Decentralization is undoubtedly one of the key tenants within the cryptocurrency community, both with the virtual currencies and the exchanges. However, recent reports point to a manipulation of sorts as these exchanges’ reported volumes do not correspond with their actual figures.
The above was indicated by a Bitwise report which suggested that 95 percent of the trade volume is “fake and/or non-economic” stoking concern within the market. Mati Greenspan, a senior market analyst at eToro, in an exclusive interview with AMBCrypto, suggested that Bitwise’s report which demarcated “real exchange” from “fake exchanges” points to the decentralized nature of the market.
In Greenspan’s opinion, what the Bitwise report indicated was not “not a bad thing”. He added that the variance of “95 percent” could have very easily been 10 percent on the lower side or 99 percent on the higher side. If the game was to fudge numbers, the culprits would push the figure as much as possible and not hold back, in his opinion.
“The 95% isn’t as significant as the number of exchanges that are actually reporting true volumes, and are not doing wash trading. That number is 10, and that is a very good number.”
According to the report, the ten exchanges that report “real volume” are Binance, Bitfinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex, and Poloniex.
Greenspan stated that this exchange variance shows that the Bitcoin trade dominance is spread out, which points to a firm decentralized nature, especially compared to its traditional equivalent the stock market. In his words:
“This actually shows, that the Bitcoin market, is decentralised. In most markets you have one exchange, that’s basically the arbiter, that’s saying what the price is.”
He added that one dominant exchange, in other markets, provides the “price feed” for other exchanges to operate by. However, in the cryptocurrency market, there is a multiplicity of ten different exchanges that provide this same price feed.
Greenspan also shed light on the arbitrage efficiency of the Bitcoin market currently, compared to the 2017-2018 high, as analyzed in the Bitwise report. The report stated that in December 2017, the BTC price deviation between the aforementioned ten real exchanges was 0.7 percent, Currently, the figure has dropped to 0.1 percent. He added:
“The fact that we have those ten exchanges and that there is very little price difference in the price of Bitcoin on each of those exchanges shows that we have very good price discoverability in this market.”
The senior market analyst further referenced Messari Crypto’s “Real 10 volume” metrics which tracks the trading volume based on Bitwise’s “real exchanges” via their OnChainFX dashboard. Based on the figures indicated by Messari, Greenspan concluded:
“It shows that we have quite a solid and stable market here.”
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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.
A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.
Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.
Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.
It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.
Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.
The analyst added:
“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”
With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.
Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:
“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”
Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.
This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.
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