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A major crypto hedge-fund manager expects Bitcoin to collapse once the SEC greenlights a Bitcoin-backed ETF – here’s why


Hi there: Welcome to the most important step in crypto and news updates and what’s on the near-term horizon in digital assets. I Frances U, MarketWatch’s Crypto Reporter, and for the next three weeks, October 10-24, we will publish the need to know the crypto version as a prelude to a new weekly crypto newsletter “Distributed Laser”. Will start in November.

Click on this link to subscribe to Distributed Ledger, but until then: Enjoy the need to know the crypto version.

Another issue is that MarketWatch and Barons are bringing together the most influential people in crypto to help identify the opportunities and risks of digital assets on October 27 and November 3.

Crypto in a moment

Bitcoin BTCUSD,
+ 2.46%
This week saw a significant increase, up 12.7% from last week to Friday, as Factset data shows. As of Wednesday, the cryptocurrency has recorded a seven-day growth of 33.5%, its best seven-day performance since February this year, according to our research team at Dow Jones Market Data.

Ethereum ETHUSD,
+ 0.69%
Dogecoin DOGEUSD, while also recorded 9.7% weekly profit as of Friday
-1.86%
Increased 13% per week

Crypto matrix
The biggest earner

Price

% 7 day return

Shiva INU

$ 0.00002697

262.53%

Phantom

2.35

73.99%

Axis Infinity

$ 135.21

43.47%

Harmony

$ 0.227

42.5%

Arweave

$ 66.3

38.46%

Source: CoinMarketCap.com Until 8 October

The biggest decliner

Price

% 7 day return

eCash

$$ 0.0002233

-10.05%

Hubby token

$ 7.8

-9.07%

Snowfall

$ 62.58

-6.96%

Amp

$ 0.04746

-6.17%

dYdX

21.53

-5.71%

Source: CoinMarketCap.com Until 8 October

A Bitcoin-Future Bounce?

The fourth quarter histor has historically been good for bitcoin. According to CoinDesk’s data, in the fourth quarter of 2020, Bitcoin has risen about 170% from about, 10,780 to, 28,980.

Entering October this year, Bitcoin also saw a good start, as the cryptocurrency rose above $ 55,000 on Wednesday, the first time since May.

Traders and analysts have blamed the rally on partly institutional flows, as established players expect the SEC to approve the first Bitcoin Futures Exchange-traded fund next week.

SEC Chairman Gary Gensler recently reiterated his support for a bitcoin-backed futures ETF, which will invest in bitcoin-based futures contracts instead of crypto. The SEC has not yet approved any of the Bitcoin-backed ETFs or Bitcoin Derivatives.

CME Group Bitcoin Futures Agreement at CME,
-0.29%
Bitcoin was trading at a premium of up to 17% at the spot price on Wednesday, the highest since April, after reaching an all-time high, according to the Data Analytics Tool Skew. Metrics typically reflect institutional flow, as CME is the preferred path for an organization’s exposure to Bitcoin.

Crypto trading firm QCP Capital wrote in a telegram on Thursday, “Abnormally large premiums indicate buying in full.”

Analysts say the liquidation of leveraged short positions has fueled the recent rally in Bitcoin’s price. Leveraged short positions are when traders bet that the price of an asset will decrease using borrowed funds.

“The setup for a small skew this week lowered the bear’s K 50K resistance,” NYDIG, a financial services firm focused on Bitcoin, wrote in a report on Wednesday.

Already seen Q4 2020?

Some analysts expect this growth to continue. Anto Parwan, chief operating officer of crypto hedge fund ARK36, said this week’s trend is different than when Bitcoin exceeded 50,000 50,000 a month ago. “The market did not have enough power to hold more rallies,” Parwan told MarketWatch via email.

“Now, after a long period of consolidation in the K 40K range, Bitcoin seems to be better prepared for a bigger move,” Parwan wrote. “If that happens, Bitcoin will probably test its ATH (all-time high) and it’s a high probability it will break.”

However, some are wary that the crypto market could see another similar swing in the fourth quarter of 2020.

Dan Morehead, CEO of asset manager Pantera Capital, warned that the “buy rumors, sell news” pattern could be applicable if the SEC approves bitcoin-backed futures ETFs.

“Can anyone remind me?” [me] The day before the Bitcoin ETF officially launched? I might want to take some chips from the table, ”Morehead wrote in a report.

Almost a year before CME listed Bitcoin futures in December 2017, Bitcoin rose 2,440%. Coinbase COIN, up 822% in 12 months before crypto exchange
-1.37%
Direct list of Nasdaq. However, the market has been declining since both events, Morhead noted in the report.

Meanwhile, as the crypto market expands, more institutionalized, price changes should be moderate, Morehead estimates.

Crypto is short

Bloomberg Businessweek this week released a cover story about the সবচেয়ে 69 billion fortune mystery of Teether, the world’s largest stablecoin issuer. With the index growth in recent years, Teether has received increasing scrutiny from regulators and some investors. Its stablecoin USDT is held 1: 1 in US dollars.

Teether has invested some of his reserves in Chinese commercial paper, and this was preceded by the recent woes of Chinese real-estate developer Evergrand, according to Bloomberg, citing a document detailing Teether’s reserves.

A Teether representative did not answer questions about whether Teether holds any Chinese commercial paper, but wrote via email that the USDT is always backed by reserves, including cash, cash equivalents, other short-term deposits and commercial paper.

Bloomberg also reported that Teether has made billions of dollars in crypto-backed loans, one of which is cryptocurrency platform Celsius Network Ltd.

“We have a select, small group of customers who borrow USDTs in exchange for security postings. These loans are secured by securing more than 100% of the rights to Teether’s Wells and earning monthly interest for Teether,” the Teether correspondent wrote to MarketWatch.

A bean bag for Bankman-Fried?

According to Forbes, Sam Bankman-Fried, the founder and CEO of crypto exchange FTX, is the richest man in the world under the age of 30. Thanks to the crypto boom, Bankman-Fried is now valued at $ 22.5 billion, up from 8. 8.7 billion in April.

The 29-year-old self-made billionaire is known for sleeping in a bean bag in the office most nights. “One side advantage of bean bags: if I sleep in the office, my mind is in work mode, and I don’t have to reload everything the next day,” Bankman-Fried once said. Wrote on Twitter.

This habit also seems to have been adopted by Ryan Salam, who was the CEO of FTX Digital Market, a newly launched subsidiary of FTX in the Bahamas. FTX has moved its headquarters from Hong Kong to the Bahamas, where the regulatory environment is more crypto-friendly.

Currency quotes

Don Fitzpatrick, chief executive officer and chief investment officer at Soros Fund Management, said the family office set up by billionaire investor George Soros owns some bitcoins.

Fitzpatrick said in an interview at the October 5 Bloomberg event, “We own some currencies, but not many.

“I’m not sure Bitcoin is only seen as an inflation hedge,” Fitzpatrick said. “I think it has crossed the mainstream barrier.”

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