Monday, February 15, 2021
Your Weekly Update On All Things Crypto
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OVERVIEW
  • Institutional Adoption Reaches New Peaks
  • First Publicly Traded Crypto ETF Reaches Canada
  • LatAm Exchange, Bitso, Purchases Quadex
  • Bitcoin: On The Hunt for 50k
  • Alt-Coins Rally But Look For Breakout
  • Picks of the Week: OMG & AKRO
MACRO NEWS
An Avalanche of Institutional Adoption
Last week may have been the most bullish week we have ever had in the cryptocurrency space. Following Microstrategy's Bitcoin for Corporations conference, we saw a tidal wave of corporations speaking publically about their adoption of Bitcoin. Throughout this year, and in 2020, we saw a number of corporations and institutional investors adopting Bitcoin as a "top-down" strategy, making multi-million dollar purchases of Bitcoin in their treasury reserve. This is great for Bitcoin as a store of value asset. However, now we are also seeing a wave of corporations taking a "bottom-up" approach and allowing consumers to pay for their goods and services using Bitcoin and other cryptocurrencies.

There was too much good news last week to cover in one article, so here are a few bullet points from major corporations who have taken the Red Pill, and started down the path of Bitcoin adoption.

TESLA, Elon Musk made serious waves last Monday when he announced a 10% allocation of their corporate treasury to Bitcoin, totaling $1.5B. They will also allow their customers to use Bitcoin to purchase their electric vehicles in the future.

BNY MELLON - The world's oldest and largest custodian Bank (with over $41 Trillion in assets under management) announces Thursday they will roll out a new digital custody unit later this year, to help clients deal in digital assets, including cryptocurrencies.

TWITTER, CFO, Ned Segal discussed the firm's consideration of Bitcoin to pay employees, as well as a treasury reserve asset. "We have done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they asked to be paid in bitcoin and whether we need to have bitcoin on our balance sheet,” he said.

MASTERCARD, the payment giant announced they will let merchants accept payments in crypto this year. They haven't disclosed which currencies yet, but will probably lean towards stablecoins to create easier payment rails for new CBDC's.

UBER - On Thursday, Uber CEO, Dara Khosrowashahi said the company will consider using crypto for rides. However, he shut down the idea of Bitcoin on the balance sheet, saying "we are going to keep our cash safe."

Any way you shake it, last week was a good week for the cryptocurrency industry. Nathaniel Whittemore, host of The Breakdown Podcast released a great episode on Friday titled "Gradually, then Suddenly". This I believe is a fitting recap of what is unfolding in front of our eyes. The adoption of Bitcoin will not be a linear process. What we are witnessing right now, is the beginning of a corporate avalanche into the cryptocurrency space... and we're happy to be here with you, watching from above the clouds.
TOP STORIES
North America's First Bitcoin ETF is Coming to Canada
Last Thursday, the Ontario Securities Commission gave the go-ahead to the first Bitcoin exchange-traded-fund (ETF) in North America. The portfolio will be managed by Purpose Investments and will be listed on the Toronto Stock Exchange in Canadian Dollars. The fund seeks to replicate the performance of the price of bitcoin (-0.89% for fees and expenses) according to a fact sheet posted online by the Canada-based asset manager, Purpose Investments.

ETFs contain a basket of investments, similar to mutual funds, but trade on exchanges much in the same way stocks do. An ETF’s risk is based on what kind of underlying assets it has, in this case, the underlying asset is Bitcoin. While multiple close-ended bitcoin funds have been listed on the Toronto Stock Exchange, such as the ones listed by Canadian investment manager 3iQ, they differ from an ETF. In the case of an ETF, units are issued on a continuous basis while close-ended funds issue units only at their initial public offering and reopenings.

This is a big deal for Canadian investors, as it gives large mutual fund managers and investment advisors the ability to start offering Bitcoin exposure to their clients. This will bring a completely new wave of liquidity that has been waiting patiently on the sidelines since 2017. Eric Balchunas, a senior analyst at Bloomberg, said he believes the fund in Canada is a “good sign” for a U.S.-sanctioned bitcoin ETF.
ACQUISITIONS & FUNDING
Bitso Acquirers Crypto Derivatives Platform Quadex
Mexico's first and largest crypto exchange, Bitso, has purchased Quadex; a crytpo derivatives trading platform based in Gibraltar. Bitso has declined to release the details of the deal, however consultation giant PwC was involved in the sale. Additionally, Quadex's leadership and high-level engineering teams will be kept on.

This acquisition comes just two-months after Bitso's $62 million Series B funding round which was was led by QED Ventures and Kaszek Ventures, with participation from the likes of Coinbase Ventures and well known Pantera Capital. The round was to help fund Bitso's strategic plan of expanding throughout Latin America, with a focus on Brazil.

Bitso's CEO, Daniel Vogel, told The Block “Aside from performance, the technology Quedex has built will allow us to offer more advanced trading products within Bitso, such as leveraged trading in cryptocurrency futures and options. This is something our customers have been asking for: more sophisticated trading offerings. This will be game-changing in the region as no other platform in LatAm offers similar products and services with regulatory oversight,”

The deal also comes at an exciting time for crypto and Latin America. In a recent study, it was found that over 31% of those in Argentina, Brazil, Mexico, and Colombia want to invest in Bitcoin. Back in 2019, LatAm boasted the most crypto users in the world. For a region with a history of political shakiness, the rise of cryptocurrencies and decentralized applications could have a major positive impact addressing a growing lack of trust in governments, economic instability, inflation, transparency, and the millions of economically neglected individuals.
TECHNICAL ANALYSIS
Bitcoin: On The Hunt For $50,000
After such a bullish week of news for Bitcoin, it is no surprise that the price is once again pushing for new all-time highs. This time, the mark is even more significant... the elusive $50K. For many, this marks the "halfway-point" towards their predictions for this cycle. Regardless of where you think we are in this cycle, big even numbers tend to hold a lot of physiological significance for investors. This next hurdle will be a true test of the strength of this bull run.

If we breakthrough $50K there is a chance price will run up significantly to touch the top of the megaphone, around $60K. However, if we are rejected at $50K, we may see a retracement back to previous all-time highs at $42K. If this happens, we expect 42K to act as support before making another push towards the big even of $50K. View the trading chart here.
Alt-Coins: Range-Bound But Looking for a Breakout
Last week was also a splendid week for you in you were invested in alt-coins. As more excitement moved into the crypto space, it filtered into the large-cap alt-coins as people looked for the potential to produce a yield that would outpace Bitcoin. Typically in any macro Bitcoin cycle (roughly 4 years) liquidity will always start by entering into Bitcoin, then as the cycle progresses, investors get greedier and greedier looking for higher returns, so the liquidity filters first into large-cap alt-coins then works its way down into the small-cap coins as the cycle progresses. Currently, we are seeing liquidity filters from large-caps into mid-cap coins.

Alt-coin dominance has been range-bound between 57% to 73% since July of 2019. As the bull run continues, we expect alt-coin dominance to increase as liquidity filters into the rest of the alt-coin market. That said, by no means are we expecting Bitcoin to be devalued, we just expect the market cap of alt-coin to grow at a faster rate than the market cap of Bitcoin.
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TRADES OF THE WEEK
OMG Network (OMG)
OMG aims to increase the scalability and functionality of the Ethereum Blockchain. The OMG Network is a trust-less, non-custodial, Layer-2 scaling solution for transferring value on Ethereum. They are the only production-ready scaling solution for the Ethereum blockchain and are focused on enabling enterprise adoption. OMG seems to have found its bottom after a 78% retracement vs. Bitcoin. If ETH 2.0 development is delayed, OMG will serve as a much-needed stop-gap, allowing the scalable transfer of value on Ethereum.

OMG is currently 83% down from its recent high vs Bitcoin on August 20th of last year. It is showing strong signs of recovery and has made support on a critical line of resistance-turned-support. As the Ethereum network becomes more overcrowded and overworked as this cycle continues, we expect the need for the OMG Network to increase dramatically. View the chart here.
Akropolis (AKRO)
Akropolis s a DeFi protocol on a mission to help its users grow their wealth safely without depending on a central authority or multiple intermediaries. They seek to accomplish their goals with their lending and savings product set, namely, Sparta, Delphi, and the AkropolisOS framework. Sparta offers undercollateralized loans. Delphi is a pool that executes automatic dollar-cost averaging (DCA) into Bitcoin and Ethereum. Akropolis has also built a framework for building decentralized autonomous organizations (DAOs).

Akropolis is positioned to be a key player in the decentralized finance space well into the future. Its interface is clean and user-friendly and its development team continues to pump out new and exciting innovations on its product. It is currently still 76% down from its all-time high vs Bitcoin, so there is a lot of opportunity for growth. View the chart here.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space.