Bitcoin Dips But Quickly Rebounds to $19,000 As Chance of XRP Token Burn Heats Up 

Bitcoin Dips But Quickly Rebounds to $19,000 As Chance of XRP Token Burn Heats Up 

Bitcoin hit a week-low of $17,935 before recovering somewhat and is now back above the $19,000 level. Many altcoins also struggled last week, with Litecoin and TRON all posting double-digit losses but did see a small rebound over the weekend. 

By Simon Peters, analyst, eToro and David Derhy, analyst, eToro

Despite last week’s momentary dip below $18,000 the recovery was quick and calming. We are now back above $19,000. What is positive to see is that each time the price does try to really sell-off and go lower, buyers are stepping in to support it. Announcements such as Microstrategy securing $650million for another bitcoin buy and MassMutual’s recent $100million purchase certainly helps the bullish case.

This could be the news that takes us convincingly beyond the $20,000 level as investors buy bitcoin in anticipation of the next Microstrategy purchase. However, in light of the eight-week run we have been on, perhaps a correction is also in order. Such a correction could take us back down to the $14,000-16,000 levels. Whilst I think the probability of a fall to these levels is low (given Microstrategy’s announcement on Friday) I’m not ruling it out completely.

Chance of XRP token burn heats up 

Altcoins also struggled last week, with many of the outperformers seeing investors take profits and rebalance portfolios. Chainlink, Tron and Tezos all saw 7-day drops of over 10%. Some of the losses made by XRP in the week were mitigated by solid performance on Wednesday, despite continued talk of an upcoming forced burning of 50bn tokens in escrow accounts.

The weekend saw the snapshot of the XRP ledger, ahead of which traders dumped large amounts of XRP tokens causing the price to drop 8%. Since the announcement, XRP has recovered, sitting at $0.500, although it is down 18.5% over seven days.

Stellar chosen as the go-to for banking institution’s stablecoin

Stellar was a diamond in the rough. XLM’s price jumped following the news that one of the world’s oldest banks, Bankhaus von der Heydt, is working with Bitbond to launch a stablecoin on the Stellar platform. The EURB stablecoin will be the first one launched by a banking institution and will be used initially for cross-border money transfers.

Ethereum 2.0 gets more nods of approval from community  

There were some expressions of concern ahead of the deadline for the required amount of Eth to be locked in to trigger the genesis block a few weeks ago (I hold my hands up). Since then, the number of Eth locked in the deposit contract has risen dramatically. Data from Etherscan shows that over 1.3m Eth has now been deposited, with Glassnode reporting that over 81,500 Eth was deposited on 8th December alone.

The vast number of tokens now staked, and thus now locked away for an extended period of time, must give the foundation and developers great confidence that the community is behind them in the transition to 2.0.

The increasing number of validator nodes will provide greater decentralisation to the network going forward, which, at a time when questions are being raised about potential centralisation of the overall computing power on major blockchains like Bitcoin, is positive to see.

Fidelity sings sweet melody of custody business 

An interesting development from Fidelity and BlockFi last week, with the cryptoasset arm of the investment management firm announcing its plan to provide institutional investors with the ability to use bitcoin as collateral for cash loans.

If investors cause this service to take off, then there is every chance that other banks will follow suit. It’s not an opportunity for old financial institutions to increase their squeezed margins. Perhaps the reason that they’re hesitating is because they don’t want to pass any monetary sovereignty over to decentralised assets such as crypto.