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Cryptocurrencies

New Cryptos on the Move

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Hi Everybody,

In this crazy new world of blockchain technology and digital assets, news travels fast and prices move even faster.

Yesterday, I made a short video explaining the current Bitcoin scaling issues. About an hour after the video editing was complete and before I’d even had a chance to upload it to YouTube it seems the situation was already altered slightly.

You can see the video, which is still quite relevant, here: https://youtu.be/6gjKY-XHKMI

Yesterday afternoon, it was announced that a major supporter of bitcoin will be leaving the main network for a new one known as Bitcoin Cash. However, the level of support for this new project is still limited and so the price of BTC has only been slightly affected.

Let’s take a look below…

@MatiGreenspan
eToro, Senior Market Analyst

Market Overview

The world of traditional finance remains completely irrelevant. Let’s do it quickly so we can get on to the important stuff. 🙂

Janet Yellen’s interest rate decision today is expected to be boring by design. No changes and no press conference. No surprises expected. In just a few moments from the time of this writing, the U.K. will announce their quarterly growth number, watch the Pound.

Oil surged on less production in the USA. It’s a comforting thing to see that supply and demand are having a larger impact on the price than the talking heads of OPEC.

Stock market volatility reached a new all time low yesterday. The VIX “fear” index, which tracks the speed of movement on the S&P500 reached as low as 9.06. This, as the S&P500 itself, reached a new all-time high of 2,479 points.

In this chart, we can see the S&P500 (in white) against the volatility index (in green) since the beginning of the year. Notice the reverse correlation?

Bitcoin Cash (continued)

Now that we’re about 12 hours after the breaking news, it seems the market is already fully pricing in the possibility of a break-off. Some are calling it a hard fork but at this point, it doesn’t seem like one to me.

Here’s the graph of BCC since inception about 24 hours ago…

In that time, the price of bitcoin has come down by about $260.

As this project gains momentum or loses it, it could impact the price of bitcoin. Other than bitcoin cash, the mining community is still showing outstanding support for SegWit, which should be implemented shortly. Still unclear is whether or not we’re headed for a hard fork with SegWit2x.

Here’s where it gets fun. If SegWit2x does not come through, it’s now likely that more miners could move in favor of this new option.

News from Uncle Sam

In a groundbreaking announcement, the SEC in the United States has ruled that digital tokens of all kinds will now be considered as financial securities.

The ruling was part of an investigation into Ethereum’s first token sale “the DAO project.”

Going forward, ICOs in the USA are going to be a lot less fun and a lot more regulated.

Indeed, the current ICO market is a bit of a free for all and many consider these new token sales to be “wild west” investments. So a little oversight wouldn’t really be a bad thing. Personally, I was hoping that the tech community would provide a solution for this before Uncle Sam had the opportunity to bring down the sledgehammer.

So as far as the U.S. citizens are concerned the proverbial party seems to be over. However, other regions are certainly still free to proceed. A few days ago we learned that Russia is looking to oversee and regulate this market in their own way starting from next year.

Introducing the new Crypto CopyFund

Here in eToro, we are incredibly excited by the awesome growth of blockchain technology and we feel passionately that it will play a big role in the future of finance and technology.

So, we’ve been working on a brand new investment product for you that is designed to capitalize on this paradigm shift.

We’re very pleased to announce the release of the brand new Crypto CopyFund, which is now available on this link.

Yesterday, we held a one time webinar, hosted by yours truly, to show off the advantages of this unique way of investing and how simple it is to get started and of course answer the many questions from our current clients.

Feel free to review a recording of the presentation now on YouTube: https://youtu.be/CpXjOAyzc1Q

As always, please feel free to contact me directly with any questions, comments, or feedback.

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.

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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.

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




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Cryptocurrencies

Hard Forks and Crypto Prices

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Right now, there is no measure of “intrinsic value” in the crypto world. And even if there is a measure for a specific protocol, investor sentiment tends to overshadow it by a significant amount. The lack of certainty in this space creates a high level of volatility that naturally plays out in the prices and makes it difficult to determine a fair value for cryptocurrencies. By understanding hard forks better, you can properly make a decision ahead of time in order to protect your investment.

Past Forks

First thing’s first: let’s get the definitions straight. A hard fork is a change to a cryptocurrency’s protocol that creates two different versions of a cryptocurrency. Soft forks, on the other hand, stick to just one cryptocurrency (and one blockchain). Segwit was an example of a soft fork, and Bitcoin Cash is the most well-known example of a hard fork.

Hard forks can signify upgrades to security or new functionality, or they can be designed with the express purpose of reversing past transactions. However, the most well-known function of a hard fork is to split a cryptocurrency into two. A new version and old version result, and it turns into somewhat of a battle between the two for dominance of the aggregate community.

We have seen this play out most notably with Bitcoin Cash, but Bitcoin Gold and Setwit2x were also cases where this occurred.

Likely Outcomes

There are three outcomes that can occur when a hard fork is executed. Either one blockchain becomes dominant and the other one fades into obscurity, both achieve similar adoption and are able to act independently of each other, or both remain successful with one outshining the other. The third case is the most common, as network effects often lead to compounding success within a single domain.

With Bitcoin Cash, we have seen a very active community attempt to push the cryptocurrency to dominance over Bitcoin, but BTC is so entrenched that this is nearly impossible. When a cryptocurrency forks into two separate coins, there end up being two ledgers and two sets of code, all with the same original blockchain.

Secondary Concerns

Even if you’re not worried about the future of the space, hard forks have created some question of how the overall ecosystem can adapt to them. The complications involved in managing a hard fork and distributing the private keys to the newly minted cryptocurrency can be significant. Generally, issues arise from the fact there is no “standard” method of handling an event such as this, and it becomes a question of each exchange’s policy. As we have seen with lawsuits such as OKCoin’s, sometimes the lack of clear guidelines and announcements can create confusion in the space.

An additional reason why investor confidence comes into play are the intense debates that ensue during a hard fork. Nodes are forced to choose between upgrading to the new version of the protocol software or maintaining the old one. This sort of divisive choice can be seen as “democratic”, but it also foments instability in the way that unrest within a country would hurt its currency.

From an investing perspective, the value of your cryptocurrency pre-hard fork should be the same as the aggregate value of your cryptocurrencies post-hard fork. This would be the case in an ideal world, however things seldom work out this perfectly. What it does do is create a betting-type market where you can sell the cryptocurrency you think is most likely to disappear, and still maintain your investment in the other cryptocurrency.

The key point here is that hard forks create additional volatility in an already volatile market. Whenever a hard fork is on the horizon, it helps to have a plan and know whether you are going to “make a bet” on one currency or the other, or sell before the hard fork occurs.

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.

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Cryptocurrencies

Ethereum Price Bucks Positive Sentiment with Another 5.6% Dip

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Ethereum’s relative stability around the $300 range over the last three days was enough to trigger proclamations of a full recovery, with many prominent publications going so far as to forecast an imminent breakout.

Ethereum Price Down 5.6% in 18 Hours

The analysis here at Hacked was a little more cautious, and it turned out to be warranted as Ethereum has fallen 5.6% against the dollar over the past eighteen hours, to a coin price of $287.06 at 21:30 UTC on Monday, August 20th.

As you can see, the sell-off came in steps, and each was followed by a subsequent short-lived rebound. The good news is that the $280 range has been something of a safety net for the last six days, with each dip stopping at $280 going back to August 14th. At the time of writing the coin has just jumped by close to a dollar in value in the last few minutes, which could signal an imminent return to $300 – however ETH has been fluctuating to that extent all day, so no predictions can be based on that at the moment.

At this price Ethereum is still cheap enough to attract investors, but at what volumes? For those who are playing with big enough bankrolls, what’s to stop them buying up $100,000 worth of Ethereum at $280 and then taking a swift profit two days later when it inevitably recovers to $300?

Playing that game could earn you $7,139 every couple of days as the coin fluctuates by around 6-7%, and if enough people are playing then it could ultimately leave Ethereum in a kind of stasis. Nobody wants to hodl, and nobody wants to cash out completely.

Positive Sentiment Diminished

Ethereum had been pretty close to the $300 range for the last three days, with only a brief dip down to the $280s occurring on Saturday, August 18th. However, once again we saw the market save Ethereum $280 and within less than a day the coin had returned to its psychologically significant $300 valuation.

Daily trade volumes have been falling all week and are down 33% from the weekly high of $2.1 billion. Today’s volume of $1.4 billion has only been lower on two occasions during the last month – on July 23rd, and on August 7th, shortly before the dip which saw Ethereum lose close to 40% of its value over the following seven days.

A quick glance at total global trade volumes shows a worryingly low number. The $10.8 billion daily total is a low last seen in the run up to August 7th’s crash, and while not a conclusive indicator, does spell trouble for altcoins as Bitcoin’s dominance has climbed almost 2% in the last 48 hours.

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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.

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4.4 stars on average, based on 38 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Cryptocurrencies

EOS Again Ranked #1 Cryptocurrency by Chinese Government

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The Chinese government has once again named EOS the world’s top cryptocurrency in a ranking that prioritizes innovation and application over market capitalization. Bitcoin, the world’s largest cryptocurrency by market cap and trading volume, jumped seven spots compared with June.

Crypto Market Ranking

China’s Center for Information Industry Development (CCID) has published the third edition of its Global Public Chain Technology Evaluation Index, which ranks dozens of cryptocurrencies on technology, application and innovation. EOS topped the list for the second consecutive edition despite concerns over the platform’s botched mainnet launch in June.

EOS’ strong performance likely reflects its scalability solutions. The platform’s proof-of-stake protocol is capable of processing a huge number of transactions when compared with leading blockchains bitcoin and Ethereum.

Like the previous edition, Ethereum was ranked second. NEO was bumped out of the top-three in favor of Komodo, which failed to crack the top-15 in June.

The top-ten are ranked as follows:

  1. EOS
  2. Ethereum
  3. Komodo
  4. Nebulas
  5. NEO
  6. Stellar
  7. Lisk
  8. GXChain
  9. Steem
  10. Bitcoin

The first version of the report, released in May, ranked Ethereum as the world’s top blockchain.

Bitcoin’s Rise

Although bitcoin did not perform particularly well in the first two CCID reports, it has risen through the rankings following a major structural shift in the cryptocurrency market. As Hacked previously reported, bitcoin’s dominance rate has risen more than 40% over the past three months. Bitcoin now accounts for more than 52% of the entire market capitalization for cryptocurrencies after hitting a high of 54.5% last week.

EOS and Ethereum have seen their market values plummet over the same period. Ether’s dramatic fall, which culminated in last week’s 14-month low, has raised alarm bells over the health of initial coin offerings (ICOs) in the wake of last year’s record funding amounts.

Bitcoin’s growing market share essentially means other digital assets will rise and fall on its whim. Although non-correlation with bitcoin is seen as necessary for a healthy, dynamic cryptocurrency market, recent price developments suggest investors are dropping more speculative bets for an asset with a proven track record. According to Ethereum founder Vitalik Buterin, this will ultimately lead to a new era of ICOs with better protocols and more proven business models. This paradigm, known as “Tokens 2.0,” could materialize as early as next year.

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.

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4.6 stars on average, based on 554 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.




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