First Mover: Bitcoin Low Exchange Balances Looks Bullish, But Chart Looks Bearish as $11K Nears

ALSO: KuCoin hit with $150M hack and Bahamas targets mid-October for CBDC launch

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Sept. 28, 2020 Sponsored by  By the CoinDesk Markets Team Edited by Bradley Keoun If you were forwarded this newsletter and would like to receive it, sign up here.  TODAY: Bitcoin (BTC) +1.0% $10,884 | Ether (ETH) +0.7% $360 (@11:03 UTC) Price Point: Bitcoin was rising for a third straight day, nearing $11K. Market Moves: Bitcoin balances on exchanges have fallen to a 2-year low, seen as a bullish sign that traders are holding for the long term or tokenizing the digital assets for use in decentralized finance, or DeFi. Bitcoin Watch: Price-chart patterns suggest bitcoin's latest rally might be running out of steam, CoinDesk's Omkar Godbole writes.  What's Hot: Singapore's KuCoin hit by $150M hack, Bahamas targets mid-October for digital "sand dollar" release, Uniswap passes $2B collateral milestone, Bitwise fund doubles to $9M.  PRICE POINT Bitcoin was rising for a third straight day, pushing back toward the upper end of the $10,000-$11,000 range where the largest cryptocurrency has traded for most of September.  In traditional markets on Monday, European stocks rose and U.S. equity futures pointed toward a higher open, with a Nordea Investment Funds macro strategist telling Bloomberg News that "there is a tremendous amount of liquidity and it will continue to help the global economy." Gold was 0.3% lower at $1,859 an ounce.  "The world has morphed into one big macro trade," the cryptocurrency analysis firm Delphi Digital wrote late Friday in a report.  MARKET MOVES There's a degree of transparency in cryptocurrencies that doesn't exist in traditional markets like stocks and bonds: Thanks to data that's easily extracted from blockchains, everyone can see everyone else moving their money around.  That means traders can keep an eye on exchange wallets to gauge whether investors and crypto miners are getting their bitcoin into position for a possible sale — or taking balances down from the exchanges in anticipation of holding for the longer term. The latter might be what's happening now, CoinDesk's Muyao Shen reported Monday. Total balances of bitcoin on major exchanges has hit its lowest levels since November 2018. It could be an indication of bullishness among bitcoin traders. “There’s no reason to sell now," Mike Alfred, CEO of Digital Assets Data, told Shen in a phone interview. “Why would you be selling when you’re at the beginning of a wave of potential corporate treasuries and institutional investors coming in?” Another interpretation, according to Arcane Research, is that traders are taking their bitcoin off exchanges to deploy them in the decentralized finance sector, known as DeFi. Juicy returns can be obtained from tokenizing crypto assets and depositing them as collateral in semi-automated, blockchain-based trading and lending platforms. As CoinDesk reported earlier this week, tokenized bitcoin has become one of the largest assets on DeFi. Currently, there are more than 108,000 BTC worth some $1.1 billion minted from seven issuers, according to Dune Analytics. That might be another bullish sign.  "Bitcoin maximalists would decry the use of bitcoin on Ethereum, arguing that it isn’t 'real' bitcoin," David Derhy, an analyst for the cryptocurrency trading platform eToro, wrote Monday in an email. "I view this development as positive for the sector, as it highlights an evolution within the industry." Whatever the case, it's all there to see.  Bitcoin balances on all exchanges have fallen to the lowest since 2018. (CoinDesk)   Read More: Bitcoin Balances on Exchanges at 2-Year Low and That May Be a Bullish Sign SPONSORED BY BITSTAMP Since 2011, Bitstamp has earned the trust of over four million traders and top financial institutions looking for a safe, reliable cryptocurrency platform. Bitstamp gives you the premium tools, security and support to achieve your goals: Nasdaq trading technology: Cutting-edge Nasdaq matching engine delivers unmatched trading speed and efficiency in all market conditions. 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The cryptocurrency's weekly chart MACD histogram, an indicator used to identify trend changes and trend strength, has dipped below zero for the first time since March, indicating a bearish shift in the broader trend. Similarly, the 5- and 10-week averages have produced a bearish crossover. As such, bitcoin could face chart-driven selling pressure.  On the higher side, $11,000 is the level to beat for the bulls. - Omkar Godbole TOKEN WATCH Bitcoin (BTC): Market cap could swell to $1-5T in next 5-10 years, from about $200B now, as largest cryptocurrency becomes settlement system for banks and businesses while taking 10% share of physical gold market, Coin Metrics says in report with ARK Invest.  Bitcoin: (BTC): Largest cryptocurrency breaks record for longest streak of days above $10K, now at 63 days.  Ether (ETH): On-chain data suggests Ether investors bought September dip.  Uniswap (UNI): Uniswap is now bigger than the entire decentralized finance space just two months ago, as trading protocol becomes first to pass $2B milestone. Uniswap (UNI), Balancer (BAL), Curve (CRV): Gemini lists DeFi tokens following Binance, Huobi and OKEx in succumbing to FOMO.  Tether (USDT): Bitfinex, the cryptocurrency exchange affiliated with the dollar-linked USDT stablecoins, has launched perpetual contracts tracking European equity market indexes, settled in USDT.      WHAT'S HOT More than $150M drained in hack on Singaporean cryptocurrency exchange KuCoin (CoinDesk)  Bahamas sets Oct. 20 as date for "sand dollar" token, perhaps the world's first retail central-bank digital currency (CoinDesk) Trading volumes for Grayscale Bitcoin Trust (GBTC) and other crypto exchange-trading products shrink as prices fall (CoinDesk) Bitcoin mining-rig-maker MicroBT expands into offshore manufacturing, reportedly to help U.S. buyers dodge tariffs on Chinese imports; inks deal with Foundry Digital, a subsidiary of Digital Currency Group, which also owns CoinDesk (CoinDesk) OKEx CEO Jay Hao says "fair launch" distributions are "fundamentally flawed" because tokens end up "in the hands of retail investors," leading to "superlatively high fluctuations," or else it all becomes "a playground for whales" (OKEx via LinkedIn) Coinbase CEO Armstrong says cryptocurrency exchange won't engage in "social activism" or "debate causes or political candidates internally" because it's a "distraction" and creates "internal division" (Brian Armstrong/Medium) Bitwise bitcoin fund doubles to $9M as investor fears grow over runaway inflation ANALOGS The latest on the economy and traditional finance Just as Federal Reserve-fueled stocks rally fades, giant public pension systems decide maybe they're missing out and should allocate more money into equities (WSJ)  New York Fed says moral hazard from official coronavirus aid to be less than in 2008 because business losses weren't necessarily due to poor risk management, just "bad luck" (NY Fed) Accenture, Darden Restaurants, Foot Locker among companies reinstating dividends or stock buybacks after cutting jobs (CNBC) Deutsche Bank revising remote-working policies in effort to permanently reduce office space (Bloomberg) Coronavirus fears and US presidential elections caused mixed results for Asian stocks during the weekly open (SCMP) Bank of England governor won't say no to negative interest rates; it's "in the tool bag" (FT) Money Reimagined: A new podcast by CoinDesk Imagination has always been a key part of what money is. That piece of paper in your wallet only has value because the payer and the payee have both invested belief in its value. The crypto community -- and its many competing sub-communities -- create that common meaning with their preferred form of money. We've launched a new podcast to explore these ideas and the technological, political and social forces reshaping our financial system. Listen to the Money Reimagined podcast, hosted by our Chief Content Officer and author of CoinDesk's Money Reimagined newsletter Michael Casey and Sheila Warren of the World Economic Forum, on Fridays at 10 a.m. ET. Universities are often key to getting new industries off the ground, providing the infrastructure to take paradigm-shifting ideas to the next level. But in blockchain and digital finance technology, how do they measure up? Introducing CoinDesk U, a ranking of the top 20 schools identified in our research in collaboration with Mousebelt. During a special CoinDesk Live episode on Oct. 6, we will release the results of the first CoinDesk U ranking. We are inviting students from around the U.S. as well as representatives from student club networks, the crypto industry and leading institutions to discuss traditional academia’s relevance and support for the financial technology poised to fuel Web 3.0. Watch CoinDesk Live: Can Old Schools Teach New Tech on CoinDesk.com, Twitter and  YouTube. TWEET OF THE DAY CoinDesk Research continues its webinar series on Bitcoin's fundamental metrics with two episodes on UTXO-based analyses. UTXOs, or unspent transaction outputs, are fundamental components of Bitcoin's distributed ledger that can shed startling light on investors' behavior and positions. On Sept. 29 at 10:30 a.m. ET, Lucas Nuzzi from Coin Metrics will present charts and insights on the market-value-to-realized-value (MVRV) ratio and the spent output profit ratio (SOPR). Register to join How to Value Bitcoin: UTXO-Based Fundamentals. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. First Mover A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.