Bitcoin hovers near $48K ahead of fresh key US inflation data

Inflation marks just the start of some key macro decisions that could keep Bitcoin down for months, warnings indicate.

Bitcoin (BTC) recovered above $48,000 on Dec. 10 after another fall took BTC/USD to lows of $47,350 overnight.

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

Taper tantrums

Data from Cointelegraph Markets Pro and TradingView showed the pair orbiting $48,300 at the time of writing as markets braced for November’s Consumer Price Index (CPI) readout.

As Cointelegraph reported, economists tip this month’s year-on-year inflation data to beat October at 6.7%.

While last month’s shock CPI news fuelled an uptick across Bitcoin and crypto assets, caution among analysts prevailed ahead of Friday’s figures.

“At this point I think the CPI data is moot. Markets have priced it in unless it’s to the extreme end,” popular trader Pentoshi argued on Twitter.

He added that the “real” potential market mover from the macro side should be next week when the United States Federal Reserve’s Federal Open Market Committee gives indications over the central bank’s asset purchase taper policy.

Increasing the rate of tapering — decreasing asset purchases — would pressure risk assets, commentators say, leading to reduced performance for Bitcoin. For Arthur Hayes, former CEO of derivatives platform BitMEX, this would only reverse once the Fed returns to “business as usual.”

“For those who are deciding whether to allocate more fiat into crypto, it pays to wait. I don’t see money getting any free-er or easier. Therefore, it pays to sit on the sidelines until the dust settles after a March 2022 or June 2022 Fed rate hike,” he wrote in his latest blog post on Thursday.

“Watch out for a puke fest in risk asset prices should the Fed hike, followed by a quick resumption of zero interest rate policy and aggressive bond purchases. When the Fed signals a return to business as usual, then it’s time to back up the truck.”

U.S. inflation chart. Source: Trading Economics

“Bottoms take time”

Such a prognosis ties in with existing medium-term forecasts for Bitcoin putting its cycle top further on in 2022 — not this month, as previously slated.

“Bottoms take time. Unfortunately, they do. And we’re getting close to it with Bitcoin,” he advised Twitter followers.

“After that, we’ll get another big cycle in 2022. All good.”

He added that compared to 2017, the last post-halving bull run year, Bitcoin was “probably” more toward the beginning of its peak phase than the end of it.

Meanwhile, separate data, which has shown Bitcoin copying price action from 2017 almost to the day, faces a key test this month.

Bitcoin could hit $100K, gold $2K in 2022 thanks to ‘deflationary forces’ — Bloomberg analyst

An about turn and fresh turmoil for macro would play to Bitcoin’s strengths, argues Mike McGlone.

According to Bloomberg Intelligence, $100,000 Bitcoin (BTC) and $2,000 gold could greet 2022 as global markets face “deflationary forces.” 

In a tweet on Dec. 9, Mick McGlone, a senior commodity strategist at Bloomberg’s research arm, forecast that next year would be good for both gold and BTC.

“Positive ramifications” for Bitcoin thanks to deflation

As inflation makes headlines worldwide this month, Bitcoin has faced criticism over its alleged role as a hedge thanks to its 39% drawdown from all-time highs.

As Cointelegraph reported, the latest U.S. Consumer Price Index (CPI) data is due Dec. 10, with analysts presuming that inflation will have sharpened 6.7% year-on-year.

Next year could be very different, McGlone argues, as inflationary pressures give way to declining commodity prices and equities.

“$100,000 Bitcoin, $50 Oil, $2,000 Gold?” he tweeted.

“Peaking commodities and the declining yield on the Treasury long bond point to risks of reviving deflationary forces in 2022, with positive ramifications on Bitcoin and gold.”

Macro assets comparative chart. Source: Mike McGlone/ Twitter

A previous post highlighted crude oil prices now being roughly equivalent to where they were just before the 2008 global financial risis.

Schiff forecasts inflation “getting medieval”

McGlone is well known for his bullish views on Bitcoin. Gold, much-maligned this year thanks to its comparatively flat performance versus Bitcoin, may also benefit from macro headwinds.

Related: Bitcoin dips below $50K as Evergrande defaults on US dollar debt

The Bitcoin versus gold debate continues to rage, with proponents trading barbs as neither camp sees the kinds of gains they assumed would characterize Q4.

On inflation, however, there was consensus to be found.

“How long before investors realize that even if the Fed follows through with its inflation-fighting plan to taper QE and raise interest rates slightly in 2022, that it’ll be too little too late to derail this inflation juggernaut?” gold bug Peter Schiff queried this week.

“If Powell doesn’t get medieval, inflation will!”

U.S. inflation chart. Source: Tradingeconomics.com

3 reasons why DeFiChain (DFI) price has gained 60% in December

In the last two weeks, DFI price bounced off its swing low and a number of data points suggest the project’s fundamentals will continue to improve.

Decentralized finance (DeFi) offers one of the most widely applicable use-cases for distributed ledger technology and today it is one of the main avenues for the wider adoption of blockchain technology.

Last week, as the wider crypto market corrected and Bitcoin (BTC) dropped by 22%, DeFiChain (DFI) bucked the trend and rallied 76% to establish a new high at $5.70 on Dec. 6 as its 24-hour trading volume surged from an average of $3.6 million to $24.3 million.

DFI/USDT 4-hour chart. Source: TradingView

Three reasons for the price breakout for DFI include the launch of decentralized assets on the DFI mainnet, a surge in transactions and users on the network and an increase in the total value locked on the protocol.

Traders pile into decentralized stocks and cryptocurrencies

The biggest source of momentum for DFI in recent weeks has been the launch of decentralized assets on the DeFiChain network and staking options for holders.

Users of the platform now have access to multiple pools that include large-cap cryptocurrencies like Bitcoin and Ether, as well as synthetic versions of popular stocks and indices, including pairs for Tesla (TSLA), Apple (APPL) and the S&P 500 (SPY). In addition to having exposure to these assets, stakers also benefit from the higher-than-average yields available on the platform.

DeFiChain DEX pool pairs. Source: DeFi Scan

Other d-asset options available to users include Gold (GLD), Silver (SLV), the ARK Innovation ETF (ARKK) and the iShares 20+ Year Treasury Bond ETF (TLT).

Transaction volumes surge

Another reason for the strong performance seen from DFI has been an increase in transactions on the network following the release of decentralized assets.

Daily DeFiChain transaction count. Source: DeFiChain Analytics

The surge in network activity is largely the result of the new use cases made possible by the launch of decentralized assets, including the creation of assets, liquidity mining and arbitrage trading.

The added features have also helped to attract new users to the DFiChain ecosystem, with the number of unique wallets holding DFI reaching a new record high of 42,555 on Dec. 8.

Unique addresses holding DFI. Source: DeFiChain Analytics

Related: Nasdaq to provide price feeds for tokenized stock trades on DeFiChain

Total value locked hits a new all-time high

DFI has also seen a steady increase in total value locked on the DeFiChain protocol, which is now at an all-time high of $1.83 billion according to data from Defi Llama.

Total value locked on DeFiChain. Source: Defi Llama

The spike in value locked coincides with the launch of decentralized assets on the network and it’s claer that users rushed to deposit funds to gain access to the high yield opportunities available to liquidity providers.

Aside from the staking features offered on the DeFiChain DEX, larger DFI holders with at least 20,000 DFI also have the option of locking their DFI tokens up in order to run a masternode on the network and earn rewards in return for helping to verify transactions and secure the blockchain.

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.

AOC Says She Doesn’t Hold Bitcoin so the Lawmaker ‘Can Do Her Job Ethically’

AOC Says She Doesn't Hold Bitcoin so the Lawmaker 'Can Do Her Job Ethically'

Alexandria Ocasio-Cortez, otherwise known as AOC, is a New York representative well known for her political stances and statements. The Democrat believes that it is “absolutely wild” that U.S. representatives can buy and swap popular stocks. AOC also thinks it’s not ethical for members of Congress to own cryptocurrencies.

AOC Doesn’t Hold Crypto Because She Wants to ‘Remain Impartial’

Lawmaker Alexandria Ocasio-Cortez (AOC) discussed owning bitcoin (BTC) in a recent Instagram story she told on Monday. AOC explained that she doesn’t believe members of Congress should own stocks and the same morality applies to digital currencies in her opinion. During her Instagram story, AOC said she doesn’t hold BTC because she wants to remain impartial and an unbiased lawmaker.

“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold [or] trade individual stocks and I choose not to hold any so I can remain impartial about policy marking,” AOC insisted on Instagram. “I also extend that to digital assets/currencies (especially because I sit on the Financial Services Committee). So the answer is no because I want to do my job as ethically and impartially as I can,” AOC further stressed in her Instagram story.

In 2017 AOC Said She Wasn’t Sure ‘About FEC Laws Regarding Crypto’

Close to four years ago in December 2017, AOC was asked if she accepted bitcoin after she tweeted about a fundraising campaign that year. “Not [until] Actblue does,” AOC said at the time. “Also I’m not sure about FEC laws regarding crypto. Good question,” she added. “Sadly reporting this info is law and must be collected, even with cash donations,” AOC continued on Twitter. “It’s unfortunate that our campaign finance laws demand more stringent reporting of regular small donors than they do from Superpacs.”

In recent times, AOC has started ferocious debates over her “Tax the Rich” Met Gala dress. She and her colleagues Rashida Tlaib and Ayanna Pressley attempted to get president Joe Biden to choose someone other than Jerome Powell to lead the Federal Reserve. Biden ultimately chose Powell, but AOC wanted the U.S. president to choose a Fed chair that would address social change and the so-called climate crisis.

What do you think about AOC’s declaration that she doesn’t own bitcoin so she can remain impartial as a U.S. lawmaker? Let us know what you think about this subject in the comments section below.

Bank of Russia Rejects Provision of Crypto-Related Financial Services

Bank of Russia Rejects Provision of Crypto-Related Financial Services

Russia’s central bank has voiced opposition to the provision of financial services related to cryptocurrencies. The monetary authority believes such offerings would go against the interests of Russian investors as they are highly risky.

Central Bank of Russia Unwilling to Allow Financial Services for Crypto Assets

The Central Bank of Russia (CBR), known for its hardline stance on the legalization of cryptocurrencies, has dismissed a call by members of the financial sector to authorize the provision of crypto-related services. The regulator announced its position during a meeting with representatives of the industry, held to discuss the prospects for the development of the Russian stock market.

According to a recently published announcement, the financial businesses raised the question of allowing crypto investment in the Russian Federation. Responding to their suggestion, the monetary policy regulator stated:

According to Bank of Russia, the provision by financial institutions of services related to operations with crypto assets and derivatives on such assets does not meet the interests of investors in the financial market and carries great risks.

The press release further reveals that the central bank has also turned its back on the industry’s proposal to expand the practice of issuing Russian financial instruments in foreign fiat currency.

Bank of Russia has consistently maintained a conservative view regarding the status of the Russian ruble as the only legal tender in the country which it wants to preserve. The CBR remains opposed to permitting the free circulation of bitcoin and the like as well as their use in payments.

The monetary authority has often referred to cryptocurrencies as “money surrogates” which are banned under current Russian law. It’s also working to develop and issue its own digital ruble with trials expected to begin as early as January 2022, after the completion of the platform’s prototype by the end of this year.

While cryptocurrencies remain only partially regulated in Russia through the law “On Digital Financial Assets,” which went into force in early 2021, their popularity as an investment option has grown significantly. Survey results released by the CBR have shown that cryptos and other alternative assets form over half of the portfolio of non-qualified Russian investors.

In July, Bank of Russia advised domestic stock exchanges to avoid the trading of financial instruments tied to crypto assets and their prices. Their listing “entails increased risks of losses for people who do not have sufficient experience and knowledge,” the authority warned.

The bank also insisted that asset managers should not include cryptocurrencies in mutual funds and called on brokers and trustees to refrain from offering “pseudo-derivatives with such underlying assets to unqualified investors.” Russian lawmakers are considering restrictions on the funds private investors may put into crypto.

Do you think Bank of Russia can change its stance on crypto investment in the future? Share your expectations in the comments section below.