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The Bitbuy Brief: BTC Dominance Continues

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November 12, 2020
Bitbuy Staff
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The Bitbuy Brief

Issue #122

Weekly Market Update: Steady Climb To $21K 🚀

Analysis:  BTC is outperforming and threatening a decisive breakout at $16,000 USD ($21,000 CAD). Beyond BTC, ETH led the way from the other major coins, with an over 10% gain over the 7-day period.


BTC Dominance: Metric Growing After A DeFi Summer ↔️

BTC Dominance Is Approaching New 52-Week Highs. Perhaps Surprisingly, The Ethereum-Based DeFi Narrative Has Been Overwhelmed By Bitcoin Sentiment And Performance

It seems we’ll all be talking about Bitcoin at the Christmas dinner table after all. The ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets continues to climb steadily.

That’s a far cry from August and September,  when native tokens on decentralized finance platforms, particularly those offering ‘yield’ exploded in terms of interest and market cap. Coins such as COMP, UNI, YFI all increased 1,000s of % within weeks. A slew of smaller and newer coins also followed suit in a move that was reminiscent of the 2017 ICO craze.

Google search interest spiked in turn with the terms ‘defi’ and ‘decentralized finance’ seeing unprecedented levels of interest. In the last few weeks, however, that trend has completely reversed.

While DeFi tokens have so far remained somewhat buoyant, Google searches have evaporated. BTC Dominance has exploded and investor attention is clearly elsewhere.

Takeaway: Many have characterized the yielding platforms as dangerous momentum-based carry trades with risks that were for the most part ignored by investors.

The same critics said that DeFi trade was distracting from more important narratives in the space such as: the fantastic fundamentals of BTC emerging out of COVID and future risks to Ethereum ahead of their supposed move to PoS consensus algorithm.

That view has been vindicated in the last few weeks as DeFi tokens have for the most part been flat to lower while BTC posts a clear breakout.

Furthermore, since the beginning of October BTC is up over 50% with ETH, the largest beneficiary of the DeFi wave in the Top 5 coins, is up closer to 20%.

While at this point the DeFi unwind has been more ‘whimper’ than ‘bang’ we continue to urge caution around valuations in the space which have skyrocketed in the last 3-months.

Other Weekly Headlines 📰

  • Ethereum service providers are experiencing a range of technical difficulties caused by an apparent split in the network’s blockchain. The split was seemingly caused by Ethereum developers introducing changes to the network’s code causing some service providers to to be out of sync.  Binance’s CEO Changpeng Zhao tweeted ‘There was a possible ETH chain split at block 11234873. Etherscan and Blockchair are showing two different chains and data after this block. We’re resolving now but have temporarily closed withdrawals.’ – link – @CoinDesk
  • According to a JP Morgan Research note published on Friday, institutional investors ‘may be looking at bitcoin as an alternative to gold.’ Comparing the performance of Grayscale’s bitcoin trust and outflows from gold ETFs, the note claims that investors that previously sought gold may now be looking to BTC. – link – @TheBlock
  • A bill known as ‘Digital Asset and Blockchain Technology Act’ was introduced to New Jersey’s Senate last Thursday by a Democrat representative. The bill aims to bring crypto service providers under the regulation of the state’s Department of Banking and Insurance. – link – @CoinDesk
  • Fidelity Digital Assets has announced a ‘hiring initiative’ aimed at expanding its ‘platform to secure, trade, and support investments in digital assets.’ The firm is looking to hire ‘more than twenty’ engineers with ‘development experience with Bitcoin, Ethereum and other digital assets.’ – link – @Fidelity
  • Square’s Q3 earnings reported the firm had sold USD 1.63B equivalent BTC in the period through its Cash App. Square has now sold USD 3.4B worth of BTC since launching the service in 2018. According to the report, ‘Bitcoin revenue and gross profit benefited from an increase in bitcoin activities and volume per customer.’ – link – @Square

 More Crypto Media 📹
  • Why Bitcoin Now: Bitcoin Under A Biden Administration, Unchained Podcast, November 10, 2020. Dan Tapiero, founder of 10T Holdings and Gold Bullion International, and Cathie Wood, CEO and CIO at ARK Invest speculate on BTC’s performance moving away from the US election and under a Biden Administration.

Photo of Author Bitbuy Staff
Bitbuy Staff
Bitbuy is a Canadian owned and operated digital currency platform. Trade on or on the Bitbuy app today.
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