Crypto Crypto Crypto

Crypto weekly: Bitcoin making a comeback

Anders Nysteen

Senior Quantitative Analyst, Saxo Bank

Summary:  During the past week, several positive Bitcoin-specific headlines caused Bitcoin to shine performance-wise when compared to other major cryptocurrencies. Meanwhile, the demand for regulative clarity around cryptocurrencies is increasing.


Bitcoin outperforming altcoins

Over the past week, the price of Bitcoin has increased by more than 10 %, whereas most of the larger altcoins have given close-to-zero or even negative returns. The Bitcoin rally has been driven by multiple Bitcoin-specific headlines, such as El Salvador making Bitcoin legal tender in the country (although the Minister of Labor and Social Welfare states that the country is not prepared for using Bitcoin for paying wages). Additionally, Telsa announced that they will resume allowing Bitcoin transactions whenever there is confirmation that clean energy constitute more than 50 % of total energy consumption for Bitcoin mining. And the first major Bitcoin upgrade in four years has now been locked in – see more below.

Regulation – providing constraints or opportunities?

The global focus on crypto regulation has increased over the past weeks. Last week the U.S. Senator Elizabeth Warren called on U.S. policymakers to confront the issues related to the growing use of cryptocurrencies. An official in the Netherlands has proposed a ban on Bitcoin, but the Dutch minister of finance sees that supervision is more effective than a total ban in the Netherlands, although it is crucial to have proper rules for mitigating the associated risks, e.g. regarding money laundering. The head of Italy’s stock market regulator has as well raised concerns about the lack of regulatory standards within the growing crypto sector, and South Africa are also laying out the fundament for a structured regulation of cryptos. But is regulation necessarily a bad thing for cryptocurrencies? The CEO of BlockFi Inc, Zac Prince, see regulation as something positive as “regulatory clarity enables companies like BlockFi to continue innovating, it enables consumers and investors to participate in this sector with the utmost confidence”.

Bitcoin’s first update in four years

Over the weekend, the first upgrade to the Bitcoin network in four years, the Taproot upgrade, was accepted by a majority of the Bitcoin miners, signaling that they are ready to implement the upgrade. It is expected to activate in November 2021, as miners and nodes will need time to update their software. In short, the upgrade will provide improved privacy, scalability and security to the Bitcoin network. Additionally, the upgrade opens the door to running smart contracts on the Bitcoin network, which is currently one of the widely used features of the Ethereum blockchain.

BTC vs. USD. Source: CoinMarketCap
ETH vs. USD. Source: CoinMarketCap
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.