Tag Archives: Markets

Hive Reports $7.4M Q2 Profit as Lower Costs More Than Offset ‘Big Spend’ on Expansion

Publicly traded mining company Hive Blockchain (HVBTF) reported a Q2 profit even as the firm continued its “big spend” on upgrading its mining facilities. 

Hive took in $13 million in quarterly mining revenue, according to its Q2 earnings report Tuesday, 8% up from the year-ago period’s $12 million.

The company posted a profit of $7.4 million, a significant increase from its $1.8 million loss in the same period last year. Gross mining margin expanded to $9.2 million, or a $0.03 profit per share, up from a $11.5 million loss, or a $0.04 loss per share.

“We’ve been able to drive down costs, which has led to the highest cash flow in any one quarter since Hive went public three years ago.,”  said Frank Holmes, interim executive chairman. Cash flow was $10.6 million, up from a loss of $4.6 a year earlier.

As one of the largest ether mining firms, Hive noted a year-over-year decrease in bitcoin mining due to ending prior cloud mining agreements, which became unprofitable. The firm has significantly increased its mining capacity, however, and has used ether mining profit margins to enable “acquisition and initial scaling” of new bitcoin mining operations. 

The ongoing coronavirus pandemic has “delayed the ability to acquire and deploy” its new bitcoin mining operations, Hollmes said on the firm’s earnings call. But the firm maintains its goal of 1,000 petahashes per second (PH/s) “in the future,” Holmes said. 

Shares of the Vancouver-based company have outperformed ether’s year-to-date returns by 880 percentage points. Hive over-the-counter traded shares have gained over 1,200% year to date and were near $1.22 at last check.

The firm’s predominant focus on ether mining represents its bullish outlook on the cryptocurrency relative to bitcoin. “We think ether is going to do a big catch-up to bitcoin on a relative basis,” Holmes told investors. 

“There’s been a big spend this quarter on upgrading all of our facilities,” Holmes said, adding that the process still has “a long way to go”. By the end of January 2021, he said he expects Hive to have fully upgraded from 4GB GPU mining chips to 8GB chips and “become an even larger player” in the ethereum mining sector. 

Beyond its mining capacity, Holmes reiterated his view that the firm serves as “a proxy for people who are reluctant to use a cryptocurrency exchange or set up their own wallet and buy cryptocurrency.” 

The dollar value of Hive’s cryptocurrency earnings grew to $10.7 million, up nearly 50% from $7.2 million during the same period last year. Chief Financial Officer Darcy Daubaras told investors that Hive “likes to maintain an inventory of coins” but the company is selling current production to fund its ongoing operational upgrades. 

“We have had to accelerate the sale of coins a little bit to fund the upgrades of GPU mining chips,” Daubaras said. “But we feel it’s important to maintain a good inventory of bitcoin and ethereum.”

Update (Dec. 1, 22:03 UTC): This article has been updated to clarify Hive’s 2019 reported financial information.

Market Wrap: Bitcoin Falls to $18.1K as Correlation to Ether Picks Up

The price of bitcoin took a bit of a dip, though overall market sentiment remains bullish. Ether’s correlation to bitcoin is going up despite differences in value propositions.

  • Bitcoin (BTC) trading around $19,077 as of 21:15 UTC (4:15 p.m. ET). Slipping 2.1% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $18,171-$19,920
  • BTC above its 10-day and 50-day moving average, a bullish trending signal for market technicians.
btcdec1

Bitcoin trading on Bitstamp since Nov. 28.
Source: TradingView

The price of bitcoin was able to hit as high as $19,920, according to CoinDesk 20 data, before momentum stalled. Traders began hitting the sell button, taking the price to as low as $18,171 before it recovered. It was at $19,123.70 as of press time. 

Katie Stockton, a technical analyst for Fairlead Strategies, sees $19,511 as a “resistance” level, a price point the world’s oldest cryptocurrency can break through in this time of highly bullish sentiment. An eventual breakout appears likely from a momentum perspective,” she said, noting that $19,511 “is not a strong resistance level – $20,000 is a psychological hurdle, much like Dow 30,000.”

As for equities, Tuesday was green across major market indexes.

A positive performance out of stocks often means bitcoin’s price will trend upward, but Tuesday’s sideways activity again reiterates how volatile the crypto markets can be. In turn, that raises questions about a major narrative regarding bitcoin’s role. 

Read More: Coinbase Brokered MicroStrategy’s $425M Bitcoin Purchase, Exchange Says

“Expect additional short-term volatility, although intermediate- and long-term momentum are strongly positive,” Fairlead’s Stockton said. Thus, when looking at bitcoin’s volatility versus popular traditional assets, the store of value thesis may not be as strong as many believe as volatility is trending up versus other investments.

Bitcoin versus S&P 500, gold and bonds in 2020.

Bitcoin versus S&P 500, gold and bonds in 2020.
Source: Shuai Hao/CoinDesk Research

However, the narrative that bitcoin serves an important purpose in uncertain times still holds for a large swath of the market. 

It is being used as a hedge against inflation that will come from global monetary easing as a result of COVID-19,” said Midori Kanemitsu, a market analyst at cryptocurrency exchange bitFlyer.

Some of this increased volatility may simply be because investors are participating in profit-taking at these lofty levels, said Andrew Tu, an executive for quant trading firm Efficient Frontier. “Currently, there is less stablecoin inflow into exchanges and more bitcoin inflow into exchanges, which suggests less buying pressure for bitcoin for the very near future,” Tu told CoinDesk. 

Analysts are also keeping an eye on ether. The all-time high for the native currency of the Ethereum network is over $1,400 and many think the cryptocurrency is a good buy in this bull market. 

ethdec1

Ether trading on Bitstamp since Nov. 28.
Source: TradingView

“I think ETH is still undervalued versus BTC,” noted George Clayton, managing partner of investment firm Cryptanalysis Capital. “All this DeFi (decentralized finance) going on is showing the utility of smart contract protocols.”

Is bitcoin leading ether?

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Tuesday, trading around $596 and slipping 2% in 24 hours as of 21:15 UTC (4:15 p.m. ET).

Over the past several days, ether has mirrored bitcoin’s price rise closely.

btcethdec1

Bitcoin (gold) versus ether (ETH) performance on Bitstamp since Nov. 28.
Source: TradingView

The correlation between bitcoin and ether is also trending upward, though is lower than it was after the March market meltdown.

btcethercorrelation2020

Bitcoin and ether correlation in 2020.
Source: Shuai Hao/CoinDesk Research

The fact the two cryptocurrencies are increasingly trading in tandem belies the fact that Ethereum’s 2.0 Beacon Chain launch clearly differentiates some of its use case aspects. While bitcoin’s “store of value” narrative continues to be a strong signal coming from industry analysts, the “programmable money” thesis of Ethereum doesn’t seem to be making the market asset perform based on its own fundamentals – yet. 

Read More: Ethereum 2.0 Beacon Chain Goes Live as ‘World Computer’ Begins Overhaul

“Both assets have definitely seen a [U.S. dollar]-priced upswing, and though BTC has been the one to have a lot of recent news around its proximity to all time highs, Ethereum has been the real star of the summer of DeFi and into the fall compared to BTC,” noted John Willock, chief executive officer of crypto custody provider Tritium. “I believe that as confidence in 2.0 with some operating history and broader investor understanding of the economic implications to the valuation of ETH spreads, we will see a bull run in ETH,” he added.

Other markets

Digital assets on the CoinDesk 20 are mostly red Tuesday. One notable winner as of 21:15 UTC (4:15 p.m. ET):

Notable losers:

Read More: Hive Reports $7.4M Q2 Profit as Lower Costs More Than Offset ‘Big Spend’ 

Commodities:

  • Oil was down 1.1%. Price per barrel of West Texas Intermediate crude: $44.54.
  • Gold was in the green 2.1% and at $1,814 as of press time.

Treasurys:

  • The 10-year U.S. Treasury bond yield climbed Wednesday jumping to 0.929 and in the green 11.8%.
coindesk20november
Disclosure

Missed the Bitcoin Rally? Here’s an Investment Strategy to Ride the Bull Market While Reducing Your Risk

Bitcoin has come a long way since bottoming out below $4,000 in March. The cryptocurrency clocked a record high above $19,900 early Tuesday and is up nearly 170% this year.

While institutional participation has increased, a large part of the retail crowd may have stayed away from the market. For that group, the fear of missing out (FOMO) on the opportunity to make triple-digit gains may have set in over the past few weeks.

Yet, investing now while the cryptocurrency is trading near lifetime highs may seem risky because there is always a possibility of significant price pullback. Bitcoin has seen several pullbacks of over 20% during the previous bull markets. 

As such, investors looking to buy bitcoin now should consider implementing a dollar-cost averaging (DCA) strategy, according to leading traders in the cryptocurrency space. 

“It is a good way to build exposure to both bitcoin as well as other asset classes such as global equity indices, as both look set to perform well against a backdrop of negative real rates for the next few years,” Scott Weatherill, chief dealer at the over-the-counter liquidity provider B2C2 Japan, told CoinDesk.

How dollar-cost averaging saves money

DCA, also known as the constant dollar plan, involves buying smaller amounts of an asset at regular intervals, regardless of price gyrations, instead of investing the entire amount at one time. The strategy helps investors take the emotion out of their trades and can result in a lower average purchase cost because markets seldom move higher without pullbacks. 

Read more: 5 Reasons Why Bitcoin Just Hit an All-Time High Price

“Dollar-cost averaging in bitcoin has historically been a very profitable strategy that lowers drawdown risk,” Weatherill said. 

To illustrate, let’s say an investor has been accumulating $100 worth of bitcoin at the highest price observed on the 17th of every month, starting from Dec. 17, 2017, when bitcoin peaked at $19,783. As of press time, that investor would own roughly 0.48 BTC at an average cost of around $8,660. It also means the investor would be making a nearly 120% gain at the current market price of $18,850.

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Bitcoin prices, Nov. 30, 2017, to Dec. 1, 2020. Buying at the top would have meant missing cheaper entry points in subsequent months.

However, if the investor made a lump-sum investment at the record price of $19,783 on Dec. 17, 2017, the investment would currently suffer a loss of 4.7%. Over a long period, that loss could be more significant when adjusted for inflation.

dca

Dollar-cost averaging in action
Source: Omkar Godbole

In the former case, the investor spread out $3,600 over 36 months, buying fewer bitcoin when prices were high and more when prices were low. That helped pull down the average cost and bring in a substantial gain. The strategy has delivered similar results during the previous bull-bear cycles. 

“Ideally, one must invest with a hope of selling at higher prices in the long run,” Chris Thomas, head of products at Swissquote Bank, said. “The best way, in my opinion, is to buy each month and build up a position over the longer term.”

The risk of certain option strategies for retail traders

Some investors may think of implementing synthetic strategies through the options market, such as buying a put option against a long position in the spot market. The put would gain value in the event of a sell-off, mitigating the loss (on paper) in the long spot market position. 

Yet, such strategies are more suitable for speculators who intend to profit from short-term price volatility and go against the idea of pulling down the average purchase cost via DCA. “I wouldn’t recommend buying puts if you are ‘DCAing,’ as it would crimp returns,” Weatherill said. 

A put option is a derivative contract that gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy. 

An option buyer needs to pay a premium upfront while taking a long call/put position. A long put position makes money only if the asset settles below the put’s strike price on the day of expiry. Otherwise, the option expires worthless, causing a loss – in this case, the premium paid – for the buyer. 

Read more: Bitcoin Price Sets New Record High of $19,850

What’s more, those trying to combine DCA with an options hedge may end up hurting their portfolios. For example, if an investor buys puts while DCAing and the market goes up, the options bought to hedge against a potential downturn would bleed money, crimping overall returns from dollar-cost averaging. 

“Retail investors should stay away from options trading,” warned Thomas. He added that one particular strategy, selling out-of-the-money calls, is extremely dangerous. 

Savvy traders often generate additional income by selling call options well above bitcoin’s current spot price and collecting premiums on hopes the market wouldn’t rally above the level at which the bullish bet is sold. However, with short call positions, holders can theoretically suffer unlimited loss because the sky’s the limit for any asset. 

In the case of bitcoin, that’s particularly risky as sentiment remains bullish, with analysts expecting a continued bull run on increased institutional demand. As such, selling call option(s) while DCAing could prove costly. 

“While there may be a temptation to optimize through various trading strategies, the new money should stick to sure strategies: 1) stay long, and 2) buy dips,” said Jehan Chu, co-founder and managing partner at Hong Kong-based blockchain investment and trading firm Kenetic Capital. 

Disclosure

First Mover: Bitcoin’s Failure to Break $20K Shows Big Investors Only Just Arriving

Bitcoin was lower, retreating after rallying over the past 24 hours to a new all-time-high price of $19,920, based on CoinDesk’s Bitcoin Price Index

Cryptocurrency analysts predicted that bullish traders might next target the $20,000 threshold, though the market could struggle to break through if large potential holders choose to take profits at that level. 

The “resistance into $20,000 could be more psychological than anything else,” said Denis Vinokourov, head of research at the digital-asset prime broker Bequant. “It would make sense that once we are finally able to get past this threshold, that the rally has legs.”

In traditional markets, European shares rose, led by banks and energy firms, and U.S. stock futures pointed to a higher open on the first day of the final month of a tumultuous 2020. Gold strengthened 1.2% to $1,798 an ounce. 

Market Moves

All sorts of reasons were cited Monday as bitcoin pushed to a new all-time-high, ranging from PayPal’s recent entry into the space to the collective market shrug in response to the massive outflows from the OKEx cryptocurrency exchange following after a five-month withdrawal suspension was lifted. 

What’s clear is that most analysts, traders and industry executives are talking about the sudden influx of big investors and Wall Street firms nosing into bitcoin and digital-asset markets for the first time. As noted Monday in First Mover, “institutional adoption” has become among the buzziest of buzzwords from bitcoin bulls and marketeers. 

The key driver of their interest appears to be the desire for a hedge against inflation, during a year when the deep economic toll from the coronavirus has prompted the U.S. Federal Reserve and other central banks to pump trillions of dollars of emergency liquidity and monetary stimulus global financial markets.  

“With so much excess liquidity in the system, the original investment case for bitcoin is being vindicated.” Rich Rosenblum, who heads trading at the crypto firm GSR, told CoinDesk’s Daniel Cawrey. On Monday, just before bitcoin prices began their single-day price climb of 8.3% to end the month, the market was filled with chatter about a new endorsement from an analyst at the $631 billion investment firm AllianceBernstein. (“I have changed my mind about bitcoin.”) Later in the day, CNBC reported that strategists for another Wall Street firm, BTIG, said cryptocurrency had come of age, and that bitcoin should reach $50,000 by the end of next year. 

“The stream of institutions commenting and allocating to BTC became a flood of good news that reinforced the narrative,” Matt Blom, head of sales and trading at the cryptocurrency-focused financial firm Diginex, told subscribers in an email. 

CoinDesk’s Muyao Shen reported that support from institutional investors might help to sustain the latest rally, contrasted with the bull run of 2017 when prices briefly touched these levels before quickly tumbling and then hibernating in a bear market for most of 2018.  

“Broadly speaking, institutional positions and high-net-worth individuals are leading the way this time,” Jason Deane, an analyst at Quantum Economics, told Decrypt.

Another difference from 2017 is that digital-asset markets appear to have evolved dramatically in the past few years and appeared to have handled the recent uptick in intensity and transaction volumes without too many glitches. (The well-trod fiat-to-cryptocurrency on-ramp Coinbase did report delays in processing some bitcoin withdrawals due to network congestion.) 

“The trading, settlement and custody services are all far more sophisticated and mature, which instills confidence,” GSR’s Rosenblum said. 

Major spot exchanges, where retail customers casually buy the world’s oldest cryptocurrency, have seen an uptick. Combined daily volume for Coinbase, Bitstamp, Kraken, Gemini and ItBit was at $1.5 billion as of press time Monday, much higher the $488 million average of the past six months, Cawrey reported.

Jeff Dorman, chief investment officer at Arca Funds, wrote in his weekly blog that some big investors, due to regulatory concerns, might be using futures on U.S. commodities exchanges or publicly-traded investment vehicles in traditional stock markets to gain exposure to bitcoin – instead of just jumping into digital-asset markets. He provided a chart showing how key closures on public U.S. markets over the past week coincided with big swings in 24-hours-a-day, 7-days-a-week cryptocurrency markets.

“The institutions are coming all right, but they are taking the local bus while the rest of us are on the express,” Dorman wrote. 

The upshot is that bitcoin is reaching new all-time-highs when institutional adoption hasn’t even really got going, in the truest sense. 

– Bradley Keoun

dorman

Chart showing hourly price changes in bitcoin from Wednesday through Sunday, with yellow lines denoting when the CME closed and white lines the subsequent open. According to Arca’s Jeff Doramn, the CME was only open for a brief time period and missed both the move down and subsequent move higher.
Source: Arca Funds

Bitcoin Watch

skew_btc_atm_implied_volatility-5-2

Bitcoin’s implied volatility rises to multi-month highs.
Source: Skew.

Bitcoin’s one-month implied volatility has risen to 6.5-month highs, reflecting increased expectations of price turbulence over the next four weeks.

According to data source Skew, the metric influenced by demand for call and put options has increased to 89%, the highest level since May 18, having bottomed out near 44% in September. The doubling of implied volatility has happened alongside bitcoin’s rally from $10,000 to $19,920 and looks to have been caused by relatively higher demand for call options (bullish bets).

That’s evident from the record low one-, three-, and six-month put-call skews, which measure the cost of puts (bearish bets) relative to calls. The options market looks positioned for a continued rally.

Some analysts say a healthy pullback could be in the offing as bitcoin’s inflow to exchanges has exceeded outflows since the Thanksgiving sell-off, according to data source CryptoQuant. “That on-chain metric could indicate a short-term bearish trend, sending bitcoin back to a level of around $16,000,” said Ki Yong Ju, chief executive officer of CryptoQuant.

At press time, bitcoin is trading near $18,800, representing a 4% drop on the day.

– Omkar Godbole

Read More: Google searches for “bitcoin price” hit 18-month high

What’s Hot

  • Ethereum 2.0 Beacon chain goes live as “world computer” begins long-awaited overhaul (CoinDesk
  • Coinbase reported delays processing bitcoin withdrawals on Monday as cryptocurrency’s price move to all-time-high created congestion on blockchain network (CoinDesk
  • Over-the-counter cryptocurrency trading firms report uptick in purchases by institutional investors during latest bitcoin rally (The Block)  
  • While some near-term pricing correction is likely to be expected, analysts who spoke to CoinDesk said bitcoin’s latest rally will be more sustainable for the long term compared with 2017 (CoinDesk)
  • European Central Bank President Lagarde says stablecoins “pose serious risks” to financial security (CoinDesk
  • 100x Group, holding company for embattled cryptocurrency exchange BitMEX, picks former head of German stock exchange as new CEO (CoinDesk
  • Upstart bitcoin exchange LVL, backed by Anthony Pompliano, Jimmy Song and Willy Woo, cuts trading fees to ratchet up competition with Coinbase and Gemini, plans new debit card with Mastercard (CoinDesk
  • Authorities shut off electricity to bitcoin miners in China’s Yunnan province (CoinTelegraph)

Analogs

The latest on the economy and traditional finance

  • “Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the U.S. financial system,” economic historian Niall Ferguson writes in op-ed (Bloomberg Opinion)  
  • Fed Chair Powell calls economic outlook “extraordinarily uncertain” in prepared remarks ahead of scheduled appearance Tuesday before U.S. Congress (CNBC)
  • China’s new anti-dumping rules on Australian wine could escalate tensions, signal broad effort to tamp down dissent among trading partners (Bloomberg)
  • As coronavirus cases surge in Hong Kong, banks including Goldman Sachs, Standard Chartered, UBS and Citigroup bring back work-from-home policies (Bloomberg)
  • Tech startups are helping to modernize India’s agriculture industry (Nikkei Asia Review)

Tweet of the Day

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Disclosure

Google Searches for ‘Bitcoin Price’ Hit 18-Month High

General interest in bitcoin looks to have risen alongside the top cryptocurrency’s rally to a new peak price.

As of last week, Google Trends, a barometer for gauging general or retail interest in trending topics, returned a value of 21 for the worldwide search query “bitcoin price”. That’s over double the value of 10 observed roughly a month ago and the highest level since June 2019.

Bitcoin set a new record high of $19,850 on Monday, having narrowly missed the previous lifetime high of $19,783 last week. The cryptocurrency surged over 40% in November to register its biggest monthly gain since May 2019.

What makes bitcoin’s ascent more impressive is that traditional assets seldom chart a 40% rally to record highs in a single month.

However, the market is far from being in a state of retail frenzy seen in December 2017, when the google search for the term “bitcoin price” returned a maximum value of 100. The data may validate analysts who say this year’s rally is mainly driven by increased institutional participation.

“The differences between 2020’s run toward $20,000 and 2017’s is that this current one is against a backdrop of greater geopolitical chaos, increased adoption but less general audience interest and less new coin supply,” Clem Chambers, founder and CEO of financial markets website ADVFN.com, told CoinDesk in an email.

Many observers expect institutions to power more substantial gains over the long run. “We believe we have just scratched the surface,” Arjun Subburaj, co-founder and CEO of cryptocurrency exchange Giottus, said in an email. “We will have the mother of all bull runs in 2021 when the cryptocurrency gets adopted by masses and cryptocurrencies go mainstream.”

According to Chambers, bitcoin will sail through $20,000, and the “sky is the limit” in the long term.

Traditional and non-financial media widely reported $20,000 as the record high back in December 2017. As such, a notable rise in retail interest may not be seen until prices establish a foothold above that level.

At press time, the cryptocurrency is changing hands at $19,593, up 5% over 24 hours.

Coinbase Brokered MicroStrategy’s $425M Bitcoin Purchase, Companies Reveal

U.S. cryptocurrency platform Coinbase facilitated MicroStrategy’s $425 million bitcoin buy earlier this year.

In an announcement Tuesday, both companies revealed that MicroStrategy’s initial $250 million investment, which occurred over a five-day period in August, came via Coinbase Prime, the exchange’s crypto brokerage arm formed following the acquisition of Tagomi in May.

That was followed up in September by a further $175 million investment from the Virginia-based business intelligence firm, bringing MicroStrategy’s total investment to $425 million in bitcoin. MicroStrategy became the first publicly-traded company to acquire a large chunk of bitcoin to hold on its balance sheet as a primary treasury reserve asset.

Michael Saylor, MicroStrategy’s CEO, said via the announcement that investing in bitcoin is part of the firm’s “new allocation strategy.” The strategy aims to maximize long-term value for shareholders while reflecting the cryptocurrency’s use as a store of value with greater “appreciation potential than holding cash.”

In Tuesday’s announcement, Coinbase outlined three reasons why MicroStrategy chose the San Francisco-based exchange: the firm’s smart order routing, trading algorithms and white-glove service. Coinbase also said it had been involved in several pre-trade calls with the firm during the onboarding process and was asked to conduct a small “test trade.”

The test trade assessed data gathered from Coinbase and was analyzed by the exchange’s OTC and Coverage teams. When an optimal pace to minimize market impact was decided upon and successfully executed, Coinbase received a green light from MicroStrategy to proceed with the “larger investment.”

Following the test, Coinbase executed real-time trades using the time-weighted average price algorithm – a strategy that takes into account the average price of an asset over a specified time to minimize market impact.

“Our system takes a single large order and breaks it into many small pieces that are executed across multiple trading venues,” Coinbase said via email. “The trading team achieved an average execution price that was less than the price at which buying started.”

Armstrong’s exchange can now claim bragging rights in the market as the one that helped a publicly listed company take a nine-figure leap of faith on bitcoin as a reserve asset.

Riot, Marathon, Canaan See Record Monthly Share Gains as Bitcoin Clears All-Time High

Shareholders of publicly traded bitcoin mining companies enjoyed record monthly gains as the leading cryptocurrency reached a new all-time high Monday morning.

Castle Rock, Colo.-based mining firm Riot Blockchain (RIOT) ended November with a 160% gain trading at $8.45 per share. Las Vegas-based Marathon Patent Group (MARA) also soared over 190% in November, the firm’s largest monthly percentage gain, up over 600% year to date. 

Miner manufacturer Canaan (CAN) ended November with a record monthly gain of nearly 140%, with its American depositary receipts trading at $4.99 by Monday close.

Riot’s gains come amid its accumulation of thousands of the industry’s leading mining machines, according to Thomas Heller, chief operating officer at mining software company HASHR8

“Riot expects to have a total of 22,640 miners deployed by June 2021, and the majority of them are S19 Pro miners,” Heller said. “Along with the M30S++, the S19 Pro is the most powerful and efficient miner on the market, and commands the highest market price.” 

Riot also nearly tripled the dollar value of bitcoin holdings, per the company’s Q3 earnings, reaching $9 million, up from $3.1 million during the same period in 2019. Marathon also reported a triple-digit percentage increase in its bitcoin holdings after a record-setting quarter of mining revenue in Q3.

Canaan’s gains come as a relief to shareholders who suffered a 85% drawdown at the end of Q3 from its initial list price in November 2019. To date in Q4, Canaan shares are still down 18 percent. 

Strong demand for new machines by miners holds promise for Canaan, which reported a $12 million Q3 loss Monday. Heller told CoinDesk, “Current orders with Canaan won’t ship until April due to the high demand for ASIC miners.”

Shares of other public mining companies also saw triple-digit percentage gains in November. For example, Vancouver-based Hive Blockchain (HVBTF) gained more than 160% in the month with over-the-counter shares trading hands at $1.23 by market close Monday. 

“Mining stocks are a very attractive way for investors to get upside exposure to [the] bitcoin price while being limited on the downside due to the infrastructure nature of the business,” said Ethan Vera, co-founder of mining company Luxor Technologies, in a direct message with CoinDesk.

“The best mining companies can deliver profits in bear markets and have outsized returns in bull runs,” Vera said.

Market Wrap: Bitcoin All-Time High Tops Out at $19,850 as Ether Options Market Goes Mega-Bullish

Bitcoin’s price hit an all-time record high Monday as positive market factors converged. Meanwhile, ether options traders are paying heavy premiums on the asset’s potential to hit new records as well.

  • Bitcoin (BTC) trading around $19,436 as of 21:00 UTC (4 p.m. ET). Gaining 6.6% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $18,093-$19,850
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
btcnov30

Bitcoin trading on Bitstamp since Nov. 27.
Source: TradingView

Bitcoin’s price hit an all-time high in the past 24 hours, trading as much as $19,850, according to CoinDesk 20 data. The price then dipped and was at $19,436 as of press time. 

Read More: Bitcoin Price Sets New Record High Above $19,783

“Institutional inflows may have been much of the driving force behind this rally, but it’s been retail investors that have helped bitcoin pick up steam in recent weeks,” said Zac Prince, chief executive officer of crypto lender BlockFi. ”Balances on our retail accounts have grown over 25% in the last 30 days, compared to just under 10% for institutional,” he added. 

Major spot exchanges, where retail customers casually buy the world’s oldest cryptocurrency, have seen an uptick. Combined daily volume for Coinbase, Bitstamp, Kraken, Gemini and ItBit was at $1.5 billion as of press time Monday, much higher the $488 million average of the past six months. 

btcvolumessixmonthsnov30

Spot USD/BTC volumes the past six months on major venues.
Source: Shuai Hao/CoinDesk

The steady rise of bitcoin’s price since Saturday followed a drop during a market holiday in the U.S. last week that bitcoin as low as $16,242 on Thursday. The $3,608 price gain over the past week shows just how volatile cryptocurrency can often be. 

btcpastweekcdbpinov30

Spot bitcoin price over the past week.
Source: CoinDesk 20

“Bitcoin investors sitting on the sidelines of this recent rally got a Thanksgiving holiday gift as bitcoin saw a drop from $19,500 to $16,300,” noted Jason Lau, COO of San Francisco-based OKCoin. “Derivative liquidations led the move down as some derivatives exchanges lost over 20% of open interest,” he added.

Indeed, liquidations on derivatives exchange BitMEX, while not as significant of a venue as it once was, clearly had some impact on Thursday’s drop ($10 million in sell liquidations in an hour) and Monday’s rise ($4 million in by liquidations within an hour). A liquidation on BitMEX is akin to a margin call whereby a long is sold or a short triggers a buy to close out a position if it moves enough to wipe out the margin. 

skew_bitmex_xbtusd_liquidations-53

Liquidations on derivatives exchange BitMEX.
Source: Skew

Bitcoin’s recent rise was not solely due to retail investors. Rich Rosenblum, who heads trading at crypto firm GSR, noted how much more infrastructure is in place for institutions to invest compared to bitcoin’s last bull run in 2017. 

“The trading, settlement and custody services are all far more sophisticated and mature, which instills confidence,” he said. “The [Federal Reserve] continues to fan the flames with its monetary strategy, which looks to remain in place in the year to come. With so much excess liquidity in the system, the original investment case for bitcoin is being vindicated.” 

Ether traders paying for bullish bets

The second-largest cryptocurrency by market capitalization, ether (ETH), was up Monday trading around $605 and climbing 8.5% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: ‘Basis Cash’ Launch Brings Defunct Stablecoin Into the DeFi Era

The ether options put/call ratio on Deribit, the largest derivatives exchange in the crypto ecosystem, has been skewing heavily towards calls over the past month. The put/call ratio shows the number of puts, which are options bets to price downside, versus calls, which are options bets to price upside.

putcallreatioetherpastmonthnov30

Ether put/call ratio the past month on Deribit.
Source: Genesis Volatility

“During the past month, when looking at the put/call ratio in terms of premium traded, we can see an abnormally high ratio of calls trading to puts,” noted Greg Magadini, chief executive officer of Genesis Volatility. 

The bullish activity is so strong traders are doling out high premiums to make bullish bets on ether, noted Magadini. “Traders were quick to start paying higher prices for calls,” he told CoinDesk. “So much so that … puts are 25 implied volatility points cheaper. This level of differential is rare and quite extreme.

The all-time high of ether is $1,432, according to CoinDesk 20 data. 

Other markets

Digital assets on the CoinDesk 20 are all green Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Read More: Canaan Reports $12M Q3 Loss, Says There’s ‘Rebounding Demand’

Commodities:

  • Oil was down 0.80%. Price per barrel of West Texas Intermediate crude: $45.20.
  • Gold was in the red 0.62% and at $1,776 as of press time.

Treasurys:

  • The 10-year U.S. Treasury bond yield climbed Monday, jumping to 0.846 and in the green 0.77%.
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5 Reasons Why Bitcoin Just Hit an All-Time High Price

Bitcoin surged Monday to a new all-time high price of $19,864, extending its year-to-date rise to an astounding 170% during a 2020 that has seen tumultuous swings in global markets. 

Here are five reasons why the oldest and largest cryptocurrency has pushed to new highs. 

Some institutional investors are taking on bitcoin exposure, such as buying into the publicly traded Grayscale Bitcoin Trust (GBTC), according to a Nov. 20 report from analysts at JPMorgan Chase. (Note: Grayscale is a unit of Digital Currency Group, which owns CoinDesk.) Guggenheim, a money manager that oversees $233 billion for investors, said in regulatory filings its Macro Opportunities Fund might allocate up to 10% of net assets to GBTC, CoinDesk reported Nov. 28. As well, the outstanding number of bitcoin futures contracts is surging on the Chicago Mercantile Exchange, seen as another sign that big investors are using commodities markets to speculate on the cryptocurrency’s price, according to the JPMorgan report.

Well-known hedge fund managers are increasingly calling bitcoin a long-term investment. Legendary managers, including Paul Tudor Jones II and Stanley Druckenmiller, have recently said the cryptocurrency’s price, as denominated in U.S. dollars, could rise as the Federal Reserve prints money to help finance the government’s coronavirus-related emergency stimulus bills. The central bank has thus far created more than $3 trillion of new money in 2020, or more than three quarters of the entire amount created during its prior 107-year history.

Wall Street analysts have made positive comments over the past few days. AllianceBernstein, a $631 billion money manager, published a report saying the post-pandemic economic environment could create a role for bitcoin in investors’ asset allocation, CoinDesk reported Monday. Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, wrote that when it comes to a role in hedging against inflation, “the driver of bitcoin is similar to that as for gold.”

PayPal (PYPL) is allowing customers – some 346 million active accounts – to buy bitcoin. The person-to-person payments network announced Oct. 21 it would let customers buy, sell and hold bitcoin. According to the company, the cryptocurrency will become a “funding source for purchases at its 26 million merchants worldwide.”

The bitcoin market last week overcame a major source of concern – bitcoin outflows from one of the world’s biggest cryptocurrency exchanges, OKEx. Some traders and analysts had speculated the end of a five-week suspension of withdrawals might translate into liquidations that could put selling pressure on the bitcoin market. Data extracted from the cryptocurrency’s underlying blockchain network showed some 24,631 bitcoin, worth $500 million at current prices, flowed out of the exchange in the 24 hours after the suspension was lifted last week.

But bitcoin’s price action shows the market shrugged off the news, along with other negative developments, such as rumors the U.S. Treasury Department might be considering onerous cryptocurrency regulations. Traders also appeared to ignore data showing some large bitcoin traders – known as “whales” – might be preparing to dump their holdings in response to the cryptocurrency’s price rise.