Hi, everyone Today we have our traditional crypto markets with Mati Greenspan
I hope you missed Mati as we did How was your vacation, Mati? Oh, it's fantastic Thanks a lot Great So, before we start, let me remind you that on Friday we announced the competition
We asked you to guess the Bitcoin's price today at 7:00 am Eastern Time And we have a winner So the Bitcoin's price at 7 a
m on Coin360com was $10,256 and the user with a nickname Big On Crypto guessed it would be $10,25401 So please contact us by email in about section to claim your prize, which is $50 credit on Cointelegraph merch store
Good job, Big On Crypto, you are really big on crypto Mati, Bitcoin has been stuck in the mid low $10,000 range for about a week Can you give us an overview of the current market situation? Is it still possible to see an ascending pattern? So the pattern that I pointed out on Twitter this morning is actually, unfortunately, a descending pattern We can see that huge rally up from the beginning of the year and it has stalled, as you mentioned Right now, we have support just below $9,500
And the resistance here is actually going down We can see that the highs are getting lower This is a descending triangle formation in technical analysis The base case or the most likely scenario as of downward break Luckily enough, we do have a nice indicator right below, which is this blue line over here
This is the 200-day moving average We've discussed that 200-day moving average many times in these interviews And it is a key indicator for Bitcoin And I believe that that could, if we do see that scenario play out or we see a downward break, I believe that that blue line is very likely to cause some sort of a support Awesome, and what about altcoins? What's the situation at the moment? I think that altcoins are still following Bitcoin for the most part
We had some nice movement in EOS over the last 24 hours, though it's not really clear exactly why, but for the most part we're looking at Bitcoin as the leader and altcoins just kind of following in the wake So last week, Ripple apparently transferred 500 million XRP from its escrow wallet, which is quite enormous sum Given that XRP price has been in downtrend, many in the community are worried about company continues dumping of the token The company, in turn says that they are investing in firms that could help the ecosystem grow What is your stance on this issue? On the one hand, Ripple has an advantage that they have an enormous treasury chest that they can use to invest in the future of Ripple
On the other hand, is every time that they take some of that treasury out, they're actually hurting the price because they're not holding US dollars on the side They're holding billions of XRP tokens Every time they take half a billion tokens out, they have to then sell those on the market And that reduces both the value of XRP and in turn, their treasury chest So overall, this is basically a downward pressure, especially in the short term
I mean, if you're thinking about long term, if they gain worldwide adoption and are seen as the de facto way to transfer or to do settlements between two banks, that you know, that's a very long term bullish scenario However, in the short term, every time that they take some money out of XRP in order to invest in the future, they are going to pull down the price a bit Last week, Fred Wilson, the co-founder of venture capital firm Union Square Ventures, expressed criticism towards Ethereum He said: "Ethereum has shown the way to so many important things: smart contracts, programmable trust-free computing, potentially proof of stake, and a lot more But it remains hard to build on, scaling issues abound, and many developers are looking elsewhere
" Also, not long ago Vitalik Buterin admitted that Ethereum blockchain is almost full What do you think of these criticisms? Do you still see the potential of Ethereum? I definitely see the potential of Ethereum in the long term Ethereum is probably one of the biggest places where people are able to do decentralized fundraising And that's an amazing thing And as our friend said, that opens up the way for new business models and new models for raising capital
I do believe that it has, obviously, if the blockchain is almost full, that means that a lot of people are still using it, right So let's not lose sight of what's happening in real time Obviously, they do have scaling issues I do believe that they will get over those scaling issues eventually However, when we're talking about decentralized networks, this is right now the gold standard of them
What worries me as far as investing in Ethereum, very similar to what we saw in XRP, is a very high rate of inflation at the moment We're seeing about 13,000-13,500 new ETH is created on a daily basis And I don't think that the demand from developers is just that strong at the moment So right now what I see for Ethereum, especially at this point in time, is a strong rate of inflation after the huge run up in price that we saw in 2017 Obviously we saw a huge rise in the usage of the network which translated into higher value per token
I don't think that we're seeing that same level of the network growth at the moment to support that high level of inflation Can you see the same issues affecting Bitcoin at the moment? Or you think these are just problems belonging to Ethereum? Well, Bitcoin at the moment has a much lower rate of inflation than Ethereum does And I think that Bitcoin actually has shown very strong fundamentals lately So first of all, we can point obviously to the hash rate, which is about six times higher than it was at the height of the all-time high in 2017 As well, I mean, even if we're looking just at the short term, this is the estimated USD transaction volume on the Bitcoin network is right now $1
4 billion per day approximately And that's about as high as it's been since July So we can see that people are still using Bitcoin for its intended purpose of transferring value from one person to another In an analysis on stablecoins released by JPMorgan, the company pointed out some risks which a global cryptocurrency like Facebook's Libra would pose In particular, their analysis says the network could fail in periods of stress
Quoting JP Morgan: "The risk of payment system gridlock, particularly during period of stress, could have serious macroeconomic consequences" What do you think about this risk? Is it existing? It's not an existing risk until there's an existing currency I mean, right now it's a very hypothetical situation How would they even know how much usage is going to see and how will they even know how much usage that that blockchain could handle at the moment? There are two things that are very far Let's see them get the regulatory approval that they seek
Let's see them get that out Let's see them put the blockchain up and then they can talk to me in about, you know, scaling issues or whatever Right now, it's just way too early to even be talking about that Even going further down that path, why are we even talking about, you know, Libra coin at all? It's very difficult right now to be investing in it It's a stablecoin first of all, an asset backed stable coin
So at the moment, I mean, we've set up on eToro Libra portfolio, which is basically tracking public companies that have committed to being the master nodes of the Libra blockchain But short of buying those stocks, it's a very difficult investment opportunity to be discussing right now So another risk pointed out by JPMorgan is related to the possibility of negative yields on the Libra's fiat currency reserves This scenario becomes even more likely if we consider the global trends are going towards further monetary easing policies So do you share these concerns? I find it very funny that JPMorgan is bashing Libra
Obviously, we know that JPMorgan is coming out with their own JPM stablecoin, which is backed to the US dollar Perhaps Libra's model of having an asset backed stablecoin, rather than having it pegged to a specific, specific currency is that they have, you know, more stability so that they're not only exposed to one currency On the other hand, I myself have raised questions about how that asset backed platform is going to work What it seems to me is that actually opposite of what JPMorgan is saying in your quote is that the people who are managing that fund actually have a larger incentive to seek out higher yielding investments, because the yield on those investments actually go to the people who are managing the fund As from an asset managers perspective, their incentive is always to seek out the highest possible yield
Now, JPMorgan is talking about a world where or a trend where we see yields on assets, generally speaking, going down and some are even negative I find it very hard to believe that we'll be in any sort of world where they will not be able to pick out some high yielding assets from all of the global assets that are out there So these were the latest market updates with senior market analyst Mati Greenspan Thank you for watching and see you next week And always remember to like, subscribe and hodl
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