Bitcoin Mempool Cleared
Mati Greenspan | Feb 23, 2018 06:38AM ET
It's not often that drama from reality television influences the stock markets but I suppose it's one of the hallmarks of the new world we live in.
For those of you who haven't heard yet. Kylie Jenner sent out this tweet...
and Snapchat (NYSE:SNAP) stocks did this...
The follow-up apology didn't seem to help much though.
Love or no love, it's pretty clear that investors are following these personalities fairly closely and taking notes.
Today's Highlights
More Market Funk
Bitcoin is Clear
CME Bitcoin Expiration
Please note: All data, figures & graphs are valid as of February 23rd. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets
The market funk continues. All the indicators are totally sensational and correlations are way-out.
The Dow Jones went up and the NASDAQ Compositewas down. This morning the Asians did great but Europe is starting out weird.
Things are just kind of all over the place. There weren't really any progressions in Volatility or the 10 Year Yield. Both kind of just coasted through Thursday.
But hey, today is Friday. So we could get some action going into the weekend. Especially with some heavy fed activity planned for this evening.
Get The News You Want
Of course, the only FOMC member traders really want to hear from at the moment is the newly appointed Jerome Powell, who will be giving his first interest rate announcement on March 21st.
Bitcoin in the Clear
The community celebrated yesterday as the Bitcoin mempool was cleared for the first time in months.
Here we can see that during the peak of the FOMO from December 8th util January 21st, the bitcoin network was backlogged with more than 100,000 unconfirmed transactions at any time.
This comes as the adoption of both SegWit and the Bitcoin Lightening Network have been dramatically increased.
In short, the scaling issue that we've spoken about often in the last few months may finally have a solution. Of course, we'll only know for sure once we give it a real test.
For now, transactions rates are at the lowest point since at least May of 2016, with an average of only 2.14 transactions per second (TPS) over the last 7 days.
It should be noted however that adoption of the Lightning Network will actually reduce the TPS rates since Lightening transactions happen off of Bitcoin's main chain.
Rather than adding each transaction to the main blockchain, trusted parties are able to transact freely with each other. They then send an aggregate summary of their transactions onto the main blockchain so that the rest of the network can update the final results.
Either way, it's clear for now that there's simply less activity on Bitcoin since the pullback. This can be confirmed by Google) Trends which shows that interest in the world's largest digital currency is now as low as it was in early November, which at the time was an all-time high.
Futures
Another thing to bear in mind is that the CME February Bitcoin futures contracts will expire today. Any positions that are not rolled over to the March contracts will need to be settled in cash on the Gemini exchange.
It should be noted that Wall Street is still taking it very slowly with bitcoin, and so far only 5,840 BTC have been traded on the February CME contracts.
Some people have pointed out that the price of bitcoin tends to dip around the time of the contract expirations, but I still haven't seen enough evidence to support this theory.
For now, my tinfoil hat is still in the closet. Will let you know once I take it out. ;)
Have an amazing weekend!!
@MatiGreenspan
eToro, Senior Market Analyst
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