GB Market Commentary 29/07/2021
by William Morris
Bitcoin continues to show strength as it remains at the top side of the range at around $40,000. The 21-week EMA (exponential moving average, shown in light blue) is acting as a strong resistance, in confluence with the weekly resistance area of around $39,500 (shown in dark blue). Bitcoin has wicked above this area several times over the past few months, each ending in rejection. However, on the single occasion that Bitcoin closed the week above the $39,500 level, it enjoyed an impressive rally to new All-Time Highs. A close above this level and the 21-week EMA, largely regarded as the bull market support band, could be a signal for the continuation of the bull market.
Horizon Kinetics, one of the top performing US investment advisory services, increased its holdings on property and cryptocurrency, to protect investors from rising inflation. Peter Doyle, one of its cofounder’s, stated that post pandemic “there is a debt problem and it means either default or currency debasement”. Investors are increasingly looking for investments which can inflation-proof their portfolio. Goldman Sachs filed yesterday for a Defi ETF, tracking companies most active in the market, capitalising on investor interest highlighted in a recent report. Grayscale is also launching a DeFi index comprising of the 10 most used DeFi systems.
With continued institutional interest widespread regulation appears an increasingly likely next step in cryptocurrencies future, as it is sought after and adopted. An FT article, today argued crypto supporters need to “shift away from a ‘zero-sum’ mindset where their gains can only come from the losses of the established financial system.” While expressing the need for western governments to stop dismissing crypto as a mix of illegal payments and reckless speculation. Instead promoting consensus and willingness to embrace the innovations of crypto; “channelling them into a better direction for finance, the economy and society at large”. Following on from this Jordan Belfort also called for increased regulation in an interview with CoinDesk. Stating: “the sooner that massive regulation comes into the market, the better it is for Bitcoin, stablecoins, and everything else.”
Mastercard’s Start Path is trying to make it easier for consumers to buy, spend and hold crypto. Working with startups focused on crypto and digital assets, access has been given to Mastercard’s technologies, as well as a network of executives. Seven startups have joined so far, including Uphold and Domain Money who are building investment platforms for digital assets. In the first six months of 2021 Visa crypto-linked cardholders spent over $1 billion.