In a filing with the United States Securities and Exchange Commission on Tuesday, special purpose acquisition company, or SPAC, Adit EdTech Acquisition Corp, announced it would merge with Cincinnati-based Bitcoin (BTC) miner Griid at a $3.3 billion enterprise valuation. SPACs are blank check companies created for the sole purpose of acquiring other firms. After the deal consummates, Griid will list on the New York Stock Exchange under the ticker symbol GRDI. The deal is expected to close by the first quarter of next year.

According to its investor presentation, Griid expects to mine 637 BTC this year with a total hash rate of 187 petahash per second (PH/s) from all miners combined. By 2024, the company projects it can mine 24,348 BTC per year, with its total hash rate surpassing 26,180 PH/s. In context, the total hash rate of the entire Bitcoin network as of Tu is approximately 156,000 PH/s.

The firm also claimed that newly designed chips in its mining machines can surpass one of the best application-specific integrated circuit Bitcoin mining devices out there, the S19 Pro. Comparing its proprietary machine to the S19 Pro, Griid boasts that it is 15% more efficient, 50% cheaper and results in 130% more gross profits per year. Currently, about 70% of the company’s Bitcoin mining operations are carbon-free.

Trey Kelly, CEO of GRIID, issued the following statement regarding the development:

We are building an American infrastructure company with the largest pipeline of committed, carbon-free power among public bitcoin miners at the lowest cost of scaled production.

David Shrier, CEO of Adit EdTech, added:

Carbon-free mining is the future of Bitcoin. GRIID’s combination of a large pipeline of low-cost, carbon-free power, distinctive access to next-generation ASICs, and market-leading execution position them to generate attractive profitability and growth.

Griid business metrics | Source: Company Investor Presentation


Cointelegraph By Zhiyuan Sun

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Global financial market took a hit on Nov. 30 after comments from U.S. Federal Reserve Chair Jerome Powell hinted that inflation and the Omicron COVID-19 variant are growing threats and that the bank’s easy money policies could end sooner than anticipated.

Prior to Powell’s comments, Bitcoin (BTC) had been on the rise and the digital asset had rallied 6% from a low of $55,840 in the early trading hours on Nov. 30 to an intraday high at $59,200, but the price was hammered back below $57,000 after the Fed’s remarks.

BTC/USDT 4-hour chart. Source: TradingView

At the time of writing, Bitcoin has managed to climb back to $58,000 but a series of technical indicators signal that traders are not confident about BTC’s next move.

Stocks and commodities take a hit

It wasn’t just Bitcoin that was hard hit by the Fed’s comments. According to economist and CryptoQuant analyst Jan Wuestenfeld, the dollar index (DXY) increased while the DOW, gold and other equities indexes pulled back. 

DXY vs. Gold vs. BTC/USD vs. SPX. Source: Twitter

Wuestenfeld said,

“US dollar index appreciating on Powell remarks that the FED might speed up taper (no matter how believable). Everything else going down. Gold included.”

Related: Vladimir Putin says cryptocurrencies ‘bear high risks’

The Fed “behaves in a binary way”

Deeper insight into the actions from the Fed was provided by market analyst and former treasury employee Nik Bhatia, who highlighted the fact that the Fed “doesn’t have the ability to react to dynamic conditions” and instead “behaves in a binary way.”

Bhatia said,

“If things are going well, it can tighten policy. If the economy is in trouble, it eases policy.”

According to Bhatia, “inflation is running hot in the United States” with “headline statistics pointing to multi-decade high increases in aggregate price levels.”

At the same time, the Fed has implemented “a monetary policy at essentially the easiest it has ever been,” leading Bhatia to caution that “with inflation waking up, this will soon come to an end.”

Bhatia said,

“The Fed is clearly heading into a policy error in which it tightens policy despite longer-term growth and inflation expectations coming down, due to tighter monetary policy itself (that’s why it’s called policy error).”

It’s no longer “transitory inflation”

Interstingly, Powell’s comments acknowledged that the year-long mantra of “transitory inflation” is now coming to an end, with the Federal Reserve chair suggesting that it’s time to “retire” the transitory narrative.

While it’s refreshing to see a bit more honesty coming from the Fed, cryptocurrency pundit Anthony Pompliano pointed out that the average person knew all along that the inflation was anything but “transitory” in nature and will likely remain an issue well into 2022.

The overall cryptocurrency market cap now stands at $2.638 trillion and Bitcoin’s dominance rate is 41.2%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.




Cointelegraph By Jordan Finneseth

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Volatility reared its ugly head for a second day after growing fear of the new Omicron COVID-19 variant and the Federal Reserve’s admission that an earlier-than-expected adjustment to its bond-buying program continues to impact global stock markets. The impact of these concerns appears to have impacted Bitcoin price and this morning, the digital asset retreated from its intraday high at $59,175, falling to as low as $55,875.

It’s not all bad news for crypto holders, however, as several altcoins have racked up notable gains over the past 24 hours.

Top 7 coins with the highest 24-hour price change. Source: Cointelegraph Markets Pro

Data from Cointelegraph Markets Pro and TradingView shows that the biggest gainers over the past 24 hours were Shiba Inu (SHIB), Rari Governance Token (RGT) and Ampleforth (AMPL).

Shiba Inu reveals gaming and Metaverse plan

Shiba Inu is a meme coin that operates on the Ethereum (ETH) network and has risen in popularity over the course of 2021 by embracing emerging trends like nonfungible tokens (NFTs) and decentralized finance (DeFi).

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for SHIB on Nov. 29, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. SHIB price. Source: Cointelegraph Markets Pro

As seen in the chart above, while the VORTECS™ Score for SHIB has remained relatively flat over the past week, the NewsQuakes™ alert system from Cointelegraph Markets Pro posted three updates around 15 hours before the price increased by 42% over the next day.

SHIB’s price spike comes after the token listed on the Kraken exchange and the news that Shiba Inu partnering with William Volk, the former vice preside of technolog at Activision, to create games for the project’s ecosystem and foray into the Metaverse.

Related: Shiba Inu gains over 30% in just 2 days as Kraken announces SHIB listing

Rari Capital holds $1.5 billion in value

The Rari governance token is the native token of Rari Capital, a non-custodial DeFi robo-advisor that enables users to autonomously earn a yield with their crypto holdings.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for RGT on Nov. 25, prior to the recent price rise.

VORTECS™ Score (green) vs. RARI price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for RGT spiked into the green zone and reached a high of 77 on Nov. 25, around 78 hours before the price increased 51.5% over the next two days.

The rally in RGT comes as the protocol surpassed $1.5 billion in total value locked and launched a new shield mining campaign with Nexus Mutual (NXM) where NXM stakers can earn RGT for their staking activities.

Ampleforth adds a wrapper

Ampleforth is a rebase project hosted on the Ethereum network that uses an algorithmically adjusted circulating supply that aims to be the base money for a decentralized economy that can remain decoupled from the price action of other cryptocurrencies.

Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $0.75 on Nov. 22, the price of AMPL has rallied 87.5% to a daily high at $1.41 on Nov. 30.

AMPL/USDT 4-hour chart. Source: TradingView

The rally appears to be connected to the release of wAMPL, a wrapped version of AMPL that does not rebase and can be more easily used throughout the DeFi ecosystem.

The overall cryptocurrency market cap now stands at $2.613 trillion and Bitcoin’s dominance rate is 41.1%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.


Cointelegraph By Jordan Finneseth

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The use of cryptocurrencies to evade international sanctions from various international governmental organizations like the United Nations (UN), the International Monetary Fund (IMF) and the World Bank, among others, has been a concern for regulators ever since the creation of cryptocurrencies.

The rapidly increasing adoption of digital currencies in the last two years makes this discussion more important than ever, especially with the advent of central bank digital currencies (CBDCs) like the digital yuan. 

In an interview on Nov.17, United States Deputy Treasury Secretary Wally Adeyemo said that the efficacy of U.S. sanctions would not be undermined by central bank digital currencies. 

Adeyemo’s remarks follow comments from sanctioned Russian oligarch Oleg Deripaska, who urged the Russian government to use Bitcoin to evade U.S. sanctions and even weaken the dominance of the U.S. dollar. Deripaska said, “The U.S. had realized long ago that uncontrolled digital payments are capable of not only nullifying the effectiveness of the entire mechanism of economic sanctions but also taking down the dollar as a whole.”

The Biden administration at large has taken a hard stance against cryptocurrency firms that are abetting such causes. It has found cryptocurrency exchanges guilty of enabling ransomware attacks facilitated through rival countries. 

Related: Ethereum dev must face jury for allegedly helping North Korea evade sanctions

Ransomware attacks are the tip of the iceberg

In September, the Treasury Department Office of Foreign Assets Control sanctioned over-the-counter broker Suex by adding it to the list of Specially Designated Nationals for whom assets are blocked and any U.S. persons are prohibited from engaging in financial transactions with them. The broker’s offices in Moscow and Prague were also listed by the government agency as a part of their sanctions, including 25 cryptocurrency addresses for Bitcoin (BTC), Ether (ETH) and Tether (USDT).

More recently, on Nov. 8, the regulator sanctioned the cryptocurrency exchange Chatex and seized $6.1 million in cryptocurrency tokens from the firm. Both these exchanges were sanctioned for the same reasons, i.e. accepting cryptocurrencies that were used to pay off hackers for ransomware attacks.

Cointelegraph discussed these sanctions with Ari Redbord, the head of legal and government affairs at TRM Labs — a blockchain intelligence protocol. Redbord previously served as a senior adviser to the Deputy Secretary and the Undersecretary for Terrorism and Financial Intelligence at the United States Treasury. 

Redbord told Cointelegraph, “These are non-compliant nested exchanges or parasite virtual asset service providers that nest on the infrastructure of larger compliant exchanges in order to take advantage of their speed and liquidity.”

Exchanges such as these live in the shadows of the largely compliant cryptocurrency ecosystem and do not have adequate compliance procedures in place to avoid illicit financial risks. Redbord mentioned further the administration’s stance on the issue:

“The administration has been very clear that ransomware is not a crypto problem. It is a cyber problem and the focus should be on hardening cyber defenses. Treasury has been very intentional in its actions — only going after the illicit underbelly of the crypto ecosystem — for example, parasite VASPs and darknet mixing services — rather than the overwhelmingly licit and growing crypto economy.”

Terrorist financing with cryptocurrencies is also a major concern for regulators. Indeed, it is one of the primary motivators behind the Indian regulator’s intention to ban cryptocurrencies, which led to a panic sell in the region when the development was revealed.

Redbord mentioned that over the last year, there has been a global shift to a “post-post” 9-11 world wherein the battlefield is now predominantly digital. He added, “We have seen cryptocurrency used in terrorist financing, ransomware payments and programmatic money laundering by nation-state actors such as North Korea. But, we have also seen law enforcement use blockchain analytics tools […] to track and trace the flow of funds in order to mitigate the risks posed by these illicit actors.”

The fact that the majority of cryptocurrencies and the blockchains enabling them are open-sourced means that law enforcement, regulators and financial institutions have better visibility of the flow of funds than in fiat-enabled transaction mechanisms. In order to effectively ensure that cryptocurrencies aren’t being used in the evasion of sanctions, however, it is essential that financial watchdogs have an enhanced understanding of the asset class and technology that backs it.

Charlie Chen, chief marketing officer of decentralized finance protocol Horizon Finance, told Cointelegraph, “Governments and financial institutions have not yet learned how to work with cryptocurrencies, so they really can be chosen to commit crimes. The world is full of stories like that of the Silk Road. There are real criminal cases involving cryptocurrencies and there are convictions, which means there is evidence.”

Related: Iranian General Calls for use of Crypto to Evade Sanctions

CBDCs to have minimal impact on sanctions

Another aspect of the cryptoverse that could potentially impact the sanctions is central bank digital currencies. China is currently the leader where CBDCs are concerned with the most advanced CBDC program — the Digital Currency Electronic Payment or the digital yuan. 

In the past, major Chinese banks with operations in the U.S. have made tentative steps to comply with American sanctions. But some have worried that the adoption of this CBDC in global markets could lead to the weakening of the dollar over time unless the United States comes up to pace with China’s program.

Chen, however, believes that there is little chance that CBDCs could be used to bypass economic sanctions. He said, “At the moment, most international transactions are made in U.S. dollars, and Russian companies will find it problematic to persuade their partners to abandon transactions in USD in favor of a digital ruble.”

He added that the existing mechanisms and algorithms for tracking transactions already allow for detecting suspicious transactions, and in the future, these mechanisms would only become more advanced and efficient. 

Currently, there are no barriers that would prevent paying a sanctioned party for a service with cryptocurrencies like Bitcoin. Even with the use of popular cryptocurrencies and whitelisted wallets, these transactions would go unnoticed by the financial regulators. However, Chen explained that problems would arise when the tokens are exchanged for fiat currencies and transferred to the bank account of the sanctioned party.

Chen added, “If you are using a major exchange like Binance, this bank transfer will not work. Therefore, you will have to use smaller exchange services that are so popular in post-Soviet space.”

While cryptocurrencies grow more mainstream every day, in many jurisdictions around the world, they remain largely unregulated and adoption is still nascent. As such, the ability of cryptocurrencies to be used at the scale of a nation-state to avoid sanctions remains to be determined. 

One thing is clear, whether crypto turns out to be the next iteration of money or merely another form of investment, regulators are monitoring its use in illicit activities such as sanction avoidance.

Related: China’s CBDC is about domestic dominance, not beating the dollar


Cointelegraph By Anirudh Tiwari

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Major cryptocurrency exchange Crypto.com continues expanding its crypto on-ram and off-ramp solutions with a new partnership with the California state-chartered bank Silvergate.

Crypto.com announced on Tuesday that it is working with Silvergate to allow institutional clients to deposit and withdraw from the exchange using the U.S. dollar (USD).

According to the announcement, bank transfers to and from the Crypto.com exchange are now available for institutional investors. With the help of Silvergate, institutional clients can transfer USD between their bank accounts and Crypto.com with no fees.

The new feature is enabled through the Silvergate Exchange Network, a payments platform enabling users to instantly send U.S. dollars at any time of the day. The feature will be available to institutional clients in all exchange available markets, the announcement notes.

Crypto.com co-founder and CEO Kris Marszalek said that the new feature is “highly requested” and supports the company’s vision of accelerating the world’s transition to cryptocurrency. “We are excited to work with Silvergate to provide an additional fiat on/off ramp solution to our institutional clients,” he added.

As previously reported, Crypto.com has been working with the USD Coin (USDC) stablecoin issuer Circle to provide USD deposits and withdrawals on its platform.

Crypto.com launched withdrawals through USD bank transfers for institutional clients across more than 60 countries via Circle API in August. The exchange previously partnered with Circle to enable USD deposits and USDC transfers for users in more than 30 countries.

Related: Silvergate Bank issues $100M credit line to mining firm Marathon Digital

Silvergate is a crypto-focused bank known as the issuer of Facebook’s not-yet-launched digital currency Diem USD and the manager of its reserve. The bank also assisted the launch of El Salvador’s government-backed Bitcoin (BTC) wallet Chivo, acting as a responsible entity for facilitating Chivo’s U.S. dollar transactions.


Cointelegraph By Helen Partz

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Central bank digital currencies (CBDC), digital versions of national currencies introduced in response to growing cryptocurrency adoption, would be an essential tool for combating crypto, according to the Bank of Indonesia.

The central bank of Indonesia is considering launching a digital rupiah to “fight” against cryptocurrencies like Bitcoin (BTC), Bank of Indonesia’s assistant governor Juda Agung said at a recent parliamentary meeting.

“A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions,” Agung stated, according to a Nov. 30 Bloomberg report.

The official noted that cryptocurrencies like Bitcoin are currently traded alongside commodity futures and regulated by the trade ministry despite severe impacts on the financial system.

The news comes shortly after the National Ulema Council (MUI), Indonesia’s top Islamic scholarly body, reportedly found cryptocurrencies like Bitcoin to be haram, or forbidden, by the tenets of Islam. The East Java branch of one of MUI previously issued a statement deeming the use of the cryptocurrency haram in late October.

As previously reported, the Indonesian government has taken a mixed stance on crypto regulation. Despite banning cryptocurrency payments back in 2017, local authorities have opted to keep cryptocurrency trading legal. In April 2021, Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti) of the Ministry of Trading reportedly announced plans to launch a government-backed crypto exchange in the second half of 2021.

While maintaining a mixed stance on crypto, Indonesian regulators have been increasingly looking at a potential CBDC. In May, the Bank of Indonesia Governor Perry Warjiyo announced plans to launch a digital rupiah as a legal payment instrument in Indonesia.

Related: Retail-focused Singaporean CBDC to hedge against privately issued stablecoins

CBDCs like the Chinese digital yuan are apparently designed to curb cryptocurrency adoption as one of their key features. Indonesia is not alone in thinking that CBDCs can help governments combat crypto. In mid-November, Bank of Russia’s governor Elvira Nabiullina said that CBDCs should serve as a good option for governments to replace decentralized cryptocurrencies like Bitcoin.


Cointelegraph By Helen Partz

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The creator of India’s crypto bill, former Finance Minister Subhash Garg, dismissed the notion of banning “private cryptocurrencies” as a misinterpretation while highlighting the enormous potential of cryptocurrencies and blockchain technology.

The Parliamentary discussions around a controversial crypto bill sparked fears around the ban on cryptocurrencies, with no clear indication about the ban’s scope. As Cointelegraph reported, an episode of panic selling among Indian investors followed the announcement. In an interview with local news channel News 18, Garg clarified:

“[The description of the crypto bill] was perhaps a mistake. It is misleading to say that private cryptocurrencies will be banned and to intimate the government about the same.”

He believes that the Indian government should formulate a bill after discussing it with stakeholders and crypto investors. Furthermore, the bill suggests banning private cryptocurrencies without clarifying what the word “private” stands for.

As a result, the crypto community in India self-interpreted two different versions of the bill’s agenda — one that considers banning all non-government issued cryptocurrencies and the other that excludes cryptocurrencies running on the public blockchains such as Bitcoin (BTC) and Ethereum (ETH).

Garg also pointed out a flaw in classifying cryptocurrencies as assets after underscoring the vast ecosystem powered by disruptive technology. He also said that crypto exchanges have limited interests and do not represent the entire community:

“You don’t classify the wheat that you produce, you don’t classify the clothes you produce, as assets. That is too much of oversimplification to treat this as an asset.”

On an end note, Garg added that the central bank digital currency (CBDC) initiatives, especially in countries like India, are complex. According to him, the government first needs to address challenges, including the unavailability of smartphones and digital wallet issuance.

Related: Singaporean crypto exchange enters India amid regulatory uncertainty

The Indian crypto market continues to attract international firms with the latest being Coinstore, a Singaporean crypto exchange. As Cointelegraph reported, Coinstore has allocated a $20-million fund to set up three new offices in the region.

Speaking to Cointelegraph, Coinstore spokesperson was hopeful for the development of a positive crypto regulatory framework:

“Strict KYC process, security requirement for exchanges, as well as gradual regulation of certain cryptocurrencies naturally protects the Indian users and would clarify the legality of certain cryptocurrencies.”


Cointelegraph By Arijit Sarkar

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Bitcoin (BTC) returned to cement higher support on Nov. 30 after the latest BTC price comeback halted near $59,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewRSI sees “bullish engulfing”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing to local lows of $55,920 on Bitstamp overnight.

The pair then recovered to circle $56,500 at the time of writing, with analysts keeping the faith on higher timeframe strength.

Popular Twitter personality TechDev noted that Bitcoin’s stochastic relative strength index (Stoch RSI) had “reset” to levels that echo BTC/USD at $44,000 — just before the run, which culminated in all-time highs.

“Bullish engulfing printed on stoch RSI cross with RSI reset to 44K levels,” he summarized alongside the 3-day chart. 

Bitcoin’s late strength Monday coincided with a return to form for macro markets and news that Twitter CEO Jack Dorsey had quit the company to focus entirely on Bitcoin activities.

While $60,000 remained out of reach of bulls, signs of a marked shift in sentiment were everywhere.

“Bitcoin high timeframe structure is bullish. Cycle awareness is key,” TechDev added in a separate post.

The Crypto Fear & Greed Index, days ago in “extreme fear” territory, looked set to enter its “neutral” zone with a score of 40/100 Tuesday.

Crypto Fear & Greed Index. Source: Alternative.meEthereum avoids breakout against BTC

For Ether (ETH) against Bitcoin, the picture was mixed.

Related: Where will BTC end November 2021? 5 things to watch in Bitcoin this week

As altcoins saw broadly flat performance over the past 24 hours, trader Crypto Ed highlighted a rising wedge pattern on the 4-hour timeframes for ETH/BTC. The weekly chart produced similar characteristics.

Rising wedge structures are often seen as a potential bear flag due to their tendency to break to the downside. 

ETH/USD traded at $4,400 at the time of writing, nonetheless up 7.3% over the past week.

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView


Cointelegraph By William Suberg

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The Bitcoin network’s value settlement efficiency has been improving steadily recently, with more being settled for lower fees.

Over the past week, the Bitcoin network has transferred or settled an average of $95,142 of value for every $1 worth of fees.

The on-chain settlement efficiency has been gradually increasing since May as more has been moved around the network during the bull cycle.

On-chain analyst Dylan LeClair made the observation using data from analytics provider Glassnode. The value is derived by dividing the mean transaction volume by the fees.

The final settlement costs amounted to just 0.00105% of the total value transferred of $451.3 billion.

According to CryptoFees, Bitcoin is seventh in the list of networks ordered by daily transaction fees. Its seven-day average is around $678,000 which puts it behind Ethereum, Uniswap, Binance Smart Chain, SushiSwap, Aave, and Compound.

The fee tracking platform currently reports that Ethereum is currently processing $53 million in daily fees, 98.7% more than the Bitcoin network. Bitcoin and Ethereum should not be compared in terms of value settlement and fees as they are two different entities — the former is a store of value asset and the latter a smart contract and decentralized application network. 

Ethereum’s mean transaction volume divided by the fees comes out at just $139 in value transacted per dollar in fees.

The settlement efficiency of the Ethereum network has declined as more value has accrued to the network and a much greater demand has been put on it, especially with the rise of DeFi and NFTs over the past 18 months.

Related: Bitcoin network tags record high for daily settlement volume

According to Bitinforcharts, the average transaction fee on the Bitcoin network is around $2.13 at the moment. Comparatively, the Ethereum network’s average fee is a whopping $42.58. As reported by Cointelegraph yesterday, Bitcoin transaction fees are down by more than 50% this year.

The divergence in average transaction fees between the two networks can be seen widening from the end of July.

Average BTC and ETH tx fees, 6M – Bitinfocharts.com

Ethereum’s network fee woes can be circumvented by using layer two networks which have surged in adoption over the past couple of months with a near all-time high total value locked of $6.87 billion according to L2beat.




Cointelegraph By Martin Young

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The $4,700 Bitcoin (BTC) price spike on Nov. 29 was likely a great relief for holders, but it seems premature to call the bottom according to derivative metrics. 

This should not come as a surprise because Bitcoin price is still 15% below the $69,000 all-time high set on Nov. 10. Just 15 days later, the cryptocurrency was testing the $53,500 support after an abrupt 22% correction.

Today’s trend reversal was possibly encouraged by MicroStrategy’s announcement that it had acquired 7,002 Bitcoin on Monday at an average price of $59,187 per coin. The listed company raised money by selling 571,001 shares between Oct. 1 and Nov. 29, raising a total of $414.4 million in cash.

More bullish news came after German stock market operator Deutsche Boerse announced the listing of the Invesco Physical Bitcoin exchange-traded note or ETN. The new product will trade under the ticker BTIC on Deutsche Boerse’s Xetra digital stock exchange.

Data shows pro traders are still neutral-to-bullish

To understand how bullish or bearish professional traders are positioned, one should analyze the futures basis rate. That indicator is also known as the futures premium, and it measures the difference between futures contracts and the current spot market at regular exchanges.

Bitcoin’s quarterly futures are the preferred instruments of whales and arbitrage desks. Even though derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, the most notorious benefit is the lack of a fluctuating funding rate.

Bitcoin 3-month futures basis rate. Source: Laevitas.ch

The three-month futures typically trade with a 5%–15% annualized premium, which is deemed an opportunity cost for arbitrage trading. By postponing settlement, sellers demand a higher price and this causes the price difference.

Notice the 9% bottom on Nov. 27, as Bitcoin tested the $56,500 support. Then, after Monday’s rally above $58,000, the indicator shifted back to a healthy 12%. Even with this movement, there is no sign of excitement, but none of the past few weeks could be described as a bearish period.

Related: Key data points suggest the crypto market’s short-term correction is over

Lending markets provide additional insight

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, therefore increasing the returns. For example, one can buy Bitcoin by borrowing Tether (USDT), thus increasing the exposure. On the other hand, borrowing Bitcoin can only be used to short it or bet on the price decrease.

Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched.

OKEx USDT/BTC margin lending ratio. Source: OKEx

When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low lending ratio signals that the market is bearish.

The chart above shows that traders have been borrowing more Bitcoin recently, because the ratio decreased from 21.9 on Nov. 26 to the current 11.3. However, the data leans bullish in absolute terms because the indicator favors stablecoin borrowing by a wide margin.

Derivatives data shows zero excitement from pro traders even as Bitcoin gained 9% from the $53,400 low on Nov. 28. Unlike retail traders, these experienced whales avoid FOMO, although the margin lending indicator shows signs of excessive optimism.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.




Cointelegraph By Marcel Pechman

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