First Mover: Ethereum Steals Limelight With New All-Time High Price as Bitcoiners HODL

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Bitcoin (BTC) was higher for a second day, staying in the past two weeks’ range of between roughly $34,000 and $40,000.

“This period of consolidation is building a solid base, giving those who wish to sell bitcoin plenty of time,” according to the cryptocurrency exchange firm Diginex.

Ether (ETH), the Ethereum blockchain’s main cryptocurrency, rose Tuesday to a new all-time high of $1,439.33, reaching price levels not seen since early 2018. The LINK token from Chainlink, which provides price feeds to decentralized trading and lending systems built atop blockchain networks, also set a record price.

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With the bitcoin market trading sideways, some investors might be rotating into so-called alternative cryptocurrencies for faster returns, Edward Moya, a senior market analyst for the foreign-exchange broker Oanda, said in emailed comments.

“The cryptoverse is growing again, and right now many cryptocurrency traders are diversifying into other coins,” Moya said.

In traditional markets, Asian and European shares rose and U.S. stock futures pointed to a higher open ahead of Treasury Secretary nominee Janet Yellen’s confirmation hearing. The former Federal Reserve chair is expected to call for the government to “act big” on stimulus borrowing and spending, to aid the economic recovery.

Gold strengthened 0.2% to $1,845 an ounce.

CORRECTION: (17:42 UTC, Jan. 20, 2021): An earlier version of this article incorrectly stated the new all-time high price for ether. The piece has been updated to reflect the record price of $1,439.33 reached early Tuesday.)

Market moves

With bitcoin prices up 26% so far in January after quadrupling in 2020 and doubling the year before that, a trader might be forgiven for looking to take some profits.

But based on data extracted from the underlying blockchain network, investors appear content to sit tight, apparently betting a new rally could quickly take the cryptocurrency to fresh all-time highs.

Delphi Digital, a cryptocurrency analysis firm, noted last week in a report that bitcoin balances on cryptocurrency exchanges had decreased to about 2.3 million from 2.4 million over the past month as prices rose. Often, when prices rise the balances increase as more investors transfer bitcoins to the exchange to be liquidated.

“The net outflow this time around is potentially indicative of the long-term focused nature of recent investors,” according to the Delphi analysts, Yan Liberman and Kevin Kelly.

Bitcoin balances on exchanges have declined even as prices for the cryptocurrency rose, indicating holders are in no hurry to take profits. Source: Delphi Digital

The exchange outflows dovetail with other blockchain data showing more bitcoin being held by investors for the long term, known in crypto-industry jargon as HODLing.

Analysts for Glassnode, a blockchain-data firm, noted Monday that the number of bitcoins held in “accumulation addresses” has climbed by 17% over the past year to more than 2.7 million. These are addresses that have only ever received bitcoin and never spent them.

“This increase highlights the massive supply restriction that is occurring in the BTC market, with almost 15% of the total supply held in these addresses,” according to the firm.

Some 14.6 million out of the 18.6 million bitcoins mined over the blockchain network’s 12-year history are “either lost or being HODLed long term,” Glassnode says. That means new buyers coming in, such as big investors or companies looking to use the cryptocurrency as a hedge against potential inflation, would have to compete for the remaining 4 million or so bitcoins still circulating.

“When combined with the general decrease in bitcoin’s liquid supply and the number of lost coins, this leads to an even more limited supply, which is helping BTC maintain the highest prices it has ever seen,” the analysts wrote.

– Bradley Keoun

Past episodes of a decreasing “liquid supply” of bitcoin have preceded price rallies. Source: Glassnode

Bitcoin watch

Bitcoin’s hourly chart, with bull-bear tug of war represented by “contracting triangle” price pattern. Source: TradingView/CoinDesk

Bitcoin remains locked in a narrowing price range despite resurgent institutional demand.

The top cryptocurrency has charted a symmetrical triangle over the past few days, as seen on the hourly chart. It’s a sign both buyers and sellers are unwilling to lead the price action.

Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, purchased a total of 16,244 BTC ($607 million) on Monday, taking out 18 times more supply from the market than what miners added. This was after the trust reopened last week following a month-long pause and quickly accumulated another 4,700 BTC. (Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.)

Even so, the cryptocurrency is struggling to gather upside traction. The bulls look to be taking a hiatus, having engineered a rally of more than 200% over the past three months.

Digital-asset traders appear to have shifted toward alternative cryptocurrencies such as ether, the second-largest cryptocurrency, which rose to a new record high early Tuesday.

The focus could move back to bitcoin if the largest cryptocurrency breaks out of its hourly chart triangle pattern. That would imply a resumption of the broader trend and put $50,000 on the map, as noted by Vinny Lingham, investor and founder of crypto wallet and identity verification firm Civic.

– Omkar Godbole

Token watch

Enjin (ENJ): Enjin Coin becomes first gaming cryptocurrency whitelisted for use in Japan (CoinDesk)

Tether (USDT): Anonymous columnist questions whether Tether’s true peg is distorted by promotional awards (Medium)

Celsius (CEL): Alex Mashinsky, CEO of crypto lender Celsius, says in interview that company filed SEC exemption form on CEL tokens “because the regulations are not clear” (CoinDesk)

XRP (XRP): Kraken exchange becomes latest to halt XRP trading for U.S. residents after SEC suit against Ripple Labs (CoinDesk)

What’s Hot

Goldman Sachs reportedly planning to enter crypto market soon with custody play (CoinDesk)

Huobi Global connects to European banking system via UK’s BCB Group (CoinDesk)

Coinbase cryptocurrency exchange, hounded by snarky social-media comments about reliability, plans improvements to infrastructure (CoinDesk)

CoinShares starts exchange-traded bitcoin product (Bloomberg)

MetLife’s investment arm predicts “true central bank digital-currency launch among Western countries seems unlikely to occur anytime soon” (CoinDesk)

Bitcoin takes over as “most-crowded trade” in Bank of America survey after passing “long tech” (CoinDesk)

“No, bitcoin is not in a bubble,” CoinDesk Research Director Noelle Acheson writes in Crypto Long & Short newsletter (CoinDesk)

JPMorgan analysts see $40,000 as a key bitcoin price threshold before bullish uptrend continues, Bloomberg reports (CoinDesk)

Former Canadian Prime Minister Stephen Harper, in interview, lists bitcoin among U.S. dollar alternatives that could make inroads as an international reserve asset (CoinDesk)

Wall Street chief financial officers (CFO) are more wary of putting company funds into bitcoin after last week’s 30% price plunge (CoinDesk)

Bitcoin is “two bets in one: a sound, unimpeachable monetary protocol and the reserve asset for a rapidly expanding crypto-financial network,” Castle Island Ventures’ Nic Carter writes (New York Magazine)

South Korea’s Dunamu launches its own bitcoin “fear and greed” index (CoinDesk):

Dunamu’s new index is pushing toward the red zone, indicating “extreme greed.” Source: Dunamu

Analogs

The latest on the economy and traditional finance

Biden Treasury secretary nominee (and former Federal Reserve Chair) Janet Yellen says in prepared remarks for Tuesday’s confirmation hearing that “with interest rates at historic lows, the smartest thing we can do is act big” (FT)

Jamie Dimon says JPMorgan Chase should absolutely be “scared s—less” about threat from fintech rivals, names PayPal, Square, Stripe, Ant Financial, Amazon, Apple, Google (CNBC)

Beleaguered U.S. bank Wells Fargo targets $8B in cost savings over three years, including job cuts, and considers options for exiting asset-management and corporate-trust businesses (Pensions & Investments)

Foreign investors expect U.S. dollar to remain weak under Biden (WSJ)

U.S. corporate bond spreads shrink to 0.93 percentage point, narrowest since January 2020, at least partly reflecting investor confidence in ongoing economic stimulus and easy money from the Federal Reserve (WSJ)

Reserve Bank of Australia could shut down quantitative easing program in April (Australian Financial Review)

China’s GDP grew 2.3% in 2020, lowest lowest in 44 years (Nikkei Asia Review)

Taiwanese chip maker startup Kneron eyes global expansion, aims for 8x growth in 2021 as U.S. blacklists hit Chinese rivals (Nikkei Asia Review)

Southeast Asian ride-hailing company Grab considers U.S. IPO estimated at $2B (Reuters)

Tweet of the day

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Decentralized oracle network Chainlink’s LINK token and other prominent alternative cryptocurrencies (dubbed altcoins) are charting solid gains as the crypto market leader bitcoin takes a bull breather.

LINK set a new record price of $23.68 overnight and is changing hands near $21.73 at press time, a 7.3% gain on a 24-hour basis. The previous lifetime high of $19.90 was reached in August, according to CoinDesk 20 data.

Link price Source: CoinDesk

The cryptocurrency has nearly doubled in the first two weeks of the year in a strong follow-through to last year’s 530% rise. Chainlink’s oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds.

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Some altcoins such as OMG and OXT are up over 10% in the past 24 hours, while others including ether, litecoin and bitcoin cash have gained at least 2%–8% each.

Bitcoin is currently trading near $36,900, representing a 5% gain in 24 hours, but remains trapped in a week-long tightening range of $30,000 to $40,000. The period of consolidation looks to be paving the way for the rotation of money into the relatively cheap altcoins.

The switch to alts began last week with Polkadot blockchain’s DOT token rallying sharply to become the fourth-largest cryptocurrency by market capitalization, according to Alex Melikhov, CEO and founder of cryptocurrency framework Equilibrium and the EOSDT stablecoin. “Other coins now seem to be following Polkadot higher,” he said.

The record ether-bitcoin implied volatility spread seen earlier this month had suggested a rally in ether and alternative cryptocurrencies in general may be on the way.

Altcoins could continue to “pop hard” while bitcoin is held in a narrowing price range, said market analyst Lark Davis on Twitter.

Also read: Bitcoin Struggles to Recover After Biggest Weekly Price Loss Since September

LINK may receive an additional boost from Ethereum’s impending switch to the staking model, which would allow node operators to stake their collateral in order to gain access to certain data jobs that require collateral.

5 digital identity platform providers in the Financial ecosystem

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As we continue to endure the prolonged effects of the pandemic, it should come as no surprise that millions of people are online more than ever. A digital identity is the body of information about an individual, organization or electronic device that exists online. In today’s digital ecosystem, every one and every thing has a digital identity.

The revolution of managing identity is here. Digital Identity is changing the way financial institutions interact with customers. The article list 5 digital identity platform providers in the Financial ecosystem.

Civic Technologies

Civic believes that everyone should have more control, access and privacy when it comes to their personal data. Its mission is to help protect customers’ digital identity with simple, elegant solutions that unlock their world, from accessing cryptocurrency easily to connecting with friends to making transactions that require authorization.

Civic Wallet is a non-custodial, multisig digital wallet that provides a safer, easier way for consumers to transact. It combines identity and payment in one. Its technology platform creates trust with blockchain-powered identity verification, privacy-focused health status, and better peer-to-peer Bitcoin transfers. The firm offers the ability to transition flexibly between traditional currencies and crypto, manage money and identity more easily with a friendlier user interface, and meet security requirements with our compliance wrapper for partners.

Acuant

Acuant is a leading global provider of identity verification, regulatory compliance (AML/KYC) and digital identity solutions. It’s Trusted Identity Platform is powered by AI and human-assisted machine learning and provides AI-powered identity verification, regulatory compliance (AML/KYC) and digital identity solutions that deliver unparalleled accuracy and efficiency.

Acuant’s solutions balance security with customer experience while fighting fraud across the physical and digital world. The company is said to have over 30 digital identity and IDV patents currently. Beyond identity proofing, Acuant Compliance (formerly IdentityMind) offers online risk management and automation for AML, KYC, transaction monitoring, and sanctions screening. The firm has leading partners in every industry, including finance and has completed more than 1 bn transactions in over 200 countries and territories.

HYPR

HYPR is the Passwordless Company backed by Comcast, Samsung, and Mastercard. It helps financial corporations secure user credentials by storing them safely on mobile devices. Powered by advanced Public Key Cryptography, the HYPR solution combines enterprise-grade security with a mobile-first user experience. It is a True Passwordless Security solution designed for cross-cloud, cross-platform, in-app deployment across the Global 2000.

The company’s solution is being leveraged by many large organizations to eliminate fraud, phishing and password reuse for their customers and employees all while delivering passwordless security. It is an Authentication Platform designed to eliminate passwords and shared secrets thereby removing the hackers’ primary target while eliminating fraud, phishing and credential reuse for consumers and employees across the enterprise.

ForgeRock

ForgeRock is a leading provider of identity platform for the identity & access management market. The company delivers a modern, comprehensive digital identity platform designed for any cloud environment to provide exceptional, secure digital experiences. Its platform supports identity and access management for all use cases.

ForgeRock offers the full power of the ForgeRock Identity Platform on-prem and as a service with the ForgeRock Identity Cloud. Its hybrid approach helps bridge the gap between legacy and the new world, and transform business apps and services all without impacting user experience. Using ForgeRock, more than a thousand global customer organizations orchestrate, manage, and secure the complete lifecycle of identities from dynamic access controls, governance, APIs, and storing authoritative data – consumable in any cloud or hybrid environment.

Evernym

Founded in 2013, Evernym is a market leader in verifiable credential technology and develops software and applications to help organizations worldwide build trusted digital relationships. It builds and deploys self-sovereign identity solutions, with the technology and go-to-market resources powering digital credentials’ implementations in production.

The company has a vision of ubiquitous verifiable credentials that facilitate trusted interactions in daily life. The company knew its vision is bigger to remain a single company and that for decentralized identity to take off, it invented the Sovrin Network, a public ledger specifically built for identity in 2016.