Cryptocurrency Market Analysis [May 27]
Bitcoin exceeded $110,000 last week, recording the all-time high price in USD.
In April it had fallen to $72,000, and amid the mood that a bearish market might continue, it became a surprising development that it already set a new high price by the end of May.
At this stage, Bitcoin is maintaining its peak price and is performing considerably better than other coins.
Currently BTC remains just below $110,000, but other major cryptocurrencies and altcoins have shown renewed strength since yesterday.
In particular, ETH once again surpassed the $2,600 level, rising from $2,565 to $2,636 today, a 2.8% increase. Ethereum-related gains are becoming noticeable.
Today it briefly recorded $110,000 again, and the reason is
The cryptocurrency market saw a small uptick on Monday after an optimistic outlook for the U.S.–EU trade agreement and reports that President Trump’s media company plans to raise $3 billion for cryptocurrency purchases.
In recent markets, Monero (XMR) has shown noticeable gains similar to coins that drew attention in 2017 like zcash. There was news that funds stolen by hackers were converted into Monero causing its price to rise, and it seems the price has continued to increase since then.
◯Widespread use of stablecoins
Big news came that major U.S. banks such as JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are jointly considering a stablecoin business.
This could mark an effort to regain supremacy of the U.S. dollar.
◯Japan is worse than Greece
The world is talking about Japan as the world’s most risk-averse asset class in Tokyo.
Shigeru Ishiba, Japan’s prime minister, compared his country’s fiscal situation to Greece, and markets reacted to one of the weakest government bond auctions in recent years.
That is a concern for U.S. investors.
The Bank of Japan has long sought to keep down government bond yields, but the failure of the 20-year auction last week hints at the end of the era of monetary easing.
- Japan’s 30-year government bond yield exceeded 3%, the highest since 1999.
- Japan’s 40-year government bond yield reached a record high of 3.6%.
A decline in demand for government bonds is driven by growing concerns about fiscal stability. This is a particularly bad sign for countries like Japan where domestic investors and the central bank hold more than 80% of government bonds.
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This is how Japanese economic deterioration is being reported in overseas news.
If interest rate rises continue, the mark-to-market losses on investors’ government bonds could widen, potentially creating a vicious circle of selling. Some capital may shift away from risk assets.
◯ Ethereum's settlement capabilities
Vitalik Buterin, co-founder of Ethereum (ETH), on the 25th mentioned that Ethereum could play a role as an alternative when centralized digital payment systems come under crisis.
Nordic countries have found that centralized cashless systems are too fragile and are rolling back the idea. Cash is indispensable as a backup.
Ethereum needs to be equipped with enough resilience and privacy to reliably serve as such a backup — CoinPost
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Regarding the growing adoption of stablecoins, trading on the Ethereum chain is said to become mainstream.
Therefore, I feel Ethereum is paying particular attention to privacy, and as stablecoins become more widespread, Ethereum may gain even more attention similar to Bitcoin today.
Regarding the technologies Ethereum will primarily adopt in the future, L2 zkSync is ahead, but the performance of currency-related ZK is not striking.
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(This article has been distributed since 2016)
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