Bitcoin closed the month of October with the highest performance in the last 33 months. For the tenth time in its history, Bitcoin closed a month above USD 10,000.

Kraken’s latest market report reveals that, in October, Bitcoin had its best monthly performance since April. The report highlights that the increase in the price of Bitcoin (BTC) for October was higher than 28%.

That performance puts October just behind April when the price of BTC jumped more than 34%. At that point, the recovery from the March market crash began. That event occurred along with the declaration of a coronavirus pandemic, as well as the collapse of traditional markets and that of cryptocurrencies.

Not only was October the third best-performing month since November 2019, but Bitcoin closed it at its highest price in 33 months, says Kraken. Also, it is the 10th time in its 11-year history that Bitcoin has closed a month above USD 10,000.

Towards the end of October, Bitcoin decoupled from traditional assets and had a negative correlation with them. One particularly prominent case is that of S&P 500. The report also points to a correlation of -0.34, which contrasts with 0.86 recorded in mid-October.

This year, the behavior of Bitcoin in the market has reached record highs regarding its correlation with traditional markets. These include gold, with which it exceeded 0.70 (or 70% correlation) last August. However, BTC also broke away from gold in October, with a -0.22 correlation, according to data from Kraken.

In 2020, BTC’s returns have outperformed those of all other markets. Traditional indexes, large-company stocks, and precious metals have all had lower returns than the pioneering cryptocurrency.

Key Events and fall in Bitcoin’s Volatility

In a previous report, Kraken noted that higher returns would come in October that would coincide with increased volatility. However, after exceeding 50% volatility at the beginning of the month, that percentage fell to a range between 32% and 37%, according to the most recent report.

October’s key events include new institutional investment milestones in Bitcoin, according to Kraken. For example, Square sought to safeguard part of its capital by purchasing USD 50 million worth of BTC.

The study also mentions the new high regarding investments during a quarter in investment firm Grayscale: 1 billion USD worth of Bitcoin.

Another significant milestone is PayPal’s entry into the game, announcing its Bitcoin purchase, sale, and payment service. Singapore’s DBS, one of the largest banks in Southeast Asia, followed it with the launch of a Bitcoin exchange.

Kraken believes that the growing number of large investors (whales) who continue to accumulate capital in BTC will lead to further increases in its price. They even forecast new highs and the possibility of approaching the USD 20,000 level again, which the cryptocurrency touched during the 2017 bullish rally.

The report highlights that, historically, November is one of the months with the highest volatility. On average, the second last month of the year maintains 85% volatility in the history of BTC. This could be a significant piece of information to evaluate the behavior that Bitcoin will maintain in the future.

By Alexander Salazar

The growth of Bitcoin in recent days overshadowed its rivals, especially altcoins. Its adoption as a reserve asset proves its power and superiority over other digital currencies and DeFi tokens.

DeFi tokens suffered a significant loss on their Binance composite index, dropping by 60%, according to the exchange. It is the second consecutive month of problems regarding this index. The data indicate that the fall from its all-time high of USD 1,200 has reached USD 400.

Likewise, Binance says that most of the Decentralized Finance (DeFi) tokens have lost 7/10 of their value. In other cases, the losses in profit of many tokens have been 90% since last September.

Will Bitcoin Maintain the Power that It Showed?

The power that Bitcoin showed in recent days overshadowed all of its rivals. However, there is still uncertainty as to whether the price of the pioneering cryptocurrency will continue to grow or if it will recede as tension decreases in the United States.

Nervousness took hold of the markets given the uncertainty that the US presidential elections brought. Due to their concern about losing their capital, investors strengthened reserve assets, including Bitcoin, thanks to massive purchase.

However, as the political calm returns, the price of Bitcoin could recede. It is too early to predict what will happen, but the crypto universe could be returning to the previous situation.

The price of Bitcoin would be in limbo as investors regain their interest in DeFi tokens. According to a report from Binance, this could be the scenario. If the DeFi Token Index drops by 60%, it is possible to contrast it with the strength of their Total Value Locked (TVL), which is around USD 12.4 billion.

Few Tokens and DApps Are Doing Well in Index

Beyond the power that Bitcoin showed and the fall of DeFi tokens in their Binance composite index, all is not lost for the latter. Eight tokens have shown a neutral correlation with Bitcoin since the 45 days before November 1^st.

The same seems to have happened to tokens regarding Ethereum. The report highlights that 7/13 of them showed a negative correlation with the second-largest digital currency. In both cases, the negative behavior in both Bitcoin, and Ethereum “is not a surprise”, considering the end of the DeFi bubble, according to Binance.

Regarding Capitalization

In recent days, Bitcoin has been the protagonist, showing its power not only concerning price. The most popular of digital currencies also did so regarding market capitalization, demonstrating great superiority compared to other cryptocurrencies.

The capitalization of Bitcoin is around USD 286.9 billion. This represents a great dominance, compared to Ethereum’s USD 52 billion and Tether’s USD 17.1 billion, its two closest rivals.

Bitcoin will remain the absolute king if its price and capitalization continue to rise. Furthermore, if the political stability in the United States pushes its price back and investors regain their interest in DeFi tokens, Bitcoin will share its dominance a bit more.

By Alexander Salazar

The news that Joseph Biden was officially the winner of the presidential elections led the price of Bitcoin to plummet. However, the pioneering cryptocurrency recovered in a few hours, showing that its maturity has grown exponentially.

At first, social media reacted cautiously and many users considered selling their Bitcoin holdings massively. The latter would have caused a large drop in the price of Bitcoin. However, signs of recovery did not take long to appear.

The news on Biden victory caused the price to drop to USD 14,200, but the cryptocurrency touched USD 15,000 again. After some movement in both directions, the value of the most important cryptocurrency regained the support of USD 15,200 that it had before Biden’s victory.

Bitcoin Rebounds from Its Drop, Showing Its Maturity

The times when the price of Bitcoin sank during any turmoil and remained at the bottom for a long time seem to be distant. The last of those winters occurred in 2018 when the price remained very low until the first quarter of 2019.

Since then, the maturity of Bitcoin has allowed it to overcome the instability that terrified investors. The price of the pioneering cryptocurrency still suffers in the face of remarkable events, but its recovery comes very quickly.

The price of Bitcoin plummeted dramatically due to the announcement of the World Health Organization (WHO) about the start of the COVID-19 pandemic. Adversaries of the cryptocurrency predicted the “end of Bitcoin,” discarding any possibility that it would continue to be a store of value.

A short time later, large Wall Street investors and traditional companies such as MicroStrategy used it precisely as a store of value. Bitcoin rebounded from the market crash that took place in March so quickly that it has performed as the best asset of 2020 ever since.

The Repeating Pattern

The recovery of Bitcoin allows foreseeing that its maturity is at another level compared to previous years. In that context, the day of the presidential elections in the United States arrived, which significantly influenced the drop in the price of the main cryptocurrency.

With the official announcement about Biden’s victory, the price of Bitcoin as a reserve asset reacted negatively. For that reason, it plummeted from almost USD 15,500 to USD 14,200.

However, the price of the cryptocurrency showed signs of recovery, reaching USD 15,000 again in a few hours. At the time of writing this article, its price is above the USD 15,400 support. If it continues that trend, its next goal could be USD 16,000.

This Is an Endless Turmoil

The maturity of Bitcoin could be the main factor in this rapid recovery. However, the current uncertainty suggests that the history of the presidential elections is not over.

Biden’s victory leads many to wonder how the markets, including that of Bitcoin, will behave during his administration. The first 100 days of his term of office will be a crucial factor in determining the behavior of the price of the leading cryptocurrency.

By Alexander Salazar

Between 2018 and 2020, there has been an estimated decrease of 35% in the blockchain market. The researchers predict a new momentum for Blockchain investments by 2023.

According to a recent study by global technology market advisory firm ABI Research, income related to blockchain investments has fallen by 35% between 2018 and 2020. The report indicates that the potential loss amounts to USD 2,800 million.

The researchers consider that the coronavirus pandemic is one of the causes. They believe that the spread of the virus has had a significant negative impact on investment opportunities. This may have affected the desire to develop new blockchain-based apps.

They also talk about the influence of the cryptocurrency market on the decline in profits. They mention that the fall in prices in late 2018 “eliminated 80% of the total aggregate market capitalization.” They explain that this led around 2,000 projects with crypto assets to disappear and “significantly reduced the adoption of blockchain in other markets.”

However, the company believes that this drop in income will be short-lived. For that reason, they predict that the market may return to the 2018 income levels by 2023.

The researchers expect interest and demand to drive income for blockchain apps focusing on manufacturing, transportation, warehousing, and retail trading over the medium term. Their forecasts are similar to the calculations that firm KPMG made.

In August 2019, this company published a report indicating that investments in blockchain had reached an all-time high of USD 128,000 million in 2018. During the first half of 2019, they observed a drop in investments, which reached USD 38,000 million.

The latest research from the market intelligence firm International Data Corporation (IDC) shows more encouraging statistics. They expect global blockchain spending to close 2020 with an increase of at least 50% compared to 2019. They estimate that investments in blockchain solutions will amount to USD 4.1 billion this year.

New Momentum for Blockchain in Post-Coronavirus Era

According to the analysts from ABI Research, current successful business use cases will be ready to take advantage of the new momentum phase in blockchain investments. They anticipate that this will happen within about three years.

ABI Research’s director of digital security research, Michela Menting, said that “the coronavirus pandemic has impacted on selected blockchain apps. The most affected are those connected to the supply chain management and the medical and healthcare supply logistics.”

The executive mentions some problems related to the health area that they have successfully addressed with blockchain. She refers to the apps that they use to share timely, relevant, and authenticated information about the pandemic.

This position of the ABI Research board coincides with the estimates of Colombian specialist Manuel Acero. He considers that the use of blockchain could be “a light at the end of the tunnel” in the post-coronavirus era.

Acero said that blockchain is useful for incorporating improvements in the food and pharmaceutical chains, and in the management of controlled work environments. He added that the implementation of blockchain registries, smart contracts, and devices for the Internet of Things (IoT) in supply chains will be essential in post-coronavirus periods.

By Alexander Salazar

After having declined in September, Bitcoin’s returns reached 28% in October. According to Kaiko, Bitcoin purchases with US dollars were between 4 and 5 times higher than its sales in October.

After having recorded negative returns in September, Bitcoin (BTC) showed a notable 27.93% rebound last month. According to its October report, analytics firm Kaiko highlighted that announcements about institutional adoption drove this increase.

The report indicated that October was one of the best months in Bitcoin’s history since this cryptocurrency recorded one of its best returns.

It is possible to better visualize the resurgence of Bitcoin in October by analyzing the combined trading volume of Bitcoin and Ether (ETH), according to the report.

Even though the price of Ether had positive returns in October, this cryptocurrency declined in the end and did not exceed USD 400, according to Kaiko.

Investors turned to Ether, which showed the best returns in August and September. However, in October, they returned to Bitcoin amid positive sentiment for the pioneering cryptocurrency, the authors note.

Correlations with No Clear Trend

The movements of Bitcoin have been similar to those of conventional stocks in some recent periods and in line with those of gold in other periods, the report indicates. There have also been periods in which the first cryptocurrency has followed a similar trend to that of both asset classes, say the authors.

However, the Standard & Poor’s index ended the month of October with a 3% increase, while Bitcoin neared 28%. There is no clear narrative of Bitcoin’s correlations with other asset classes, Kaiko notes.

Investment management company Fidelity states that, on an extended time scale, this cryptocurrency does not show any correlation with traditional assets. This information appears in the second part of its Bitcoin Investment Thesis, in which they explore Bitcoin’s role as an alternative investment.

The Kaiko report also observes that there has been an increase in the gap between purchases and sales of the BTCUSD pair on different exchanges, especially on Bitstamp and Gemini. For example, on Bitstamp, purchases exceeded sales by a factor that ranged between 4 and 5 on average in October.

Ethereum’s Ether and DeFi Decline in October

Besides addressing and analyzing the increase in the price of Bitcoin, Kaiko’s report records a decline in the trading volume of Ether. That has happened amid a double-digit decline in the top eight decentralized finance (DeFi) tokens.

Following the notable rebound in decentralized finance in early September, the Bitcoin boom in October coincided with negative double-digit returns from the top eight DeFi tokens. The report highlights that Yearn Finance (YFI) was the worst performer, with -54%.

In early October, the increase in the volatility of Ethereum in September affected the DeFi sector the most, which was part of Kaiko’s report from that month. Concerning investments in Bitcoin, Fidelity released the first and second parts of its Bitcoin Investment Thesis.

By Alexander Salazar

Massive adoption on the network would help mitigate congestion and high fees. The community is still far from being able to enjoy the optimized services of the network.

In recent weeks, users of the Bitcoin network have been facing difficulties such as high congestion and high fees. This suggests that the complete adoption of SegWit (Segregated Witness) addresses would have helped mitigate such an adverse situation. However, there is still a long way to go to reach massive acceptance, while this software is waiting to be able to offer its advantages.

Transactionfee data indicate that 47% of Bitcoin transactions occur in Legacy addresses, whose fees tend to be higher than those processed with SegWit. According to these records, three years after the activation of the protocol on the Bitcoin network, the community is still unable to enjoy the benefits that it offers.

SegWit does not represent a complete solution for the level of congestion and the high fees generated on the Bitcoin network. However, it offers benefits that would help reduce these inconveniences. This makes it possible to expand the capabilities of the network, making it lighter.

This protocol was an improvement on the Bitcoin code that separates the digital signature from the rest of the main block. This generated space savings, allowing a greater number of transactions per block, thus accelerating the processing of transactions on the network. Faster operations would also decrease the competition for user fees, as well as their price.

With the massive adoption of SegWit for Bitcoin, users would have saved up to 40% in fees. The significant benefits lead many analysts to recommend the immediate implementation of the tool. This would allow them to remain competitive, as Andreas Antonopoulos explains.

Everyone Wants Cheaper and Faster Transactions

There is no complete performance optimization for the Bitcoin network that includes enabling all of its features, as the low adoption of SegWit suggests. Further adoption may not have occurred because it is optional software. This allows the receiver of a transaction to use SegWit, even if the sender does not yet support it.

Many exchanges and wallets are aware of the benefits that SegWit offers, which is why they have enabled support for it. However, several companies that provide services have postponed their transition. For that reason, several specialists have warned for some time that user demand is key to driving mass adoption.

Users must look at the prefix of an address to identify whether it is in a Legacy or SegWit format. In this way, Legacy addresses start with a 1 and correspond to the P2PKH format. Regarding native SegWit addresses, they begin with the acronym bc1. A third format (P2SH-P2WPKH), which corresponds to addresses that start with a 3, is non-standard or nested SegWit.

Last year, the percentage of transactions on the Bitcoin network that involved SegWit reached an all-time high of 53%. Since then, the figure has remained in that range, as the Blockchair website shows.

By Alexander Salazar