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eToro Market Update: Bitcoin Blockchain in Action
Hi everyone,
Leave it to the SEC to adjudicate a case involving a private jet token, just when cryptocurrency markets are soaring.
For the first time ever, US regulators have found that a utility token is not considered a security. For those of you who are new, I’m sorry we won’t go into all the details of what this means today, but just know that this is a big deal.
A little-known token called TKJ was designed by a private jet operator called TurnKey Jet as a kind of rewards program that allows its customers to pay for services with cryptocurrencies. The SEC has now declared that this project has not violated any securities laws and can continue its offering without regulatory scrutiny.
Additionally, as if that wasn’t enough, the SEC has now also released a complete guideline designed to clarify whether or not a particular cryptocurrency should be considered a security token. There is a great summary of the above ruling and framework in this tweet storm by Katherine Wu here. My favorite was this gem.
When we talk about programmable money, the practical applications can be quite flexible. Each utility token is set up quite differently, and the SEC has decided to treat each on its own merits on a case-by-case basis.
This may take some time.
@MatiGreenspan – eToro, Senior Market Analyst
Today’s highlights
- Tough Brexit deadline
- Ethereum technical setup
- Bitcoin is Blockchain in action
Note that: All data, figures and graphs are valid as of April 4th. All trading involves risk. Risk only as much capital as you can afford to lose.
Traditional markets
The President of the European Commission did it now announced that the deadline of April 12th is peremptory and no further short extensions will be granted. Basically, either Parliament approves May’s deal, or they ask for a long extension or a hard Brexit.
Funny enough, these appear to be the same three options that have been on the table for a month, but it looks like there will be nothing to do this time.
Despite all the sentiment shown above, looking at global indices since the start of the month, things don’t look that bad.
Ethereum technical setup
It’s great to see the excitement in the cryptocurrency market right now and even though we saw a pullback last night, the charts still look strangely bullish.
After a surge like this, it is quite normal to see some profit taking. The big question now is: how far back will the retracement take us?
If prices fully retrace Tuesday morning’s surge, the entire figure could be discounted. If we could survive here, though, it would be incredible. Take a look at this chart of Ethereum.
Notice a strong break above the 200 day moving average (blue) and then a return to test that level as support. This is a really bullish situation as far as charts go.
Bitcoin blockchain in action
Of course, with the excitement around Bitcoin, we need to keep an eye on network congestion. In December 2017, this was a major concern as far more transactions were being sent to the network than miners were able to confirm.
Adopting SegWit has helped a lot with this, as we will see below, but looking at the mempoolthe number of unconfirmed bitcoin transactions has increased slightly in recent days.
Looking at the situation historically, however, we can see that we are not yet at dangerous levels. This graph shows the mempool, which was flooded twice in 2017.
However, with around 56,000 unconfirmed transactions at the moment and transaction rates near all-time highs, this is something to keep an eye on.
The good news is that transaction times do not appear to have been affected at all. Anyone sending a bitcoin today should receive faster confirmation than ever before.
…and, perhaps more importantly, rates were not affected that much. There is a small noticeable spike, but nothing that would stop most people from sending a transaction today.
Overall, the Bitcoin blockchain is performing much better than in 2017. As we saw above, we are seeing almost the same number of transactions per second, but there have been no significant spikes in transaction times or fees.
This is largely due to the adoption of SegWit, an update installed in the blockchain in August 2017, which allows some transaction data to be stored in a separate location.
According to Woobull.com, approximately 40% of all Bitcoin transactions now use the SegWit solution to lighten the load.
Let’s have a fantastic day!!
About the Author: Mati Greenspan is a Senior Market Analyst at eToro Connect with Mati on…. eToro: http://etoro.tw/Mati Twitter: https://twitter.com/matigreenspan LinkedIn: https://www.linkedin.com/in/matisyahu/ Telegram: https://t.me/MatiGreenspan Office Phone: +44-203-1500308 (ext:311)
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