Line in the Sand

Hi Everyone,

One of the central developments in crypto over the last year is the interest we’ve seen from large-scale financial institutions looking to get into this space.

Cryptoassets are increasingly being seen as a brand new asset class with significant potential for portfolio managers and financial advisers. However, despite the increased level of access to digital assets, it seems that education among these groups remains low.

In order to get the ball rolling, we’ve put together a paper that looks into the level of crypto knowledge among independent financial advisers and their clients in the UK.

What I found interesting is that clients are seemingly better informed on this subject than the people they’re getting advice from. Here we can see that only 9% of advisors are confident giving advice on cryptos…

Whereas, 26% of their clients have already transacted with them…

To see the full report please visit this link and download the IFA report:

https://www.etoro.com/trading/markets/research/cryptocurrencies/

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Brothers in Oil
  • Dropping on Brexit
  • BCH Hard Fork Explained

Please note: All data, figures & graphs are valid as of 12/11/2018. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Today is Veterans Day in the USA so volumes could get a bit thin. Markets are scheduled to be open but for the short term traders out there you might want to take the day off.

All eyes are on crude oil today. After a deep retracement from the highs, it looks like OPEC, led by Saudi Arabia is stepping in to prop up the prices.

The way down from the top has been a very large swing and the break below the 200 day moving average (blue line) seems to have accelerated the decline.

The Saudis move is a clear indication that they’re willing to defend the floor at $60 a barrel. However, this line in the sand could prove difficult to uphold, especially if they don’t see cooperation from the other producers.

Pound Under Pressure

The British Pound is under immense pressure this morning after some disappointing Brexit news over the weekend.

It seems that Theresa May’s plan to avoid a hard border with Ireland was rejected both by the EU and her own cabinet. The likelihood of a no-deal Brexit has reared its head once more.

Things aren’t looking much prettier on the chart either. The bounce off from resistance last week (purple circle) confirms that we are now in a full-blown descending triangle (yellow lines).

Hard Fork Incoming

It should be clear that as confusing as the Bitcoin Cash hard fork may seem, especially for beginners, it is unlikely to have any significant impact on the broader crypto industry, are very slim. However, this drama is a lot of fun to watch and a great exercise for people to increase their knowledge and understanding of how these things work.

The current fight that’s playing out is between the two main proponents of BCH (Bitcoin Cash) Craig Wright and Roger Ver.

For those of you who are new, Bitcoin Cash forked from Bitcoin on August 1st 2017 and though the proponents claim that this is the real bitcoin, it has failed to gain the widespread adoption that they were hoping for.

This graph from bitinfocharts.com shows the number of active wallets on Bitcoin (BTC) VS those on Bitcoin Cash.

Over the weekend, we’ve seen videos emerging from both Roger Ver and Craig Wright explaining their positions, how this fork came about and what they think will happen next.

Both Roger and Craig are advocating a different version of Bitcoin Cash. The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday.

For simplicity’s sake ,we’ll call them Bitcoin ABC (Ver’s version) and Bitcoin SV (Wright’s version).

In this video released last week, Ver described Dr. Wright’s behavior as less than professional and even published this letter allegedly sent to him from Craig.

Roger went on to say explain that Craig had yet to explain his position or why he wasn’t happy with the current roadmap.

Yesterday, Craig struck back by going on the record with famous BTC advocate Tone Vays. In the interview, Craig clarified his belief that the Bitcoin ABC version might have elements that some governments will try to block, hence his opposition

Craig then went on to describe his control of most of the network hashrate in BCH, which could give him a clear advantage in the upcoming war.

However, one thing that Dr. Wright failed to mention is the amount of hashpower that is currently allocated to BTC. Crypto miners, for the most part, are not as ideological as Ver and Wright, they’re in it for the profit.

At the moment, BCH is only running about 8% of the total SHA256 hashpower.

This makes it very difficult for people to mine BTC. So it wouldn’t surprise me if some people who are currently mining BTC would switch a small portion of their hash over to Bitcoin ABC or Bitcoin SV, whichever givesthem the best bang for their buck. This might actually be a healthy thing for BTC as well.

Let’s have a great day ahead!

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

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

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

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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

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