Market Update 5th – 11th August 2020

In Markets

Another week of bullish price action saw Bitcoin top the US $12,000 ($16,600) mark yesterday, to record its highest weekly close since January 2018 – and the highest price since June 2019. Bitcoin is currently up 4.4% on seven days ago to trade around $16,650. But all eyes were on Chainlink which gained another 50%. EOS gained 5.8%, Bitcoin Cash was up 1.2% while Ethereum and Stellar finished the week flat. XRP (-6.1%), Bitcoin SV (-2.3%) and Litecoin (-1%) lost ground.

BTC A$16.6k. Bitcoin & LINK on fire

In Headlines

Bulls on parade

The general sentiment seems insanely bullish right now. On-chain analyst Willy Woo says we’re in the “early main bull phase, it’s Q4 2016 all over again”. Messari founder Ryan Selkis says he’s “still not mentally prepared for what’s about to happen in the crypto markets in the next 12-18 months” pointing to increased accessibility, better info sources and the “macro narrative” as reasons crypto will explode. Former Goldman Sachs fund manager Raoul Pal says the charts are “incredibly bullish” right now, and that “it may not be even worth owning any other asset as a long-term asset allocation.” The Crypto Fear and Greed Index is at 78, or Extreme Greed.

Bulls on parade
Bitcoin as a function of Nasdaq – Bloomberg

What’s the total supply of Ether?

Bitcoiners, including Pierre Rochard and Anthony Pompliano, highlighted a ‘flaw’ in Ethereum over the weekend that means various block explorers provide different answers to the question of “what is the total outstanding supply?” The answer, “somewhere around 112 million” apparently isn’t good enough for them, with Pomp calling it a “MAJOR problem and showcases why ETH is not good money‘. But Mastering Bitcoin author Andreas M. Antonopoulos thinks the whole thing is “a silly gotcha that doesn’t make much sense if you understand how Ethereum works”. A positive bit of news to emerge from the discussion is that Eth co-founder Vitalik Buterin revealed that “transaction fees (over) the past 2 months have been high enough to more than fully cancel out PoS rewards post-EIP”. (Explainer here).

LINK: the choice of a new generation

The DeFi oracle coin has been on fire this week and claimed the No.6 spot on Coinmarketcap after increasing in price by 50%. LINK has recorded a new all-time high price above $20, marking a 700% increase since January 1. Cane Island CFA Timothy Peterson says that at this rate it will hit $45 by the end of the year. While some expect a pullback, Michael Anderson from Frameworks Ventures (the fund with the heaviest LINK bags outside of the core team) predicts LINK’s value will “track the value of the smart contract platform it is securing, meaning the long term market cap of LINK will eventually be larger than Ethereum’s current market cap today.” If he’s right, that’d be another 10x from here.

Three new DeFi listings

We enabled order book and OTC trading for Maker (MKR), Dai (DAI), and USD Coin (USDC) this morning. If stable coins are your thing, we now have you (even more) covered! We also have a discount on trading fees for the first two weeks.

Crypto goes mainstream

Crypto fund Grayscale has launched a major advertising campaign on CNBC, MSNBC, Fox and Fox Business, with a succinct explainer about the need for digital currencies. Dave Portnoy – the comic blogger who has come to represent an army of amateur Robinhood day traders – has invited the Winklevoss twins to explain Bitcoin to him. “I want to buy all the Bitcoins” he told them, and his 1.7 million followers. They accepted the challenge. Goldman Sachs’ new global head of digital assets, Mathew McDermott told CNBC that within five to ten years he expected to see “a financial system where all assets and liabilities are native to a blockchain.”

DCA: Better than average returns

Investors who dollar cost averaged into Bitcoin since the all-time high price in December 2017 are in profit by 61.8%. Doing the same with Ether since its ATH in January 2018 would have been even more profitable, returning a total of 87.6%. Coin Metrics noted that Bitcoin’s realised price (the average price each investor bought at) is above US$6,000 ($8,350) for the first time in its history.

You can take advantage of several Dollar Cost Averaging methods on Independent Reserve, by using AutoTrader strategies like ‘AutoBuy’, ‘AutoSchedule’ and ‘AutoBasket’.

DCA: Better than average returns
Until next week, happy trading!

Independent Reserve Trading Desk