Connect with us

Bitcoin

Is Bitcoin Stealing Gold’s Luster?

Published

on

It may still be too early to gauge Wall Street’s attitude towards bitcoin but so far the sentiment we’re seeing is extreme caution.

Yesterday, the CBOE’s new contracts saw just 411 coins traded, which comes out to about $7.3 Million, or about 0.062% of the total amount traded on the world’s largest exchange sites.

The SEC financial regulator in the United States has now issued a warning on cryptotrading and especially on ICOs saying what most of us in the industry already know. If something looks like a scam and smells like a scam, it probably is one.

Furthermore, by calling something an ICO it does not change the underlying nature of the asset itself. If a company is offering a token that acts as an investment in the success of that company, it still falls under the jurisdiction of the same regulations as any other financial asset.

We can expect them to continue to crack down on specific companies who have intentionally tricked investors in this space as they probably should have been doing right from the start.

In today’s update, I’d like to explore with you the relationship between the world’s newest financial asset and it’s oldest most established store of value. Please keep an open mind as I’d love to hear your opinion after you read it.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Oil & Ice in London

Bitcoin Replacing Gold?

Some Data and a Question

Please note: All data, figures & graphs are valid as of December 12th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Stocks in the United States climbed further yesterday nearing all-time record highs powered by advances in tech stocks and the energy sector.

The UK’s main North Sea pipeline has been shut down for repairs due to a hairline crack and will likely be out of commission for a couple weeks. There’s a yellow weather warning out in London telling residents to prepare for ice.

The combination of greater demand and less supply has sent the price of oil up in the UK but even the West Texas Instruments oil that is traded at eToro is seeing a significant surge toward the highs.

The price of oil has been rising steadily thanks to efforts from OPEC to reduce the global glut. Still uncertain, how US oil producers are going to react to all this.

Stock markets in Asia did not continue New York’s sentiment and the China50 index fell 1.8% today. The European markets are opening just now but looking rather flat.

In addition, we’re seeing a notable risk-on sentiment in the currency markets, with the safe haven’s (USD, JPY), and Euro) down and the risky currencies gaining in comparison.

What about Gold?

Normally, we would look to gold to understand investor attitude towards risk on any given day. After thousands of years of acting as a store of value and a solid place to keep your money in times of crisis, it has forged a sturdy relationship with other assets and served as the main barometer for risk sentiment.

Indeed, with the markets showing risk on today, we do in fact see gold taking a dive. However, what’s more interesting to investors at the moment is gold’s relationship with bitcoin.

An analyst on from ACG on CNBC yesterday made the claim the bitcoin was stealing some of gold’s market share, saying the the crypto-market is now standing at about 23% of the liquid “tradeable” gold in the market.

Seemingly in response, an analyst from Goldman Sachs was quoted in the Financial Times as saying that this is not happening and that the markets remain unconnected.

Let’s take a look at some charts

Over the last few weeks, we can spot a rather clear reverse-correlation between the two assets with the chart creating a rather large X as bitcoin surges and gold declined over the same period.

but the most interesting thing that I’m seeing is actually what’s happened in the last 20 hours or so. Here, take a look at this snapshot.

Of course, it’s a very small amount of data, but at least from 16:00 yesterday afternoon bitcoin and gold are trading in a lockstep mirror image.

Deeper in the data

In eToro, it’s no secret that we’re seeing a lot of new customers mainly thanks to the rise in populist finance surrounding the cryptocurrencies. I’d like to take this opportunity to welcome everybody, I hope you’re enjoying the platform so far. 🙂

After an extensive conversation on the above question with one of our senior officers in the trading department. It seems that what we’re seeing in eToro is actually a trickle-down effect.

Meaning, yes. We’re seeing volumes on bitcoin going through the roof but the volumes on gold are rising as well. Of course, this is only an initial finding and we’ll need to pour into the data a bit further later on, but it seems that the volumes that we’re seeing on gold so far this year have more than doubled what we saw last year.

In comparison, we are also seeing increases in the volumes of Oil and the Euro Vs the US Dollar but the increase on these assets is not as much as the increase that we saw in gold.

This indeed could be a remarkable find in behavioral economics. Similar to when a new Pizza Shop opens up just down the street from an established one. It would seem initially that they would now need to fight over market share but in fact, as the awareness grows so does the hunger for investments and in fact, both end up benefiting as a result.

As this is only my personal view from where I sit. I do believe that this question is more of an emotional one that should be put to the general public and not one to be answered by financial analysts such as myself who may be already stuck in a certain way of thinking.

If you have a moment, please reply on this post either by Email, or with a comment below (depending where you see it), or just tag me on social media with your thoughts and opinions.

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 (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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.7 stars on average, based on 122 rated postsSenior Market Analyst at Etoro.com.




Feedback or Requests?

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Altcoins

IOTA, Vechain Lead Tepid Crypto Market Recovery on Sunday

Published

on

Digital currencies IOTA and VeChain were among the biggest gainers on Sunday, though a lack of buying interest kept the broader market at a standstill.

IOTA, Vechain Lead Recovery

In terms of percentage gains, IOTA was among the best-performing cryptocurrencies on Sunday. The value of MIOTA sprung up 12.2% to $0.545 on trade volumes of $44.4 million.

IOTA is rebounding from extreme oversold levels after being losing more than 40% of its value during the latest rout in market prices. MIOTA was disproportionately impacted by the recent downturn because of multiple controversies at the Berlin-based IOTA Foundation. As Hacked reported earlier this month, a failed partnership with Sirin Labs and internal divisions at the Foundation have all contributed to the massive drop.

IOTA, which has since dropped to no. 12 on the crypto market cap rankings, has trimmed its seven-day decline to just 1.7%.

Meanwhile, the highly touted VeChain (VET) rose 12.1% to $0.013, regaining much of Saturday’s sharp reversal. The digital currency is also enjoying some momentum after launching its official mainnet in late June. The accompanying token swap on Binance officially produced VeChain Thor (VET), which is the cryptocurrency now quoted by the market.

Although there was no immediate catalyst for the recent upsurge in IOTA and VeChain, both currencies are part of a much larger initiative aimed at monetizing the Internet of Things. In particular, VeChain is benefiting from China’s latest push to speed up development and commercial implementation of blockchain technology. VeChain has developed national level partnerships with various government entities in the world’s second-largest economy.

Broader Market Trades Laterally

Gains in the broader cryptocurrency market were much slower to materialize on Sunday. At the time of writing, the total cryptocurrency market cap was worth $216.6 billion, up just 1.3% over the previous day.

Tepid moves in the broader market were accompanied by a sharp drop in total trading volumes. Market turnover has plummeted by 24% since Saturday, according to CoinMarketCap.

Bitcoin, the world’s largest digital currency by market cap, continues to trade below a key technical resistance. Bitcoin’s lateral moves come despite multiple signs of a bullish reversal over the past few days. As Hacked reported Thursday, the bitcoin price has returned above the 50-day moving average with key measures of relative strength showing stronger upward momentum.

At the time of writing, bitcoin was trading at $6,404 on Bitfinex. The cryptocurrency’s total trade volumes declined to $3.3 billion after spending the better part of a week above the $4 billion mark. The bitcoin price is up 1.7% compared to last week.

Ethereum rose 2.1% on Sunday to $303, trimming its weekly drop to 5.9%. Meanwhile, XRP rose 3.6% on Sunday to $0.342. Compared with last week, the so-called banker’s cryptocurrency has gained 12.8%. At its lowest point, XRP was down 93% from its record high.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 552 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.




Feedback or Requests?

Continue Reading

Altcoins

Cryptocurrency Rally Stalls as Bitcoin Price Hits Resistance

Published

on

Cryptocurrency prices were down across the board on Saturday, with bitcoin – the market’s biggest bellwether – stalling near a key  resistance.

Market Update

After reaching a high of $225.6 billion on Friday, the total cryptocurrency market capitalization has fallen back to $211.3 billion, according to CoinMarketCap. The broad pullback was accompanied by only a minor dip in trading volumes, a sign that profit-taking was a factor.

Six of the top-ten coins (excluding Tether) had reported declines at the start of the weekend. Bitcoin was down 3.5% to trade at $6,355.00 on Bitfinex. The leading digital currency reached a high of $6,619, which is just shy of the most recent peak. Bitcoin’s market still exhibits strong trading volumes, with 24-hour turnover at $4.3 billion.

Among the major altcoins, Ethereum, Stellar Lumens, Litecoin and Cardano had each declined between 1.2% and 3.5%. On the opposite side of the spectrum, XRP, bitcoin cash and EOS had reported gains of at least 1.6%.

Bitcoin’s dominance rate, or the percentage of the total cryptocurrency market cap held in BTC, was 52%. Bitcoin accounted for as much as 54.5% of the total market capitalization earlier this week.

Dollar Factor?

The recent meltdown in cryptocurrencies originated 11 days ago when the U.S. Securities and Exchange Commission (SEC) announced it would delay a ruling on a highly anticipated bitcoin exchange-traded fund (ETF). However, analysts have struggled to explain the extent of the selloff – namely, the $35 billion plunge between Aug. 10-13.

According to eToro analyst and Hacked contributor Mati Greenspan, a surging U.S. dollar may have contributed to the decline. As CCN reports, the cryptocurrency market’s movements this week have been highly correlated with fluctuations in emerging-market currencies. Emerging-market exchange rates have been rocked by contagion fears emanating from Turkey’s political crisis, which have boosted demand for the U.S. dollar. As Hacked reported Friday, the U.S. dollar index recent hit more than one-year highs.

“As the United States moves to tighten its economy and avoid strong inflation, they’re taking action that is strengthening the Dollar. Because the US Dollar is the global reserve currency, many smaller economies rely heavily on a stable exchange rate with the greenback,” Greenspan wrote. “So too, as the Dollar is being seen as a stable store of value at the moment, there really isn’t much incentive for people to store their money in digital assets.”

Bitcoin is generally viewed as a non-correlated asset, which means it enjoys unique price independence when comparted with traditional markets. Correlation, when it does occur, is often driven by the erroneous belief that bitcoin is associated with the broader market. This was observed earlier this year when bitcoin seemingly fell in lockstep with the U.S. stock market.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
3 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 5 (3 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 552 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.




Feedback or Requests?

Continue Reading

Bitcoin

‘Bitcoin Is Better than Gold’, Says Venture Capitalist

Published

on

The bitcoin price is trading above $6,500 again and technical indicators like RSI appear more stable, all of which bodes well for market sentiment heading into the weekend.  The improving outlook for the BTC price has silenced the naysayers for now and reinvigorated the case for bitcoin and its applications as both a store of value and payment method.

Lou Kerner of CryptoOracle, a crypto advisory and VC fund startup, on CNBC made the case for bitcoin overtaking gold as a store of value, pointing to gold’s “awesome run” as a “global store of value for a couple thousand years.”

“We now have something that we think is functionally much, much better. So we would expect over time — not in a day, not in a week, not in even five years — but we would expect over time for some of the people using gold as a store of value to switch to bitcoin,” Kerner told CNBC.

Precious metals investors have in fact been switching from gold, as evidenced by a decline in the gold price to an 18-month low this week. The price of gold is currently trading below $1,200 an ounce. Take a look at the declining performance in this popular gold ETF. And while billions of dollars have poured into crypto over the past week, bolstering the total value of the market to $214 billion, there hasn’t been much evidence of investors redirecting assets from gold to bitcoin in 2018 until now.

Source: Trading View

Kerner went on to compare the emergence of the new technology that is Bitcoin to the junk bonds of Michael Milken’s era, pointing to when junk bonds were similarly volatile and viewed as a scam decades ago but today are offered alongside the most traditional of investment products.

“We think bitcoin is going in that same trajectory. Any new assets in its early days are extremely volatile. Nobody knows how to price it. And that’s exactly what we’re seeing with bitcoin,” he said.

Kerner cut his teeth on Wall Street as an equity analyst at Goldman Sachs and Merrill Lynch, according to his LinkedIn profile. Now his career as a venture capitalist dedicated to crypto, which he says is the “biggest thing to happen in the history of mankind.”

Coinbase Payments

Meanwhile, leading U.S. cryptocurrency exchange Coinbase wants to bolster the security of bitcoin payments for its customers, as evidenced by a new payment-fueled patent that was published in recent days. The invention is comprised of features like a “key ceremony” involving a custodian, master key, bundle and encryption “during a checkout”.

Source: U.S. Patent and Trademark Office

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 5 (1 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 40 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




Feedback or Requests?

Continue Reading

5 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending