Bakkt and Bitcoin Breakout Volume, Congress and Crypto, Money Printing and the Man: eToro Market Update
Hi Everyone,
Of the many takeaways from Zuckerberg’s appearance on Capitol Hill yesterday, the one thing that stood out for me was a comment from Representative Tom Emmer who pointed out that a vast majority of the questions being asked were ill-prepared and/or unrelated.
“Congress is nowhere close to catching up with some of the most basic technologies affecting our time.”
Indeed, there were probably at least as many, if not more questions about Facebook’s community standards policy than there were about the Libra project.
Still, what seems to me is that Facebook’s strategy to highlight the difficulties of innovating in the United States, especially in the face of Chinese progress, has paid off handsomely. We do hope that Facebook is successful in its mission to bring regulatory clarity to crypto USA.
We’ll take a good look at the market reaction below.
@MatiGreenspan eToro, Senior Market Analyst
Today’s Highlights
- Crawling Economy
- Draghi’s Last Stand
- Volumes are Back
Please note: All data, figures & graphs are valid as of October 24th. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets
One stock that is often seen as a bellwether for the global economy is the well-known maker of industrial equipment Caterpillar, who reported their earnings yesterday with a rather depressing outcome.
It’s now quite clear to all, that the current trade wars that have been dominating headlines over the last few years are inflicting real damage to business confidence. Even the game making giant Hasbro has blamed their recent troubles and a 15% drop in share price on the ongoing trade wars and tariffs.
What seems interesting to me, and I know I’ve been using the ‘R’ word a lot lately, is that investors don’t seem too concerned with CAT‘s under-performance. Here we can see the initial dip when the report was published (purple circle), followed by a mean rally that took it to fresh highs.
Last Stand
Today we will bid a teary farewell to the outgoing president of the European Central Bank, who will deliver his last interest rate decision before leaving office next week.
Super Mario Draghi has had a pretty good run as the ECB boss. He will always be remembered as the man who saved the European Union with a 2012 speech in which he stated that “the ECB will do whatever it takes to preserve the Euro.”
In this case, what it took was a whole lot of money printing. So, let’s take a look at his legacy. Here we can see the ECB’s balance sheet from the time that he took office in November 2011 until today.
All in all, throughout his tenure, €2.2 trillion was injected into the global economy. His last major act as president was to reinstate the QE program, which is set to resume next month at a pace of €20 billion per month for the foreseeable future.
Here’s to hoping that his successor will be able to do more with less.
Crypto Volumes Return
Shortly before Zuck took the stage before the House Financial Services Committee, Bitcoin broke a major level of support that it had been working on for almost a month.
Here’s a chart that was tweeted by stock analyst Mark Dow moments before the movement. He totally called it, possibly even caused it.
As we’ve often seen in the past, when Bitcoin gets volatile, volumes go up. Yesterday was no exception. Most notable are the new Bitcoin futures contracts on Bakkt, which smashed a new all-time high level of trading activity. A total of 640 BTC changed hands with an estimated value of $4.8 million.
Across the top crypto exchanges, volumes saw a significant breakout. According to Messari data, the top 10 crypto exchanges saw about triple what they’ve been tracking over the last week.
At this point, it’s really unclear what caused the movement or how long the action will last. These things do have a way of snowballing and if we can build some momentum here, it’s very possible we’ll be in for a larger movement up or down.
However, if the activity was solely surrounding Zuckerberg’s testimony or the downside breakout, it’s quite likely that volumes could fall back down as easily as they rose. So, I guess we’ll have to wait and see.
For some light entertainment, feel free to watch this crypto duel between myself and YouTube trader Erik Crown. According to YouTube, Crown “destroyed” me. But I guess I’m guilty here of breaking a cardinal rule of the Internet “never read the comments.”
Many thanks to all of you for continuing to send your amazing feedback, awesome insights, and thoughtful questions. They are my main source of inspiration and I enjoy every one.
Have an incredible day ahead!
Best regards,
Mati Greenspan Senior Market Analyst
Connect with me on
eToro Twitter LinkedIn Telegram Your Social Investment Network – www.eToro.com
eToro (UK) Ltd is authorized and regulated by the Financial Conduct Authority. eToro (Europe) Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission. eToro AUS Capital Pty Ltd. is regulated by the Australian Securities and Investments Commission, ABN 66 612 791 803, AFSL 491139.
This is a marketing communication and 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 prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.
This content is sponsored and should be regarded as promotional material. Opinions and statements expressed herein are those of the author and do not reflect the opinions of The Daily Hodl. The Daily Hodl is not a subsidiary of or owned by any ICOs, blockchain startups or companies that advertise on our platform. Investors should do their due diligence before making any high-risk investments in any ICOs, blockchain startups or cryptocurrencies. Please be advised that your investments are at your own risk, and any losses you may incur are your responsibility.
