Crypto Weekly Outlook: August 23, 2021
Infrastructure Bill Passage Update: The US House of Representatives will return to session today. House Speaker Pelosi recently set an October 1st target date for the passage of the bipartisan infrastructure bill as well as the $3.5T budget resolution. The infrastructure bill contains the controversial crypto tax and reporting provisions that could significantly hamper the crypto industry. Pelosi warned her Democratic colleagues against delaying the vote as some Democratic centrists have bucked her stated plan of passing both pieces of legislation together. The House of Representatives has a very slight Democratic majority and New Jersey Democratic Representative Gottheimer and his faction of nine moderates hold enough votes to defeat Pelosi’s measure. This moderate faction wants the infrastructure bill passed first as the budget resolution package would likely not be ready for months. More Democratic intra-party drama should be expected as neither side will likely compromise anytime soon.
Bitcoin broke through the super important $50K resistance this morning for the first time since mid May. BTC’s market cap now stands at just under $950B. The price already breached the $50,300 resistance level and next up is the $50,500 resistance level. Support is still strong at the $49,750 level if the current bullishness fades. If the price consolidates above the $50K level, it would be a major win for the bitcoiners as it slowly marches back to its previous high in the $60K’s. Bitcoin exchange volume continues to decline and Paypal recently announced their support of purchasing Bitcoin in the U.K.- possible reasons for the bullish price action.
Ethereum also reached a new 3 month high this morning, breaking above the $3,300 level. Since Ethereum’s London Hard Fork, more than 73,500 ether have been burned, equating to $240M. The ETH 2.0 staking platform has also seen approximately 200,00 additional ETH added with total staked now sitting at 7,092,551 ETH, worth $23.5B. The platform also saw a weekly increase of 5,495 new validators with the total now at 214, 490 validators. The circulating supply of Ether seems to be getting tighter. Glassnode recently reported that “exchange ETH balances have now declined to reach an all-time low of 13% of the circulating supply this week, equivalent to 15.3M ETH”, a very bullish sign indicating that the ether is being staked, put in DeFi, or into private wallets.