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Too Many Assumptions

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I’d like to wish all of our clients in France and Italy a happy Assumption Day. In the financial markets, we try not to make any assumptions but apparently in religion it’s Ok. 😉

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of August 14th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

They’re calling it a de-escalation but that assumption may be a bit premature. The fact that Donald Trump and Kim Jong Un have not traded spats in the past 48 hours does not mean that the situation is any less tense. However, stocks are climbing again as investors try to buy the dip and so the headlines suggest that investors fears about nuclear war between the two nations are dissipating.

As we’ve mentioned before, the stock market has not been a very accurate gauge of fear in the last few years. Therefore, this may simply be a case of financial journalists trying to determine the narrative according to the market movements instead of the other way around.

Nevertheless, regardless of the apparent problems in the world the markets are indeed expressing less fear at the moment. Gold has come away from her highs and the USDJPY has managed an impressive gain thanks to some good data from Japan.

One asset that doesn’t quite support the move away from safe haven trading is oil. Crude took a significant dive yesterday. Proving, that at least in the energy market, there is still some level of fear.

In this graph we can see all the assets mentioned above. Crude oil is in candlesticks. Notice the build up and let down of gold (green) as investors moved to safety and then away from it. As well, we can see the risk assets USDJPY (blue) and Dow Jones (orange) doing exactly the opposite of gold.

Bitcoin Boom

Seeing a blockchain boom is always exciting. To watch any asset move as fast as the cryptos sometimes do is simply a thing of beauty.

Today, bitcoin touched a new all time high of $4,413 before seeing a $220 retracement. The total market cap of all bitcoins in circulation reached an astounding milestone of $70 Billion this morning as BTC continues to lead the crypto market higher.

Bitcoin dominance is now firmly above 50% as consensus forms around the original form of digital money.

Watch out though! As with anything that moves this quickly sharp swings are always a possibility in either direction. The cryptocurrency markets remain the most volatile and risky market mankind has ever seen so please trade with caution.

Ethereum’s Win

Though the price movement has not been as impressive as bitcoin, the Ethereum network has been seeing huge success in other areas.

Vitalik Buterin, the founder of Ethereum tweeted this morning that transactions are at an all time high. The tweet that he’s quoting even suggests that this might be a record level of transactions for any blockchain ever.

Of course, that “I believe” statement is still just an assumption until proven right or wrong.

Either way, technical analysis of the Ether token reveals that the price may be finding some sort of stability even if that stability is more like a flag pole in the centre of a tornado.

For now, the range that’s been built is between $200 and $300. We should get confirmation soon enough if this range will hold or if we see another cryptastic breakout.

Let’s have 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 (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 114 rated postsSenior Market Analyst at Etoro.com.




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Bitcoin

Bitcoin Price Gains Momentum as BlackRock Gets Serious About Crypto

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After a week of lateral moves, the bitcoin price rose Monday on reports that one of Wall Street’s biggest asset managers was assembling a team to explore cryptocurrency adoption.

Bitcoin Price Update

The largest cryptocurrency by market capitalization peaked near $6,620 at 08:49 UTC, the highest in six days. At the time of writing, bitcoin was trading near the intraday high of $6,620 for a gain of 4%, according to CoinMarketCap.

Bitcoin held relatively steady over the weekend, with prices hovering between $6,300 and $6,400. The coin’s successful defense of $6,000 – a key technical and psychological threshold – has encouraged bids after trading volumes plunged to their lowest levels of the year.

As Hacked reported Sunday, turnover in the cryptocurrency market fell to $8.8 billion over the weekend. Bitcoin accounted for roughly a third of that total. On Monday, bitcoin’s trading volumes were back up to around $4.9 billion, the highest in two weeks.

Bitcoin is likely to run into resistance north of $6,800 – a region that capped last weekend’s rally. BTC/USD peaked at $6,866 on July 8.

Institutional Bull Run?

Bitcoin’s gains were fueled by speculation that BlackRock, one of the world’s largest asset managers, is planning an entry into the cryptocurrency market.

London’s Financial News, citing unnamed sources, said BlackRock has assembled a working group to investigate blockchain technology and cryptocurrencies. Sources also indicated that the team of exports is looking at what other asset managers are doing with cryptocurrencies and how it can impact BlackRock’s underlying business. The findings of the research will be presented to senior management.

“Like most financial institutions, BlackRock has a working group that meets periodically to exchange information on blockchain and consists of employees from various parts of the business,” a spokesperson for the company said in a statement, according to CNBC.

“We have been looking at blockchain technology for several years, recognizing potential for shared processes and data across market participants, clearing, settlement and reconciliation and simplified securities issuance.”

CNBC believes the working group was first assembled in 2015.

While cryptocurrencies continue to polarize Wall Street, major financial institutions are slowly changing their tack. It was only last year that BlackRock CEO Larry Fink said that bitcoin was merely a “speculative” instrument used for anonymity and money laundering. Now, his company may be on the cusp of entering the market.

Exchanges like Coinbase are betting big on institutional adoption and have created a suite of custodial services aimed at luring this segment of the market. Industry experts believe that the next major bull market for cryptocurrencies will be driven mainly by institutions, marking a significant departure from the retail-dominated surge of 2017.

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 497 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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Altcoins

Cryptocurrency Market Rebounds as Trade Volumes Recover from Yearly Low

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Cryptocurrency prices were seeing green Sunday, as market activity rebounded from the lowest level of the year with bitcoin and the major altcoins making tepid progress.

Crypto Market Update

Every cryptocurrency in the top-20 by market capitalization was trading in positive territory Sunday. As a result, the total market capitalization of all digital currencies rose by $6 billion to $254.5 billion. Bitcoin’s share of the pie remains roughly 43%.

The bitcoin price edged up 1.7% to $6,363, with the bulls continuing to defend the critical $6,000 level despite repeated downturns.

Ethereum, the no. 2 cryptocurrency by market cap, rose 2.4% to $447.

Bitcoin cash jumped 3% to $719. BCH has shown poise over the past five days even as accusations of node centralization continue to grow.

Ripple XRP rose 1.9% to $0.445. Meanwhile, EOS gained 2.4% to $7.13.

Volumes Hit 2018 Lows

Daily turnover in the cryptocurrency market bottomed fell to around $8.8 billion on Saturday, the lowest since November, according to CoinMarketCap data. Daily trade volumes rose by as much as 20% Sunday, reaching $10.5 billion. At the time of writing, 24-hour volumes were valued just under $9.9 billion.

Since the April downturn, trading volumes have thwarted multiple rally attempts for cryptocurrency prices. Daily turnover has crossed the $20 billion mark only once since June.

As Hacked previously reported, tepid volumes reflect a general decline in retail trading activity on major digital currency exchanges. This is further corroborated by the sharp drop in Google search results for terms like “bitcoin” and “cryptocurrency.” Basically, the half-year market downturn has spooked new traders from entering the market.

Amid the downturn, exchanges like Coinbase have reported a drop-off in app downloads as fewer traders show interest in buying cryptocurrency. Meanwhile, trading apps like Robinhood are still growing thanks to a suite of service offerings that extend far beyond cryptocurrency. Robinhood began offering cryptocurrency back in February but still maintains a thriving platform for traditional markets, such as stocks and ETFs.

Several leading exchanges have announced plans to relocate to jurisdictions with friendlier policies toward cryptocurrency. Malta, a tiny Mediterranean island state, has managed to lure Binance and OKEx to its shores thanks to favorable regulations.

As Hacked’s James Waggoner recently showed, much of the downturn in crypto trading activity has been associated with fears of a regulatory clampdown in jurisdictions like the United States and South Korea. In the case of China, those fears were realized last September when policymakers issued a blanket ban on cryptocurrencies and initial coin offerings.

However, a “tectonic shift” in regulatory thinking is currently underway, which could pave the way for a renewed uptrend in cryptocurrency markets. Case in point: the U.S. Securities and Exchange Commission (SEC) has declared bitcoin and Ethereum to be non-securities. So long as there is no conveyance of ownership, ICOs may also fall under this favorable regulatory purview.

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 497 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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Bitcoin

Where Do Bitcoins Go When They’re Lost?

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Although it could conceivably happen with any cryptocurrency, the conundrum of lost Bitcoins is the most common because of its market dominance and stratospheric rise in prices. Having been around since 2009, there has been a lot of time for people to lose track of where they put their Bitcoin or how to access their private key, and the result is a sizable portion of the existing money supply being assumed lost.

A Lot of Crazy Stories

Every few months there is a major news story about some dramatic way someone lost their Bitcoin or tried to recover it. The issue is that in the beginning, no one knew how much Bitcoin was going to be worth. At the prices they bought it at (early on), they had no incentive to put much thought into how they were going to store it.

This is how you end up with stories like the IT worker who wasn’t paying attention and threw out the wrong hard drive. Now he is trying to excavate the local landfill to find his approximately $117 worth of Bitcoin.

People have also gone through the trouble of hiring experts to crack their hardware storage device, or getting themselves hypnotized in order to remember their passphrase. With every wild story we hear, there are likely 100 more cases where someone either hasn’t realized they lost their Bitcoin yet, or haven’t announced it to the world as lost.

Identifying Lost Bitcoins

It is actually quite difficult to determine how many Bitcoins have been lost, since people are unlikely to report their errors to the world. Bitcoin can be lost in numerous ways: by sending to nonexistent addresses, losing the hard drives, forgetting passwords, or even something as morbid as someone dying without passing on the access to their private key.

Chainalysis specializes in analyzing the Bitcoin blockchain to track down criminals or tax evaders, but they also have performed a detailed analysis of the money supply. By looking at all the coins that have been held for a long period of time, and then examining how they reacted during forks in the blockchain where further action would normally have been required, they have been able to get a general estimate of the amount of Bitcoin that has been lost. Right now, it is estimated at $2 billion USD, but that number may vary as time goes on.

Much of this becomes educated guesswork. For example, the 1 million BTC that Satoshi Nakamoto holds and has never traded are assumed to be lost. No one knows what has become of those coins or whether they will surface again, so assumptions like this must be made.

A New Industry

With a limited amount of Bitcoins ever planned to be minted, these lost Bitcoin will become more and more coveted as time goes on. A whole cottage industry is beginning to spawn for the “treasure hunters” who seek to recover lost Bitcoin. With approximately $20 billion USD on the table, there is plenty of incentive for companies to find ways to recover this money.

As a result of the high potential payoff, professionals are starting to offer their services in recovering lost coins. It is possible to hire a password recovery experts or a data recovery specialist who will help you gain access to your missing funds. These skills were previously employed in recovering data on computers, but with Bitcoin’s unexpected rise in the last few years, there is now huge monetary compensation available to those who are good at it.

These professionals either charge a fixed fee or a percentage of the recovered funds, which could work out to be a very lucrative business. We know the market is big enough, but the question is how possible it is to recover much of the lost cryptocurrency.

As such, even with this new trend emerging, everyone should be taking the time to secure their cryptocurrency by making backups (hopefully multiple backups) and storing them in safe places. And although it sounds crazy, you would do well to consult a legal expert about formulating a solution that would give your family access to your Bitcoin if something ever happened to you.

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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