First Mover: Bitcoin Pause, Ethereum Snafu, 1,000% Returns Put Focus on Exchange Tokens

ALSO: Ether prices steady after reported "blockchain split"

November 11, 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.  Bitcoin (BTC) +2.2% $15,650 Ether (ETH)  +2.9% $463 (Price data as of Nov. 11 @11:30 UTC) TODAY: Price Point: Bitcoin was higher as Asian stocks tumbled on Chinese tech crackdown.  Market Moves:  Exchange tokens used to just be an in-house currency for users. Now investors are buying them as a way to bet on the exchanges themselves, CoinDesk's Muyao Shen writes. Stocks? Not really. Similar in some respects? Definitely.  Bitcoin Watch: Minor pullback looms as analysts looking at price-chart patterns see key relative strength index, or RSI, above 70, typically a sign of "overbought" conditions, CoinDesk's Omkar Godbole writes.  What's Hot: Ether prices steady after reported "blockchain split," Cardano's in and Zcash is out of the CoinDesk 20, DeFi fever returns, Gary Gensler gets Biden post, Greece bond yields flip negative, U.S. office-rental market gets flooded with empty space as remote working proves durable.  Price Point Bitcoin was higher, pushing toward the upper edge of its recent range between about $14,700 and $15,600.   "The positive sentiment towards bitcoin has not gone away," said Denis Vinokouov, head of research at crypto prime broker Bequant.    In traditional markets, Asian shares tumbled, led by Alibaba and Tencent, as Chinese government issues regulations designed to curb growing influence of big tech companies. European shares were up, and U.S. stock futures pointed to a higher open. Gold weakened 0.1% to $1,875 an ounce.  Market Moves Crypto-exchange tokens like Binance Coin (BNB) and FTX's FTX (FTT) started out as a sort of in-house currency: Traders could use them within the closed environment to buy digital assets, getting discounts on transaction fees.    But recently some digital-asset traders are thinking of them a bit more like traditional stocks – as a bet on the exchange itself. It's also increasingly possible to park the tokens in various systems and protocols for yield, not too dissimilar from a dividend.    And some of them are registering outsize gains. Binance's BNB tokens have gained about 30% this year, while FTX token is up 157% and upstart Hxro's token has increased 10-fold in price.    Exchange management teams increasingly viewing the tokens as a way to bind loyalty among customers. The rationale, according to Jack Purdy, senior research analyst at the cryptocurrency research firm Messari, could be that the exchanges now view token holders as an important component to their long-term business success.   The specter of an unexpected move by authorities to crack down on the tokens – precisely because of their resemblance to stocks – remains a threat.   Exchange tokens "are a gray area with equity-like characteristics," Purdy said. "Regulatory concerns are definitely a problem because they definitely look like securities under U.S. laws."  - Muyao Shen    Read More: Exchange Tokens Are Skyrocketing as They Act More Like Equity; That Could be a Problem Prices for Binance Coin over past year (CoinGecko)  SPONSORED BY GRAYSCALE® Grayscale Investments is the world's largest digital currency asset manager, with more than $9.1B in assets under management as of November 6, 2020. Grayscale offers the investment community industry-leading insights, expertise, and exposure to digital assets.  Insights - Grayscale produces bold, differentiated research and reports that shed light on digital currency investing. Whether you're a crypto newbie or an industry pro, Grayscale's growing resource library is invaluable. Expertise - Founded in 2013, few can claim to be involved in the industry as long as Grayscale. The firm understands what investors need to know about digital currencies and is dedicated to expanding interest in this rapidly expanding asset class. Exposure - Through its family of 10 investment products, Grayscale provides access and exposure to the digital currency asset class in the form of a security without the challenges of buying, storing, and safekeeping digital currencies directly.  Connect with Grayscale today EDITOR'S NOTE: CoinDesk, publisher of the First Mover, is a unit of Digital Currency Group, which also owns Grayscale, our sponsor. Sponsors have zero input into our editorial content.   Bitcoin Watch Bitcoin daily price chart (on left) and weekly chart on right, showing key RSI levels above 70. (TradingView) After the recent rapid rally, the bitcoin market is likely to take a breather before continuing its rise toward the end of the year, analysts told CoinDesk. "The cryptocurrency may consolidate for a short period before moving higher" toward the end of the year, said Chris Thomas, head of digital assets at Swissquote Bank. Indeed, further notable gains look unlikely in the short term, as the cryptocurrency's 60% rally from $9,800 to $15,900 seen over the past two months looks overstretched, per the technical charts. Both the 14-day and 14-week relative strength indexes are hovering well above 70, indicating overbought conditions and scope for consolidation or minor pullback. Patrick Heusser, senior cryptocurrency trader at Zurich-based Crypto Broker AG, expects bitcoin to consolidate in the range of $14,000 to $16,000 in the next few weeks.    He expects the pause to allow a rally in alternative cryptocurrencies, most of which have lagged bitcoin in the past two months. - Omkar Godbole   Read More: Bitcoin Likely to Consolidate Before December Rise Toward $20K, Say Analysts Token Watch Ether (ETH): Prices hold firm as Ethereum service provider Infura suffers outage from reported blockchain split.    Bitcoin (BTC): Nearly $360M of bitcoin tokenized on Ethereum blockchain in October despite cool-down in the thriving cryptocurrency subsector of decentralized finance, known as DeFi.     Filecoin (FIL): Winklevosses' Gemini crypto exchange is developing a wrapped version of decentralized data-storage provider's tokens.    Balancer (BAL): Cryptocurrency funds Pantera Capital and Alameda Research invest in liquidity provider via direct purchase from Balancer Labs treasury.    Algorand (ALGO), Cosmos (ATOM), Cardano (ADA), Kyber Network (KNC), OMG Network (OMG): Growth in trading volume means tokens are added to CoinDesk 20 while Bitcoin SV (BSV), Dai (DAI), Zcash (ZEC), Monero (XMR) and Dash (DASH) are out.  What's Hot DeFi fever returns as total collateral value locked into protcols hits all-time-high above $12.8B (CoinDesk) Former CFTC Chair Gary Gensler, a crypto-savvy veteran of Wall Street and Washington, plans to lead projected President-elect Joe Biden's financial-policy transition team (CoinDesk) Chinese bank, world's second-biggest, plans to issue $3B of tokenized certificates of deposit on blockchain via a branch in Malaysia, and they'll be tradeable for bitcoin on the Hong Kong-based digital-asset exchange Fusang, according to the South China Morning Post (CoinDesk)  Ethereum 2.0 deposit contract tops $22.5M, week after launch (CoinDesk)  Cred bankruptcy highlights need for crypto-lending industry to adopt best practices absent "paternalistic state to backstop credit and bail out excessive risk-taking" (CoinDesk) MicroStrategy CEO Michael Saylor explained why gold is "an antiquated approach to storing value," while bitcoin is "a million times better." (CoinDesk) Analogs This time might actually be different, since "another round of massive fiscal+QE MMT combo" would likely push up inflation and asset prices too far, Lyn Alden Schwartzer writes (SeekingAlpha)  U.S. job openings increase less than expected in September while hiring fell, suggesting labor market recovery was petering out even before recent coronavirus resurgence (Reuters)  Stimulus, spending bills top U.S. lawmakers' "to-do list" in lame-duck session (WSJ)  Greece, debt defaulter as recently as 2015, now sees yields on its short-term bonds going negative (WSJ)  European banks worry over $1.7T of bad loans that could take toll when government rescue packages end, possibly necessitating state support (WSJ)   Biden faces resistance from U.S. Senate over $2T tax increase unless Democrats win Georgia seats (WSJ)  U.S. corporate tenants put record 42M square feet of office space on rental market with many employees remote working for foreseeable future (WSJ)  Lenders see big opportunities in bailing out financially strapped hotel owners (WSJ)  Australian mining giant BHP links with China's Baowu Steel in bid to reduce environmental footprint through carbon capture research (Nikkei Asian Review) Fitch report chronicles how far Chinese yuan has to go before challenging U.S. dollar's dominant role in foreign exchange markets (Fitch): Goodbye, DAI and bitcoin sv. Hello, kyber and cosmos.   A swelling in volume in the crypto markets over the third quarter has changed the list of noteworthy digital assets beyond bitcoin and ether that matter most to traders and investors. That change is reflected in the CoinDesk 20.    In the latest revision, five assets were replaced by crypto assets that saw volume surges outpacing even the double-digit gains posted in market volume as a whole.    The new assets are algorand (ALGO), cosmos (ATOM), cardano (ADA), kyber (KNC) and omisego (OMG). On average, incumbent CoinDesk 20 asset volume increased by 22% from Q2 to Q3. However, these crypto assets' trusted market volume increased by much more.   These five new crypto assets replaced incumbent assets that are well-known to crypto investors. Read more about how they displaced incumbents bitcoin sv, dai, zcash, monero and dash on CoinDesk 20's latest update.   Tweet of the Day Webinar: How to Value Ethereum   In this 30-minute webinar, the first of the four-part series How to Value Ethereum, CoinDesk Research looks at accounts - a concept that sounds familiar to blockchain addresses, but involves novelties and complexities that are critical to understanding how Ethereum works.   Register to join How to Value Ethereum on Nov. 11. 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.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.