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Google to Buy Apple for $9 Billion

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Wait… what????

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You can’t make this stuff up, but the Dow Jones newswire just did. They later apologized claiming that the article was a “technical error.”

The ordeal did seem a bit more elaborate than a simple glitch.

Several headline alerts were sent…

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…and the full article included a fair bit of detail…

It seems like somebody was testing some serious news algos. I’ve heard of fake news but this one takes the cake.

@MatiGreenspan
eToro, Senior Market Analyst

Due to local holidays, there will be no market update tomorrow. We’ll pick up where we left off on Friday the 13th.

 

Please note: All data, figures & graphs are valid as of October 11th. All trading carries risk. Only risk capital you can afford to lose.

Bitcoin “Flash Crash”

The popular Crypto News website CoinDesk displayed a price plunge of about $600 per coin for almost 10 full minutes.

Even though no major exchange was showing the sudden price movement some financial media ran with the story anyway.

Coindesk has since updated their charts to remove the foul price quote and CNBC has completely revamped the article in which they ran with the story but the original tweet has not been removed.

This one we can probably chalk up to overzealous financial reporting and click bait. Well…. can’t blame them there 😉

Bitcoin Scaling

You’ve probably heard by now that bitcoin is currently undergoing some serious scaling issues at the moment.

The main issue is that the network needs to be able to handle a lot more transactions per second if indeed it is to compete with the world’s biggest payment processors.

Visa currently handles about 24,000 transactions per second. Bitcoin would struggle if it were to see a sustained volume of more than 7 transactions per second. We’re well under that level at the moment but as the use of bitcoin continues to grow it’s something that needs to be worked out quickly.

This graph shows the average transactions per second since May 2016…

and this one demonstrates the fast pace of bitcoin adoption by showing the average number of transactions per day since the blockchain began.

Segwit2x

The debate on how to improve the network speed is heating up and the proposal currently on the table is to double the size of each block in the blockchain from 1 Megabyte to 2 Megabytes.

The process to do this is called a hard fork and it would essentially create a new bitcoin that people would then need to transfer to. The estimated date for this to happen is on or around November 18th.

The miners are currently signaling in strong favor of this solution with more than 94% of mining power onboard.

However, much of the community is largely opposed. As this is extremely political and extremely democratic each side does their best to try and force their ideas on the rest of the network.

What’s in a name?

The main question here is what will the new bitcoin be called. Ideally, the proponents of the Segwit2x would like it to simply be called bitcoin.

This could of course create a problem, especially if not everybody is on the same page. If we had two different currencies both with the same name it would create mass confusion and chaos as nobody would really be sure what they’re sending where and who accepts what.

The popular exchange site Bitfinex has made the call that they will be calling the old bitcoin BTC and will call the new one B2X.

A Hong Kong based wallet and debit card provider named Xapo has issued the following statement.

Meaning, that they are going to support whichever currency the network as a whole decides.

Therein lies the problem.

So what’s the solution?

The price of bitcoin however doesn’t seem to be phased by all this and is currently testing its all time high of $5000 per coin.

So, either the alternative investment community is not aware of the dangers lurking or they simply don’t care.

After all, we had some very similar issue on August 1st with the argument whether to implement Segwit or not and even though there was a lot of fuss then, the average user was largely unphased and the price has nearly doubled since that time.

My personal hope and best educated guess is that at the critical moment the community will indeed come together to realize the best solution. Despite all the fuss and bother it does seem likely that we can get through it rather painlessly.

What else?

As far as other markets are concerned all eyes now on the central banks. Specifically, the FOMC meeting minutes that will be released tonight.

The central banks are the biggest market participants at this time so everything they say or do can have a big impact on the direction of the markets.

Tonight, traders will hyper-focus on if the Fed will raise interest rates in December and how they plan to unload their balance sheet.

Tomorrow, there will be a monetary policy conference in Washington DC that will include speeches from several Fed officials and a guest appearance from Mario Draghi.

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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3 Comments

3 Comments

  1. ferdi03

    October 11, 2017 at 3:12 pm

    Seriously, sending a push notification for a rumor… don’t do that

  2. cryptovirtualwallet

    October 11, 2017 at 6:54 pm

    And the clickbait train continues… It’s all a joke! Do any media outlets have the slightest bit on integrity?

  3. ferdi03

    October 11, 2017 at 8:18 pm

    Yes, btw a paid service

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Bitcoin

Bitcoin Returns to Health After Flash Crash

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The value of bitcoin stabilized Thursday after a flash crash wiped nearly 9% from its value, a sign that investors are getting over the initial fear of regulatory encroachment on their tokens.

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Bitcoin’s Epic Drop

Beginning at around 12:45 UTC, the BTC/USD began an epic decline that continued for 90 minutes until prices bottomed in the low $5,100 region. At its worst, bitcoin was down nearly 9% on the day.

Prices would soon recover, and do so in a big way. BTC/USD regained more than $300 over the next two hours before continuing higher for the rest of the day. At press time, bitcoin is up 1.3% at $5,646, having traded within a $180 range early Thursday.

At present values, bitcoin is capitalized at $94 billion, according to CoinMarketCap. The token peaked above $97 billion last week as it set multiple record highs.

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Bitcoin continues to trade in overbought territory, according to the Relative Strength Index (RSI). As the following chart illustrates, the BTC/USD has been technically overbought on several occasions over the past six months.

As CCN reports, bitcoin wasn’t the only digital currency to experience a sharp drop. Ripple plunged by 12% and Ethereum shed 8%. For bitcoin and ether, the losses would later prove to be a healthy correction after last week’s run-up. The ETH/USD is currently trading around $314.

Ripple is still down roughly 9%, where it is trading near three-week lows.

Bitcoin, ether and Ripple are the world’s top-three digital currencies by market cap. Combined, they’re worth more than $131 billion.

Regulatory Fears Emerge

The plunge came just a day after the U.S. Commodity Futures Trading Commission said it has jurisdiction to regulate bitcoin derivatives. In a report titled A CFTC Primer on Virtual Currencies, analysts at the Commission reaffirmed that bitcoin and others like it are commodities.

The report said:

The CFTC’s jurisdiction is implicated when a virtual currency is used in a derivatives contract, or if there is fraud or manipulation involving a virtual currency traded in interstate commerce.

A commodity is defined in various ways by the CFTC. It can be a physical commodity or natural resource, a currency or interest rate and “services, rights, and interests… in which contracts for future delivery are presently or in the future dealt in.”

Three bitcoin exchanges were listed as examples of permitted cryptocurrency activity. They included TeraExchange, LLC, North American Derivatives Inc. (NADEX) and LedgerX, LLC.

The report also said there was no inconsistency between how it defines cryptocurrency and how the Securities and Exchange Commission (SEC) dealt with The DAO. SEC regulators deemed The DAO tokens to be “securities” under federal law.

There is no inconsistency between the SEC’s analysis and the CFTC’s determination that virtual currencies are commodities and that virtual tokens may be commodities or derivatives contracts depending on the particular facts and circumstances. (CFTC)

As cryptocurrency trading expands in scope, investors can expect a slew of products designed to track the market. The Chicago Board Options Exchange (CBOE) plans to launch its own bitcoin derivatives product next year.

Meanwhile, Grayscale currently operates the Bitcoin Investment Trust, a traditional investment vehicle with shares solely invested in BTC.

Featured image courtesy of Shutterstock. 

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Analysis

Technical Analysis: Bitcoin Dumps and Pumps amid Broad Volatile Correction

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The crypto segment has been in turmoil today, as the most valuable coins turned significantly lower, leading to a mini-panic, but they rallied strongly off their slows as buyers stepped in the second half of the session.

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Bitcoin fell as low as $5100, for a 15% correction top-to-bottom, but it is now trading near the prior short-term support at $5400. As the long-term picture remains overbought, investors shouldn’t open new positions here, but traders could play a likely move towards the $6000 level, although we still advise small sizes, as correction risks remain elevated.

BTC/USD, 4-Hour Chart Analysis

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The other majors were also declining in early trading, led by Ripple, with only NEO and IOTA, holding up well during the sell-off.  Both of the latter coins faded away as the rest of the market recovered, but Ripple continued to suffer. For now, the long-term bullish picture is unchanged for the segment, but BTC’s overbought correction could still cause volatility in the coming period. Let’s see the short-term charts after the busy session.

(more…)

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Bitcoin

Money Leads to More Money – Power to More Power

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Every 5 years the Central People’s Government of China has a grand political event to reshuffle the distribution of power in the world’s most populated country.

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In today’s 19th National Congress the most powerful man in the world just became even more powerful. President Xi delivered an eloquent three hour speech stressing the importance of globalization and China’s role of leadership going into the future.

The reaction from financial markets in Asia was rather muted given the recent gains in global markets.

@MatiGreenspan
eToro, Senior Market Analyst

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Please note: All data, figures & graphs are valid as of October 18th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

A brand new record high for the Dow Jones and a huge milestone of 23,000 points. The index is now up approximately 25% since Donald Trump was elected last November!!

Though Donald Trump might make a comment or tweet on this fact later today the rally may not be entirely Trump related.

Correlation does not equal causation!!

The Trump election did indeed wake the markets from a deep slumber that it was in with little movement between 2014 and 2016. However, if we zoom out and take a look, we’ll see that since the bottom of the market after the crash of 2008 we’re up 228%.

Many analysts agree that earnings ratios are at their peak yet investor sentiment remains extremely bullish on stocks.

Why are stocks going up?

The reasons are simple. First, there’s still plenty of cash ready for investment left over from the central bank injections over the past decade. Rates for borrowing money are still very cheap, which allows investment firms to borrow money easily and put it in the stocks.

Furthermore, any portfolio manager currently sitting on the sidelines is getting squashed. Try explaining to your clients that you missed out on a 25% rally because you think the markets are overvalued and watch them leave and go to a competitor.

This circle can indeed go on for a while as money does have a tendency to lead to more money.

In this cycle particularly, due to the ample assistance from the central banks, I’m not even certain that historic PE ratios are even a factor.

Bitcoin Volumes

The Crypto Market is pulling back a bit. After the incredible highs we saw over the weekend it only makes sense.

Specifically regarding bitcoin, we need to understand where the excitement and the action are coming from. Sure, many people are fed up with government backed money and I do believe that the financial revolution is well underway. But besides grandiose ideology, there is one country that stands above the rest as far as bitcoin adoption.

According to an article in bitcoin.com 60% of all volume on bitcoin is coming from Japan, with an additional 25% coming from the USA and 9% from South Korea.

Well, that makes sense. After legalizing bitcoin as a currency in April, Japanese vendors and businesses are adopting it at an incredible rate.

We continue to watch other interesting countries that seem to be on the verge of this type of adoption particularly Russia, Australia, and hopefully someday soon, India.

Many thanks to a local band that I’m fond of for the title of today’s update. And many thanks to everyone who continues to send me your comments, feedback, and relevant articles. Keep tagging me!!

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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