Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 03 January 2018 at 14:21 GMT

Crypto Update: Central banks join the fray as market diversifies

Cryptocurrency Analyst / Saxo Bank
  • Cryptocurrency market continues to expand
  • Central banks mulling crypto options
  • Futures launch to be followed by new ETFs

Bank of England
Central banks like the Bank of England are presently mulling potential cryptocurrency ventures as the market continues to expand. Photo: Shutterstock

By Jacob Pouncey

Since December 19, Bitcoin (BTC) fell over 35 % to recover 30%. Ethereum (ETH) also fell about 40%, according to coinmarketcap, to recover all the losses and break new all-time highs. Since the last weekly update, ETH lost its position as second most valuable cryptocurrency by market cap to Ripple (XRP).
Bitcoin’s market dominance, measured by BTC’s market cap compared to the entire crypto market, fell to an historical low of 37% down from BTC’s previous dominance of 67% less than a month ago. This represents a greater interest in the crypto market as a whole, which is valued at $700 billion

Thirty-six crypto instruments have market caps over $1 billion, and 56 are valued at over $500 million. An increase in market cap as a whole is good for BTC and ETH regardless of their respective market dominance since all of the crypto market trades against Bitcoin or Ethereum.

Peter Thiel bets huge on Bitcoin while others retreat

The price of Bitcoin rose after a Wall Street Journal stated that Thiel’s Founders Fund holds hundreds of millions of USD worth of BTC after an initial $15-20 million investment over the last couple of years. Thiel was quoted as early as October stating that he believes people are “underestimating” BTC, and that there is “great potential left.” 

On the other hand, Mike Novogratz, who was setting up a $500 million crypto hedge fund postponed the fund as he believed the market was not favourable for new investors at the current price levels.

National cryptocurrencies are planned to arrive this year

The Bank of England is playing with the idea of issuing its own crypto. Venezuela has issued detailed plans to release the Petro, a cryptocurrency backed by 5.3 billion barrels of oil. Russia is set to release its own crypto-ruble to avoid Western sanctions. Russia has even suggested creating a transnational cryptocurrency for the members of BRIC countries.

Wealth will continue to be generated or destroyed

Japan could see a 0.3 % increase in GDP thanks to the crypto market, according to Nomura. Last year over $6 billion was raised via ICOs, eclipsing the amount of VC funding, with $1 billion being raised in December 2017 alone. This trend is likely to continue barring heavy regulations. 

The world has at least 35 Bitcoin billionaires and as many as 200, based on news from BitInfoCharts. With futures in place, several ETFs are planned to emerge for crypto instruments this year.
— Edited by Michael McKenna

Jacob Pouncey is a cryptocurrency analyst at Saxo Bank 


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail