To avoid any confusion, a gold bug is a term used in the financial sector and among economists to refer to people who are extremely bullish on gold as an investment with no connection to actual bugs or software bugs.
Now that that’s clear, gold prices soared past the $1,400 level for the first time since September 2013 and the yield on the benchmark 10-year US Treasury note fell below 2% for the first time since November 2016, after the US Federal Reserve (Fed) opened the door to a possible rate cut in the future. At the same time, the S&P 500 also rallied to an all-time high as investors flocked into risk assets.
In the crypto space, Bitcoin continued to advance towards the key $10k level. At this stage, Bitcoin bugs will be quick to point out that BTC does not need monetary policy interventions to rally, that it is an uncorrelated and non-sovereign hedge amid the growing macro uncertainty. In line with Bitcoin, Ethereum also continued to advance higher and remains on track to make a test on the $300 level and its correlation with Bitcoin (1-month) is now back towards highs of 0.9. Altcoins continue to underperform and, even though the vast majority have no real-life use cases — or functioning business models for that matter, the surge higher by BTC will ensure (albeit temporarily) that the much-needed purging of zombie alts is delayed yet again.
In another development, the Atlantis hard fork for Ethereum Classic (ETC) has been officially set to occur at block 8,772,000 on the blockchain according to the Ethereum Classic Improvement Protocol (ECIP) finalization call. As a guide, ETC is +71% year-to-date vs Ethereum +113%. As a reminder, the first stage of the Ethereum network’s transition to Ethereum 2.0 is expected to take place on January 3, 2020. Phase zero is the name of the first transition stage of the Ethereum network from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm, which would transfer the block validation function from miners to special network validators.
Also of note, one Ethereum community member is about to begin what one might call a “friendly fork” of the Ethereum blockchain. Called “Alternateth,” the new offshoot will be helmed by James Hancock, project team lead at ethereum startup ETHSignals, and will act as “a sister chain” to ethereum, validating ideas and proof-of-concepts before adoption on the main chain. The goal is to initiate the split in two months’ time. As such, Hancock sees Alternateth as a test network of sorts for speeding up development on the ethereum mainnet.
Finally, with the ongoing price rally by Bitcoin, it’s worth keeping an eye on the real elephant in the room and that is Tether. Tether’s total circulating supply is now 3.7 billion. The company is headed toward issuing a full $1 billion worth of USDT this month on top of the $1 billion worth it issued last month.
Thank you for reading,
The BeQuant’s Analytics team