Moving to the Blockchain

Hi Everyone

Big thanks to our client Scott Chamberlain who recently contacted me with an excellent suggestion to make an eToro copyfund strategy that includes stocks of companies that are investing in blockchain solutions.

The big names that come to mind would be IBM, who have their own Hyperledger blockchain, and Wal-Mart who opened up a blockchain to track produce across their various supply lines.

Of course, we could also add Amazon after their recent addition to the AWS service, and graphics card producers Nvidia and AMD who have benefited from the demand for bitcoin mining equipment.

More recently, Salesforce has announced their addition of a special Dapps team in order to integrate blockchain into their Force.com solutions. Listening to the above-linked video it seems that they will actually be using the Ethereum network in this process. Indeed, I have a feeling that we’re going to hear a lot more of these type of announcements in the future.

The more I think about it, the more I realize what a monumentally difficult task it would be to set up a fund to try and track all the large companies who are integrating blockchain. It would be like setting up a fund to track companies who had a website in the 90s. The list would continue to grow until it completely encompasses the entire market.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Happy Holidays
  • Goodbye Ms. Rudd
  • Crypto Test

Please note: All data, figures & graphs are valid as of April 30th. All trading carries risk. Only risk capital you’re prepared to lose.

Traditional Markets

The last day of April and the first trading day of the week will start out a bit slowly. Traders in China and Japan have the day off with local holidays. Tomorrow there will be some holidays in Europe as well.

Though the holidays may affect liquidity, it seems like there won’t be any significant downtime. Do be careful though, when market liquidity is thin it’s quite common to see spikes, gaps, and all sorts of slippage.

We’ve already experienced this just a bit this morning in the commodities markets. Take a look at oil that dropped quite suddenly. Not a huge move but it was rather sudden….

Gold also had two such spurts this morning of sudden selling…

…as it inches closer to the important resistance line at $1,300 per ounce.

Another May Shakeup

With less than a year left of Brexit negotiations, Theresa May received another blow last night. Her close ally Amber Rudd has been forced to resign.

Ms. Rudd, a long time ally of the British Prime Minister, has been under intense pressure following scrutiny of targets for removing illegal immigrants and the Windrush scandal.

The Pound itself is also at a critical junction as we can see on this graph of the GBPUSD. Take a look at the long-term trendline (yellow) which has been a very strong support line for the rising Pound. At this time in converges with the short-term support line of 1.3750 (dotted blue) and if it breaks below it will put the Bank of England in a rather sour spot for their upcoming meeting on May 10th.

Crypto-Market Test Levels

Bitcoin is also at a critical junction at the moment and indeed starting the week out rather sluggishly. As we discussed on Friday, the next test is at $10,000, a critical level of resistance. As well, Ethereum is working hard to surpass $700 a coin.

It does seem like the massive upward momentum that we saw last week is on hold for now and waiting for further confirmation before cryptotraders pile into the buy side again. All of the top 10 cryptos are down so far today and the weekend hasn’t been fantastic.

Still, it hasn’t been terrible. In the grand scheme of things, if we can hold current valuations, I believe it will be the best thing for this market. We all enjoy it when prices rise uncontrollably but if those rises aren’t backed by real world adoption as discussed above, then we’ll have to give them back eventually and that puts us back to square one.

A break in the above-mentioned levels for Bitcoin and Ether could indeed lead to some more FOMO but I’m not sure if that’s the most healthy thing for cryptos at the moment.

Let’s have an amazing week 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

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