Julius Bear

Market Report: 27th Feb. 2019— Subscribe to our newsletter.

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OUR TWO SATOSHIS

The daily view from our desk

The move towards a cashless society is getting closer each day. Don’t forget that some coins are worth more than their original value, so don’t waste them on a change machine. Others are growing increasingly pointless, but that doesn’t mean you should chuck them in an aeroplane’s engine! Companies like uber negate the need for cash, but drivers are still going out of their way to get a tip.

CONSTANTINE THE GRETH

“IN HOC SIGNO VINCES”

We’re less than 36 hours away from Constantinople — the name of an anticipated upgrade to Ethereum — to kick-in. While some people are still having nightmares about it being delayed again — as it was in January — it seems it’s going a bit smoother this time. Whilst this concerns technology, traders are anticipating some price volatility.

Why so? The argument goes that a successful update removes uncertainty from the market. But the question is what kind of trend will resume? The uplift ether saw since December’s local bottom? Or a continuation of last year’s bear market? Remember one of the five changes the update brings is the reduction of block rewards from 3 to 2 ETH, which will make mining less profitable.

JULIUS BEAR

“MEN WILLINGLY BELIETH WHAT THEY WISH”

The other side of this reduced mining profitability is a decrease in potential selling pressure. Right now, miners make 20,300 ether per day on average — a large part of which is sold to pay for electricity and other costs. But the 33% cut will drop this value to around 13,400 ether per day. And this supply reduction implies that the market needs less demand to support the equilibrium price.

However, such effect takes time to notice, even if it’s likely we see some short-term fireworks given the speculation around the upgrade. And it might even be the case it turns out to be a non-event, as Mr. Chief visualises with this bearish take. Anyway, as Josh argues, the continued investments into this space by famous institutions anticipate a bright future for the crypto market.

WHAT YOU CAN’T MISS TODAY

DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY

▪ Joseph Young breaks the news that Julius Baer, a major private bank, partnered with SEBA Crypto AG to offer cryptoasset services to its wealthy clients.

▪ The days of well-timed alt pumps are back! Yesterday MANA pumped 50% on news that Decentraland partnered with Exodus on their new blockchain phone.

▪ James Foust announced CoinCenter is opening up their US Congress “Crypto Bills Tracker”. Keep an eye on its developments and watch out for the pumps.

▪ Humans of Blockchain is apparently a thing! And an interesting one. We recommend this January interview with Morgan Pierce, CMO of SEBA Crypto AG.

▪ Lastly, to be fair to Warren Buffet, Louis Aboud-Hogben explains why the billionaire “hates Bitcoin, why he is (sort of) right and why we are still bullish”.

QUOTE OF THE DAY

ET TU, BAER?

“At Julius Baer, we are convinced that digital assets will become a legitimate sustainable asset class of an investor’s portfolio.”