Crypto Market Analysis: December 6, 2021

The weekend saw a flash crash in bitcoin and ether, which sent cryptoassets values plummeting by around 20%. Although prices have started to recover, both cryptos trade well below their levels at the week’s end.

Bitcoin traded in the $57,000 to $57,000 range when it began trading last week. There was some movement over the course of the week but nothing extraordinary. The cryptoasset fell precipitously on Friday, however. BTC declined to a low of $45,412 in a matter of hours – a near 20% collapse.

The flash crash also affected Ether. Having traded up toward $4,700 midweek ETH began to fall in trading on Friday from around $4,600 to a low of $3,652 – a fall of over 20%.

Prices have rebounded modestly since then and both cryptoassets are now trading around $47,900. BTC currently trades around $47.900, while ETH trades around $4,000.

While speculation has run rampant about what led to the flash crash some analysts suggest that the reason was the extinguishment of leveraged position. Other evidence meanwhile points to significant increased activity with investors moving cryptoassets from wallets to exchanges – making reaction to price movement more precipitous when it comes.

Omicron’s investment market fear seems to also be at play.

Canada’s Bitcoin Spot ETF Launched

Fidelity Investments, a major asset manager, has a Bitcoin Spot ETF available in Canada.

The ETF – named the Fidelity Advantage Bitcoin ETF invests directly in bitcoin or through derivative instruments. At least 98% of the ETF’s holdings will be stored in cold wallets.

The ticker FBTC is used to list the fund on Toronto’s stock exchange. Investors will pay 0.4% in management fees. Customers have the choice of either investing through Canadian dollars or US dollars.

Canada is an attractive destination for crypto ETFs, with over 20 options available to Canadian investors. Fidelity’s offering however is unique among crypto ETFs in offering physical holdings of bitcoin rather than trading on futures.

MercadoLibre to accept cryptoassets

Market leader in Latin America, MercadoLibre allows Brazilian customers to buy and sell products using cryptoassets.

According to the company, users from Brazil will now be able buy, hold, and sell Bitcoin, Ethereum, and Pax Dollar (a U.S. Dollar-based stablecoin).

Customers will be able to use their cryptoassets to make transactions on products that are priced in fiat currencies by combining two of the most important cryptoassets with a stablecoin from MercadoPago (the payments platform of MercadoLibre).

MercadoPago is authorised by Brazil’s central bank, making it easier for the firm to begin its crypto operations there. MercadoLibre operates more broadly in Central and South American countries. This suggests a potential client base of many millions for crypto payments as the company expands.

In the wake of Dorsey tweet departure, Square rebrands

Payments firm Square has announced it is rebranding to ‘Block’, days after its chief executive Jack Dorsey stepped down as head of Twitter.

In its announcement, the company stated that the new name has many associations. One of these was Blockchain technology being used in certain of its projects.

Square Crypto, an initiative separate to the firm that promotes the use bitcoin is changing its name from Spiral.

The Square brand won’t be disappearing though – Square remains the name of the firm’s seller business, which is among a stable of brands that now also includes Cash App, TIDAL and TBD54566975.

Jack Dorsey abruptly resigned from Twitter last Wednesday. Many speculated that he was moving to crypto and blockchain projects with Block, his newly rebranded company.

Meta crypto head departs firm

The head of Meta’s (formerly Facebook) crypto arm is departing the firm as the launch of stablecoin Diem remains in doubt.

David Marcus announced he would be departing the firm after seven years, having worked on Meta’s financial offering since May 2018, when the company’s Libra crypto project was first announced.

Later, the project evolved into Novi, a payment wallet with the cryptocurrencyasset Diem. Although the crypto wallet was launched in 2016, Diem’s launch is still unknown.

Meta was faced with significant obstacles when launching its crypto products. Commenting on the departure, Meta chief executive Mark Zuckerberg commented on Marcus’s post: “We wouldn’t have taken such a big swing at Diem without your leadership, and I’m grateful you’ve made Meta a place where we make those big bets.”


This communication is not intended to be considered investment advice or personal recommendations. It should also not be construed as an offer or solicitation for any financial instrument. The material was prepared with no regard for any specific investment goals or financial situations and it has not met the regulatory and legal requirements that promote independent research. References to the performance of financial instruments, indexes, or packaged investment products in the past are not indicative of future results and should be avoided.

The contents of this report serve only informational purposes and do not include financial advice. eToro cannot guarantee the accuracy and completeness of this publication. This report was created using public information.

Cryptoassets can be volatile and subject to rapid fluctuations. They are therefore not suitable for everyone. Trading cryptoassets via CFDs isn’t regulated. Therefore, it is not subject to any EU regulation. Your capital may be at risk.


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