Uncomfortable Sustainability In Markets And Bitcoin
Mati Greenspan | Aug 10, 2017 06:53AM ET
After much uncertainty regarding the future of the bitcoin network, it seems we now have more clarity.
After years of debating about the right thing to do for bitcoin, the community has finally taken action and has implemented the SegWit solution. The move has been seen as incredibly positive and has propelled bitcion to new all time highs.
It has now been announced that the much in question SegWit2x "Hard Fork" is scheduled to happen within the next 90 days, or sometime in mid-November.
The August 1st deadline has passed us quite smoothly but still to come is the network split that will double the size of each block in the blockchain. We hope this goes smoothly as well.
However, some trouble is brewing under the surface. A recent update to the bitcoin Core software will force any SegWit2X fork to be contentious and create a new blockchain. When Bitcoin Core 0.15.0 is released, it will begin disconnecting all nodes who are signaling for SegWit2x and essentially make them invalid.
At this moment, the mining pools are staying silent. No doubt cowering from this sudden blow to what seemed like a reasonable compromise. Going forward, they need to decide if they want to simply be happy with SegWit, without going for the Fork or create a new blockchain to support SegWit2x.
Of course, if you're already creating a new blockchain, why not just use the one that was already created and turn to Bitcash. Though the price doesn't seem to be affected much bitcoin is very likely for some more surprises in the near future.
Today's Highlights
- Volatility Sustained
- Markets Taking a Dip
- Inflation Data Tomorrow
Please note: All data, figures & graphs are valid as of August 10th. All trading carries risk. Only risk capital you can afford to lose.
Market Overview
The volatility that we saw in the stock markets yesterday has indeed continued. The VIX has sustained and closed out yesterday above 11 points.
Not exactly a high number but at least it's away from the historic lows that it's been setting these past few weeks. To put things into proportion, here's a graph of the VIX over the last 2 years. In mid 2016 we can see the Brexit bump and at the start we have the sell-off of August 2015, the last major market correction.
For now, fear is still at a very low level. However, the flight to safety that we noted yesterday is still very much at play.
Get The News You Want
Gold has reached even further highs clocking in as high as $1280 this morning and the USDJPY is indeed looking weak, indicating Asian concerns have not abated.
The Swiss franc rally however is retracing for the moment. It's come a long way in a short time so some type of retracement is not at all surprising.
The US dollar, which has been dropping since January is indeed getting some support. Most likely her safe haven status is what's holding her up at this point.
Bitcoin and ethereum have seen minor resistances but by the chart the trends looks strong.
What's next?
We continue to monitor the news for any updates about North Korea. Many investors still put a nuclear war at a very low probability. Of course, even a low probability of something that terrible has a way of sparking fear. If there are no further updates in the near future, we can expect this to blow over... at least until the next time.
This is far from resolved and for now there doesn't seem to be any clear path to a resolution.
On the data front, we have some PPI data that could be key later today but the big release that everyone is waiting for is the inflation data tomorrow, which we'll of course cover tomorrow.
Very sorry for the delay in the updates yesterday and today. I've been travelling a lot lately. Tomorrow's may be a bit late as well. We should be back on schedule by next week. It's really nice to see all the emails and messages coming in once we pass the 15 minute mark. Very glad to see that you guys are eager to read the updates.
Have an awesome day ahead!!
@MatiGreenspan
eToro, Senior Market Analyst
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