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Bigger than Wall Street

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It’s amazing how fast the future comes at you.

Just a few years ago we were theorizing about how the crypto market may come to replace the Foreign Exchange market. Earlier this week, business insider has reported that the volumes in the cryptomarket are now comparable to those of the New York Stock Exchange.

As we can see from the data, a typical day at the NYSE produces an average turnover of $41 Billion. Some days are more than $100 Billion and some days less than $25 Billion.

The crypto market has advanced exponentially this year. On January 1st the total turnover was about $120 Million but by now they’re consistently surpassing $30 Billion.

However, as the author points out, there’s still a long way to go to reach the $5 Trillion daily turnover that is seen in the global currency markets. After seeing what’s happened in 2017, it’s already easy to imagine that this may somehow be possible in the year ahead.

@MatiGreenspan
eToro, Senior Market Analyst

Traditional Markets

Wall Street came back from their long weekend with a bit of a hangover. It’s quite common for large hedge funds to close out their positions and realize some of their profits by the end of the year. It looks good on their reports.

The main target was Apple, which fell about 2.5%. After a 53% gain in share price this year, the retracement looks pretty normal and I wouldn’t doubt that many investors will see this as a discount. Though the losses were not staggering, it did manage to bring down the major indices, which ended at a bit of a loss.

Unfortunately, it seems that the Asian markets have detected the sour sentiment from New York. Though the Nikkei is only slightly down, the China50 dropped 2.5% today. Contrarywise, the markets have just opened in Europe and though volumes are likely to be weak during the holiday season, the boards are all green for the Dax and his pals.

Commodities Jump

Gold and Oil seem to be benefiting from the low liquidity holiday season trading. Both have made significant gains the last few days.

Gold actually saw a drop at the beginning of the month and so now is only recovering from that. Oil on the other hand, has seen a shift in trend over the last few months and has now touched $60 a barrel for the first time since mid-2015.

Many analysts are pointing to a pipeline explosion in Libya as the cause for the price surge yesterday. To me, that’s a hard story to swallow really. It’s really difficult to see such an occurrence as having much of an impact on the long term balance between supply and demand of this global market.

More likely, the news of the explosion caused traders to focus their energy on crude oil. That together with low liquidity during the holidays and a weaker US Dollar gives us a more complete picture.

Ripple Explosion

Though Bitcoin regained a lot of its composure yesterday, it’s Ripple that should be making the headlines.

The Ripple network is a bit different from most other blockchains in that Ripple is a private company and their protocol is maintained as such. So it’s not completely open source like the rest but it still is included in the overall asset class we call cryptocurrencies since it does make use of the distributed ledger technology.

Ripple’s aim is to replace the swift system that is currently being used to send money from one bank to another. If you’ve ever sent an international wire transfer, you know that it usually takes between two and five business days and costs about $25. Ripple can do this in seconds for pennies.

Every transaction that is sent through the Ripple network burns a small amount of XRP tokens, as a payment for the transfer. Those tokens then disappear and can never be used again. This means that the overall economics of the coin are super deflationary. Meaning, over time the supply dwindles causing the price to rise.

However, to counteract this Ripple has started with a monumental amount of 100 Billion tokens. Though they’ve recently locked up more than half of this supply in a long term escrow account, there is still a current circulation of almost 39 Billion XRPs.

The price gains have been intense. At the start of the year each token was a fraction of a penny and in December alone it’s come from 23 cents to $1.17 this morning for a total gain of 408%.

I’ve already heard several people tell me that it’s actually cheap at around $1 but we do really need to think about the total supply in the market. Compared to bitcoin’s current supply of about 16 million and Ethereum’s 96 Million.

In the end of the day, the value will be determined by the banks. The more financial institutions use it to set up payment gateways the more they will need XRPs to facilitate the transactions.

However, in the long term, there may actually be a real cap on the amount this toke can grow. The more expensive the tokens are the more the transactions will cost. For now, it’s extremely cheap to send a Ripple transfer but at some point, if XRP gets more expensive it may be seen as less viable.

Sorry for getting the report out a bit late today. Wishing you an amazing day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 128 rated postsSenior Market Analyst at Etoro.com.




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  1. gideon104

    December 27, 2017 at 1:41 pm

    Are you sure about circulating supply there? Coinmarketcap shows 38,739,144,847 XRP. Based on this I think that the total was probably 100 Billion, not Trillion.

    Fairly confident this is an error, but I could be wrong?

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Analysis

Stocks Pull Back From Highs as Pound Plunges

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After yesterday’s record-breaking session, US stocks once again broadly opened at all-time highs, even as the momentum of the global rally waned. Chinese stocks kick-started the day by extending their relief rally off their 4-year lows and Europe also ticked higher, although the major indices couldn’t hold on to their early gains. Since the US open stocks are drifting lower, but with no major events scheduled for today, a calm afternoon session is likely on Wall Street.

GBP/USD, 4-Hour Chart Analysis

The slight weakness came on the heels of the weaker than expected European flash Manufacturing and Services PMIs, while Theresa May’s Brexit ultimatum also weighed on local equities. The Great British Pound fell sharply on the news too, erasing yesterday’s lofty gains and briefly getting close to the 1.30 level, as the Dollar rallied across the board.

NASDAQ 100 Futures, 4-Hour Chart Analysis

The Nasdaq has been lagging the Dow and the S&P 500 from a short-term perspective and the tech benchmark is once again leading the way lower today. The worse than expected guidance by Micron (MU) from yesterday is weighing on the segment and the market-leading tech giants are also weaker than average.

10-year US Treasury Yield, 4-Hour Chart Analysis

All eyes are still on the bond market, as Treasury yields are near multi-year highs concerning almost all maturities, and with the 10-year yield being very close to signal a trend change in the multi-decade structural downtrend.

While next week’s rate hike by the Fed is near certain, the outlook for the next year will likely be crucial, and given the positive US economic trends and the trade wars’ contained impact, the market’s rate hike expectations are rising across the curve.

Futures and Option Expiries Lead to Choppy Trading

Today is an important day for futures and options traders, as the quarterly contracts are expiring across asset classes, and that has a huge effect on stock and commodity markets as well, with high volumes and volatile trading especially around the key strike prices. Strong trends are rare on these sessions and day-traders should be cautious of sudden volatile spikes in even the most traded assets.

Copper, 4-Hour Chart Analysis

Commodities already experienced volatile swings throughout the day, with especially gold being tossed around the $1200 level that has been in the center of attention in the past weeks. Shorts in copper have been squeezed heavily before the end of the week, with the crucial metal surging above key support with the rally in Chinese stocks, while WTI crude oil retreated from a more than two-month high above the $71 per barrel level as the Dollar rallied.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 350 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Market Overview

Rapid Delays Bring a Blessing

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Hi Everyone,

For what seems like the first time in forever, crypto prices are on the rise again.

There was some excitement on social media yesterday as the SEC took the expected step to delay the decision on a bitcoin backed ETF.

The decision to delay is actually coming 10 days ahead of schedule, which moves the entire timeframe forward a bit. The next deadline is December 29th, right between Christmas and New Year, which means if they delay again before then, we could be looking at a final decision date of mid-February rather than the second week of March, as was previously expected.

Cryptotrading on Wall Street now seems one giant step closer.

In other news, Brazil’s largest broker has finally buckled to the pressure and will now be offering crypto-assets. This comes as around 3 million Brazilians are holding Bitcoin, compared to just 600,000 who invest in stocks.

Cryptocurrencies are rapidly proving their place as the preferred asset class of the millennial generation.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Enter Weaker Dollar
  • Dash on Weed
  • XRP Flys with the Crows

Please note: All data, figures & graphs are valid as of September 21st. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The emerging market currency rout that began with the Turkish Lira in early August seems to have lost moment. The US Dollar now seems to have lost momentum.

The trend comes as yields on the US treasury bonds continue to grind higher. Here we can see the US 10-year yield over the last month. Remember, higher yields were largely considered to be the catalyst for the market dip in early February.

However, the above dynamic doesn’t seem to be hampering the stocks at all. Both the Dow Jones and the SPX500 have marked fresh all-time highs yesterday and Asian markets are following their lead this morning.

The Dollar weakness is also allowing some much-needed breathing room for the precious metals, which have been battered badly over the last few weeks.

Here we can see the Platinum and Silver over the last six months suffering from Dollar strength and the comeback over the last few days.

Digital Cash for Marijuana

In light of the recent movements in cannabis-related stocks and the launch of the new eToro @CannabisCare CopyPortfolio, we’ve been talking a lot about the budding marijuana industry and the possible investment opportunities.

Here we can see a map of all the states in the USA and their legalization status. As we can see, the map is now quite green but there’s still a lot more room for growth if other states join the trend and decide to legalize it.

The issue is the Cannabis has yet to be legalized at the federal level in the US making it difficult for vendors and entrepreneurs to open a bank account. Therefore, despite its new legal status in many places the industry is still heavily reliant on cash.

Enter Dash…

Obviously, cash has its pitfalls and no self-respecting businessman really wants to be walking around with bundles of bills. This is why the Dash foundation in partnership with the Alt Thirty Six payment processor aim to make Dash Cryptocurrency the go-to medium of exchange for the cannabis industry.

We know that Dash has been making strong headway in places like Venezuela. To me, it just seems like this reigning crypto industry leader has their hands in several markets with plenty room for growth.

XRP & Everything After

The recent crypto rally can very much be seen in the context of the weakening Dollar trend highlighted above. As we’ve been saying, the reverse correlation between the USD and the crypto market has been striking over the last few months, so it’s no surprise to the latest rally in crypto assets coming on the back of a weaker Greenback.

In this chart, we can see the US Dollar index in purple and Bitcoin in blue.

The surge in XRP however, cannot be explained by this phenomenon though. A surge of nearly 80% in less than four days needs to have a deeper explanation.

Given the nature of these rapid movements, my gut tells me these fluctuations are more than just speculation. Nevertheless, the main chatter surrounding this move is all about the launch of the xRapid software next month, which aims to use XRP for international settlements. As well as Ripple’s Swell Conference on October 1st and 2nd, which will host Bill Clinton as the keynote speaker and bring in the Counting Crows for entertainment.

Wishing you an amazing weekend ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

Market Update: S&P 500 Joins Dow in Record Territory; XRP Leads Cryptocurrencies to Stability

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Bull pattern

U.S. stocks advanced sharply on Thursday, as pro-growth optimism helped investors set aside fears of a prolonged trade between the world’s biggest superpowers. Meanwhile, the cryptocurrency market held its ground for a second consecutive day as XRP extended its rally following a series of business announcements earlier in the week.

Stocks Notch New Highs

All of Wall Street’s major indexes finished in positive territory, with the Dow Jones Industrial Average notching its second straight record high. The blue-chip average gained 251.22 points, or 1%, to 26,656.98. Nearly all 30 index members finished with gains, led by Intel Corp (INTC) and Wallgreens Boots Alliance Inc. (WBA).

The broader S&P 500 Index added 0.8% to close at 2,930.75, which was also a record high. Shares of consumer staples, technology and materials companies were the best performers percentage-wise.

Big gains in tech lifted the Nasdaq Composite Index sharply higher. The index rose 1% to 8,028.23.

U.S. Economy Humming Along

A strong domestic economy has fueled Wall Street’s stellar third quarter. The momentum streak has continued in September, a historically volatile month for stocks.

The U.S. economy under President Trump is the strongest it has been in years, with unemployment falling to nearly two-decade lows and economic output expanding at the fastest pace since 2014. On Thursday, the Labor Department added to the optimism by announcing that initial jobless claims fell to nearly five-decade lows.

The number of Americans filing for first-time unemployment benefits declined to a seasonally adjusted 201,000 in the latest week. Labor’s most recent nonfarm payrolls report highlighted a tighter jobs market and noticeable pick-up in wages for the month of September.

XRP Boosts Crypto Values

The combined value of all digital currencies held firmly above $200 billion on Thursday after XRP added $2 billion to its market cap. The third-largest cryptocurrency is surging on reports that Ripple, its parent company, is embarking on several commercialization initiatives.

A Ripple executive announced this week that the company will soon launch a cryptocurrency-focused product based on xRapid, the highly touted settlement service. Meanwhile, on Wednesday, American   banking giant PNC announced it had joined a long list of financial institutions to start using Ripple’s payment products.

XRP jumped nearly 20% to $0.388, bringing its total market capitalization to $14.4 billion.

After a volatile Wednesday evening, bitcoin was back in a stable trading range and holding above $6,400. BTC plunged suddenly to $6,100 on Wednesday before quickly recouping its losses.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 606 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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