Dear Teroxx Community,
This week we saw a digital asset market that experienced sell-offs along with the global trend.
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
Only twice have long-term investors been similarly convinced by Bitcoin, and in both cases massive climbs followed. As data from the crypto market research institute Glassnode shows, more than 60% of BTC in circulation has not left their wallets for a year now, despite the high volatility.
This stubborn holding by long-term investors is a characteristic that fundamentally differentiates the current sentiment around Bitcoin from other previous downtrends. As the HODL Waves Indicator, a metric from crypto market research firm Glassnode, shows, 60.61% of Bitcoin’s circulating supply had not been moved for at least a year as of February 18.
This is a remarkable figure, as only twice in the history of the market-leading cryptocurrency has the metric, which indicates firm conviction among long-term investors, been at this level.
Crypto investor Alistair Milne therefore points out that in both cases, a longer sideways movement was initially experienced before massive climbs followed.
While Fidelity has so far been denied a “direct” Bitcoin ETF on the US market, this is now working out in Germany and Switzerland after all. According to a corresponding announcement by Deutsche Börse, the physically backed exchange-traded product (ETP) can now be traded on Xetra and the Frankfurt Stock Exchange under the ticker FBTC. Trading on the Swiss SIX Swiss Exchange is also expected to commence in the coming weeks.
Fidelity Digital Assets will take custody of the Bitcoin (BTC)-linked investment product, while Eurex Clearing AG will act as the central clearing counterparty. The ETP’s management fee is 0.75%.
Deutsche Börse Xetra’s crypto trading now includes 40 financial products, also ETNs, that track the cryptocurrencies BTC, Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), Cardano (ADA), Solana (SOL), Stellar (XLM), Tezos (XTZ) and Tron (TRX). In November, investment firm Invesco had already launched a bitcoin ETP under the ticker BTIC.
Founded in 1969 as a subsidiary of U.S. investment firm Fidelity Investments, Fidelity International now manages more than $812 billion.
The asset management arm of major investment bank Morgan Stanley has released a new report arguing that Ethereum will have to fight harder for its market share in the future than market leader Bitcoin (BTC).
In the report called “Cryptocurrency 201: What Is Ethereum?” the investment bank takes a detailed look at the leading altcoin and takes a look at its advantages and disadvantages in direct comparison to Bitcoin.
To that end, it states, “Being in a more ambitious, larger market, Ethereum faces greater competition, has to solve the scalability problem, and generally has more complex challenges to overcome than Bitcoin. In addition, Ether exhibits significantly more volatility than Bitcoin.”
The biggest threat is not coming directly from the market leader; rather, other smart-contract platforms are the big competition Ethereum must fight off, including blockchain projects such as Cardano, Solana, Polkadot and Tezos.
“Ethereum has more competition in the smart contract market than Bitcoin has in competing as a store of value. Ethereum could very well lose market share to faster and cheaper smart contract platforms.” But the investment bank’s market researchers also see advantages for Ether at the same time. For example, the altcoin would have more potential overall than bitcoin. The deflation mechanism tied to transactions is also praised, and as soon as the long-awaited switch to the Proof-of-Stake (PoS) consensus process is finally completed, the performance of the smart contract platform should improve drastically.
Technical term of the week
Correlation: Describes how strongly different “objects of observation” are connected with each other. This is applicable to almost any “product”. The higher the correlation, the greater the joint price movements. So if X rises, then the probability that the correlated object Y also rises is high.
Bullish outlook: $40,000 established as strong support would be a bullish signal for the entire market.
Bearish Outlook: On further setbacks, support at ~$36,000 should hold to avoid testing lower support levels. A positive countermovement could start here.