Crypto Marketplace Analysis: 17th August 2020

By Ritwik

Bitcoin teases us at $12,000: says Simon Peters, market analyst

Be sufficient it to say, it was a busy week, with mixed performance in equity markets and odd but not discouraging movements for bitcoin. The FTSE All-Share index & the STOXX600 both documented steady growths, while the S&P500, which started the week at 3,352, took a turn for the worse on Wednesday. Subsequently its drop to 3,335, it has meanwhile improved to 3,372.

Bitcoin destitute through $12,000 on Monday, only to suffer a noteworthy fall to $11,275 by Wednesday morning. Nevertheless, far from dispelling recent hopes for a bull run, its subsequent return to the mid and even high 11,000s over the weekend suggests that we might be witnessing another new bottom for bitcoin; drops under the old $10k resistance level are looking progressively unlikely. Besides, there is a significant difference amid investors strategically unwinding their positions and the sudden, panic-driven falls that we saw in March as the coronavirus pandemic began to take hold.

clingers to shine while other alts retrace their steps: says David Derhy, market analyst

In a week of moderately poor performance for some altcoins, Chainlink continued its impressive upsurge upon a steady wave of industry chatter & has present-day become the fourth significant crypto assets by market capitalization (up 978% YTD). With a session anticipated in the not-too-distant future & prevalent anticipation of yet more strategic partnerships, it preserves its position as a star performer with no end in the vision for its positive momentum.

Indeed, what’ individually remarkable is Chainlink’s dominance in the DeFi space. Now standing at 47%, it is not unparalleled with bitcoin’s 60% share of the whole crypto sphere.

Bitcoin’s burgeoning market cap warrants careful comparison

Simon Peters, market analyst:

At present approaching $200billion, bitcoin’s market cap is undeniably remarkable and, as Decrypt notes, is closing in on the equivalent numbers of significant legacy financial businesses. It is previously comparable to portfolio stalwarts such as Netflix & AT&T, and rise towards the 2017 high of $300bn would indeed align it with the likes of Mastercard and JP Morgan Chase.

Fascinating though this is, we believe that an assessment with gold would be more fitting. Their comparable potential as inflation hedges makes them a more natural pairing and one that the industry should monitor closely, especially when we begin to experience the long-term effects of quantitative easing on reeling economies everywhere.

For anybody who doubts bitcoin’s hedge probable this week was providing yet another wake-up call. Nasdaq-listed business analytics firm MicroStrategy established that it had bought $250million of the crypto asset, citing its “superiority [to cash] for those seeking a long-term store of value.” In preceding newsletters, I’ve emphasized that institutional investment is essential for a future bitcoin bull run, & so this is certainly a promising development.

As bitcoin’s steady push higher lingers, it is worth bearing in mind that a high bitcoin price can sometimes create a psychological barricade for the retail investor. merely like investors can get fractional shares, crypto-asset investors can hold fractions of bitcoins (Satoshis). Yet the fact relics that many retail investors will want whole bitcoins & the price of attaining them is moving further out of reach. It’s a psychological peculiarity, but a reality nevertheless & a future barrier to further widespread retail investment. Such a barrier highlights the reputation of institutional investment.

Ethereum fees hit highest, but a fall could be on the horizon says

David Derhy, market analyst

Ethereum fees hit the highest of $6.87M on Wednesday. This milestone is to be probable, as Ethereum remains to be the go-to platform for Dapps. As we take steps near Eth 2.0, those all-time high fees will likely fall. The Proof of Stake mechanism states that users of the platform would not have to contend with each other to complete transactions. We’e also been enthralled with the excellent documentation from the Ethereum team on how to stake. It is wonderfully coherent and widely available, which should be useful for future investors looking to receive staking rewards. In the meantime, Ethereum Classic stays to operate in ETH’s shadow, having lost so much of its momentum in the fork. It is no surprise to see commentators calling for ETC to follow suit and switch to Proof of Stake sooner rather than later.

This is a marketing communication & should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been organized without having regard to any specific investment objectives or financial situation & has not been prepared following the legal and supervisory requirements to promote independent research. Any references to past performance of a financial instrument, index, or a packaged investment produce are not & should not be taken as a dependable indicator of future results.

All contents within this report are for informational purposes only & do not constitute financial advice. eToro makes no representation & assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared to utilize publicly-available information.

Cryptoassets are volatile instruments that can fluctuate widely in a brief timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading crypto assets are unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.

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