First Mover: Bitcoin Steady Over $13K as JPMorgan Has Eureka Moment

ALSO: Exploit at Harvest Finance leads to plunge in FARM tokens

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Oct. 26, 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) +0.9% $13,155 | Ether (ETH) -0.0% $406 (@11:34 UTC) Price Point: Bitcoin was holding above $13K for the first time since 2018. Market Moves: Bitcoin traders can be forgiven for gloating over JPMorgan's sudden pronouncement that the largest cryptocurrency has considerable long-term price upside.  Bitcoin Watch: Spinning top candle appears in price charts, potentially signally temporary bull fatigue, CoinDesk's Omkar Godbole writes.  What's Hot: Exploit of DeFi platform Harvest Finance leads to plunge in native FARM tokens, central banks lap up European Commission's new common bonds.   PRICE POINT Bitcoin was higher, appearing to hold above $13,000 for the first time since January 2018.  But the most drama in crypto markets came after an exploit of the decentralized finance protocol Harvest Finance sent the platform's native FARM token tumbling by 65% in less than an hour.   In traditional markets, European stocks slid as Spain declared Covid state of emergency and Italians were urged to stay home. U.S. equity futures pointed to a lower open, on signs of a resurgence in the coronavirus and dimming hopes for a big stimulus package prior to the election. Gold was little changed.  MARKET MOVES Bitcoin bulls are accustomed to the put-downs. The largest cryptocurrency has been lambasted in recent years as a "fraud," for having " basically no value" and for failing to qualify as "a suitable investment."  Now, as bitcoin mounts what might be its most durable rally in almost three years, the bulls may have to get used to a new sensation: vindication.  Analysts for JPMorgan, the largest U.S. bank, wrote Friday in a report that bitcoin has "considerable" price upside in the long term, as reported by CoinDesk's Zack Voell.  Bitcoin’s increasing use as an alternative to gold is amplified by millennials’ interest in cryptocurrency, according to the report, written by JPMorgan's global quantitative and derivatives strategy team. “Even a modest crowding out of gold as an alternative currency over the longer term would imply doubling or tripling of the bitcoin price from here,” the analysts wrote.      Such plaudits from the biggest of big U.S. banks represent a remarkable milestone for a digital asset launched in early 2009 with the specific aim of eliminating middlemen in payment systems.  And it's pretty hard to resist dredging up JPMorgan CEO Jamie Dimon's memorable remark in 2017 that bitcoin was a "fraud."   "If you're stupid enough to buy it, you'll pay the price for it one day," Dimon said at the time. Lately, that price just keeps going up, buoyed by the growing belief among many crypto investors that bitcoin might serve as a hedge against trillions of dollars of central-bank money printing.  Bitcoin has climbed 82% in 2020, and it's doubled in value since Dimon made the disparaging remark in October 2017. Those who bought the cryptocurrency are looking smart compared with shareholders in JPMorgan, whose shares have tumbled 26% in 2020, leaving the stock price roughly where it stood three years ago. Bitcoin's price since start of 2019 versus JPMorgan. (TradingView)  SPONSORED BY KAIKO Kaiko is the premier cryptocurrency market data provider for professional traders, researchers, exchanges, fund managers, and custodians. Our data services enable seamless connectivity to historical and live data feeds from 100+ spot and derivatives exchanges. Highly-granular data for professionals: Trade data, order book snapshots, tick-level order books, OHLCV candlesticks, exchange rates, and more. Extensive coverage: 6+ years of history for more than 40,000 traded instruments (spot, futures, swaps, and options). Flexible data delivery: Robust REST and WebSocket APIs designed for enterprise-use and downloadable CSV files through a cloud-based Data Feed. On-call support: Private slack channels, SLA's and integration assistance. Request a free trial, browse our data dictionary, and subscribe  to our weekly research newsletter today! Learn More BITCOIN WATCH Bitcoin daily price chart. (TradingView) Bitcoin’s technical charts are showing signs of temporary bull fatigue. The cryptocurrency carved out a spinning top candle on Sunday, which occurs when an asset sees two-way price action during a specific period. It is widely considered a sign of indecision in the marketplace, especially when it appears following a notable rally, which is the case here.  The candle validates signals from another technical indicator, the 14-day relative strength index, where its reading over 70 suggests that the market is overbought. The immediate support is seen at $12,500 (horizontal line on the daily chart).  Dips could be short-lived, as the cryptocurrency’s long-term bull case has been bolstered by the online payments giant PayPal’s recent decision to announce support for bitcoin. Also, several top public companies have recently disclosed their bitcoin holdings, providing a strong vote of confidence in the cryptocurrency's future.  Besides, the recent rally from $10,000 to $13,300 is backed by increased accumulation by large investors and looks sustainable.  As of Sunday, the whale population – clusters of addresses held by a single network participant holding at least 1,000 BTC – rose to 1,939, the highest since Sept. 2016, according to data source Glassnode. - Omkar Godbole Read More: Active Bitcoin Addresses at Highest Since 2017’s $20K Price Record WHAT'S HOT An attack against decentralized finance (DeFi) protocol Harvest Finance has sent the platform’s native token, FARM, tumbling by 65% in less than an hour (CoinDesk) Swiss central bank, Bank of International Settlements plan test of central-bank digital currency by end of year (The Block)  Lawyer files motion to dismiss U.S. government charges that Ethereum developer Virgil Griffith violated sanctions law by speaking at North Korean cryptocurrency conference (CoinDesk) Proposed Chinese law outlaws all yuan-pegged tokens – except for Its own central-bank digital currency (CoinDesk)  ANALOGS The latest on the economy and traditional finance Central banks lap up 17B-euro ($20B) common bonds issued by European Commission to finance coronavirus-relief programs (WSJ)  Morgan Stanley's chief U.S. equity strategist says to buy the dip if S&P 500 falls after election, since economic stimulus is near certainty no matter wins (Bloomberg)  Coronavirus-induced sell-off in March came with record bid-ask spreads on U.S. Treasuries, showing limits of liquidity in world's deepest bond market (Reuters)  Mission creep?: European Central Bank President Christine Lagarde pushes organization beyond traditional monetary-policy concerns like global warming and gender imbalance (Reuters) Ripple's Brad Garlinghouse says tech companies have obligation to help solve societal issues, rejecting "apolitical" stance taken by Coinbase's Brian Armstrong (CNBC)    TWEET OF THE DAY With the U.S. Election Day next week, much is at stake - including crypto policy over the next four years.   Like it or not, this election will matter for the crypto industry. Our latest limited-run newsletter, The State of Crypto: Election 2020 by regulatory reporter Nikhilesh De, aims to walk you through why. At stake: Will new crypto products be approved or allowed to operate in the U.S.? Will regulators target more overseas exchanges and platforms like BitMEX? Will the U.S. launch a “digital dollar” or some other form of central bank digital currency? These questions will come down to who takes the reins at the various financial regulators and government departments. Over the next several days, we map out the possible outcomes and introduce analysis of the candidates.  Our limited-run newsletter runs Mondays, Wednesdays and Fridays at least until Election Day. Subscribe to The State of Crypto: Election 2020. Most Influential 2020: Cast Your Vote Every year, CoinDesk recognizes the “Most Influential” people working to expand cryptocurrency and blockchain’s reach. It’s a list of the 10 outsized individuals who have gone the furthest and done the most. In this most unusual year, we need your help determining who should be named as Most Influential. Check out the list of the top contenders and cast your vote by Oct. 31. 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. 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