Crypto Market Analysis: December 6, 2021
07 Diciembre 2021 - 12:25PM
NEWSBTC
Bitcoin and ether suffered a major flash crash over the weekend,
sending cryptoasset values down by some 20% at points. Prices have
now recovered somewhat but both cryptos remain trading well below
pre-weekend levels. Bitcoin began last week trading in the $57,000
range, with some movement during the week, but nothing remarkable.
This changed on Friday however as the cryptoasset began to fall
precipitously. BTC declined to a low of $45,412 in a matter of
hours – a near 20% collapse. Ether likewise fell victim to the
flash crash. Having traded up toward $4,700 midweek ETH began to
fall in trading on Friday from around $4,600 to a low of $3,652 – a
fall of over 20%. Both cryptoassets have regained a measure of
stability since, with prices rebounding modestly. BTC is now
trading around $47,900 while ETH is trading around $4,000.
Speculation has been rife over what caused the flash crash, with
some analysts citing the expiry of leveraged positions. Other
evidence meanwhile points to significant increased activity with
investors moving cryptoassets from wallets to exchanges – making
reaction to price movement more precipitous when it comes. The
wider backdrop of investment market fears over Omicron seems to be
in play too however. Bitcoin spot ETF launches in Canada Major
asset manager Fidelity Investments has a bitcoin spot ETF in
Canada. The ETF – named the Fidelity Advantage Bitcoin ETF invests
directly in bitcoin or through derivative instruments. At least 98%
of the ETF’s holdings will be stored in cold wallets. The fund is
listed on the Toronto stock exchange with the ticker FBTC. The fund
will have a 0.4% management fee for investors with customers given
the option of investing via Canadian or US dollars. Canada is a
popular destination for crypto ETFs with more than 20 available to
Canadian investors. Fidelity’s offering however is unique among
crypto ETFs in offering physical holdings of bitcoin rather than
trading on futures. MercadoLibre to accept cryptoassets Major Latin
American online marketplace MercadoLibre now allows customers in
Brazil to exchange and pay for products in cryptoassets. The firm
has announced users in Brazil will be able to buy, hold and sell
bitcoin, ether and a U.S Dollar based stablecoin, Pax Dollar. The
combination of two major cryptoassets and a stablecoin on
MercadoPago, the payments platform of MercadoLibre, will enable
customers to conduct transactions for products priced in fiat
currency using their cryptoassets. MercadoPago is authorised by
Brazil’s central bank, making it easier for the firm to begin its
crypto operations there. But MercadoLibre more generally operates
in many Central and South American countries, suggesting a
potential customer base for new crypto payments of millions as it
expands its offering. Square rebrands in wake of Dorsey Twitter
departure Payments firm Square has announced it is rebranding to
‘Block’, days after its chief executive Jack Dorsey stepped down as
head of Twitter. The company said in its announcement the new name
had many associations, but among them was the use of Blockchain
technology in some of its projects. Square Crypto, a separate
initiative of the firm which aims to promote the use of bitcoin is
also changing its name to Spiral. The Square brand won’t be
disappearing though – Square remains the name of the firm’s seller
business, which is among a stable of brands that now also includes
Cash App, TIDAL and TBD54566975. Jack Dorsey announced his sudden
departure from Twitter last week, with many speculating he would
move to focus more of his time on crypto and blockchain projects,
with his now rebranded firm Block at the forefront of this. Meta
crypto head departs firm The head of Meta’s (formerly Facebook)
crypto arm is departing the firm as the launch of stablecoin Diem
remains in doubt. David Marcus announced he would be departing the
firm after seven years, having worked on Meta’s financial offering
since May 2018, when the company’s Libra crypto project was first
announced. The project later morphed into a payments wallet called
Novi with the cryptoasset to go with it called Diem. The crypto
wallet has since launched, but the launch of Diem remains elusive.
Meta has faced significant hurdles in the launch of its crypto
products. Commenting on the departure, Meta chief executive Mark
Zuckerberg commented on Marcus’s post: “We wouldn’t have taken such
a big swing at Diem without your leadership, and I’m grateful
you’ve made Meta a place where we make those big bets.” This
is a marketing communication and should not be taken as investment
advice, personal recommendation, or an offer of, or solicitation to
buy or sell, any financial instruments. This material has been
prepared without having regard to any particular investment
objectives or financial situation, and has not been prepared in
accordance with the legal and regulatory requirements to promote
independent research. Any references to past performance of a
financial instrument, index or a packaged investment product are
not, and should not be taken as a reliable indicator of future
results. All contents within this report are for informational
purposes only and does not constitute financial advice. eToro makes
no representation and assumes no liability as to the accuracy or
completeness of the content of this publication, which has been
prepared utilizing publicly-available information. Cryptoassets are
volatile instruments which can fluctuate widely in a very short
timeframe and therefore are not appropriate for all investors.
Other than via CFDs, trading cryptoassets is unregulated and
therefore is not supervised by any EU regulatory framework. Your
capital is at risk. Image: Pixabay
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