The volatility that drove Bitcoin’s price below $31,000 has now brought it up to the $33,000-level, based on CoinMarketCap. In previous market cycles, the volatility has shown a cyclical nature. However, in the current market cycle, it depends on the momentum and activity of institutional investors.
Back in 2018, there was institutional participation. Alas, the momentum was high for only a short period of time and the short-term volatility was what led to a massive drop on the charts. More than the price, the perceived value of Bitcoin has had an impact on the current volatility. Since there was accumulation at the $34,000-level by most institutions and whales, the price was soon heading towards the $34,000-level on the charts again.
Another metric, the active supply that increased significantly over the past 2 months, more so in 2021, may have led to increased volatility and the price drop on spot exchanges. A high active supply can be equated to increasing sell pressure. The price fluctuates in response to the cascading sell-off, and this is what happened during the “double-spend” sell-off on Thursday.
As demand for Bitcoin on spot exchanges is revived, sell-pressure is expected to ease off. In the current market cycle, institutional investors are pulling the trigger on volatility, even though the sharp sell-off on Thursday raised more questions on the sustainability of the price rally.
However, post the aforementioned price decline, Bitcoin made a comeback with 24-hour gains of over 5%, with the same trading at $33,460, based on CoinMarketCap, at press time.
In light of the inflows of investments into institutions’ Bitcoin products, it is likely that there may be an increase in demand and consequently, in volatility, leading to a short-term top in Bitcoin’s price.
When the price dropped, Grayscale added over 4% new Bitcoins to its holdings. Despite the significant drop in prices, institutions are not seen liquidating their holdings and if they continue to HODL, the price may continue on its onward trend. The immediate challenge is that of active supply on exchanges and that may drop once OI on derivatives exchanges increases to the level before the drop. This may occur post the Bitcoin Options expiry at the end of January. An increase in trade volume and volatility by institutions may lead the way.
ChiliZ To Expand Operations, Will Invest $50 Million in the US
Following milestone partnerships with sports teams in Europe, ChiliZ have their eyes set on conquering the United States. The fintech platform will open a new office in one of the world’s major commercial cities, New York.
ChiliZ To Set Up New York Office
Maltese blockchain giant, ChiliZ is scaling up operations after securing several partnerships with top European sports franchises. Reuters reported earlier today that the fan engagement platform would open an office and invest $50 million in the United States. According to its chief executive, Alexandre Dreyfus, the move should bring the firm within reach of top United States sports outfits. He told Reuters :
“A huge focal point for us in our global growth plans is the U.S.. That’s why we’re opening a New York office and investing $50 million into the country’s sports industry in order to launch Fan Tokens with leading franchises from the five major U.S. sports leagues”
On launching Fan tokens, ChiliZ has made headway through its subsidiary, Socios. It has partnered with football behemoths like FC Barcelona, Juventus, Paris Saint-Germain, AS Roma, Galatasaray, and Atlético de Madrid to launch branded fan tokens. These permit owners to engage in club polls, access VIP rewards, and partake in chat forums.
The company currently has offices in Malta, France, Turkey, Korea, Switzerland, and South America. It had earlier announced that it would open offices in New York and Madrid. With the New York office inching towards reality, Chiliz is undoubtedly advancing towards global growth.
Aims To Double Up on 2020 Revenue
Speaking further about the expansion, Dreyfus boasted about his company’s capacity to generate returns for its partners in the sports and entertainment industry. He said:
“We head to the U.S. with a proven track record in generating millions of dollars of revenue for some of Europe’s biggest sporting organisations. In 2020, we shared more than $30 million with our partners, but this year we’re targeting a minimum of $60 million.”
Revenue from the company’s partnership with seven-time European champions AC Milan proves Dreyfus is not bluffing. The Italian football giant launched its token ($ACM) on Binance on February 24th. Within hours of the launch, over $6 million was generated as trading volume hit $50 million in the first 30 minutes.
Big Market For ChiliZ?
For Joseph Edwards, Enigma Securities head of researcher, there is no better time to seize the initiative. He opined that the soaring interest in NFTs indicates a big market. He elaborated further that NFTs bridge the gap between fans and their subject of interest, especially as Covid-19 caused a disconnection.
“Fan tokens right now are just hitting the perfect itch at the perfect time – fans are disconnected physically from their fandom, and this helps bridge that gap,”
NBA Top Shots seems to be a perfect example. The NFT platform has continued to gain momentum as interest surges. It reached a record-breaking $231 million in sales over the past 30 days. Perhaps, ChiliZ is taking a cue from this to target the American sports market.
Bitcoin has brought new thinking to payments and financial inclusion: SEC chair nominee
When it comes to Bitcoin, market opinions are often divided, with those who support the asset and those who don’t. Similar camps may now appear to take hold of US regulators and policymakers. Recently, President Biden’s nominee for chairman of United States Securities and Exchange Commission (SEC), Gary Gensler appeared to share his perspective on the crypto sector. Gensler said that cryptocurrencies “have been a catalyst for change.”
Speaking to US Senator Mike Rounds during his Senate confirmation, Gensler added:
Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection that we still need to attend to.
His opinion on crypto is in stark contrast to Treasury secretary, Janet Yellen’s, who believed that Bitcoin is “extremely inefficient for conducting transactions” and that it is a “highly speculative asset.” It goes against Senator Elizabeth Warren’s views, who thinks Bitcoin would only “end badly.”
However, if Gensler is confirmed, a move that many crypto enthusiasts are looking forward to, the nominee plans to work to “promote the new innovation.”
I think, as I teach at MIT on these subjects, that these innovations have been a catalyst for change. Bitcoin and cryptocurrencies have brought new thinking to payments and financial inclusion but they’ve also raised new issues of investor protection…If confirmed at the SEC, I will work to promote innovation.
He quickly stressed on the importance of investor protection and said:
It’s always important to update our market oversight to new technologies…It’s important to stay true to our principles of investor protection.
Gary’s answer to concerns of crypto. pic.twitter.com/DR9u6FfDex
— CryptoBomber (@GSL24236982) March 2, 2021
Furthermore, in his opening remarks, Gensler said that markets—and technology— “are always changing” and must not be taken for granted.
Our rules have to change along with them. I believe financial technology can be a powerful force for good but only if we continue to harness the core values of the SEC in service of investors, issuers, and the public.
Gensler is most famously known for testifying before Congress for crypto and blockchain several times in the past. He even argued against the notion that crypto was similar to Ponzi schemes.
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Crypto services firm BCB Group raises $4.5M led by North Island Ventures and Blockchain.com Ventures
BCB Group, a crypto payment/trading services provider, today announced it has closed a $4.5 million investment round. The strategic funding was co-led by North Island Ventures and Blockchain.com Ventures; with participation from Pantera, L1 Digital, and Pack Capital.
As a dual regulated institution, BCB Group offers an end-to-end suite of payment processing, cryptocurrency trading, and custody. Services are accessible through a unified API-enabled platform; allowing clients to access a full range of crypto-asset products in one place.
The proceeds of the round will be used to fund investments in several new initiatives…
These initiatives include: BCB Treasury, a service designed to help companies interested in investing in bitcoin as a treasury asset. BCB Yield Accounts, a product offering clients a return on their positions. And BCB Wealth Partners, a comprehensive crypto service for private wealth clients.
“There’s so much more we want to offer our clients; and many untapped regions we’d like to be in to help those markets grow via reliable payments and market infrastructure. This funding round comes at a very exciting time for BCB Group and will be transformative for our client experience.”
– BCB Group Founder and CEO, Oliver von Landsberg-Sadie
Previously, back in March 2019, BCB Group received funding from NKB Finance and a private investor in a $1 million seed round; which brought the company much-needed talent in engineering and operations.
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