|Analysis: Crypto had a volatile week overall, with most major coins settling with a double digit weekly loss over the past 7 day period. Many expect the volatility to continue following this mornings address on inflation by Jerome Powell, chairmain of the US federal reserve.
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Big Story Of The Week
After A Volatility Spike At The End Of July / Beginning Of August, BTC Has Found A New Range Just Below USD 12,000 (CAD $15,000) – We Detail Some Current Trading Dynamics
Takeaway: In late July, 10-day realized BTC volatility jumped from a near-record low 11% to 86% in about a week. Since then the measure has settled back into the 40% range. This remains low by historical standards with 1-year realized volatility, for example, remaining in the 80% range. This has had a noticeable impact on funding markets. Investors were borrowing USD to buy crypto on Bitfinex at rates as high as 30% annualized two weeks ago and now are paying about half of that. Similar contraction has happened in perpetual swap funding rates which have roughly halved, though longs consistently continue to pay shorts. All that said, BTC futures markets remain in steep contango. Furthermore, USD 12,000 is arguably the last major visible technical level before all-time highs in the range of 20k. A breakout or decisive failure at this key range seems likely to hold bullish implications for volatility.
Other Weekly Headlines
- Fidelity Director of Digital Funds, Peter Jubber, filed documents with the SEC related to a new fund called Wise Origin Bitcoin Index Fund I, LP. The fund, incorporated earlier this year, will share headquarters with Fidelity. Few details regarding the fund were revealed in the filing. – link – @Forbes
- The US IRS has sent out a letter to individuals it suspects have purchased crypto in the past, reminding them of their tax obligations. The letter, dated August 14, instructs individuals to, ‘file amended returns or delinquent returns’ if any crypto disclosures were originally omitted. – link – @Decrypt
- Ethereum development firm ConsenSys has announced acquiring JPMorgan’s Quorum blockchain unit. The acquisition is ‘part of a strategic investment by JPM.’ Quorum is described as a ‘ foundation for businesses to build public or private Ethereum-based enterprise solutions.’ – link – @ConsenSys
- Custody provider BitGo has filed paperwork with the New York State Department of Financial Services (NYDFS) to become a trust in the state. BitGo said it was responding to ‘strong demand’ from institutional investors in the state for crypto storage, writes CoinDesk. – link – @CoinDesk
- Ethereum wallet MetaMask has moved to license its code instead of making it open source. A blog post announcing the move noted that, ‘fair compensation for the maintenance of these community goods remains a problem, with many different sustainability attempts – from donations, to grants, to copyleft licenses.’ – link – @MetaMask
- A Tokyo court has given a preemptive green light for the confiscation of NEM stolen from Coincheck exchange in 2018. About USD 500M of NEM, based on prices at the time, was stolen in the hack. The funds will only be confiscated, however, if a man suspected of holding some of the stolen funds, is found guilty of storing the stolen crypto. – link – @TheBlock