Hello, everyone. Welcome to your weekly market updates
with senior market analyst, Mati Greenspan.
I am Giovanni. Let’s get started.
So, Marty, how are you doing today?
I’m having fun Gio, how are you?
So the Bitcoin price have been hovering around the 10000 benchmark for the last few weeks
and has not even reacted to the launch of Bakkt’s physically settled Bitcoin futures.
Are there any new movements or indicators that are worth our attention at the moment?
Oh, yeah, definitely. So as you mentioned, there was no reaction to Bakkt.
if you’ll go back on the previous two videos that we weekly interviews that we did.
This is exactly what I said.
So we’ve got to think about Bakkt as an opening up an eight lane superhighway to Bitcoin.
And that doesn’t necessarily mean that on the first day there’s gonna be a backlog of trades, in fact, that it’s not what we’ve seen at all.
You know, so far we’re looking at about 28 Bitcoins that have been traded as of this recording on the Bakkt futures, which is not it’s not incredibly small.
It’s still, you know, two hundred and seventy five thousand dollars, which is not chump change.
As far as indicators, we’re still looking at that blue line, which is the 200 day moving average.
We keep looking at this blue line because it’s the one that’s supported the price throughout the 2017 rally and really defined the bear market in 2018.
Once it was crossed on April 2nd, that’s when we realized that we in for a bull run over here.
And as the price continues to be flat, we’re going to see that the 200 day moving average is inching up.
At the moment, it’s hovering around eight thousand three hundred or just below.
If you’re looking for other indicators, we can look at the ADX which tells you how much momentum is in the market or in this case, how much momentum isn’t in the market.
A reading above 50 generally indicates that there’s a strong trend happening.
Below 25 means that there’s no trend.
Right now that indicator is around 18 or below.
So no trend, my friend.
And can you maybe say something about the latest surge of Ethereum which happened last week?
Is it something that shows a sustainable trend or it was just like a momentary surge?
It’s difficult to say exactly what’s going to happen.
I thought that surge was really cool because it happened right around the time of the Ethereal Summit.
In general, I think that people are going to be looking for value investment opportunities in the old coin markets.
Ethereum is part of my portfolio.
As you know, it’s one of the higher ups.
But there are other old coins that are that are higher than Ethereum within my portfolio.
The thing that continues to frighten me as far as Ethereum is concerned is the rate of inflation.
Thirteen and a half thousand new ether per day.
I think that that’s a bit more than the market demand at the moment.
However, the network does continue to grow.
And well, there is maybe a little bit of a capacity on how much it can grow.
But we know that the network is growing and that’s a good sign.
As far as adoption is concerned.
But again, when you’re managing a portfolio, this isn’t one of those that you want to go heavy in on, you know, 1 percent, 2 percent.
This is not trading advice.
Mm hmm. OK. Thanks.
Going back to Bakkt. So back as finally launch, it’s physically set to the bitcoin futures.
Can you point out why it is so innovative and important for the space to have physically settled contract besides the cash settled ones that are already offered by the CME and the CBO?
Yeah. Well, the CBO, I think they’ve already phased out their futures contracts.
The CME is basically cash settled.
So you don’t actually have any bitcoin changing hands.
You just have, you know, one person trading against another person.
And then at the end of the month when the contract expires, the loser pays the winner in cash.
So there’s no actual bitcoin in the transaction.
With these new futures contracts from Bakkt, the trader has the option to receive physical delivery of the bitcoin.
And this is going to go right at the heart of the S.E.C.
concerns where they’re saying that the market might be manipulable.
Actually, the price discovery is a lot cleaner when you’re talking about physically settled futures because the traders themself is incentivized to more reflect the actual price of bitcoin, because, you know, if the prices is off, then they’re going to be stuck basically with the real one or basically if the price is lower, then they’re going to buy it up.
If the price is higher, then they’re going to sell it off just as a natural way that the markets move.
More than that Bitcoin specifically more than any other commodity is one where physical settlement really counts because one of the main value propositions of Bitcoin is that you can take physical ownership and you don’t necessarily need a custodian.
So the fact that that custodian is there is great for traders who don’t necessarily want to deal with, you know, private keys or something like that.
They just want to trade it. But the fact that the option for physical delivery is there is critically important specifically in Bitcoin.
Continuing on this line about the consequences of Bakkt’s future contracts.
The economist and trader Alex Krueger launched a poll on Twitter about whether the launch of Bakkt’s futures will prove successful in terms of trading volume in the week right after the launch.
So, so far, only 50 percent of respondents believe it would be a success.
Also, Patrick Heusser, senior trader at Crypto Finance A.G.,
points out that the success of the products should not be defined by the trading volume.
It rather depends on whether backed will bring in new counterparties with fresh capital.
So what is your definition of Bakkt’s futures contracts’ success?
Yeah, I agree with Heusser.
We don’t necessarily need to put a number as a benchmark for success as far as well, I can see that Ari Paul also replied on this saying that it’s probably going to be a more gradual scale, which is what I was thinking as well.
Quite honestly, I wasn’t expecting any sort of major push to Bitcoin.
It’s possible It’ll happen later today.
But I wasn’t expecting any, you know, money earmarked on the side for bitcoin, but rather we have to think about this new channel, which is basically a direct line from Wall Street to Bitcoin.
And if we look at the CME contracts, we’ve always seen Wall Street’s activity as lagging to that of the exchanges.
So the action, whenever Bitcoin makes a sudden move, the action usually happens on the exchanges first and then only afterward you see Wall Street getting excited and trading it as well.
As we just showed on the chart the price of bitcoin hasn’t really moved much in the last few weeks, so it’s difficult to see anybody really getting excited over it just because the Bakkt door is open, but rather they have that arrow in their quiver.
And as soon as the price starts moving, that’s when we’ll really start to be able to use this metric, the volume as an indication for how much Wall Street is interested in.
And that’s when we’ll really be able to tell the real impact of the Bakkt futures.
So you also voted in that poll and what was your vote?
I said that it would be successful, but, you know, it’s difficult to define those type of benchmarks for success.
I think that it’s already successful in that it’s bringing Bitcoin to a much wider audience, an audience with much deeper pockets.
But even, you know, the CEO of ICE, who’s set up this entire system, said that Bitcoin was a moonshot bet.
The entire Bakkt is basically said, look, we hope that it works out.
And if it does work out, that’s great.
But you could tell that he wasn’t particularly bullish on the odds of it working.
And it’s going to be it’s a tough sell for a Wall Street trader.
Right. They see so much stuff in the media about Bitcoin and they don’t always understand the true value.
So the true value and you know, anybody in Venezuela can tell you very easily or anybody in Iran could point it out, or Turkey.
But for somebody on Wall Street, I think that they’re going to be actually looking at the other countries, the third world countries, to really understand what’s going on behind the scenes in Bitcoin and then only follow the rest of the market.
In a recent Singapore summit, BitMax CEO Arthur Hayes say that traders will soon lose their midday breaks and even weekends because the 24 hour trading routine, typical of crypto trading will be adopted into traditional finance, such as traditional equities, bonds and currency trading.
Do you agree with this kind of prediction?
All right. So Arthur Hayes, he’s got a lot of wild and crazy ideas, of course.
I believe that he’s right in the fact that digital assets that are native to blockchain are superior to traditional financial assets.
And we are expecting that there will be some sort of a migration where eventually could take a few years, could take a decade or even two.
All assets will be migrated over to blockchain base because they’re superior, because they can be traded peer to peer, because they can be traded, because you could take physical ownership of the assets rather than traditional financial assets where you need to hold them with a counterparty.
And another advantage, of course, which is the one that Arthur is getting to, is that they are 24/7.
You can trade them anytime because you have the private key.
You can simply send your assets anywhere, anytime.
And he’s talking about a 24/7 marketplace.
Now, does that mean that traders aren’t going to take aren’t going to eat lunch?
I seriously doubt it.
Certainly there are even today in the traditional markets, even when the markets are open.
There are times when things are, you know, there’s more action and times when there’s less action.
So, for example, you know, 4.30
local time here in Tel Aviv, when New York opens and, you know, the London Stock Exchange hasn’t closed yet, you know, that’s that’s a much busier time in the market than, let’s say, you know, noontime or afternoon, early afternoon on Wall Street when things are kind of died down.
The rest of the markets have kind of gone to sleep.
Furthermore, what tokenization is going to do is going to take illiquid assets like real estate, for example, and make them liquid so people will be able to trade real estate.
Does that mean that you won’t need to sleep?
I don’t think so.
I mean, most investors out there and the general rule of thumb in investing is the less you look at your account, the less that you’re on top of those things.
And the more you’re taking a long term outlook, the better off you’re going to do.
So, yes, it’ll provide opportunities for people who want to get in there on the nitty gritty and trade a minute to minute.
But investors who have a long term outlook, they don’t really care.
And they’re definitely to be eating lunch.
Here with us was Mati Greenspan.
Thank you, Mati. And see you next week.
And as always, remember to, like, subscribe and hodl.
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