Cypto Update: Buying the dip

Cryptocurrencies 5 minutes to read

Jacob Pouncey

Cryptocurrency analyst, Saxo Bank

Summary:  Major cryptocurrency prices are on the rise, with the number of users holding large amounts of BTC on the rise.


This week saw the entire crypto market cap rise by 8.5%, bringing the market cap to $270 billion. Bitcoin and Ethereum rose by 8.5% and 4.5% respectively. Over the weekend, the Bitcoin price found support at the $8,000 level and now appears to be headed towards testing $9,000 as potential resistance. Bitcoin has returned over 125% against the USD year-to-date.

Bitcoin whales accumulate

The number of Bitcoin addresses holding 1,000-10,000 BTC has increased to about a quarter of all circulating supply. Data from cryptocurrency research firm Diar suggest that Bitcoin Whales or holders with more than 1,000 BTC have increased their total number of coins held by nearly 26% since the start of the bear market. Additionally, retail traders or holders with anywhere between 0.01-100 BTC have added to their holdings. Looking at the holding distribution from November 2018 to May 2019, the percentage of BTC on exchanges has fallen from 20% to 16%. This supply reduction on trading venues could be a factor that is helping support the spot Bitcoin price since the recent bottom in December 2018. 

The Swiss stable coin

The Swiss stock exchange SIX is looking to develop its stable coin pegged to CHF. This Swiss franc stable coin will help the exchange further the development of its cryptocurrency initiatives. It is still unclear if the token will only trade on the exchange. The company is set to launch its digital asset exchange later this year, which would represent a first for a European exchange to launch a complementary digital asset exchange with the purpose of tokenising traditional securities and offering digitally native ones. This represents the continuous march from the traditional finance world towards a more efficient and hyper-digital financial infrastructure. SIX is already ahead of most European exchanges through its listing of several exchange-traded products that track the performance of the major cryptocurrencies. 

Binance margin trading soon

The largest spot cryptocurrency exchange Binance will launch its margin trading “soon”, according to sources close to the matter. However, the services will not be available to users in the US, Cuba and Iran, among others. The roll-out will be limited to a few pairs, but this move will almost certainly increase the trading revenue of Binance, which could help the profitability of the firm. The addition of margin trading on one of the world’s largest exchanges could add more leverage to the cryptocurrency market and increase volatility. 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

International

Trade responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.