Curious times as fragile banks and ‘the Jim Cramer effect’ allow Bitcoin to shine
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The week in review
with Jason Deane
This week the news dominating the headlines has been about whether we’ll still have a banking system in the near future. Or not.
While that may seem a flippant comment, the fact is that the underlying data, commentary and sentiment on the matter is far from positive. This is, genuinely, a very serious matter and, like any situation that requires denials from the people in power, the more they do so, the more we are inclined to think it’s even more serious than they’re letting on. Such is the low level of trust we seem to bestow on them.
The second and third biggest bank failures in US history occurred within days of each other, causing a run on confidence which, in turn, caused further pressures across the whole system, thereby perpetuating the cycle. Right now, we’re still in it and no-one is quite sure what we will be faced with when the music finally stops.
Unsurprisingly, the markets have moved, with clear rotations out of more economically sensitive assets such equities, copper and palladium to gold, silver, USD and, as it turns out, Bitcoin, something I was invited to discuss on Bloomberg’s “Asharq Indices” business program yesterday.
Usually, Bitcoin is traded as a ‘risk on’ asset and dumped as soon as anything negative happens, but this time, the opposite occurred. At the same time the banking issues were unfolding, Bitcoin’s price started heading north and hasn’t really looked back since. It is now up some 30% since March 11. By association, the crypto market as a whole has also moved upwards and is still currently holding steady.
For me, and others in the industry, this is significant and Cathie Wood’s recent comments in particular are definitely worth taking note of, which are nicely summarised here.
It is clear that certain powers want to blame elements of the crypto industry for what just happen, rather than the ropey risk management decisions made by the banks themselves and this fascinating five minute exchange between Treasury Secretary Janet Yellen and Senator Lankford seems to indicate that the Fed is using the opportunity to “encourage” people to move from smaller, regional banks to larger “fully insured” ones.
Which would be handy if, for example, you were paving the way for a CBDC in the future.
Just sayin’.
Of course, it’s entirely possible I’m letting my paranoia speak out of turn and there’s no such intention, but it does appear that Bitcoin’s “safe haven” narrative is playing out to at least some degree. Is it possible that the number of people who understand this fact has now reached a significant enough number to make the difference? Has the recent hard schooling of the dangers of counterparty risk been the straw that broke the camel’s back?
Or is it just that we’ve been in a bear market for so long, any slight move upwards will be jumped on by bulls who have been patiently waiting? Or is the whole thing just a huge coincidence?
Personally, I think it’s really because Jim Cramer just advised everyone to sell their Bitcoin “into the rally” on CNBC a few days ago, thereby activating the “inverse Jim Cramer” effect.
And you can take that to the bank (if you can find one still trading that is).
Have a great weekend!
Want to know more about how to maximise your Bitcoin holdings and learn simple ways to invest? Come to my next free webinar on March 28th at 6pm to find out, ask any questions, and grab some free Bitcoin*. Click here to register. (*18+, UK resident, new Luno users only)
Yesterday’s Crypto AM Daily in association with Luno
In the markets
The Bitcoin economy
*Data can be found at https://terminal.bytetree.com/
Total crypto market cap
The total capitalisation of the entire cryptocurrency market this morning was $1.121 trillion.
What Bitcoin did yesterday
We closed yesterday, March 16, at a price of $25,052. The daily high yesterday was $25,190, and the daily low was $24,225.
Bitcoin market capitalisation
Bitcoin’s market capitalisation this morning was $504.739 billion. To put it into context, the market cap of gold is $12.759 trillion and Tesla is $582.6 billion.
Bitcoin volume
The total spot trading volume reported by all exchanges over the last 24 hours was $39,174 billion. High volumes can indicate that a significant price movement has stronger support.
Volatility
The price volatility of Bitcoin over the last 30 days is 61.78%.
Fear and Greed Index
Market sentiment today is 51, in Neutral.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 46.31. Its lowest ever recorded dominance was 37.09 on January 1 2018.
Relative Strength Index (RSI)
The daily RSI is currently 67.70. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Soundbite of the day
Over the weekend, Bitcoin settled ~$33 billion, facilitated ~600k transactions, & issued 2,037 new BTC at a steady & predictable ~1.8% inflation rate. ~1 million new addresses were generated & miners earned $43 m producing 326 blocks.
Banks were closed. The Fed was not needed.
Yassine Elmandjra, analyst at ARK Investment Management
What they said yesterday
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Crypto AM: Editor’s picks
Mt. Gox customers will have to wait until November to recover lost Bitcoin funds
Sam Bankman-Fried: A tissue of lies soaked with fake tears?
Three-in-four wealth managers are gearing up for more cryptocurrency exposure
Crypto.com granted FCA licence to operate in UK
Q&A with Duncan Coutts, Principal Technical Architect at IO Global
Jamie Bartlett – on the trail of the missing ‘Cryptoqueen’
MPs are falling silent over potential of cryptocurrency
Erica’s ‘Crypto Wars’ handed honours in Business Book Awards
‘Let people invest’: Matt Hancock makes case for liberal crypto rules
Explained: Why the Treasury is so sold on stablecoins
Crypto AM: Features
Crypto AM: Founders Series
Crypto AM: Industry Voices
Crypto AM: Contributors
Crypto AM: In Conversation with James Bowater
Crypto AM: Tomorrow’s Money with Gavin S Brown
Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
Crypto AM: Visions of the Future, Past & Present with Alex Lightman
Crypto AM: Tiptoe through the Crypto with Monty Munford
Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry
Crypto on the catwalk
Crypto AM: Events
Cautionary Notes
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City PM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.