First Mover: Monero Leads Privacy-Coin Rally as Bitcoin Trips on Path to $12K – CoinDesk – CoinDesk

Bitcoin (BTC) was gaining for a fourth straight day, approaching the $12,000 price threshold the cryptocurrency failed to hold in August when it last rallied past that level.

The market has started to move again, the Norwegian cryptocurrency-analysis firmArcane Researchwrote Tuesday in a report.

Intraditional markets, U.S. stock futures pointed to a higher open as investors bet U.S. lawmakers could reach agreement on a new stimulus bill.

Market moves

Privacy coins like monero (XMR) and zcash (ZEC) are suddenly in vogue despite regulators efforts to crack down on them.

These digital tokens, which come with features allowing users to obfuscate their identities and hide the amounts transferred, have surged in value this year. Moneros price has nearly tripled in 2020, and zcash has doubled. According to the data firm Messari, a group of 21 digital assets with anonymity-enhancing features has gained 142% this year, compared with bitcoins 60% gain.

The bullish market tone comes even as U.S. Internal Revenue Servicerecently hiredblockchain analytics firms Chainalysis and Integra FEC to develop transaction tracing tools for monero and other protocols used to obscure identities. Andthe U.S. Department of Justice earlier this month published anextensive reporton its enforcement framework for digital assets,citing the use of anonymity-enhancing cryptocurrenciesas a risk to anti-money-laundering programs and effortsto combat terrorismfinance.

Some cryptocurrency analysts say the jump in prices for privacy tokens might just be coincidental, a function of speculation on the part of traders keying off price-chart patterns or algorithms. But it might be that traders think privacy tokens will occupy a key spot in fast-developing, international digital-asset markets and payment systems precisely because so many users dont want to transact business under the glare of monitoring by governments, banks or exchanges.

Cryptographers and researchers are always going to be one step ahead on privacy, Riccardo Fluffypony Spagni, one of the Monero networks maintainers,told CoinDesk in an interview.

In other words, theregulatory inquiriescould turn out to be net positives for monero.

It gets visibility in the market,David Jevans, CEO of blockchain forensics firm CipherTrace, told CoinDesk in a telephone interview. People should be able to pay for day-to-day expenses without having to fear hitting regulators radar and provide identity proofs.

Top 10 "privacy coins" tracked by the cryptocurrency data firm Messari, ranked by year-to-date returns.

Bitcoin watch

Bitcoin daily chart.

The path of least resistance for bitcoin is to the higher side.

The cryptocurrency jumped more than 2% Monday, confirming a descending triangle breakout. The pattern indicates the rally from the Oct. 8 lows near $10.,500 has resumed.

Open interest in bitcoin futures listed on the Chicago Mercantile Exchange, which is considered synonymous with institutional interest, jumped over20% to a seven-week high of $624 million Monday, validating the bullish breakout on technical charts.

Further, macro factors look to be aligned in favor of the bulls. The likes of the European Central Bank and the Reserve Bank of Australia are expected to ramp up monetary stimulus over the next two months a long-term positive development for the perceived store of value assets like bitcoin and gold. Traditional markets are pricing additional inflation-boosting U.S. fiscal stimulus.

Buta number of big sell orders appear positioned around $12,000, which could make it harder for bulls to engineer a quick move past that mark.

As such, the focus has shifted to resistance located at $12,476 (August high). On the downside, the Oct. 16 low of $11,200 is the level to target for the bears.

Token watch

Filecoin (FIL):Decentralized file-storage protocolreleases token rewards in advance after crypto miners rebel against unfair economic model.

Binance (BNB):Worlds largest cryptocurrencyburns 1.1% of supply of its BNB exchange tokens, fourth-highest ever.

Uniswap (UNI):Vote to reduce quorumfails to garner quorum.

Curve DAO (CRV):Decentralized stablecoin-swapping platforms tokens hitfresh all-time lows.

What's hot

Bloomberg analyst Mike McGlone says bitcoin has a history of adding zeroes, sees tethers market capitalization eclipsing ethers next year. (Bloomberg Intelligence)

Corporation-focused R3s Corda Network gets new regulation-friendly digital currency, XDC, calling it a next-generation bitcoin or XRP. (CoinDesk)

Federal Reserve Chair Powell says its more important to get digital dollar right than to be first. (CoinDesk)

A Puerto Rico-based bank founded by gold bug and long-timebitcoinskeptic Peter Schiff is under investigation over suspicions it facilitated tax evasion for high-risk clients. (CoinDesk)

Analogs

The latest on the economy and traditional finance

European investors rattled as number ofnew daily coronavirus reaches record high. (CNBC)

International money managers bet on Biden victory in U.S. presidential election to spur gains on non-U.S. assets, weaken dollar. (Reuters)

U.S. investment bank behemoth Goldman Sachs reaches deal with U.S. Department of Justice to pay more than $2B for role in Malaysia 1MDB scandal. (Bloomberg)

Investing legend Bill Miller calls Federal Reserves inflation-averaging policy the most significant change in U.S. monetary policy in 40 years. (CNBC)

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First Mover: Monero Leads Privacy-Coin Rally as Bitcoin Trips on Path to $12K - CoinDesk - CoinDesk