The largest cryptocurrency was changing hands Wednesday around $12,200, within striking distance of the year's high around $12,500. And that was even before the news emerged that electronic consumer payments giant PayPal had been granted a conditional New York state license for a partnership to buy and sell cryptocurrencies.
"Coupled with a seemingly constant flow of reports of traditional funds and companies investing or allocating some of their balance sheet to Bitcoin, we were due for a move up," Matt Blom, head of sales and trading for the publicly traded digital-asset firm Diginex, told subscribers in his daily newsletter.
In traditional markets, European equity indexes were lower, U.S. stock futures fluctuated and 10-year Treasury yields rose on renewed speculation that lawmakers in Washington might still be moving toward a stimulus package. Gold rose 0.6% to $1,919 an ounce.
Measured by the total value locked in six of the most popular DeFi protocols – Compound, Maker, Uniswap, Curve, Aave and Balancer – USD coin (USDC) is in the lead among stablecoins followed by dai (DAI), the native stablecoin to MakerDAO. That’s according to data compiled by Flipside Crypto as of Oct. 19.
USDC and DAI have market caps of $2.74 billion and $608 million, respectively. Yet, unlike on centralized exchanges, where tether is the go-to stablecoin in dollar-based crypto trades, USDC and DAI seem to have found their niche as the preferred stablecoins in decentralized trades.
In an interview with CoinDesk, Jeremy Allaire, peer-to-peer payments company Circle’s co-founder, attributed USDC’s success in DeFi to his company’s early efforts in building relationships with the DeFi communities. The fact the two companies that co-founded USDC’s governing Centre consortium, Circle and crypto exchange Coinbase, are both registered financial entities in the United States may also have something to do with USDC’s recent upturn. According to Allaire, USDC is preferred by institutional investors for being “safe, trusted and regulated.”
Authorities around the globe are giving more direction on how cryptocurrencies should be used and regulated. In late September, for instance, the U.S. Office of the Comptroller of the Currency (OCC) published its first regulatory guidance for stablecoins, clarifying that national banks can provide services to stablecoin issuers in the U.S.
“Having guidelines creates more certainty, which makes mainstream market participants ready and willing to engage in it,” Allaire told CoinDesk.
- Muyao Shen
Bitcoin's price has jumped to two-month highs, and data from the options market shows traders are positioning for a continued rally.
The top cryptocurrency by market value rose to $12,303 early today – the highest level since Aug. 18 – and was last seen trading near $12,250, representing a 2% gain on the day.
The market sentiment has turned quite bullish, with firms like Square, Microstrategy and Stone Ridge disclosing their bitcoin holdings and bolstering the digital asset's popularity as a store of value.
"The momentum is certainly picking up with support from large corporations buying into the market," Wayne Chen, CEO, and director of Interlapse Technologies, told CoinDesk in a LinkedIn chat.
The move above $12,000 has exposed the August high of $12,476, above which significant resistance is seen directly at $13,880 (June 2019 high).
Options market data shows investors are expecting a continued price rally. "Bitcoin is breaking out, and the options market is preparing for a bigger rally," Skew's CEO Emmanuel Goh told CoinDesk in a Telegram chat.
The bullish mood is evident from the negative one-, three-, and six-month put-call skews, which measure the cost of puts relative to calls.
In other words, calls or bullish bets are drawing higher prices than puts or bearish bets – a sign of investors positioning for a price rally.
- Omkar Godbole
U.S. demurral on digital dollar deprives officials of crucial “ability to rapidly and precisely disseminate stimulus funds directly to citizens during a recurring pandemic or lingering depression,” attorneys argue. (CoinDesk)
MicroStrategy CEO Michael Saylor says bitcoin markets data are “garbage” and that liquidity is far more limited than reported, based on his own experience; he says it's tough to buy more than $35M of bitcoin "without people knowing." (CoinDesk)
The latest on the economy and traditional finance
Tweet of the Day
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.