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November 9, 2020

Crypto Trader’s Weekly :: Just The Prelude


While we are seeing new all-time-highs, record trading volumes and a wild week for voters of the U.S. presidential election, we are only beginning to understand what lies in front of us – the rush into crypto and indeed, only the start of an epic bull run. The IMF encouraging stimulus, legendary Hedge Fund manager Bill Miller confirming the forthcoming institutional run on crypto assets, Square, Grayscale and the CME reporting record growth on their digital assets offering and Fidelity ramping up its hiring efforts to prep for the upcoming demand surge, is confirming the trend of having 2017 like conditions very soon.


Bitcoin price favoured the prospect of a Biden presidency and Fed’s Powell calling for more stimulus, reaching heights we haven’t seen in years. With more than 97% of Bitcoin investors being in profit right now, investors became increasingly worried about how long Bitcoin can maintain its growth trajectory. Not long after, the biggest cryptocurrency in market capita lost its momentum.

A record $816 million in Bitcoin leaves Binance within one day, indicating strong accumulation by whales. Stablecoin top dog Tether reached a market cap of $17 billion, rising stablecoin supply shows higher demand for cryptocurrencies, since the majority of coins are traded against USDT (U.S. Dollar Tether). Bitcoin Miner profits surge to pre-halving levels while mining difficulty has seen its largest percentage decrease since the invention of ASIC mining machines in late 2012. Beware, Miner’s might take profits soon, which might cause a slight dip on the way up.


Countries all around the world are paving the way for institutional money to move into the crypto market. Regulators work at full-speed to define a clear regulatory framework for crypto assets, closing in on topics like privacy coins, derivatives, fundraising, crypto exchanges, scams and money laundering. In the meantime, feds seized more than a billion dollars in Silk Road Bitcoin earlier this week, leaving the markets to wonder what might happen with the record confiscation.

Hong Kong, South Korea and the Cayman Islands announced KYC & AML regulations for crypto businesses this week, especially exchanges are being targeted. Dutch companies, on the contrary, are registering with the authorities voluntarily and 39 businesses signed up with the Dutch Central Bank. The Canadian Revenue Agency is trying to force its domestic cryptocurrency exchange Coinsquare to hand over user records. In the U.S. the SEC raised the crowdfunding limit for startups to $5 million, which comes in handy for crypto businesses that like to make use of a popular funding method – the token sale.


DeFi had a tough October, with declining trading volume in half if there wouldn’t have been the Harvest hack, which amounted to $5 billion in volume on its own and “only” brought a 26% decrease compared to September. Many investors turned away from DeFi after realizing the juicy returns in yield farming aren’t sustainable, however, prediction marketplaces and NFTs showed the strongest growth in the space for the month of October.

Users of DeFi apps are still suffering early adopters’ pain and will likely do so for a foreseeable time. While it has been reported that one user lost $9600 worth of Ethereum through accidentally paying too much transaction fees, hackers found another victim this week with Axion Network and drained them by half a million dollars through a smart contract hack. Bitcoin is getting smart contract support and will join the DeFi game pretty soon as well, whilst Ethereum just launched its staking contract and announced the release of the second version of its core protocol for December.

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