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BRACE FOR THE HEAD FAKES
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The upside steadied a bit over the weekend as Bitcoin briefly traded above $14,000 level before subsequently retracing into the mid-$13,000 zone in early Monday morning. Given the surge over the month of October, at the time when equity markets faltered ahead of the US elections, it will be particularly interesting to see how Bitcoin behaves once the results are made public. If one goes by the narrative that uncertainty over the elections in the US was one of the main upside drivers, then, by default, the resolution of this event should result in an unwind and thus some downside risk for Bitcoin. 

On that note, the FT reported that Donald Trump has threatened pre-emptive legal action against the US vote result, as polls showed the president lagging behind Democrat Joe Biden with just 48 hours until polls close. Speaking to reporters on Sunday evening, Mr Trump denied a report that he was preparing to declare victory on election night before the country had received an official vote count. But he claimed there was potential for “fraud” and “misuse” in the vote counts for Pennsylvania and Nevada — two swing states that have Democratic governors.

Looking elsewhere and it is worth pointing out that the current difficulty epoch corresponds with the end of the rainy season in China’s Sichuan province. The end of the rainy season tends to result in significant amounts of hashrate coming offline as miners transition their ASIC hardware to coal-powered northern regions like Inner Mongolia and Xinjiang. The next difficulty adjustment will take place in just under 24 hours and it is currently estimated to decline by 15%. All of this hashrate coming online will drastically reduce the block time and allow miners to earn more block rewards. On that note, The Block writes that Bitcoin mining's daily revenue per tera hash second (TH/s) of computing power is reaching its highest point since the network reward halving earlier this year.

The world of DeFi may not be all the rage anymore but it is worth highlighting several data points that in fact highlights the growing activity across DEXes. The total trade count for the month of October has topped that of September, as has the measure of unique trader addresses (makers and takers). In addition to that, despite the apparent cooling of activity across DEXes, the top venue that is Uniswap now commands liquidity of close to $3 billion, which is actually an increase from the levels observed in September. However, this activity is being somewhat diluted by another factor, and that is the number of currencies available to trade on DEXes, which rose to 8,000 in October vs 1,500 in early January.

In other news, CoinDesk writes that the governor of the People’s Bank of China praised recent tests of its national digital currency at the Hong Kong Fintech Week conference on Monday. As reported by Bloomberg, Yi Gang said the pilot program, which has spanned multiple Chinese cities this year, has proven successful. 

Over 4 million transactions totaling more than 2 billion yuan ($299 million) have been conducted using the digital yuan, Yi said. In related news, the Australian central bank announced Monday it’s partnering with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys to explore the possible use and implications of a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT). Furthermore, European Central Bank President Christine Lagarde Sunday announced an ECB survey of public opinion regarding the issuance of a digital euro, implying the central bank is considering a retail central bank digital currency (CBDC), not just one intended for use between banks, which would represent a much more profound change in the way finance works. 

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