crypto market to be put in around January 2022.

Following that, another peak would mark the bottom of the move in the DXY and the cryptocurrency’s next peak in February 2026.

RELATED READING | WHY THE UPCOMING US ELECTION IS BITCOIN’S BIGGEST RISK

The drop in the dollar every four years appears to match up well with Bitcoin’s halving-based valuation theories, like the stock-t0-flow model, which predicts the cryptocurrency’s price to spike any day now as a result of diminished supply.

If the DXY Dollar Currency Index turns around here and falls deeper, the stage is set perfectly for Bitcoin’s next bull market. Perhaps even for the asset to become the next global reserve currency, as many claim it will eventually be.

Featured image from DepositPhotos, Charts from TradingView


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Keep an Eye on This Cohort of Open Source Developer Interns

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  • For this year’s Blockchain Commons internship, Christopher Allen had an uncommon “problem”: too many quality applications to turn down.
  • Instead, he expanded the program to accommodate 7 interns where he usually only accepts one.
  • With the internship drawing to a close, the interns have just about completed their projects – but that doesn’t mean they’re done contributing to Bitcoin’s open source projects. 

When Christopher Allen received applications for the 2020 Blockchain Commons internship, he had a problem: He had more applications than he had ever received in the internship’s history, and all from stellar applicants.

This was a good problem to have, of course, and Allen tackled it head-on by expanding the internship program. He typically only takes one intern under his tutelage, but this year he took on 7.

With so many extra hands, each intern had the opportunity to work on a project of his or her preference. Each of these projects went toward improving software in the Blockchain Commons repositories. 

As the internship draws to a close, the interns’ contributions to free and open-source software (FOSS) are nearing completion and will soon be open to the public to use. 

The Blockchain Commons: a hub for open-source software

Allen founded the Blockchain Commons in 2018 in a bid to keep Bitcoin’s development open and distributed.

In a past life, he helped pioneer the OpenSSL/TLS protocol, an encryption standard for securing data transmitted over the internet. Come 2014, the Heartbleed Bug compromised the OpenSSL implementation of the encryption standard, which handled 60% of the internet’s traffic at the time (and with it, trillions of dollars of online commerce).

The flaw was promptly patched. But Allen took that tribulation to heart and vowed to not allow a single point of failure to threaten the security of other software projects he works on.

Cue Allen’s discovery of Bitcoin and the founding of the Blockchain Commons. After a brief tenure at Blockstream, Allen founded his not-for-profit benefit organization to do his part to keep Bitcoin’s development distributed. 

Now, after a summer of tinkering, his newest interns have enriched the codebase and Github libraries of some of the Blockchain Commons’ principal projects – including the addition of a project of their own design.

What these budding Bitcoin developers created

Spotbit

For their new group project, the interns began building Spotbit, a software for curating Tor-supported bitcoin (BTC) price feeds. 

Led by Dartmouth senior Christian Murray with assistance from Nishit Shah, the modular, self-hosted feed draws pricing data from 100 cryptocurrency exchanges across various stablecoin and fiat trading pairs. Users can choose which exchanges they want their feed to tap into, which trading pairs to support and what data they want to store. If a user doesn’t want to host a Spotbit node, they can connect to others. 

Lethe Kit

Besides Spotbit, each intern has an individual project which they work on alongside Allen to improve.

Gorazs Kovacic, a student from Hungary, for example, has been working on the Blockchain Commons’ code for the Lethe Kit. The DIY hardware wallet – so-named after the river of Greek mythology that cleansed the underworld’s denizens with amnesia of their past lives – is an air-gapped hardware wallet, meaning it cannot come in direct contact with an internet-connected device. 

Instead it uses partially signed Bitcoin transactions (PSBTs) which allow users to sign a transaction on the device and then port that transaction to a computer using an SD card; this way, the private key needed to sign the transaction is never revealed to an internet-connected device.

Kovacic has been working on integrating animated QR codes and Shamir secret shares (a cryptographic technique for dividing a private key into multiple parts) into the Lethe kit.

Gordian

Another intern, Gautham Ganesh Elango, is working on Gordian, a Bitcoin full-node implementation which runs over Tor. 

The software operates similarly to Bitcoin node dashboards like My Node by offering its users a graphical user interface (GUI) for interacting with Bitcoin Core. 

A GUI (an interface type we use everyday when commanding our Macs and PCs with iOs or Windows, to give one example) is the user-friendly, layman’s version of the command-line interface – the raw coding terminal that developers use to speak to their devices. 

The project has a mobile version (Gordian Wallet) and a desktop version (GordianServer).

Elango, a freshman from Australia, is also building out an accounting tool which will allow Gordian users to import transaction and price data to Microsoft Excel for tax purposes.

For another project, Elango and fellow intern Javier Vargas are stepping into the role of instructor by fleshing out the Blockchain Commons’ documentation of RPC codes for managing a Bitcoin node from the command-line interface. 

Internship takeaways

Almost all the tools the interns have been working on contribute to each others’ tech stacks (Spotbit, for example, provides price data for the Gordian Wallet). Showing that there’s more to open-source development than coding, cross-project collaboration is one of the internship’s key instructional points.

For Murray, this was indeed one of the internship’s primary lessons: that open-source development means creating sustainable tools that go beyond a solitary use case.

“This was my first introduction to open-source development, and definitely one of the big learning curves is learning to collaborate effectively and developing processes for yourself. A lot of the stuff I wrote before I got here was something I needed to work one time, but this is a lot more about something that is going to work all the time,” he told CoinDesk.

Murray said that he plans to continue to work on Bitcoin open-source software after the internship, whether professionally or otherwise. This was a common thread for the soon-to-be alumni of the Blockchain Commons. 

Kovacic, who is already diving into other open-source repositories like Blockstream’s c-lightning, said the internship “reaffirmed my position that I want to work in the Bitcoin space.” 

For his part, Elango agreed, saying the internship shook off his apprehension about approaching the seemingly daunting task of maintaining open-source projects.

“It’s definitely got me interested in Bitcoin open-source development. At first I was kind of intimidated by these large open-source projects. After the internship, I’ve become more comfortable with doing large contributions to these projects. Once I learn the basics of C++ I may start contributing to Bitcoin Core. And if not Bitcoin Core specifically, then some other open-source project,” he told CoinDesk.

Looking ahead to the next cohort of interns

With this internship coming to a close, Allen is offering another one that will begin in October and end in December. He stressed that the latest internship hopes to pull in more talent from Bitcoin-adjacent fields, not just the realm of computer science. This could mean students studying law, library science or other disciplines to help improve aspects of Blockchain Commons’ documentation. 

When Allen asked his students what they would say to incoming interns, Murray answered in the spirit of what may be considered the internship’s core ethos: Ask plenty of questions and cooperate with others whenever possible.

“If I could give advice to anyone coming in it would be: don’t be afraid to ask for help when you need it. We have one group chat and I wanted to be professional and not spam the chat with questions. One time, I had spent several hours trying to fix this Github commit and couldn’t figure it out. But then Gorazs ended up giving me this one-line solution. If I had asked the question early, I would have saved a lot of time.”



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Bitcoin News Roundup for Sept. 23, 2020

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With the bitcoin market weakening and an ECB update, CoinDesk’s Markets Daily is back for your latest crypto news roundup!

Bitcoin inventory is building on exchanges but there’s a lack of buyers, according to a Chainalysis economist. 

The EU central bank said the term stablecoin is potentially “confusing” and “misleading” to consumers.

The supply of BitGo’s wrapped bitcoins (WBTC) topped 76,000 after setting an all-time record of nearly 21,000 WBTC minted within one week. Here’s why.

The artwork titled, ‘Portraits of a Mind’ created by the Robert Alice project is a set of 40 paintings made up of a transcription of the code associated with the Bitcoin blockchain.



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Bitcoin “Should Be A Primary Beneficiary” Post Pandemic

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“Bitcoin is the answer” is a phrase that’s thrown around regularly both in a serious and comical manner all across the crypto community. But in a future where there is limited potential upside in equities and bonds, the cryptocurrency could very well be the solution to further wealth accumulation.

That’s exactly what a Bloomberg Intelligence Senior Commodity Strategist claims, offering a chart with Bitcoin “juxtaposed” versus quantitative easing to back up the theory. Here’s what this means for the leading cryptocurrency and why this stamp of approval is so significant.

The Cryptocurrency’s Rise From Tech To Finance

Bitcoin’s story as a financial asset is unlike any other’s. The cryptocurrency started out essentially as an experiment that by chance took hold. The asset started off the focus of tech enthusiasts and cypherpunks toying with the future of digital money, with added attention to privacy and anonymity. This anonymity is so crucial to the coin’s core, even the asset’s creator is still to this day unknown.

From there, its use in commerce took footing on the dark web, in the Silk Road marketplace. Without real-world adoption like that or the early days of trading 10,000 BTC for two pizzas, the cryptocurrency may not have made it to $20,000 in 2017.

RELATED READING | CAN BITCOIN FIX WHAT TOP ECONOMISTS SAY CENTRAL BANKS CANNOT SOLVE?

During that time, the cryptocurrency became a household name, and retail investors FOMOed into the asset hoping to strike it rich. But reality set in, Bitcoin wasn’t yet ready for prime time, and the bubble popped.

Time has passed, and a new market cycle could be beginning. The conditions for the cryptocurrency to rise in value almost seem too perfect to be true.

The asset’s hard-capped, finite supply of just 21 million BTC gives in an advantage over nearly every other asset on the face of the planet.

Bloomberg Intelligence: Bitcoin To Benefit From Limited Upside in Equities and Bonds

Its also why Bitcoin is potentially positioned to be one of the only assets with further potential upside, in an economic environment where financial upside everywhere else is “limited,” according to a Senior Bloomberg Commodity Strategist.

Bloomberg Intelligence’s Mike McGlone has revealed a chart on Twitter with Bitcoin’s price and supply “juxtaposed” versus quantitative easing. McGlone says that the chart demonstrates how Bitcoin’s fixed supply “should” make the cryptocurrency a “primary beneficiary in a period of limited potential further upside in equity and bond prices.”

RELATED READING | OWNING BITCOIN “IS A MUST” SAYS PRICE OF TOMORROW AUTHOR, JEFF BOOTH

Essentially, McGlone and the rest of Bloomberg Intelligence expect the rest of the financial space to suffer in the years to come due to out of control quantitative easing. At the same time, Bitcoin’s digital scarcity keeps it appreciating in value over the long-term.

In the post-pandemic future where the economy is frail, dollars are abundant, and money is harder to come by, Bitcoin may be the answer, and the likes of Bloomberg Intelligence and other big names are finally starting to realize this.

BTCUSD Monthly Pivotal Moment For Bitcoin | Source: TradingView

Featured image from DepositPhotos, Chart from TradingView, Bloomberg Intelligence


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Parity Upgrades Polkadot’s Underlying Tech

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Parity Technologies has released the second version of its blockchain building kit, Substrate 2.0, according to a blog post shared Wednesday with CoinDesk. 

The new release gives developers additional tools to customize a blockchain “precisely for your application or business logic,” the post reads. 

Parity Technologies is the developer of the Polkadot blockchain with ambitions for developing a Web 3.0, undergirded by a meshing of various blockchains.

The centerpiece of that multi-blockchain vision is Substrate. It acts as a tooling kit for developers making their own blockchains with Polkadot – also built on Substrate – working underneath as a communication and economic layer of sorts between Substrate-based blockchains.

For example, Parity Tech’s “canary” network Kusama and security token platform Polymesh are two Substrate blockchains. Both chains should be able to communicate with each other, if everything pans out as co-founder of Parity Tech Gavin Wood foresees.

The new release adds a few core functionalities as Polkadot continues rolling developments after its May debut, said Parity Technologies head of public affairs Peter Mauric to CoinDesk in a phone interview.

Most importantly, the code shipment includes 70 composable “modules” for blockchain architects to plug and play various design ideas. Parity developers call these modules “pallets.” 

For example, pallets exist for managing an on-chain developer treasury or for allowing smart contracts on a Substrate-based blockchain to speak with the Ethereum Virtual Machine (EVM). 

Substrate 2.0 also includes modules for bringing off-chain data onto the blockchain using what it calls “off-chain workers.” These remove the burden of intensive processes and massive data sets from specialized nodes on the network, and communicate with the main chain to ensure all network participants are kept up to date automatically.

Addressing what is generally referred to as the “oracle problem,” these off-chain workers help bring data from the real world, such as prices or temperatures, onto a blockchain and are “ideal for Internet-of-Things (IoT) devices or real-world data inputs via oracles,” the blog states.



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UNI Market Cap Rebounds $120M as Rest of Crypto Market Falters

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Uniswap’s week-old governance token is outperforming more established cryptocurrencies Wednesday.

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Ripple co-founder moves $115m worth of XRP – sparking fears of a selloff

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The massive hype surrounding Ripple’s XRP token throughout 2017 created an enormous community that carried over into 2018 and 2019, but this community of investors appears to have been dissolving as of late.

Interest in the token has fallen off a cliff, with the lack of significant banking partnerships and tempered utility slowing the cryptocurrency’s growth.

That being said, it is still one of the largest cryptocurrencies by market cap, with plenty of investors from 2017 and beyond still holding onto their tokens in hopes of it seeing growth and adoption in the future.

One short-term event that could place some pressure on the cryptocurrency is the transfer of $115m worth of the token by Chris Larsen – an early Ripple executive.

It’s possible that these tokens are being moved from his wallet to be sold via OTC.

Any pressure this news could place on the crypto may be offset by the secondary market token purchases that Ripple has been making in recent months.

XRP price remains stagnant within the $0.20 range as Ripple starts buying 

XRP’s price has been struggling to gain any notable momentum in recent days and weeks, with it remaining stagnant within the mid-$0.20 region.

At the time of writing, XRP is trading up marginally at its current price of $0.23. This is around the price at which it has been trading throughout the past several days and weeks.

XRPUSD Chart via TradingView.

During the peak of the recent market-wide uptrend, its price was able to stretch as far as $0.32 before it faced massive inflows of selling pressure.

One trend that may be bolstering XRP in the near-term is the secondary market purchasing Ripple has been conducting. They spoke about this in their Q2 2020 update, saying:

“A healthy, orderly XRP market is required to minimize cost and risk for customers, and Ripple plays a responsible role in the liquidity process… That said, Ripple has been a buyer in the secondary market and may continue to undertake purchases in the future at market prices.”

Ex-Ripple executive transfers $115m worth of the crypto

Per a recent note from the wallet tracking platform Whale Alert, Chris Larsen – a Ripple co-founder and former executive – just moved over $115m worth of XRP.

“499,999,979 XRP (115,847,491 USD) transferred from Chris Larsen to unknown wallet.”

He later stated in a follow-up tweet that these tokens were moved to NYDIG – a custodial solution for crypto. However, some users have observed that this would be one platform through which someone could sell a massive token stake OTC.

It remains unclear as to whether or not he intends to sell these tokens, but his potential exit from the ecosystem could strike a blow to investor sentiment.

The transaction can be viewed by navigating to this link.

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3 Crucial Reasons Why Bitcoin Could Fall Below $10K This Fall

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Bitcoin faces the prospects of breaking below $10,000 after failing to extend a rally that pushed its price up by 70 percent earlier this year.

Bitcoin is maintaining support above $10,000. Source: TradingView.com

Here are the top three risks the cryptocurrency is facing as it heads towards the fourth and final quarter of 2020, according to the latest fractals and multiple observations.

#1 Another US Equity Selloff; Bitcoin Correlation

One of the main reasons Bitcoin faces the risks of falling in the coming sessions is the equity market. The cryptocurrency earlier traded higher when the US stocks were doing the same. It also fell alongside the top Wall Street indexes: the S&P 500, the Dow Jones, the Nasdaq Composite.

That made the US equity market an excellent barometer to gauge Bitcoin market sentiments. Even recently, the downside correction in the seemingly overbought tech stocks laggingly coincided with a similar plunge across the cryptocurrency index.

Charles Edwards, the head of the crypto-focused Capriole Fund, recognized the correlation in his Wednesday tweet, stating that uncertainty in risk-off markets is keeping Bitcoin from hitting new higher levels.

A move into cash is the likely outcome. The same had happened during the March 2020’s infamous global market rout, wherein Bitcoin and stocks crashed in tandem but the US dollar grew as investors treated it as their safest haven.

If the scenario repeats, then it will put further bearish pressure on Bitcoin. That would lead the cryptocurrency to lower below $10,000.

#2 Delay in Second Stimulus Check

As stated above, a strengthening US dollar could put further downside pressure on Bitcoin. Analysts believe that the greenback might extend its recovery after crashing to its 27-month nadir in late-August. Part of the reason is an ongoing delay in the second coronavirus stimulus package.

The Democrats and the Republicans are at a standoff over the size of the next financial aid to American households, businesses, and individuals battered by the COVID-19 pandemic. Both are still $1 trillion apart in their spending plans, raising worries among investors about a resolution anytime earlier.

Meanwhile, the delay in the stimulus check is prompting Americans to save more and spend less. As the flow of the US dollar becomes more viscous, it also reduces the demand for other assets. That serves as one reason behind the recent selloff in gold, stock, and even Bitcoin markets.

us dollar, bitcoin, btcusdt, btcusd, dxy, xbtusd, cryptocurrency

US Dollar Index (DXY) is up 1.25 percent on a week-to-date timeframe. Source: TradingView.com

The dollar expects to grow more as the COVID cases rise in the US and stall the economic recovery. Overall, it might be bad for Bitcoin.

#3 US Presidential Election 2020

While nobody knows who is winning the US Presidential election in 2020, the uncertainty surrounding the outcome could leave the financial markets in a volatile state.

Gavin Smith, the chief executive of the cryptocurrency firm Panxora, discussed the possibility of elections causing political turmoil. He noted that such a scenario could lead the equities lower, which, in turn, affect Bitcoin and its ability to hold $10,000 as its support.

“The danger to the crypto market is much the same as we saw in March,” Smith said. “If you get that big sell-off in risk assets, there will be that liquidation of bitcoin.”

Simultaneously, the cryptocurrency expects to revive its bullish bias after the US presidential race ends. That is due to an improving long-term fundamental backdrop led by quantitative easing, lower interest rates, and poor bond yields.



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US Space Force Enlists Blockchain Firm to Deploy Hack-Proof Data Defenses

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The United States Space Force has engaged blockchain firm Xage Security to develop a new security layer for its communications systems.

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