Investors are gearing up for a 'watershed moment' for digital assets

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Investors are gearing up for a 'watershed moment' for digital assets

Bitcoin has been trading at record highs before Wednesday's stock debut of the cryptocurrency exchange Coinbase. Some analysts say the offer could be a potential pivotal moment for cryptocurrencies. According to Coin Metrics, Bitcoin was trading up more than 5% on Tuesday, above$ 63,220. Coinbase's direct listing is expected to be a watershed moment for the crypto world and will result in new offerings from other crypto-related entities.

Coinbase is expected to price upwards of$ 60 billion and reaches as high as$ 100 billion. I 'm not surprised the cryptos are still running; part of this is for the crypto community, nobody wants to be selling if they do the Coinbase offering, says Fundstrat founder Tom Lee. If the sellers are on a selling hiatus, the price is going to keep going up and it's kind of like having a selling strike in front of the listing. Other cryptocurrencies also traded at a new high on Wednesday: Ether for one was trading at a new high. According to Coin Metrics, it was up 6.7% at$ 2,280, according to analysts said the debut of Coinbase is driving interest in the entire crypto universe, lured in new investors and likely encourages other entities related to the market to issue their own stock. As the market awaits this IPO, what we are seeing is investors talking more about bitcoin as a hedge against the potential for higher inflation and the devaluing of the dollar and the extreme amounts of government debt, said Julian Emanuel, head of equity and derivatives strategy at BTIG. How bitcoin reacts this week could set the tone in the crypto market for weeks to come.

He said there was substantial resistance at$ 62,000, which it has now blown through, and there is solid support at its 50-day moving average, near$ 54,900. We will note that the entire space has run a very long way; there are signs that in the last week or two there is a little bit of indigestion in the nonfungible NFT tokens market. We have seen a discount on NAV in one of the more established trust products, Emanuel said. All of these things tell us that if you want to make a short-term trade on the rising price of bitcoin or ether or whatever has you, based on the success of this week's capital market activity, that's not a good reason to own something that has reduced 30%, 40%, 50% and already has done so on a couple of occasions. The value of the Grayscale Bitcoin Trust is under the value of the digital assets it holds, and an activist family office, Marlton LLC has sent a letter to Grayscale Investments asking a tender offter to raise the price, according to a Bloomberg report. If Bitcoin holds its gains after the coinbase offer, this would be a positive for cryptocurrency assets. The long term story is very positive and if, indeed, digital assets continue to rally or hold out after the coinbase offering has been digested, it's an even more positive reflection of the embrace of digital assets' long-term potential.

Lee said he does n't know how bitcoin and others will trade after the Coinbase offer, but the rise in cryptocurrencies is driving more interest in the crypto exchanges. It's sort of feeding on itself; They are less likely to sell crypto because they think Coinbase is going to help it. It's a self-reinforcing dynamic, said Lee; Coinbase would be valued more than Nasdaq, which has a market cap of$ 25.9 billion and probably the Interncontinental Exchange, valued at more than$ 66.9 billion. He said it is a positive for the currency market that Coinbase is going public. They make more money than any publicly listed exchange in the world. They 'll make more money than Nasdaq. Coinbase is also not the most profitable Cyrpto exchange in the world, Lee said. From a chart perspective, bitcoin does look for more gains. Katie Stockton, the chief technical strategist at Fairlead Strategies, said that she was looking for a breakout for bitcoin above$ 61,742, which was the March high. It broke that level on Wednesday. If bitcoin reaches this target, a measured move projection would target$ 69,121 with a short-term time horizon, wrote she. If it does n't hold this level, the moving 50-day average could provide support, noted the Research Institute.

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