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Market Wrap: Bitcoin Down to $26K but Traders Remain Bullish

Published

2 Stunden ago

Dezember 29, 2020

Few seem to be bothered by bitcoin’s volatility on Tuesday, as the No. 1 cryptocurrency by market capitalization declined to the $26,000 level after its first-ever trades above $28,000 on Sunday. Many market participants are convinced retail and institutional investors will push bitcoin’s price higher after the holiday lull.

Bitcoin (BTC) trading around $26,937.67 as of 21:00 UTC (4 p.m. ET). Gaining 0.37% over the previous 24 hours.
Bitcoin’s 24-hour range: $25,875.05-$27,117.95 (CoinDesk 20)
BTC between its 10-hour and 50-hour averages on the hourly chart, a sideways signal for market technicians.

Bitcoin trading on Bitstamp since Dec. 23

Source: TradingView

With limited institutional trading activity during the final days of 2020, traders and analysts told CoinDesk the recent price movement has been largely driven by retail investors.

“It’s quite unusual for the past whole week being like this, given it’s a holiday season. Usually during the holiday season there’s a liquidity crunch,” Mable Jiang, principal at crypto hedge fund Multicoin Capital, told CoinDesk. “The heat was partially driven by the recent run-up of bitcoin, and the resurfacing retail interest in the market, at least in China.”

Jiang noticed a few patterns in recent trading activity among retail investors. Some are rolling alt-coins into bitcoin and ether. Others are looking for coins that may potentially outperform bitcoin on returns in the coming months.

Bitcoin volumes by exchange since Dec. 1. 2020

In TradeBlock’s weekly market commentary on Dec. 28, the cryptocurrency analysis firm wrote that recent highs for bitcoin and ether were driven by outflows from XRP.

“The only two digital currencies the [Securities and Exchange Commission] has definitely stated are not securities are bitcoin” and ether, TradeBlock said. “As regulatory uncertainty increased in the alt-coin market after the SEC’s action [against Ripple Labs, claiming it was trading an illegal security, XRP], traders took the opportunity to pile into more regulatory-certain assets, bitcoin and ether, while maintaining exposure to crypto amidst its one of the strongest bull runs on record.”

Read More: Coinbase to Suspend XRP Trading Following SEC Suit Against Ripple

Yet, even though bitcoin’s price fell below $26,000 in the past 24 hours many market participants appear to be optimistic about the coming weeks and months, especially after investment activity returns after the holidays.

“Should the expected wave of retail flows materialize, I would expect to see bitcoin charge past $30,000 as we enter the new year,” said Denis Vinokourov, head of research at the London-based prime Brokerage Bequant.

Read More: CME Tops in Bitcoin Futures Rankings Amid Rapidly Growing Institutional Interest

Last month’s price move towards the previous $20,000 resistance level makes a convincing case to support such optimism, according to Chris Thomas, head of digital assets at Swissquote Bank. While small sell-offs occurred three times during that rally (on Nov. 25, Dec. 1 and Dec. 5), prices quickly recovered as a strong demand for bitcoin outweighed the amount of bitcoin sold.

Read More: Whale Sightings Become Scarce, Removing Downward Pressure on Bitcoin: Analyst

“Since then, the bears have been reluctant to sell too much more as the probability is that they’ll be able to sell at higher levels in a few weeks or months,” Thomas said. “I suspect we’ll see a $26,500-$27,500 range into the first few days of the New Year. Jan. 4 onwards we should see institutional positions coming back into the market.”

Read More: Grayscale Has $19B in Crypto Assets Under Management, Up From $16.4B Last Week

Ether lower on active retail trading activities

The second-largest cryptocurrency by market capitalization, ether (ETH) was down Tuesday, trading around $728.59 and down 0.47% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Similar to bitcoin, market sentiment for ether’s performance has also remained positive despite the price volatility.

Read More: Ether Trades Above $700 for the First Time Since 2018

“Currently, [ether’s] trading volume is more than 15% higher than average, further proof that ether is on the rise,” Guy Hirsch, eToro’s U.S. managing director, said. “We expect the second-biggest crypto asset to continue rallying into the new year, and possibly surpassing $800 sometime during the first half of the year.”

If they aren’t doing so already, institutional players could also soon start looking into ether, particularly after the Chicago Mercantile Exchange (CME) said it will launch a futures contract on ether in February 2021. That could bode well for ether’s performance relative to bitcoin, according to some analysts.

Read More: Institutions Will Start Buying Ether in 2021, Messari Analyst Says

“The imminent introduction of ETH futures from the CME Group should spur additional adoption, especially among financial institutions looking to diversify digital asset holdings with another regulated product they are comfortable with,” Vinokourov said. “This, combined with [decentralized finance’s] continued surge, should help ETH to outperform BTC for the foreseeable future.”

Retail traders also appear more interested in ether, as the total value locked (TVL) in DeFi, as provided by analytics website DeFi Pulse, reached to $14.47 billion, as of Tuesday.

Total value locked in decentralized finance since January 2020.

“From the market-making side [on DeFi], we see flows pretty evenly, with slightly more [stablecoins] to ether than the opposite, which I believe indicates that there are still plenty of retail investors trying to jump on the wagon,” said Peter Chan, a trader for Hong Kong-based crypto firm OneBit Quant who is focusing on DeFi trading.

Other markets

Digital assets on the CoinDesk 20 are mostly in red on Tuesday. Notable winner as of 21:00 UTC (4:00 p.m. ET):

Oil was up 0.76%%. Price per barrel of West Texas Intermediate crude: $47.98.
Gold was in the green 0.31% and at $1879.03 as of press time.

The 10-year U.S. Treasury bond yield dropped Tuesday, dipping to 0.931.

The CoinDesk 20: The Assets That Matter Most to the Market

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New Research Sheds Light on the Front-Running Bots in Ethereum’s Dark Forest

Published

20 Minuten ago

Dezember 29, 2020

New research from the cryptocurrency wallet ZenGo has shed additional light on front-running attacks happening on the Ethereum blockchain.

First outlined in “Ethereum Is a Dark Forest,” DeFi investors Dan Robinson and Georgios Konstantopoulos called attention to a variety of attacks by bots that were roving the Ethereum blockchain in search of prey.

The new report from ZenGo outlines how the researchers identified and isolated generalized front-running bots while evaluating their efficiency and how likely a transaction is to get hunted down, while also testing how to evade them.

“Front-running in general is not something new on Ethereum,” said Alex Manuskin, a blockchain researcher at ZenGo, who conducted the research. “The novelty here is that we looked at bots that seek any profit, even in contracts they have never seen before, and even if these contracts are quite complex, and perform several internal calls to other contracts.”

Front-running

The ZenGo report described front-running as the “act of getting a transaction first in line in the execution queue, right before a known future transaction occurs.”

An exchange bid is an example of front-running. If someone is about to buy a large amount of ETH on Uniswap, to such an extent that it would drive the price higher, one way to cash in would be to buy ETH right before the large purchase goes through, then sell immediately after.

Ethereum front-running happens because bots are able to bid “a slightly higher gas price on a transaction, incentivizing miners to place earlier in the order when constructing the block. The higher paying transactions are executed first. Thus if two transactions making a profit from the same contract call are placed in the same block, only the first takes the profit, “ write the researchers.

“Under the surface of every transaction that finds its way to the blockchain, there are fierce wars over every bit of profit,” said Manuskin. “If you happened to come across an arbitrage opportunity, or even notice an error in some contract, it is very likely that it will be hard to extract this value without either operating a bot yourself to fend off the front-runners, connecting to and paying a miner to conceal your golden goose transaction, or making the transaction complex enough for the front-runners to not notice.”

Luring a bot

The researchers set out to attract a generalized front-running bot. In order to achieve this, they had to put enough funds into their honeypot transaction to make it attractive to such a bot.

“This time, we had a hit,” the researchers wrote. “The transaction was pending for ~3 minutes before it was mined, without getting value from the honeypot contract. Looking at the contract’s internal transaction, we could see the funds went to someone else.

The front-runner’s transaction had used slightly more gwei, the smallest unit of ether, (0.000001111 gwei more, to be precise) and was mined in the same block as their attempted abstraction.

Crypto markets are lit markets, by definition. So predators can see the prey coming. The prey can see them, too – but the prey cannot escape. When you submit an Ethereum) transaction, it must wait in that mempool until a miner picks it up. It has nowhere else to go. So it is, to coin a phrase, a “sitting duck.” Every predator in the pool can see it. It inevitably gets replicated, front-run or otherwise stolen. The wonder is that any legitimate transactions ever get verified at all

Frances Coppola

Once they’d identified the bot, they were able to track how much it had pulled in since the start of its operations. Using Dune Analytics, they estimated the bot started operating in May of 2018, and surmised it had raked in about $10k in ETH in total. While that may not seem initially like a high amount, remember, one individual can create any number of bots to act on their behalf.

(ZenGo)

Source: Dune Analytics

Another bot, which the researchers attracted with a slightly larger honeypot transaction, was more sophisticated. When the researchers tried to extract the funds from their bait transaction, they obscured their call by means of a proxy contract. This type of contract function involves a totally separate contract and does not publish to the public blockchain

They “deployed the ProxyTaker contract and called the appropriate function in an attempt to extract our funds.”

The transaction was quickly front-run by another bot.

“This time it was far more impressive,” they wrote. “Not only was the bot able to detect our extraction transaction, but it identified it from within an internal call, from a completely different contract! Accomplishing this in a record-breaking time. Our extraction transaction was mined in a few seconds (and so was the bot’s).”

This bot was much more sophisticated and focused not just on ETH transactions; rather, it performed a variety of arbitrage transactions involving multiple currencies.

Viewing the account collecting the funds, the researchers found it was much more successful than the previous bot and was holding 300 ETH, or $180K at the time of publication.

Results from tracking the bot

The research shed light on the methods of some fairly sophisticated bots combing the blockchain for profitable transactions, though other bots may have varying behavior parameters.

“Factors such as potential upside, communication patterns, and minimum complexity (e.g., gas limit), among others, likely impact the way they operate,” they wrote.

Manuskin said that there is still a lot of research that needed to be done, but he did have some high-level takeaways.

“Generalized front-runners are more prominent than one might think,” he said. “Any contract call that can bring profit to anyone who calls it is very likely to be front-run by these generalized front-runners.”

Additionally, he found that avoiding detection by the front-runners is possible, but is not easy.

“Each operates differently and might be triggered by different factors of the transaction,” he said. “The bots themselves are in competition with each other over who gets the reward. This is only the tip of the iceberg in the full picture of the bots out there, which makes it even more interesting.”

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Qualtrics Files for IPO After Two Years under SAP

Published

1 Stunde ago

Dezember 29, 2020

SAP acquired Qualtrics back in January 2019 for $8 billion thus halting the intended IPO.

Cloud-based subscription software platform Qualtrics International Inc has filed for an IPO with the United States Securities and Exchange Commission (SEC) after two years under SAP SE (NYSE: SAP). According to its IPO prospectus, Qualtrics has set the initial price range between $20 and $24. Hereby anticipating to raise its valuation from $8 billion to between $12 and $14 billion.

Notably, Qualtrics will trade on the Nasdaq exchange under the ticker “XM.” SAP acquired Qualtrics back in January 2019 for $8 billion thus halting the intended IPO. Apparently, Qualtrics intended to raise gross proceeds of $200 million through an initial public offering (IPO) of its Class B shares, hence making the acquisition attractive.

As a result of the IPO announcement, SAP shares jumped 3.85% on Monday to close the day trading at $130.89. In addition, they were up approximately 0.75% during Tuesday’s premarket.

Being a tech company that provides much-needed services to revamp the economy from the coronavirus devastation, both SAP and Qualtrics are set to benefit significantly from the surge in demand for their services. As a result, its IPO is set to attract a huge investor base and likely to increase its prices after the launch.

After the IPO, SAP will own approximately 80% of the total outstanding shares, thus the majority stakeholder. Other private investors have chipped in, whereby Silver Lake is buying approximately 4% of the stock for $550 million, while Smith is buying 1% for $120 million.

As a result, Silver Lake’s Egon Durban is expected to join the Qualtrics board, alongside Zoom CFO Kelly Steckelberg.

Qualtrics Market Outlook Ahead of IPO

Having been under one of the largest software company, Qualtrics has seen its revenue and infrastructure tremendously grow in the past two years.

Notably, Qualtrics’ revenue jumped over 30% in the first three-quarters of 2020 to $550 million, from $413.4 million the same period last year and $289.6 million in 2018, just before the acquisition.

In the first nine months of 2020, Qualtrics recorded an operational loss of $24.9 million from $30.9 million in the same period a year earlier. However, its sales climbed from $309 million to $415 in the first nine months in comparison to the same period last year.

According to its IPO prospectus, Qualtrics reported having a customer base of up to 12,000 globally with 3,300 global employees.

Previously, Qualtrics has been involved in private funding including the $70 million in Series A investment from Sequoia Capital and Accel back in 2012. Two years later, the company conducted its Series B funding, led by Insight Partners worth $150 million. And back in 2017, it raised $180 million from returning investors Accel, Sequoia Capital, and Insight Venture Partners in a Series C funding round.

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Mytheresa Group’s Parent Company MYT Files for IPO with US SEC

Published

3 Stunden ago

Dezember 29, 2020

Reports showed that Mytheresa generated 6.4 million euros in the 2020 fiscal year, compared to $1.7 million euros raised in the previous year.

Mytheresa Group GmbH’s parent company MYT Netherlands Parent B.V has filed for an initial public offering (IPO) in the US. As stated in the announcement, MYT proposed the IPO of American Depositary Shares (ADS) representing its ordinary shares.

On the 28th of December, Mytheresa’s parent company MYT Netherlands Parent B.V filed for an IPO with the US Securities and Exchange Commission (SEC). Also, MYT said that Mytheresa, a fashion and luxury brand recorded a 27.5% increase in its quarterly net sales.

MYT Files for IPO

Per the IPO, MYT plans to list the ADS under the New York Stock Exchange (NYSE) with the ticker “MYTE.” A news release provided by Mytheresa gave more details on the underwriters for the proposed offering:

“Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are acting as lead book-running managers and representatives of the underwriters for the proposed offering. Credit Suisse Securities (USA) LLC and UBS Investment Bank are acting as book-running managers for the proposed offering. Jefferies Group LLC is acting as co-manager and Cowen Inc. is acting as passive bookrunner for the proposed offering.”

Although Mytheresa’s parent company MYT has filed its registration statement on Form F-1 with the SEC, the press release revealed that it is not yet effective. Until the registration statement becomes effective, MYT will not sell or offer the securities.

Mytheresa Records Gains in Quarterly Sales

During the quarter which ended on the 30th of September, MYT said German online retailer Mytheresa raised $126.4 million euros.

Reports showed that Mytheresa generated 6.4 million euros in its 2020 fiscal year, compared to $1.7 million euros raised in the previous year during the same period. Also adjusted net income reached 19.3 million euros and volume climbed 449 million euros in Fiscal 2019.

In the company’s 2020 fiscal year, about 68% of its net sales came from its top 30 brand partners. The CEO & president of Mytheresa Michael Kliger wote in the registration statement:

“Our long-standing brand relationships include Alexander McQueen, Balenciaga, Balmain, Bottega Veneta, Burberry, Dries van Noten, Dolce & Gabbana, Fendi, Loewe, Loro Piana, Moncler, Prada, Saint Laurent, Stella McCartney and Valentino.”

As a result of the pandemic and the global lockdown, there was a significant increase in volume of online shopping. At the time, online shopping retailers worldwide recorded gains during the stay-home period.

As online retailers generated increases during the stay-home period, other firms were recorded losses in their stocks. Swedish multinational retail company H&M – Hennes & Mauritz AB – (Stockholm: HM.B) reported an unexpected loss in 2020 Q3.

In the quarter, H&M sales dropped 16% to 51 million kronor, which equals $5.7 million. The group noted that the losses are caused by global lockdown. However, H&M added that the company was already recovering from the negative effects of the health crisis.

Despite recording declines and plans to close hundreds of stores, H&M said there is an increase in its online shopping as many people resorted to online shopping to curb the spread of the coronavirus.

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Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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