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Bitcoin sell-off likely played a key role in boosting Gold’s appeal

Investors’ appetite for gold increased as they assessed higher inflation and a major price crash in the Bitcoin market.

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May was a testing time for cryptocurrencies like Bitcoin (BTC). The flagship digital asset was already wobbling after rallying to nearly $65,000 in mid April, owing to profit-taking sentiment among traders.

Elon Musk accelerated the sell-off by reversing his company’s plans to accept Bitcoin as payment for Tesla’s electric cars.

Later in the month, the People’s Bank of China reiterated to the country’s financial institutions against the use of virtual currencies for payments. Chinese authorities are also starting to keep a close eye on crypto mining — the process by which computers mine cryptocurrencies like Bitcoin.

More blows to the cryptocurrency sector came from the U.S. tax and monetary authorities, including Federal Reserve Chairman Jerome Powell, who suggested that more regulations are needed.

All and all, the flurry of negative updates caused the cryptocurrency market to lose more than $500 billion in May. Being the benchmark digital asset, Bitcoin also suffered the brunt of aggressive downside pressure, falling 35.50% in the month.

Bitcoin is undergoing a sharp trend reversal on its monthly charts following May’s crash. Source: BTCUSD on TradingView

Meanwhile, physical gold exchange-traded funds (ETFs) recorded its strongest months in May 2021 since September 2020. The funds across the globe attracted a combined total of $3.4 billion compared to September’s $4.8 billion, according to data provided by the World Gold Council (WGC).

In detail, U.S.-based gold ETFs experienced an inflow worth $2.1 billion. The European gold ETFs reported $1.6 billion worth of deposits. Nonetheless, Asian funds tracking the precious metal’s prices noted an outflow of about $300 million.

Gold ETF flow chart. Source: WGC

Strong demand for gold ETFs also contributed to the rise of its spot prices. As a result, the XAU/USD exchange rate jumped 7.6% in May to $1,912.785 an ounce.

Negative correlation 

The polar opposite moves in Bitcoin and Gold markets indicated that a short-term negative correlation has been brewing between them. In addition, Wall Street veterans Nick Colas and Jessica Rabe also wrote in their DataTrek Research report that the sell-off in virtual currencies might have boosted gold’s appeal among institutional investors.

The market strategists projected Bitcoin as a riskier alternative to Gold. Meanwhile, they noted that the precious metal’s value does not decline by half in five weeks because of Elon Musk tweets, nor does it respond to policymakers’ ban threats.

“Gold is, relative to virtual currencies, a no-drama investment. [Therefore], we continue to recommend a 3-5 percent position in gold for diversified portfolios.”

Bitcoin is largely a speculative bet for wealthy and small retail investors seeking quick profits. But the fixed supply of BTC has also seen it benefit from fears of rising inflation, similar to gold. Corporates including Tesla, Ruffer Investments, Square, and MicroStrategy added Bitcoin to their cash-ruled balance sheets.

They did so to offset inflation risks brought forth by the Federal Reserve’s unprecedented expansionary policies, including near-zero interest rates and a $120 billion monthly asset purchasing program. 

The high-profile investments played a key role in doubling Bitcoin prices in the first quarter of 2021, fueled further higher to around $65,000 by mid-April by an increase in debt-fueled leveraged bets and influx of new retail traders into the market.

On the other hand, Gold ETFs reported six months of back-to-back outflows until May 2021. JPMorgan analysts in January 2021 reported that gold ETFs lost about $7 billion in the same period Grayscale Bitcoin Trust (GBTC), a trust operated by New York-based Grayscale Investments, attracted $3 billion.

The lack of capital injection into precious metal funds also lowered its spot bids; XAU/USD closed the first 2021 quarter down 10.14% opposed to Bitcoin’s 100% returns.

In May 2021, another JPMorgan report suggested that large institutional investors secured their profits in Bitcoin to seek opportunities in gold. They cited open interest data in Bitcoin futures contracts on the Chicago Mercantile Exchange that experienced its biggest drop since October 2020. JPMorgan analysts said:

“The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors.”

Bitcoin (orange) trended inversely to gold (pink) so far into 2021. Source: TradingView

The statements also appeared as Ruffer Investments, a U.K.-based fund that manages about $33.95 billion for wealthy individuals and charities, also announced Tuesday that it has unloaded its entire Bitcoin position and has netted $1.56 billion in profits.

Duncan MacInnes, investment director at Ruffer, told the Finance Times that they had shifted the funds into gold, commodity stocks, and inflation-protected bonds.

Macinnes added that Bitcoin is still “on the menu” of Ruffer’s potential investments in the future, noting that the world is desperate for new safe-haven against ultra-low bond yields.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/bitcoin-sell-off-likely-played-a-key-role-in-boosting-gold-s-appeal

Blockchain

Michael Burry Warns of the ‘Greatest Speculative Bubble of All Time’

Legendary investor, Michael Burry who once called out on the housing bubble is back saying markets are in the biggest bubble in history.

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Legendary investor, Michael Burry who once called out on the housing bubble has posted yet another warning about speculative assets like cryptocurrencies and meme stocks in a now-deleted tweet.

Michael Burry Warns of the ‘Greatest Speculative Bubble of All Time’

After deleting all his tweets just over two months ago, investor Michael Burry is back saying markets are in the biggest bubble in history.

Tweeting the hashtag #FlyingPigs360, in reference to an old Wall Street phrase: “Bulls make money, bears make money, but pigs get slaughtered,” which is used as a caution against greed.

Burry has warned that investors are more greedy now, speculating unrealistically, and chasing unrealistic wild returns, pointing to the excessive leverage used in the cryptocurrency market.

READ  Ark Investment Invests $20 Million in Grayscale Ethereum Trust Shares

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360.” he tweeted

Back in early April, Michael Burry had deleted his Twitter account after flagging the Tesla stock, which he is short along with GameStop, Bitcoin, Dogecoin, Robinhood, SPACs, inflation, and the broader stock market. He resumed twitter tweeting again on June 14.

Burry Compared the Hype Around Bitcoin to the Dot-com and Housing Bubbles

Burry even compared the hype around Bitcoin, electric vehicles, and meme stocks to the dot-com and housing bubbles and said earlier this year that the stock market was “dancing on a knife’s edge.”

Burry is most known for spotting the mortgage crisis ahead of time and making a fortune against the U.S. housing bubble.

READ  Tron [TRX] Beats Bitcoin [BTC] in Number of Transactions Within 300 days of launch

Back in February, he joined the inflation debate, making a comparison to the 1970s period warning investors to brace for inflation while pointing to a boom in demand due to the fiscal stimulus being injected into the economy, saying:

“The U.S. government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket.” he tweeted in February.

#Crypto Market #Michael Burry #Speculative Bubble

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptoknowmics.com/news/michael-burry-warns-of-the-greatest-speculative-bubble-of-all-time

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Blockchain

Virtual Real Estate in Ether Metaverse Game Decentraland Sold for $913K

Republic Reals have recently set a new ATH value LAND sale for Decentraland, an open-world crypto metaverse game based on Ethereum.

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Republic Reals have recently set a new ATH value LAND sale for Decentraland, an open-world crypto metaverse game based on Ethereum. The virtual plot of real estate was sold as an NFT in Decentraland for a record amount of $913,000 based on the price of MANA cryptocurrency at the time.

LAND Token in Decentraland Metaverse Game Based on Ethereum Sold For $913K

In accordance with the data released by NonFungible, this has proven to be the highest-value LAND sale till now in terms of US Dollars.

However, it should be noted that there have been past sales for more MANA when the currency was worth a lot less. 

The record is 2,772,000 MANA in the month of November of the year 2018, which was worth just under the level of $211,000 at the time.

Discussing a non-fungible token acts as a deed of ownership to a digital item and is tokenized on a blockchain in order to be conveniently validated. 

NFTs have the potential to take all kinds of forms, from still images to videos and even tweets.

Republic Realm, the company that invests in virtual real estate in crypto games said:

“We can’t wait to announce our big plans for this estate. Our commitment to building and developing the metaverse is stronger than ever.”

Further About the Ethereum-Based 3-D Game

Decentraland is an online metaverse in which the players are provided with an option to freely explore the world, interact with other players, and play games within the environment.

Well, the 3-D game is not the only game based on blockchain build around plots of digital land sold as NFTs either. Axis Infinity and The Sandbox are also on the list of games developed on the Ethereum blockchain and have raked in millions of dollars selling virtual real estate.

READ  Bitcoin Surges Above $6,300, Hits Dominance Records From December 2017

#Decentraland #Ethereum

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptoknowmics.com/news/virtual-real-estate-in-ether-metaverse-game-decentraland-sold-for-913k

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Blockchain

Bitcoin & Ethereum Price May Reach To These Levels By Next Week

btceth

The post Bitcoin & Ethereum Price May Reach To These Levels By Next Week appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

The Bitcoin price since the price slash has not shown the tendency to rise above the levels till now. However, it did multiple attempts to jump towards the north, yet dropped to its initial levels. A similar trend was also seen with the Ethereum price as it also fails to move and sustain above $2500. …

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The Bitcoin price since the price slash has not shown the tendency to rise above the levels till now. However, it did multiple attempts to jump towards the north, yet dropped to its initial levels. A similar trend was also seen with the Ethereum price as it also fails to move and sustain above $2500. Despite the bearish trend, yet the analyst believes much fruitful week is waiting ahead for both the assets. 

The crypto space is filled with many speculations and predictions, yet some analyst strongly believes these pullbacks are temporary. One of the popular analysts, Galaxy has predicted the price to rise above the target by next week.

The analyst predicts BTC price at $42K and ETH price at $3k in the coming 5 to 7 days. And hence keeping the hopes alive for the bull rally to resume very soon. 

Also Read: ‘Stop Trading Bitcoin Until Volatility Returns’, Says A Popular Analyst

Bitcoin Price Death Cross Expected Yet Not Validated!

Conpedia earlier reported about the upcoming death cross in the coming weekend, yet according to the reports, it may occur later in this month. But the intensity of the death cross is yet to be known. 

This is not the first time, BTC price is encountering such a situation, yet it has survived many since 2013. Each time, the price has slashed nearly 70% and regained in equal the next bottom. Each time the retracement periods are similar prior to and after the death crossover.

 The recent death cross in 2019 & 2020 did not have a similar impact as before. And according to a popular analyst,  Rekt Capital, if the upcoming DC may drag the price to as low as $18,000.

The analysts in a series of tweet explained the death cross event since the inception and its impact on the price. The analyst also said that the price have its crucial support levels at $32K and $29K. And if the price slumps below these levels, then the DC will be validated.

After the market slash, the entire crypto space is looking for a massive breakthrough that can uplift the Bitcoin price and the Ethereum price to the next level. And if the BTC price sustains the upcoming DC, then the recovery may be imminent.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinpedia.org/news/bitcoin-and-ethereum-price-may-reach-to-these-levels/

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What has been driving Amp’s price up? The Ethereum token has risen by 1200% since September!

Defi tokens AMPL and FXC

The post What has been driving Amp’s price up? The Ethereum token has risen by 1200% since September! appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

Despite the fact that the crypto market has been trending lower over the previous 24 hours, digital collateral token Amp (AMP) has continued to rise. Over the last 24 hours, AMP has gained 12.2 percent to $0.11, a gain of 12.2 percent. The cryptocurrency has gained 85.49 percent in a seven-day period. With a market …

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Despite the fact that the crypto market has been trending lower over the previous 24 hours, digital collateral token Amp (AMP) has continued to rise.

Over the last 24 hours, AMP has gained 12.2 percent to $0.11, a gain of 12.2 percent. The cryptocurrency has gained 85.49 percent in a seven-day period. With a market valuation of $4 billion on June 15, AMP was the 28th largest cryptocurrency by market capitalization. The token was trading at $0.086 at the time of writing.

Here’s more about the 1200% hype since September

In decentralized finance, AMP is an Ethereum-based digital currency that is useds as collateral to secure transactions and decentralize the risk of asset transfer (Defi). AMP is a collateral token for Defi applications that secures smart contracts.

The price began 2021 at $0.006657, after first launching at $0.009559 in September 2020, but has since fallen. Despite the fact that it saw significant increases following the Coinbase IPO last week. This year, Amp has been a standout performer, rising from $0.03 to $0.10 in a matter of weeks.

Coinbase, Gemini, Bittrex, Flexa, SushiSwap, UniSwap, and a number of other centralized and decentralized exchanges are all partners with AMP.

Shopify’s recent announcement of broadening its payments capability to Facebook and Google merchants could be another huge boost for Flexa. Furthermore, Sheetz, a US food and retail chain, said last month that it will begin taking Bitcoin payments through Flexa’s services.

Amp’s native asset, according to the developers behind it, is a collateral token. It is meant to facilitate quick, secure transactions. A

Amp insures the value of any transfer as collateral while it is pending confirmation – a process that can take anywhere from seconds to hours to days.

When consensus for a given transfer is reached, the tokens used as collateral are normally released, making them available to collateralize another transfer.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinpedia.org/altcoin/what-has-been-driving-amps-price-up/

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