Market wrap: Bitcoin rises as central bank keeps interest rates low

Bitcoin value continued to surge to an all-time high of nearly $66,000 on Monday. Cryptocurrencies are up about 5% in the last 24 hours, indicating a surge in rising sentiment. Stocks and cryptocurrencies rose as central banks in Europe and the United States were in no rush to raise interest rates. Despite plans to loosen monetary incentives, market participants typically see low interest rates as support for assets perceived as risky.

However, with the seasonal strength of cryptocurrencies and weak stocks, the year ahead could be tough for risk assets. "The Federal Reserve has started tightening its bond-buying program and could tighten further in the coming months, possibly leading to a small sell-off," said Susanna Streetter, senior market and investment analyst at Hargreaves Lansdown, a UK financial institution. "What is particularly worrying is that many investors fear missing out on rapid growth and borrow money to invest in highly risky strategies," Streeter wrote.

Ether option volume increased

Despite lower trading volumes in the spot market, ether options volume rose to its highest level since May. The increase in trading activity in the options market coincided with ETH's breakthrough to an all-time high of around $4,700. “Option volumes typically increase when the market becomes volatile and traders place targeted bets, as option buyers have the potential to make large profits while limiting their losses (due to non-linear option payouts),” wrote cryptocurrency company Post.

"Despite low volatility, options volume recently hit its highest level since May," wrote Kaiko.

Overview of altcoins

• Shiba Inu finds a five-week earnings trend: Popular meme token Shiba Inu (SHIB) recently set a new record, with speculative flames in the token reaching unprecedented levels. The number of addresses that acquired cryptocurrency within 20% of its peak value has increased sixfold in the eight days to November 2, making 12% of the total number of addresses non-zero. The last time such a jump occurred was in May, paving the way for 90 percent of token crashes.
• Sequoia invests in Parallel DeFi project: Sequoia Capital supports a seven-figure financing round for Parallel decentralized financial lending platform. Parallel, based on the Polkadot blockchain protocol, estimates $250 million in funding. At the same time, crypto networks are being set up which have not yet fully started. This round comes less than two weeks after Sequoia pledged to restructure its investment book, in part to prosecute crypto startups more aggressively, as other venture capital firm Andreessen Horowitz did.
• The banking industry is likely to capitalize on demand for stable coin deposits: Sheena Shah, leading cryptocurrency strategist at Morgan Stanley, said in a report that the banking industry will likely try to capitalize on demand for stable coin deposits on an exponential backdrop. One reason is that the coin provides access to interest rates on crypto wallets and decentralized funding. Crypto lenders are offering more than 5% interest on some coins, prompting regulators and governments to respond, the report said. Shah added that cryptocurrencies are traded "like risky assets".