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Bitcoin’s Future

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Bitcoin’s Future

Introduction

This article was posted on Thursday, 15:16, UTC.

Have you ever thought about a futures market for bitcoin. It seems the CME Group has.

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The idea is the same as the futures for any commodity really. Just as a gold miner or a farmer has a relatively fixed cost but unknown yield, bitcoin miners have the same type of deal. They know how much they’re about to spend, but have less of a clue as to how many coins they will produce or how much those coins will be worth in the future.

If the patent passes regulation, this new Bitcoin Future will allow miners to lock in current prices before starting on their venture. Pretty neat huh?

Thanks to @Jaynemesis for posting this on eToro.

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Meanwhile, the overall market cap of all cryptocurrencies has maintained above $29 Billion for the past few days despite some trouble in the industry that we’ll describe below.

Today’s Highlights

Stocks continue declines

Bitcoin breakout may be imminent

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Carney & Mnuchin Tonight

Please note: All data, figures & graphs are valid as of April 20th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Markets are still trying to process the shock delivered by Theresa May on Tuesday. This week was supposed to be all about France but now we’ve had another huge event thrown into the mix. After gaining overwhelming parliamentary approval yesterday, the UK will be going to the polls on June 8th.

Let’s be clear, this is not designed to be an election, more of a power grab ahead of the negotiations with Europe. However, as we outlined yesterday, it’s a national election and anything can happen. And, as we’ve seen twice recently, just because polls indicate one thing doesn’t mean that that will be the outcome.

The French elections are still very relevant and are taking place this Sunday. If you haven’t seen it yet, please review the video that we made outlining the potential moves in the market.

Watch the Video ->

The odds of a La Pen Vs Melenchon run-off are increasing. With Melenchon now trailing the front-runner by just 5%.

The United States indices put on a poor performance after lukewarm earnings reports and a sudden drop in the price of oil.

The USDollar is also taking a bit of a beating so far this morning, though I couldn’t say why exactly.

Perhaps this has nothing to do with it…

Opening the Spread

Two of the largest cryptocurrency exchanges have recently run into a bit of trouble. It seems that due to regulatory issues, Bitfinex and Poloniex are no longer able to accept transfers in Fiat currencies and have been restricted to only making deposits and withdrawals in cryptocurrencies.

At the moment, it seems that clients of these exchanges are getting more than a bit scared. Anybody who does have US Dollars sitting in those exchanges is currently exchanging it for digital and getting their money out.

The spread has widened significantly too. On most exchanges bitcoin is trading at around $1215 a coin but on the Bitfinex and Poloniex, the price is more like $1260 per coin as they try to discourage people from cashing out, or at least make a bit of money before they completely crash and burn.

If we look at the chart of bitcoin it does appear that a breakout may be imminent. After receiving strong support at $950 a coin (orange line), the price has managed to maintain a steady incline.

There was a tame retracement over the past week, but support came much sooner than expected at $1150 (blue line). At the moment there’s a free pass with no real resistance until the all-time high of $1294 (yellow). If the price forges new territory past $1300, the sky is the limit.

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Feedback or Requests?

Mati Greenspan

Mati Greenspan

https://www.etoro.com/

Senior Market Analyst at Etoro.com.

Comments
  • user

    AUTHOR Ershad

    Posted on 3:29 pm April 20, 2017.

    Hi Mari,

    Would you say that it’s safe to be using poloneix or should I try finding another exchange? Can you recommend one that allows deposit and withdrawals in USD and also allows the buy and sale of major cryptocurrencies ?

    Thanks
    Ershad

    • user

      AUTHOR Mati Greenspan

      Posted on 4:16 pm April 20, 2017.

      Hi Ershad,

      Thanks for asking. I’ve pulled my funds from bitfinex already.

      For BTC and ETH, you’re welcome to open an account with eToro. We have thousands of other markets as well. Keep in mind that crypto’s are traded as CFDs so once your account is verified all deposits and withdrawals will need to be done with Fiat currency.

      Best of luck!

  • user

    AUTHOR JonasMertens

    Posted on 1:22 am April 24, 2017.

    You say the sky is the limit if BTC reaches new ATH but the higher the price goes, the less likely miners will be to evolve the protocol and the less useful BTC becomes as a payment mechanism. I can see how BTC could still serve as digital gold if we keep it untouched, but I am afraid funds will instead flow into another alt that has higher capacity and tank BTC.
    This might drive miners to adopt either BTU/Segwit/something else, but it might be too late by that time.

    Is the sky the limit for BTC without capacity upgrade?

  • user

    AUTHOR Mati Greenspan

    Posted on 5:07 pm April 24, 2017.

    Hi Jonas,

    That’s indeed an excellent point.

    The fact that segwit is on track to go into effect on Litecoin is encouraging. If it is done successfully on LTC, BTC is more likely to adopt it as well.

    If you think about the miners, their incentive is to keep the network useful, otherwise nobody will use it and as you said, will jump ship. So certainly they’ll be looking for a long-term solution, even if they are profiting in the short-term. 😉

    Thanks,
    Mati

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