Research Firm Predicts Bitcoin Will Hit $200K in Second Half of 2022, ETH to Reach $12K

This week in a note to investors, Fsinsight, a Fundstrat company, said bitcoin could reach $200,000 during the second half of the year. In the investor’s note, Fsinsight’s head of digital asset strategy, Sean Farrell, said the parabolic growth would be due to “legacy market capital entering the fold.”

Fsinsight: ‘Bitcoin to Tap $200K in H2 2022, Ethereum Will Jump Close to 400%’

While last year’s $100K predictions went silent during the last month of 2021, bitcoin (BTC) price predictions are starting to appear again this year. According to the Fundstrat firm Fsinsight, BTC could increase by almost 500% from the current price point to around $200K per unit.

The BTC price prediction stems from Fsinsight and the firm’s head of digital asset strategy, Sean Farrell. Both Fsinsight and Fundstrat are bullish about the upside potential of crypto assets as Fundstrat Global Advisors’ head of research recently insisted bitcoin still has “exponential growth ahead” of it.

Fsinsight’s and Farrell’s investor’s note says times are different now that major businesses and “legacy market capital [is] entering the fold.” “This is much different from 2018 where tech stocks were still doing well but bitcoin sold off along with the rest of the crypto market cap,” Farrell explained. Meanwhile, all eyes are on the Federal Reserve’s meeting in March as Fed chair Jerome Powell has hinted at raising benchmark interest rates.

Fsinsight’s prediction notes that U.S. policymakers could bring some downside to the leading crypto asset’s price growth. “All assets can sell off and drop another 50% if the Fed hikes 4% tomorrow or next month,” Farrell remarked in the note. “But right now, as things stand, the upside to both bitcoin and [ethereum] is much larger than the downside

Meanwhile, digital currency values have increased during the last week as bitcoin (BTC) has climbed over 12% and ethereum (ETH) jumped more than 13% over the last seven days. Fsinsight’s prediction also notes that ethereum has the potential to swell in USD value during the last half of 2022. Fsinsight’s investor’s note predicts ETH could climb close to 400% to around $12K per unit.

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What do you think about Fsinsight’s prediction about bitcoin and ethereum skyrocketing to new highs in H2 2022? Let us know what you think about this subject in the comments section below.

TA: Bitcoin Bulls Keeps Pushing, Why Rally Isn’t Over Yet

Bitcoin settled above the $40,000 level against the US Dollar. BTC is now rising and could accelerate further above the $42,650 resistance zone.

• Bitcoin started a strong increase above the $40,000 resistance zone.
• The price is trading well above $40,000 and the 100 hourly simple moving average.
• There is a key bullish trend line forming with support near $41,600 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could continue to rise if it clears the $42,650 resistance zone in the near term.

Bitcoin Price Gains Bullish Momentum

Bitcoin price started a major increase after there was a close above the $38,500 level. BTC gained bullish momentum and was able to surpass the $40,000 zone and the 100 hourly simple moving average.

The upward move was such that the price even rallied above the $41,200 resistance. It traded as high as $42,694 and is currently consolidating gains. It seems like the price is preparing for the next move and trading well above the 100 hourly simple moving ave

Besides, there is key bullish trend line forming with support near $41,600 on the hourly chart of the BTC/USD pair. The pair is also trading well above the 23.6% Fib retracement level of the upward move from the $37,324 swing low to $42,694 high.

An immediate resistance is near the $42,650 level. The next major resistance is near the $43,200 zone. A clear upside break above the $43,200 resistance level could spark another increase. In the stated case, the price could even test the $45,000 resistance zone.

Dips Limited in BTC?

If bitcoin fails to start a fresh increase above $42,650, it could a downside correction. An immediate support on the downside is near the $41,600 zone. The first major support is seen near the $40,000 zone.

It is near the 50% Fib retracement level of the upward move from the $37,324 swing low to $42,694 high. Any more losses might call for a move towards the $39,500 support zone and the 100 hourly simple moving average. If the bulls fail to protect $39,500, there could be a sharp decline in the near term.

Hourly MACD – The MACD is now gaining momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $41,600, followed by $40,000.

Major Resistance Levels – $42,650, $43,200 and $45,000.

Bitcoin Beach wallet creator Galoy aims to replicate El Salvador project

Galoy, the startup that created the open-source, Lightning Network-compatible Bitcoin Beach wallet, recently completed a $3 million seed round to ramp up its operations and help bring its Bitcoin banking platform to more communities, businesses and governments. 

Miami-based Galoy, launched Bitcoin Beach as a proof-of-concept in the El Salvador surf town of El Zonte in October 2020. The wallet supports the local Bitcoin Beach project there, which has sought to create a bitcoin-based economy. The wallet has more than 6,000 users, according to Galoy’s website.

Bitcoin Beach is different than El Salvador’s state-backed wallet Chivo, which launched in September 2021, after a law making Bitcoin legal tender in the country went into force. Chivo is not open source.

Craft Ventures, Kingsway Capital, Trammell Venture Partners and Balaji Srinivasan participated in Galoy’s seed round, which was announced on December 15. Fulgur Ventures, Bitcoiner Ventures, Vijay Boyapati and Brad Mills also participated.

Galoy’s marketing director Andrew Begin told The Block in an interview that the company plans to use the funding to bring Galoy's open-source platform to a wider audience. He noted two, newer Bitcoin-based community projects in the region utilizing the wallet: Bitcoin Jungle in Costa Rica, which used Galoy’s open-source code to create their own wallet, and Bitcoin Lake in Guatemala is using the Bitcoin Beach wallet itself.

“We’re really scaling up from what started out as a proof-of-concept," said Begin. "The Bitcoin Beach wallet is being turned into its own company with local leadership,” he said. He did not name any specific companies or governments interested in using the wallet.

According to a press release from Galoy, its technology is designed to enable “any community, company or government to offer banking services using Bitcoin and Lightning.” The company says its open-source platform includes a backend API, point-of-sale apps, mobile wallets, compliance tools and administrative controls. It also offers what it calls "Banking-as-a-Service."

“Galoy is not in the business of being the bank — we want to provide the software, the infrastructure for others to repeat what we saw happen in El Zonte in El Salvador,” Begin continued. “So we’ll be scaling operations, team development, in order to really bring the platform to a broader audience to the right places around the world.”

Fed releases new research on risk and promise of stablecoins

The Federal Reserve released a new research report on stablecoins today, noting the risks and potential of the emerging digital assets.

In the report, researchers Gordon Liao and John Caramichael examine the current stablecoin ecosystem and the impact of stablecoins on credit intermediation and the central bank balance sheet. The paper identifies potential threats to the stability of US Federal Reserve monetary policy and examine ways they could be mitigated. 

Safe haven assets

The report found that dollar-pegged stablecoins have exhibited "safe asset qualities," compared to other crypto assets. Their price occasionally rises above their peg during market distress events, which leads to more issuance, compared to other digital assets that plummet. Essentially, when prices of cryptos like bitcoin decline, traders seek safety in stablecoins.

"These episodes demonstrate the potential for stablecoins to serve as a digital safe haven during market distress," said the report.

But, a run, or mass redemption of safe haven assets could severely disrupt markets. The authors recommend audits and liquidity requirements to mitigate the fallout of potential runs. Tether, the largest stablecoin, has historically avoided offering a full audit, according to regulators. 

"We think this type of instability is addressable with proper institutional and/or regulatory guardrails such as transparent financial audits and adequate requirements on the liquidity and quality of stablecoin reserves," they said.

Systems for stability

The Fed research dives deeper on credit intermediation, essentially how broad adoption of stablecoins could impact balance sheets of financial institutions and how that would affect the interactions between consumers and banks. It compares stablecoin narrow banking, in which physical cash is tokenized and backed by full reserves at the central bank, to two-tiered intermediation, in which stablecoins are backed by deposits issuers hold at commercial banks.

"Among the various scenarios, a two-tiered banking system can support both stablecoin issuance and maintain traditional forms of credit creation," said the report. "In contrast, a narrow-bank stablecoin framework can bring the most stability but at the potential cost of credit disintermediation."

Researchers found a two-tiered system creates less risk to US financial stability. A narrow bank approach guarantees the stablecoin peg remains unmoved, but financial distress could create a situation in which large swaths of people move their money from commercial bank deposits to safe haven stablecoins, which puts the system at risk. 

"Though this credit disruption effect could be mitigated by limits on stablecoin holdings and differential reserve interest rates, the overall structure of the narrow bank approach to stablecoin reserves is potentially destabilizing for the banking system," said the report. "Additionally, the narrow bank approach could lead to an expansion of the central bank’s balance sheet in order to accommodate the demand for reserve balances from stablecoin issuers."

As for the future, the Fed paper noted that stablecoins could see further use cases outside of trading. 

"In conclusion, the current usage of stablecoins is primarily driven by cryptocurrency trading, limited peer-to-peer payments, and DeFi," the paper noted. "Looking forward, stablecoins may see further growth through their facilitation of more inclusive payments and financial systems."

The wider conversation

Stablecoins have been on the mind of regulators in recent weeks. Both chambers of Congress have hearings scheduled for February to discuss the President’s Working Group on Financial Markets Report on Stablecoins. That report came out in November and urged Congress to limit stablecoin issuance to insured depository institutions.

During last year's House hearing on stablecoins, lawmakers heard from a number of crypto CEOs, including stablecoin issuer Circle's Jeremy Allaire and Bitfury CEO Brian Brooks, who allowed banks to hold stablecoin reserves during his time as Acting Comptroller of the Currency. 

Correction: A previous version of this article attributed the witness list to the Feb. 8 hearing. No witness list has yet been posted. We regret the error.

FTX Raises $400 Million in Series C Fundraise, Firm Reaches $32 Billion Valuation

Following the company’s subsidiary FTX US raising funds in its first Series A financing round, parent company FTX Trading Ltd. has announced it has secured $400 million in a Series C fundraise. The crypto company’s latest financing round brings the firm’s post-money valuation to $32 billion.

FTX Series C Fundraise Brings Firm’s Valuation to $32 Billion

FTX Trading Ltd. has raised $400 million in a Series C fundraising round according to an announcement on Monday. The fundraise follows the firm’s Series B at the end of July last year and Series B-1 toward the end of October 2021. The latest financing saw participation from Temasek, Paradigm, Ontario Teachers’ Pension Plan Board, Steadview Capital, Tiger Global, Insight Partners, NEA, IVP, Softbank Vision Fund 2, and Lightspeed Venture Partners.

“Our Series C financing round represents a milestone achievement for FTX, as we raised close to $2 billion in six months. This round will support our continued mission of delivering innovative products and services to the marketplace as well as expanding our global reach with additional licenses around the world,” FTX CEO Sam Bankman-Fried said in a statement sent to Bitcoin.com News. Bankman-Fried added:

“With the ongoing support from our dedicated investors and userbase, FTX will look to continue interacting with regulators to facilitate access to digital assets in a safe and compliant manner. We look forward to working alongside our investors to achieve our mission and continue our tremendous growth throughout 2022 and beyond.”

The capital fundraise brings the crypto company’s valuation to $32 billion which makes it one of the largest digital asset firms in the world in terms of capitalization. Additionally, the company’s exchange based in the United States, FTX US, raised $400 million in its first capital fundraise.

FTX says the company has seen immense growth since its Series B-1 fundraise and notes that the company’s “user base growing 60% and its average daily trading volume increased 40%, reaching approximately $14 billion in daily volume.” In October, the firm’s crypto trading volume propelled the exchange to becoming the third-largest cryptocurrency exchange worldwide.

What do you think about FTX Trading Ltd. raising $400 million in a Series C fundraise? Let us know what you think about this subject in the comments section below.