Reasons to Be Bullish About Bitcoin & Other Cryptocurrencies, According to Prominent Economics Professor

Panos Mourdoukoutas, an economics professor at the University of Pennsylvania, has argued that there are “a couple of signs” that the current cryptocurrency market rally could be “sustainable.”

Mourdoukoutas, who earned his Phd from the Stony Brook University, noted in a Forbes post (published on February 21st) that digital asset prices may continue to increase because the latest market rally “extended to the entire cryptocurrency chain.” Mourdoukoutas pointed out that the value of “only seven cryptocurrencies out of the top 100” depreciated in the past week.

Commenting on the recent surge in cryptoasset prices, Michael Noel, the CEO of Blockchain Consultants, remarked: 

Interestingly, it appears that the momentum behind the recent Bitcoin rise comes more from fiat and stablecoins than from other cryptocurrencies. This move from fiat currencies shows at least some consensus that BTC value, is better long term than in traditional currencies.

Bitcoin Usage Has Been "Really High Recently"

Noel added that the latest digital asset rally may also be partially attributed to increased enterprise interest in the crypto market. Established financial service providers and organizations including Western Union, the leading money transfer company, has been working closely with crypto firms such as American fintech Ripple Labs - in order to expedite cross-border payments.

Nasdaq, the world’s second largest stock exchange, recently introduced a new bitcoin (BTC) and ether (ETH) tracking index. Meanwhile, Mastercard has been working with crypto payments solutions provider, Stellar - in order to make it easier to send money globally.

Bitcoin acceptance rates also appear to be increasing as Mati Greenspan, the senior market analyst at eToro, a leading social trading platform, revealed recently that BTC usage has been “really high recently.” Additionally, Greenspan mentioned that Google searches about bitcoin and other cryptocurrencies have picked up again.

JPMorgan Coin May Have Helped Legitimize Crypto Industry

Jeff Ramson, the founder and CEO of PCG Advisory, Inc., a company “dedicated to adding value in the small-cap, micro-cap and blockchain/cryptocurrency marketplace”, remarked:

Each day we are hearing of more well-known fiduciaries, banks, funds, etc. investing into crypto/blockchain infrastructure, and I believe Bitcoin is the proxy for most who want to have exposure to the crypto asset class, while these markets develop.

Ramson continued: “While not significant to the price of Bitcoin, in reality, [the introduction of JPMorgan’s own cryptocurrency or coin] has also given additional credibility to the space, which is helping with the price of Bitcoin; and I believe, this acceptance will help sustain the crypto asset class for the long run.”

Fundstrat’s Tom Lee Explains How It’s Been ‘Confirmed’ That Crypto Winter Is Over

Siamak Masnavi

On Sunday (May 19), Thomas Lee, Co-Founder, Managing Partner and the Head of Research at independent research boutique Fundstrat Global Advisors explained why his firm believes that certain events that have occurred over the past six months "confirm" that crypto winter is over.

This is the tweet that Lee posted yesterday:

Although all of the 13 "signals" that are mentioned in Lee's tweet are interesting, in this article we are going to focus on those that we have seen during the past month or so (i.e. since mid April 2019), which means items 7–13 in Lee's list.

Adamant Capital's "Bitcoin in Heavy Accumulation" Report

This report was written by Tuur Demeester and Michiel Lescrauwaet, co-founders of Adamant Capital, and published on April 18. 

Here are some of main conclusions:

  • Bitcoin is in the last stage of the bear market, i.e. the "accumulation phase." More specifically, their analysis of the Bitcoin blockchain shows that "Bitcoin HODLers are committing for the long term again."
  • Bitcoin's fundamentals are improving as it gets embraced by both millennials, who tend to like disruptive technologies, and institutional investors, many of whom see Bitcoin as "an uncorrelated, highly liquid financial asset."
  • Bitcoin has the most "favorable" long term risk-reward ratio of "any liquid investment in the world."
  • We are going to "mass market adoption" of Bitcoin during the next five years.

Multiple OTC Brokers Reporting Surges in Trading Volumes

One example is Binance's OTC desk. On 17 April, Decrypt's Tim Copeland reported that, according to Binance CFO Wei Zhou, the "volume of over-the-counter Bitcoin trades" had "significantly risen" in April. The Binance CFO told Decrypt:

“Last month we saw a lot more volume than, say, three months ago. This was mainly due to the increase in price of Bitcoin and altcoins over the past few months. We’ve witnessed more trading activity—and demand."

Surge in On-Chain Activity

In a report published on May 6 (Volume 3, Issue 13), crypto research firm Diar had this to say about Bitcoin's on-chain activity:

"The number of transactions on-chain is also just shy of the all-time-high of December 2017. Since hitting a low in February of last year, month-on-month growth for the number of transactions has been clearly evident (see chart)."

Diar's 6 May 2019 Report - BTC - Onchain Activity Increase.png

As for Ether (ETH), this is what they said:

"776k Ether was transacted on DApps last month turning on-chain activity higher than the previous period for 4-months in a row. This year is the most prolonged period of growth in terms of transacted volumes DApps have witnessed, ever."

Willy Woo's Survey of Top Crypto Influencers, Analysts and Traders

Bitcoin's "Golden Cross"

As CryptoGlobe reported on April 23, this event, which had not been seen in around 3.5 years, was confirmed on that day.

Here is how Investopedia explains what a "golden cross" is and why it is significant:

"The golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. The golden cross is a bullish breakout pattern formed from a crossover involving a security's short-term moving average (such as the 15-day moving average) breaking above its long-term moving average (such as the 50-day moving average) or resistance level. As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes."

A "classic" golden cross is defined as one "when the 200 and 50 day moving averages cross, with the 50 crossing above the 200," and indeed this is what happened on April 23. 

Market's Calm Reaction to New York Attorney General's Court Order Agaist Bitfinex and Tether

As you probably know, on Thursday (April 25), New York Attorney General ("NYAG") Letitia James issued a press release to announce that her office had obtained a court order against iFinex (the operator of Bitfinex) and Tether Limited (the issuer of stablecoin Tether) "enjoining" the two firms "from further violations of New York law in connection with an ongoing activities that may have defrauded New York investors that trade in virtual or 'crypto' currency." 

Consensus 2019 Conference

The Consensus 2019 conference (May 13–15 in New York City) delivered several pieces of good news, two of which are listed below:

  • Crypto payment network Flexa announced that via a partnership with the Winklevoss Twins' digital asset exchange Gemini it was able to bring the "limited launch of its network and mobile app to enable instant cryptocurrency payments in stores and online for several retail merchants." These merchants include Amazon’s Whole Foods and Barnes & Noble. Flexa said that its new SPEDN mobile wallet app would allow merchants to "easily accept bitcoin, ether, Bitcoin Cash, and the Gemini dollar."
  • Kelly Loeffler, the CEO of Bakkt announced that Bakkt is working with its customers "over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody" (expected to start in July).

Chart Courtesy of Diar Research