The cryptocurrency market was on a slow and steady decline throughout last week, which reached a bottom yesterday when Bitcoin nearly fell all the way down to $7,000. Over the past 24 hours, the world’s largest cryptocurrency recovered slightly, while other top 10 cryptos showed low volatility, 7 of which moving by less than 1% as of the time of writing. Despite some important announcements last week, sentiment towards crypto remains bearish and the negative trend persisted. However, this may change this week.
This Week’s Highlights
- A Digital Euro?
- More Bitcoin Futures
- The Week Ahead
The Lagarde Effect
When Mario Draghi stepped down as European Central Bank President, he was replaced by former IMF Chief Christine Lagarde, who is known as having an open mind when it comes to crypto and blockchain. This was reaffirmed last week, ahead of the European Central Bank meeting on Thursday. On Wednesday, Bloomberg reported that ECB officials have confirmed that digital currencies are on the agenda for the meeting and that it is possible that members will discuss the possibility of creating a digital currency for the EU. After the meeting, Lagarde herself said that she believes the ECB should be a global leader in digital currency, as part of her first post-meeting press conference. This is another step forward towards mainstream acceptance of digital currencies.
On the same day, Dutch Bank ING announced that it is working on a crypto custody solution. Essentially, the solution is aimed to help bank clients to store cryptocurrencies as a service provided by the bank. In a written statement given to Reuters, ING said it “sees increasing opportunities with regard to digital assets on both asset-backed and native security tokens.”
Crypto Futures Gain Steam
Two significant announcements were published last week in regards to regulated crypto derivatives. On Tuesday, the SEC approved a cash-settled crypto futures fund, submitted by Stone Ridge. This product joins several other similar funds in the U.S. that are already available for investment, narrowing the gap between the crypto and mainstream markets. On Wednesday, Napoleon AM, a French-regulated asset management firm announced the launch of Napoleon Bitcoin Fund, which will replicated the performance of Bitcoin futures contract on the Chicago Mercantile Exchange (CME) and offer daily liquidity. Both funds will be suitable for traditional investors wanting to diversify their portfolios with crypto assets.
The Week Ahead
After last week’s decline, investors will be waiting to see if Bitcoin once again remains “stuck” between the $7,000-$7,500 range or if it will be able to break above or below it. If so, it could spark a trend in markets. Whether bullish or bearish remains to be seen. In addition, EOS, currently the world’s 7th-largest crypto (by market cap), will be launched on the Crypto.com exchange tomorrow, possibly generating volatility for the token.
eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.