Market report

ARE WE BULLISH AGAIN OR NOT??

London Block Exchange

16th March 2018

One of the biggest days for Bitcoin scaling and one of the lowest for Bitcoin’s price

ARE WE BULLISH AGAIN OR NOT?

One of the biggest days for Bitcoin scaling and one of the lowest for Bitcoin’s price

After yesterday’s scary +20% correction, markets have more or less stabilised — with Bitcoin recovering 4% and the top 100 cryptoassets up 5% on average. Crypto investors are quite sensitive, so it seems sentiment has magically turned quasi-bullish — but why?

Firstly, a popular contrarian British investor once said, whilst considering the risks of catching falling knives, that “bull markets are born on pessimism”. Additionally, several traders looked at Bitcoin’s past historical bearish markets in search for hope — once again finding solace in comparing the current dip with 2013’s brief crash, instead of the more serious one, which occurred in 2014.

Secondly, contrary to some calculations we shared yesterday, Bitcoin’s average marginal mining cost is closer to £5.7k ($8k) than to £2.9k ($4k). This means that miners who tend to have large holdings have strong incentives to keep the prices within this range, in order to support their operations. In the eyes of the reputable researchers at Fundstrat — Bitcoin may drop to £4.3k ($6k), but not below. They also maintain their £17.9k ($25k) Bitcoin price forecast for this year.

Finally — and perhaps most importantly — from an adoption and technological perspective, 2018 has been the best year for Bitcoin so far. Although alts are currently suffering from this show of strength, such innovation can benefit the entire space. In particular, we’re talking about yesterday’s launch of the first beta release of the Lightning Networkimplementation for Bitcoin’s mainnet, which could bring its network “from a measly 5 transactions per second to theoretically infinite levels”, enabling the mother of all blockchains to “serve as a platform for future applications, services, and businesses”.

THE FOURTH STATE OF SCALING

After block sizes, lightning and sharding, here comes Plasma Cash!

Crypto markets are not all about Bitcoin — we are yearning for the traditional ‘BTC sideways, alts up’ relationship to resume. For example, privacy coins are set to surge with increasing regulatory oversight on cryptoassets and some argue that utility tokens still have a chance to win the path to the “tens of trillions” in the crypto race.

To finish off the week, let’s look at another very important innovation shared in this Monday’s report — Plasma Cash. Plasma (not the fourth state of matter!) is a scaling solution for Ethereum which advanced last August — similar to Ethereum’s Lightning equivalent, the Raiden Network — but focused on scaling smart contracts instead of simple transactions.

In simple terms, Plasma Cash is an improvement to the initial Plasma proposal that reduces complexity, improves speed and mitigates some of the risks of the original plan. Some ask if this could solve all of Ethereum’s scaling problems — as the new solution seems finally suitable for exponential network growth. Here’s a small video overview!

WHAT TO LOOK OUT FOR

Filter the noise and stay ahead of the pack

MIT’s Bitcoin Expo is taking place this Saturday and Sunday, featuring PhD students, professors, founders, developers, researchers, and engineers. Jameson Lopp and Taylor Monahan are two of the most famous names. Follow the event here.

In John Oliver’s ‘Last Week Tonight Show’, a statement clarifying Brock Pierce — a popular yet controversial early advisor criticised in the show — had reached a mutual agreement last week to end his role at Block.one, an EOS parent company.

Peter Thiel, the famous investor, spoke about Bitcoin yesterday at the Economic Club of New York. Here’s the full video — watch for yourself as some say he argued “Money is a bubble that never pops.” He also stated that he is very optimistic on Bitcoin, however, bearish on alts.

WHAT TO READ TODAY

An insight a day could give you more profits to play

A report on UK’s investors’ perceptions regarding cryptoassets claims only 28% of the surveyed financial professionals believe prices will fall this year, and only 8% are planning to sell their current holdings. More insights here and a free full report request here.

Members of the European Central Bank and of the Bank for International Settlementpublished an opinion piece on the Financial Times, which is now available online — arguing “Bitcoin is not the answer to a cashless society” and criticising “central bank digital currencies”.

VCs missed the previous crypto bull runs but have now understood the potential returns from investing in networks are larger than investing in companies. Here’s a great piece on how can these firms adapt and suit their processes to cryptoassets!

  • Bitcoin
  • plasma cash
  • ethereum
  • raiden
  • crypto
  • EOS
  • Lightning Network