GB Market Commentary 23/08/2021
by Marcus Sotiriou
Bitcoin has closed another day above the 200-day moving average, as well as completing a Support/Resistance flip of the $48,000 level (shown below). Also, there has been a breakout on the down-trending RSI indicator. The trend is bullish, however caution is to be exercised at these levels - due to the decline in volume as well as HTF (high time frame) resistance from April and May.
Even though Bitcoin has rallied around 75% from the bottom around a month ago, the Google trends for Bitcoin searches remains relatively low. In fact, the last time Bitcoin was at $50,000, the Google trends was much higher than what it is now (shown on the right). This suggests that retail euphoria hasn’t entered the market yet and Bitcoin has a long way to go in this market cycle. I think that Google trends will reach an all-time high by the time the market cycle is at a peak.
Bitcoin adoption continues to rise as Palantir, who are a multibillion-dollar software company, are now taking payments in Bitcoin and will hold all the Bitcoin they receive. Palantir’s billionaire co-founder Peter Thiel has told Bloomberg that they are preparing for a black swan event. I think this is because of concerns with the soundness of the dollar, due to central bank monetary policies. Palantir have added $50 million of gold bars to their treasury and the CFO has also declared that Palantir are considering an investment into Bitcoin as a treasury reserve asset. Furthermore, the second-largest mortgage lender in the US has announced plans to accept Bitcoin as payment in Q3 this year. Home buyers will be able to pay for their mortgage in Bitcoin. People may not be willing to spend much Bitcoin at this point but these integrations definitely adds social proofing to the young asset.
Aside from more adoption for Bitcoin as payment, more financial institutions are showing interest in the asset. Wells Fargo, in particular, has launched a Bitcoin fund for their wealthy clients. The president of Wells Fargo Investment Institute, told reporters that the institution now judges that the cryptocurrency space has “hit an evolution and maturation of its development that allows it now to be a viable investable asset.” This news is in contrast to the firms’ claims in December 2020 of having little interest in crypto, and speaks volumes for Wall Street’s growing popularity of the industry. Furthermore, Coinbase announced last week that they have approval to buy $500 million of crypto, and also use 10 percent of all profits going forward to buy crypto. Lastly, PayPal are letting British customers buy, hold and sell cryptocurrencies starting this week.
Binance continues attempts to become more compliant with regulators as they introduced implementation of KYC for all users. Also, Binance have just hired the former Singapore Exchange Ltd. Executive Richard Teng as CEO of Binance Singapore in order to provide a more compliant-orientated outlook, as Binance Singapore seeks local licenses. In other regulatory news Gary Gensler has said that DeFi projects are not immune to regulation after saying that ”these platforms facilitate something that might be decentralized in some aspects but highly centralized in other aspects.”