Hey Redpill Readers!
Today’s newsletter covers our market analysis...
From a BTC price watch, to XRP’s lawsuits, ETH’s upshot, a $1 trillion dollar crypto market, and JPMorgan’s prediction, too.
Plus, a brief take on Warren Buffet’s rat poison comment. Here we go...
BTC SKYROCKETS, ETH PRICE UP, XRP LOW
Bitcoin set a new all-time high as it crossed past the $40k milestone.
Crazy stat: BTC recorded an 80%+ gain since it hit $20k in December last year. And it gained more than a 20% increase in just seven days this month after its record-breaking 300% gain in 2020.
So, what’s driving the present BTC rally? Investments pouring in. Analysts believe that the recent price hike is driven by institutional demand and investments from well-off players.
It’s not just BTC that’s been bullish these past few weeks.
Quick look: ETH, or Ethereum, is also up to more than $1,200.
Will it break records? Most likely.
We’ve seen more than a 60% gain in just one week. But it’s clear to us that it’s going for the recorded $1,433 all-time high, placed in 2017.
What triggered Ethereum's rally?
A ride-off to BTC momentum… Analysts say that the ETH surge is due to the BTC bull run. For one, OKCoin’s Communications Lead, William McCormick, said “as [long as] bitcoin goes through a bull run, it [will] drive more interest in crypto overall.”
Grayscale Investment Strategy… Joshua Frank, CEO of The TIE, recently tweeted attributing the ETH bull run to buy ups from Grayscale’s ETHE investors to pay the loans (for the purchase of shares) in Grayscale’s Ethereum Trust.
Here’s what he said: “A large number of Grayscale's ETHE investors via private placements received their shares today. ETH's run might be in large part due to those institutions buying ETH to cover their loans.”
Still, bad news for XRP fans.
What you need to know: XRP’s price dipped to a $0.22 low recently.
And in case you missed this… the XRP’s price volatility is due to the SEC lawsuit against Ripple, Inc. and its executives for the alleged sale of unregistered securities.
Just a few XRP updates:
Whales are selling their XRP assets despite the sharp fall… Truth is, the SEC allegations against Ripple caused a lot of uncertainty.
And another lawsuit... Ripple’s lead investor, Tetragon Capital, filed a lawsuit against the company to enforce a contractual right requiring Ripple to redeem the preferred stock owned by Tetragon.
Looking ahead: The question of many is how long will the BTC and ETH rally hold up? Well, at Redpill Crypto Research, our firm’s top analyst sees a 30% pullback from here, at best. But don’t hold your breath.
Our say? The BTC bull run is far from over. Why?
Because of the law of supply and demand… Data from Glassnode suggests that only 22% of the BTC supply is left circulating in the market. Meaning? A big BTC supply shortage.
So, where is the other 80% of BTC? Mostly illiquid… which means, a large chunk of it is likely hodled long-term by institutional investors.
Willy Woo on the liquidity trend: “It’s bullish” he says. Retail and institutional demands are spiking. So, if you’re still waiting for 2017-like dips, don’t bother. Now is the time to take the BTC redpill. Add some to your portfolio... or get left in the dust.
And what about the ETH bull run? How long will that last? Well, the trend shows that a robust BTC pulls other cryptos with it.
Will institutional investors behind ETHB begin to ramp up? They could. According to Grayscale, ETH is inviting more and more institutional players as BTC becomes flooded with wealthy investors.
But here’s the issue: ETH trading becomes pricey as its transaction fee soared along with the spike of ETH trading volumes.
Deets: ETH transaction fee recorded a peak of $17.43 per transaction while placing its average at $10.20 on the first Monday of the year.
For those who don’t know, gas fees are the price paid to miners on the ETH network to execute transactions on the platform. Presently, gas fees are unfixed and varies depending on the network traffic.
The high ETH fee is a problem. Says who?
Binance CEO Changpeng Zhao tweeted on the issue noting that the high fees are causing real problems for real folks. He mentioned, exchanges ‘running with $10-20 loss on each withdrawal’ which sucks... big time.
Also, Messari ETH analyst Wilson Withiam said, the fee increase ‘can ward off potential users.’ Anyhoo… the actual solution is underway. ETH 2.0 should solve this issue. But it may take years before the upgrade is complete.
As for XRP? Mostly pain…
More investors are selling their remaining XRP assets. And Litecoin bested XRP, as the fourth largest crypto, as one major investor filed a lawsuit against Ripple (on top of the SEC’s earlier complaint).
And this brings us to…
GRAYSCALE SCRAPPED XRP TO FUND MORE BTC, ETH AND OTHER CRYPTO BUYS
Grayscale recently announced the removal of XRP from its Digital Large Cap Fund. XRP previously comprised 1.46% of the fund.
After dropping XRP, Grayscale’s fund portfolio now holds 81.63% of Bitcoin (BTC), 15.86% of Ethereum (ETH), 1.43% of Litecoin (LTC), and 1.08% of Bitcoin Cash (BCH).
Reason for the dump? To fund the others.
Will it be a dead end for XRP? Maybe.
Maybe not. It’s a legal process and the outcome is determined by the allegations, defenses, and evidence presented by all parties. And resources, too. Ripple recently announced that it will fight the SEC case in court.
CRYPTO MARKET VALUE HITS $1 TRILLION
The total value of all cryptocurrencies recently hit the $1 trillion milestone for the first time in crypto history. Crazy, right?
Full story: CoinGecko’s data, shared with us, shows the global market capitalization of roughly all cryptocurrencies combined is more than $1 trillion. CoinGecko accounts for at least 6,124 cryptocurrencies.
And expectedly, Bitcoin topped the leaderboard with roughly $674 billion in market capitalization. That’s a two-third portion of the crypto market.
Ethereum follows with an estimated $135 billion market cap.
Why this milestone matters: It’s about crypto adoption.
It indicates large investments from players like PayPal, MassMutual, One River, Square, MicroStrategy, and more…
On this point: Messari Finance Analyst, Jack Purdy, said “the $1 trillion mark cements cryptocurrency as an investable asset class that no longer sits on the fringes of traditional finance as a toy for retail investors.”
He added… all of this demonstrates “that this asset class is large enough to absorb large orders like we’ve seen recently with the slew of institutions entering over the last few months.”
And know this… this is just the start. As the market cap breaches the $1 trillion mark, more investors will see the viability of digital assets.
What else to watch out for?
Bitcoin’s market cap, by itself, could hit the $1 trillion mark.
Blockchain.com research head Garrick Hileman predicted that in 2021, Bitcoin will become a trillion-dollar asset. Why? Because of more buy-in from retail and Wall Street investors going forward.
JPMORGAN PREDICTS A BTC RISE TO $146,000
More bullish BTC news. Bitcoin can reach $146K long term. Says who? Strategists from JPMorgan Chase & Co., the investment banking giant.
Full details: They wrote about “a crowding out of gold as an ‘alternative’ currency [which] implies big upside for Bitcoin over the long term.”
Plus… “Bitcoin’s [current] market capitalization of around $575 billion would have to rise by 4.6 times – for a theoretical bitcoin price of $146,000 – to match the total private sector investment in gold via exchange-traded funds or bars and coins.”
JPMorgan’s prediction will happen. Reasons? Bitcoin is seen as a store of value. It’s limited. And it can circulate with ease.
TRUMP BANS CHINESE PAYMENT APPS
Just weeks before leaving the White House…
President Donald Trump signed an executive order banning Chinese payment apps including AliPay, the payment processing firm owned by Ant Group.
Soon, US citizens will be prohibited from using AliPay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, and more.
Reason for the ban? National security.
Trump justifies it by citing sensitive data and financial information collected by the apps. And how they’re turned over to the Chinese communist government (which could expose US citizens to threats and risks).
Beyond that, they could just be caught up in the US-China trade war.
Looking back: A similar thing happened with apps like TikTok and WeChat in 2020. And under the same pretext of national security risk, too.
In any event… Trump’s days in office “are numbered,” but we expect way more political chaos to continue in the coming weeks.
MORE REDPILL CRYPTO NEWS
Investor Bill Miller says Warren Buffett’s famous BTC rat poison comment is right. BTC could be the rat poison and the rat could be cash. Boom! We like how you think, Bill.
New BTC hash rates hit new high as price continues to soar.
What will you do if BTC price hits $1M? Mavs owner says he’ll bid for the presidency plus a BTC giveaway to every citizen.
Ex-Fed Reserve Governor and former BTC skeptic, Kevin Warsh, changes mind about crypto. He says BTC makes sense in a portfolio.
Are federally-regulated banks allowed to make payments and other activities using stable coins? Yes, according to US Federal Regulator.
DISCLAIMER: Newsletters published by Redpill Crypto Research reflect the opinions of only the editors who are associated persons of the firm and do not reflect the views of anyone else. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed account with Coinbase Inc. or any other account, and are not an offer or sale of a security. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Cryptocurrencies and digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors could lose the entire value of their investment.
Redpill Crypto Research will have no liability whatsoever for any expenses, losses (both direct and indirect) or damages arising from, or in connection with, the use of information in this newsletter. Readers are encouraged to conduct their own research and due diligence, or obtain professional advice, prior to making any investment decision.© 2020 Redpill Crypto Research. All Rights Reserved.