Bitcoin trades high against Wall Street and exceeds $21,000; metaverse fire of cryptocurrencies

After trading relatively steady throughout the Martin Luther King holiday, with the exchange shut down in the US, Bitcoin (BTC) regained strength late yesterday and more confidently cleared the $21k level , marking the full recovery from the crisis triggered by the FTX crash in November. As of 7:06 am on Tuesday (17th), the cryptocurrency is trading up 1.6% to $21,179.

“We see the main driver behind BTC’s 20% rally over the past week as some macroeconomic fears easing with positive US data including lower inflation stats, strong US growth numbers occupation in Europe and the lifting of border restrictions in China,” says Bradley Duke, co-CEO of ETP cryptographic services provider ETC Group. “This shift in sentiment was reflected in the BTC futures market, with traders betting long for four consecutive days.”

The surge, which wiped out $500 million of leveraged trader accounts betting on the downside, pushes the cryptocurrency market capitalization to over $1 trillion. In light of the shift in sentiment, the Bitcoin Fear and Greed Index advances to 45, still in “fearful” territory, but more than six times higher than in June last year.

Furthermore, that was seven times the difference in Bitcoin’s rise in percentage terms versus the MSCI World global stock index and Bloomberg’s commodity index over the past week. According to experts, the cryptocurrency’s surge is related to the more volatile nature of the asset, but also to the large number of traders who were betting on more downsides.

The gap between BTC and traditional assets could even widen this Tuesday, with a possible negative session on Wall Street. US futures were trading in the red today as investors await the start of earnings season in the country, hoping to catch signs of the severity of a possible US recession.

“Growing up in our three-part thesis on digital asset adoption is the juxtaposition of a growing US debt burden against a declining workforce that is ‘aging,’ said Mark Connors, head of research at the asset manager Canadian. 3iQ Digital Assets. “If we don’t let inflation reduce our real debt and we can’t grow because of it, expect a further increase [da inflação]”.

Connors argues that the value of Bitcoin is linked to the thesis of an alternative to the loss of the purchasing power of money, so it is not surprising to see an increase in the price of the asset in the perspective of an increase in US public debt.

On the other hand, the cryptocurrency’s upward movement could also be threatened by the corporate earnings season that is so worrying the stock investor. “The question now is whether earnings season will add that newfound sense of hope or spoil the party before it really gets going,” says Craig Erlam, an analyst at currency market maker Oanda.

For him, despite reports of mass layoffs, most US companies have so far been reluctant to lay off employees, which has helped strengthen employment data in the country even as some economic indicators weaken and to the decline in inflation. “A season of poor results could undermine hopes of a soft landing which seems more possible now than it did months ago.”

Erlam points out that it is not yet possible to tell whether the Bitcoin rally will sustain itself, but that “clearly there are still some very bullish traders out there. This should make for an interesting few weeks.

Besides Bitcoin, smaller cryptocurrencies have also attracted traders and posted strong gains since last week. In a rise that has been at least five days in the making, metaverse-related assets are highlighted again this Tuesday: Gala (GALA), Decentraland (MANA), and The Sandbox (SAND) jump 12.8%, 6.1% and 6.1%, respectively. Over the week, the MANA token is the one that accumulates the largest gains, around 80%.

Check out the performance of the main cryptocurrencies at 7:06:

Cryptocurrencies with the biggest gains in the last 24 hours:

Cryptocurrencies with the biggest losses in the last 24 hours:

Find out how cryptocurrency ETFs closed in the last trading session:

$500 million worth of BNB goes out of circulation

Binance completed the burn of over $500 million worth of BNB tokens this Tuesday morning.

The provision, already planned, refers to the process of definitive exclusion of currencies from the market as a means of raising the price, similarly to the repurchase of shares by listed companies.

More than 100 million BNB, or half of its total supply, is expected to be withdrawn from circulation via burns, leaving another 100 million BNB in ​​circulation. The process runs automatically every quarter.

According to the project, the amount to be burned obeys an automated protocol that operates independently of Binance, creator of the BNB Chain network.

Failed hedge fund founders plan new trade

Three Arrows Capital co-founders Su Zhu and Kyle Davies have announced a partnership with Mark Lamb and Sudhu Arumugam, co-founders of cryptocurrency exchange CoinFlex, which is undergoing a restructuring process.

The quartet yesterday announced the raising of $25 million for a rebranding process of CoinFlex, which will be called GTX.

In addition to cryptocurrencies, the new platform would allow debt trading with bankrupt companies, such as FTX.

Three Arrows Capital filed for bankruptcy in June with an estimated $3.5 billion in debt.

China registers first digital yuan bond purchase

The digital yuan (e-CNY), a digital token issued by the Bank of China, has been used to buy bonds for the first time, according to local media reports.

Investors can now use e-CNY to buy bonds using the Soochow Securities app, China Securities Journal reported, citing the company as a source.

The development of China’s central bank digital currency (CBDC) is more advanced than in most other countries.

Last week, China included e-CNY for the first time in its cash circulation report, shortly after releasing the offline payment feature in the state-owned currency app.

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