Daily Trending Bitcoin News and Market Sentiment January 25th, 2020: CME Bullish, Bitcoin Different Beast to Amazon

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  • Bitcoin pushes to a daily high of USD 8,512 on the weekend
  • CME expects that progress in institutional offerings can only be good for Bitcoin
  • Crypto analyst PlanB says even Amazon’s incredible risk-reward ratio is normal compared to Bitcoin

 

Bitcoin traders in the US yesterday refused to allow Bitcoin to go below its USD 8,200 support levels and ensured that Asian traders on Saturday today woke up to a stronger price, with a daily high so far at USD 8,512 (CoinDesk).

Despite the failure of Bitcoin to break past USD 9,000, its ability to stay within current ranges after intense selling off is going to instil a lot of confidence in the bulls. Not only that, regular investors will be keen to study why Bitcoin has kept up with stocks over the past few days, reminding them of how the Iran-US crisis kept both markets buoyant. Crypto commentator Crypto Light commented:

“China coronavirus-driven risk-off blanketing Chinese equities… and Bitcoin. Iran correlation, now Chinese equities… If there was ever a statement to the effect, Bitcoin has now made it to the global stage.”

The current geopolitics may be resulting in a slight slump for stocks and for crypto, but news from institutional investors believe the long term outlook for Bitcoin is still very much positive. This is supported by the new Bitcoin options that was launched last week by the Chicago Mercantile Exchange Group (CME Group). According to its global head of equity products Tim McCourt, this development will cause further strength to the institutional infrastructure supporting the modern asset class.

These infrastructural improvements around Bitcoin is expected to result in positive momentum for the rest of the crypto market. Technical analyst Eric Thies told Cointelegraph that this offers long-term stability, and will be welcomed by accredited and institutional investors, since a variety of investment vehicles to go into crypto is what they prefer. Thies said:

“I’m optimistic it’s bullish for longer-term stability and that it also signals something more significant once you compound it with several other events around the market.”

Further, he sees that CME options will get in on the synergy from other players also making progress, like US exchange Gemini, who has been focusing on compliance and insurance for crypto investors. Thies says this can only be good as the baseline assurances building up are exactly what hedge funds look for before dipping into volatile sectors like crypto:

“Institutions being handed a key to an on ramping BTC during a halving year sure seems like a good recipe for fireworks for the year or so after the actual event.”

Meanwhile, popular crypto analyst PlanB, the creator of the very popular Stock-to-Flow model that we’ve covered before in past analyses, now says that the risk-return of Bitcoin is a completely different beast when compared eve to the champion of stock markets at the turn of the century, Amazon.

So much so, PlanB says that Amazon looks “normal” when sat next to Bitcoin. He proves this by sharing a chart he made that draws up the risk-return of Bitcoin versus Amazon stocks and others like US bonds, gold and the S&P 500 on yesterday’s date. It suggests that Bitcoin has a completely different investment behavior.

Because of the huge losses in 2000 that Amazon experienced, even its massive recover since then has put it far below the risk-reward ratio of the world’s largest digital asset. More recently, Amazon’s stock price also seems to be recovering from recent allegations that Saudi Arabia had supposedly hacked its CEO Jeff Bezos. Both have their fates seemingly tied, as we mentioned earlier, since both have slid down in the past week amid health fears coming out of China, with the Lunar New Year celebrated in a somber mood today.

Just a few days ago, Cointelegraph reported how Bitcoin returns — adjusted by risk — had far outperformed every other four-year investment on major vehicles. PlanB had jumped on, saying that this four-year period was around the time in between each Bitcoin halving.

Further evidence that halving every four years continues to boost price performance? We can agree with that.

 

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