October 28, 2018
QUOTE OF THE DAY
“Investing is the intersection of economics and psychology.”
- Seth Klarman
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| COIN | PRICE | 24H |
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| BTC | $6,487.457278 | +0.15% |
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| ETH | $205.007278 | +0.62% |
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| XRP | $0.457284 | +0.09% |
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| BCH | $438.615004 | +0.22% |
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| EOS | $5.405098 | +0.48% |
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*Information as of 10:00 AM EST
Now is Your Time, Bitcoin
Mania is over
We all remember the ludicrous run-up Bitcoin had at the end of last year. During this time investors were filled with euphoria and thought that Bitcoin would never go down again... but it did.
Almost a year later, many of the investors that were caught up in the mania are left dejected and capitulated. Bitcoin had erased about 70% of the gains it made in just a few weeks. Bitcoin was a bubble and it popped.
This doesn't mean it's over for Bitcoin. The crypto market has endured these sort of price movements time and time again. The price is very much based on speculation right now. We probably got ahead of ourselves last December, but since then we have been able to recalibrate.
We now have a clearer image of Bitcoin's role in our world. The ecosystem is growing and people are no longer looking at Bitcoin as a craze.
Equities are slumping
The equity market is in turmoil. After a ten-year bull market, the equity market is beginning to slide. Monetary tightening policy and trade wars are causing despair in the stock market.
Bitcoin was established during the last recession when people had little faith in the stock market. Crypto is meant to be a safe harbor and has had an almost zero correlation to traditional financial markets since inception.
Bitcoin is often referred to as 'digital gold'. If true, Bitcoin would be like gold - a place for investors to go for a store of value when other asset classes are depreciating. Bitcoin has many advantages over gold. It is easier to purchase, physically store, and transact. Also, the supply of Bitcoin is truly limited.
Institutions are no longer 'coming', they are here
When Bitcoin initially fell from its high, investors looked towards institutions to reverse the price trend. To everyone's dismay, Bitcoin continued to slide for months, even while a handful of institutions are becoming involved in crypto.
Crypto is being catered to institutions now more than ever. Coinbase has rolled out a handful of institutional focused products. Fidelity Investments recently started a crypto custodian service. CBOE and CME have been facilitating Bitcoin futures for about a year and Bakkt is rumored to be approved for futures as early as next week.
However, it is ignorant to think that institutions will just swoop in an reverse this bear trend. The institutions are here playing the same game that everyone else is.
An ETF is likely to happen
Yes, all of the Bitcoin ETF applications have been denied thus far. But, the possibility of a Bitcoin ETF is not zero. Actually, experts say that it is a matter of when not if an ETF will be accepted.
A new SEC commissioner recently took office and has taken the time to meet with the ETF applicants. The applicants are getting another go around to pitch to the U.S. Securities and Exchange Commission on their ETF. No one knows when or which ETF will be accepted, but its possible it could be within the next year.
A look at the technicals
Bitcoin's price movements recently could be described as boring. It has traded within a tight price range between $6,000-7,000 for almost two months. Low volatility is usually a sign of an impending breakout. The technicals are aligning almost perfectly with the fundamentals.
Outlook
It looks like all the stars are aligning for a Bitcoin resurgence. However, as we have seen in the past, anything is possible with a new asset class like this. The environment is continually being molded. Governments and companies are figuring out how to proceed with cryptocurrencies. Chances of failure are greater than 0, but why not bet on such a revolutionary technology?
ERC20 Token Market Cap Outpacing Ethereum Market Cap
Overtaking their platform
According to data from Santiment, the combined market cap of ERC20 Ethereum tokens has now risen to $12.8 billion.
This figure is up from $11 billion in August meaning tokens have eaten up another 21% of the combined total market cap since then.
What does this mean?
In short, this means that tokens have seen more gains than Ethereum in recent months. However, diving deeper, there could be a few reasons behind this.
To start, Ethereum's weakness in the market right now could be due to initial coin offerings (ICO) offloading their ETH to save gains during this bear market but sell-offs have allegedly slowed as Ethereum remains stable around the $200 level.
On the flipside, tokens are gaining. Notably, 0x Protocol (ZRX), the fourth largest token by market cap, saw gains following its debut on Coinbase. In addition, MakerDAO, the second largest token by market cap, saw gains after the stablecoin Tether (USDT) lost its peg and MakerDAO's stablecoin (DAI) came to light.
Either way, it is unclear whether Ethereum is undervalued or if tokens are overvalued at the current state.
But wait, there's more...
- Coinbase cut at least 15 people from its workforce despite hiring over 200 new employees this year.
- Circle's CEO believes major economies around the world should coordinate efforts to create global crypto regulations.
- A gang of Call of Duty players is suspected of masterminding a plan to steal more than $3 million in cryptocurrency.
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