Views from the Hehmeyer Trading Desk — Week of September 21, 2020

Hehmeyer
3 min readSep 25, 2020

Over the past week, it appears sentiment may have shifted in favor of the bulls as Bitcoin flirts with $11,000. Bitcoin, trading above its 10-day and 50-day moving averages, has performed poorly compared to equities for the month of September. Traders are keeping an eye on the dollar index (DXY), which is inversely correlated to Bitcoin and has broken above its 92.00–94.00 two-month long range. With the dollar strengthening, will Bitcoin fall below $10,000?

Stablecoins have exceeded $20 billion - an indication of the strong investor demand to hedge their risk. Stablecoins can be purchased with U.S. dollars or other currencies and moved to exchanges for trading Bitcoin and other cryptocurrencies. According to Glassnode’s weekly report, the increased supply of stablecoin caused higher liquidity in cryptocurrency trading last week. Growing interest in stablecoins might also be explained by the decentralized finance (DeFi) users receiving high yields from various DeFi platforms such as Uniswap, Curve, and Aave.

Meanwhile, Visa-owned fintech enabler Plaid is working with at least two DeFi start-ups. According to Coindesk, Keith Grose, Plaid’s head of UK and former Google wallet builder, has a vision for how crypto (and DeFi) will evolve alongside the fintech revolution his company is said to be driving.

The firm is currently working with Dharma, the Uniswap-friendly DeFi wallet with early backing from Coinbase and others. However, systems that are completely open to anyone without KYC/AML, and where participant’s identities are essentially hidden behind a wallet address, present problems in today’s digitally connected world.

Key Crypto Headlines

Visa-owned Plaid Has a Hidden Passion for DeFi

“Visa-owned fintech enabler Plaid, which connects traditional bank accounts to thousands of digital platforms, including crypto exchange Coinbase, is quietly working with at least two decentralized finance (DeFi) startups.”

Major Indian Exchange Proposes New Regulatory Framework to Avoid Crypto Ban

Major Indian cryptocurrency exchange BuyUCoin has developed a framework to regulate cryptocurrency in India that it claims has the support of “all the Indian cryptocurrency stakeholders.’”

China State Media Make Rare Reports Calling Crypto 2020’s Best Performing Asset

“Several Chinese state-owned media have made coordinated reports describing cryptocurrencies as the year’s top performing investment.”

Up 5%: Bitcoin Sees Biggest Single-Day Price Gain for 2 Months

“Bitcoin (BTC) is taking a breather after Thursday’s sharp rally that took prices back above a widely tracked technical line.”

CFTC-Registered Crypto Exchanges? A New Bill Proposes a Voluntary Path for That

Congressman Michael Conaway has introduced a new bill that, if passed, would offer a way for the Commodity Futures Trading Commission (CFTC) to regulate U.S.-based crypto exchanges.”

Hehmeyer Happenings

This week, Managing Director David Nuelle chatted with 3Points to talk all-things crypto: where the crypto world is currently, why Hehmeyer made the transition to focus on it full time, and why now is such an important time for the industry. Read more about their conversation here!

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