Nov. 19, 2024

CoinDesk 20 Index: 2,975.88 +1.3%
Bitcoin (BTC): $92,456.36  +2.06%
Ether (ETH): $3,144.77  +2.37%
S&P 500:  5,893.62  +0.39%
Gold: $2,636.70  +0.85%
Nikkei 225: 38,414.43  +0.51%

A message from Kraken

Bitcoin is changing hands around $92,000, just 2% below record prices ahead of Tuesday's U.S. session. The largest crypto has advanced 2% over the past 24 hours, outperforming the 1.1% gain in the broad-market benchmark, the CoinDesk 20 Index. Chainlink's LINK, Hedera's HBAR and Uniswap's UNI led gains among the biggest altcoins as traders expect broader institutional adoption and less regulatory headwinds for crypto from a Trump administration. Crypto hedge fund QCP anticipates BTC attempting a run to $100,000 in the coming months, with traders rotating those gains into altcoins. "We won't be surprised to see altcoin season in full swing in the coming months,” QCP said. Still, there's a chance of a near-term blow-off top — a rapid drop following a rapid gain — as markets remain frothy, Augustine Fan, head of insights at SOFA, warned.

Bitcoin ETF options trading in the U.S. is expected to start today. Options on BlackRock's iShares Bitcoin Trust (IBIT) ETF cleared the last regulatory hurdle on Monday, and they could bring more institutional appetite for the largest cryptocurrency. "This marks a monumental shift," 10x Research said in a Tuesday newsletter. The products "could attract significant trading volumes, potentially driving sharp price rallies in bitcoin," it said. For example, MicroStrategy (MSTR), the Nasdaq-listed company that owns the largest corporate BTC treasury in the world, is punching above its weight due to the booming market in its share options. MSTR options open interest surpasses the firm's market capitalization, while the stock's trading volume levels with Apple's and Microsoft's, companies with around a 40-times larger market value. A similar explosion in open interest and trading volume could happen with BTC, which could be accelerated due to bitcoin's supply limit, 10x Research noted.

Bitcoin mining economics improved in the first half of November, JPMorgan analysts said in a report. The hashprice, which measures miners' profitability, rose nearly 30% in the first two weeks of the month as the BTC price climbed to record highs. Rising profitability benefited the 14 U.S.-listed miners tracked by the bank, adding about $8 billion to their combined market capitalization. U.S.-based miners' share of the network hashrate remains at record highs, accounting for about 28% of the global network.

Ethereum's ether (ETH), once viewed as the shiny silver to bitcoin's (BTC) gold, has risen only 36% this year, significantly trailing behind BTC's impressive surge of more than 100%.

Such is the investor aversion toward ETH that, at the going market rate of $3,100, the cryptocurrency is still well below the record price of $4,832 in 2021, while BTC is trading at lifetime highs above $90,000.

The underperformance, which makes ETH feel more like palladium struggling to keep pace with gold, is expected to continue well into the year's end. New research from Amberdata shows only a 10% chance of ether topping its first-quarter high of around $4,000 while traders are betting on BTC setting new highs above $100,000.

Amberdata attributes ETH's dour outlook to weak fundamentals.

"ETH faces serious headwinds as the value proposition of 'sound money' (aka deflationary supply due to transaction fee burn) has flipped to inflation supply as nearly all DeFi transactions are being executed on L2s as opposed to ETH L1 itself," Amberdata's director of derivatives, Greg Magadini, said in a newsletter to clients. "I believe that’s drastically dragging prices down."

A message from Kraken

- Omkar Godbole