Mati Greenspan breaks down why altcoins move with Bitcoin. Since mid-December, BNB jumped 569% and Litecoin 300% versus Bitcoin's 220%. XRP trades at 0.8 correlation with Bitcoin, and Libra's regulatory pushback reveals the tension between centralized and decentralized finance. Justin Sun's $4.57M lunch with Warren Buffett signals crypto's push to win over traditional finance.
Bitcoin has been showing some signs of stability in the past 24 hours after a period of really intense volatility. So how do you interpret this and do you think this current stability is a positive sign for bitcoin?
Yes, generally speaking, I mean, we've been talking about this for a long time already. The more we see stability in price, the better it leads, the more it leads to adoption. People can use it as a store of value better if they're more certain that it's going to hold its value over the timeframe that they're looking to hold it. So yes, flat prices are good. What we'd like to see is some sort of a steady incline rather than extreme volatility. However, because of the limited supply of bitcoin, volatility is inherent in the price. What's interesting to note that over the last week we've seen volumes coming down. So this is the Messari website who tracks the real 10 or the top 10 brokerages showing less than a billion dollars traded on bitcoin. The CME group is showing something similar, as is the bitcoin blockchain itself. We can see that daily transaction is estimated to be below $1.4 billion per day, which is definitely a downtick from where we were trading a few weeks ago as well. The transactions per second, a little plunge over there now tracking about 3.65 transactions per second. So all in all we're looking at reduced volumes, which is not necessarily a bad thing. But it does show that the excitement has come off. For those of you who are concerned about the security of the network. However, as soon as Blockchain's website is updating. There we go. Hash rate is at pretty much the all time highs over there. Definitely much higher than it was during the height of the crypto excitement in 2017. We can see, you know, December 2017 levels over here. We are way above that at the moment.
So moving off of bitcoin now on to altcoins. Have you seen any interesting altcoin patterns happening overall?
I mean, there are two altcoins that have been outperforming so far. This is, we're looking at some of the most, some of the best performing cryptos since the lows of mid December. Top one BNB coin by far, 569% gains. Litecoin with 300% gains beating Bitcoin, but 220%, you know, in seven months, it's not really all that bad to say the least. For those who have been calling for kind of an altcoin season. I don't think we're there yet. Yes, altcoins are outperforming a little bit today. They outperformed a little bit yesterday. But I think that in order to call something a season, it needs to be done over more time. The other thing that I've been seeing people say, which is absolutely not true lately, is that XRP is now negatively correlated with Bitcoin. It's. It's completely false. This shows the correlations between Bitcoin and some of the top altcoins. So XRP is actually this green line over here, and we can see that it shares a 0.8 correlation with Bitcoin. The entire crypto market right now is very correlated. Now, some people have this kind of feeling that, yes, as the market matures, we're going to see less correlation where, you know, bitcoin can go one direction and an altcoin can go a different direction. And we have markets going all different ways. Rather, I would argue the opposite. As the market matures, it will be more correlated and not less. It's something that we can see in the stock market. You know, traditional markets, something that's within the same asset class is more likely to be moving in the same direction. So, for example, Apple stock and Tencent, right? They're on different ends of the world and have different kind of business models and different customers, and they're completely different companies, yet their price tends to move in the same direction at the same time. That's because of the macroeconomic forces at play. So, yes, the crypto market is extremely correlated at the moment, much more so than it was in 2016 when the market was less mature.
Interesting. Talking a little bit now, I guess, about like, the more traditional side, traditional financial side of cryptocurrencies. I'm going to mention Libra and their interaction with regulators last week on Capitol Hill when a lawyer named Marco Santori sent up the problem facing Libra just in one tweet, which I'm going to read here, where he said at these hearings, libra is in an impossible position. It must be centralized enough to prevent illicit activity by freezing funds, but decentralized enough not to discriminate against participants based on the use of the funds. So do you agree with his analysis and sentiment here?
It's an interesting call, and I think that that actually might apply to a lot of altcoins, actually. And what we see the stance from Facebook is that they want to be kind of less decentralized at the beginning, and then as they go move into a More decentralized fashion. And this is what a lot of altcoins are doing. Well, we saw the same from the likes of iota, the same from the likes of neo. NEO came out and said we're a centralized platform to begin with and we actually want to move into a more decentralized way. So we need to look at decentralization not as a binary factor, but like as a slider. There are things that are less decentralized and more decentralized, and that slider can move over time.
So the eToro CEO was invited by Justin sun to be joined during this week's upcoming Warren Buffett lunch. That Justin sun bid, you know, an.
Ungodly amount of money to win $4.57 million.
Yeah. For lunch?
Yes. Well, not including the three Michelin star restaurant bill that he's gonna have to pick up afterward.
Yeah, it's. We spoke to him about that actually, and I hope we'll speak to him again after the lunch and see if he thinks, you know, the expense was worth it. But one of the participants of the lunch is going to be the CEO of eToro as of this week, and he said that it's going to be an important step connecting the traditional financial world with the new financial world. So do you think this event can bring anything to the crypto space, like any benefits apart from the big media hype around it right now?
Yes, I think that this is a lot about the media hype, but it's, I think more about Warren Buffett himself as kind of the leader of traditional finance. The Oracle of Omaha. Just about every investor on the planet looks up to him, and that includes a lot of the people that are going to be at that lunch. Right. So it was a bit of a stab in the heart for them to hear Warren Buffett coming out. So against bitcoin right off the beginning. And as we found, a lot of people don't necessarily know if exactly what bitcoin is about. So what we need to think about, we need to think about this as a business lunch, but also as a sales pitch. And you know, our friends from the crypto community have their, really have their work cut out for them. It's going to be probably the toughest sale of their lives. But I think that the answer to your question is going to be contingent on if they are successful or not. I think that Warren Buffett, as a wise man is going to come into this with an open mind. The question is how he's going to go out of it. Yoni Asi I think is a perfect candidate. Actually, I tweeted to Justin Sun a day after the announcement, which he actually retweeted. These were my top picks. As you can see, Yoni Asia bridging traditional finance and traditional markets with crypto. We still have another three picks, so I hope that some of these people on the list make it in Cointelegraph.
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