The first blockchain applications are an attempt to make crypto exchanges decentralized. We’ve spoken a lot about decentralized applications already, these new type of networks, in my opinion, have the potential to disrupt even the largest centralized tech companies including the FAANGS.
Decentralized exchanges (DEXs) are still a fairly new concept but according to a recent report, they’re far from infallible. Researchers have now laid out how high-frequency traders are currently taking advantage of retail customers on DEX platforms by paying higher miner fees to get priority transactions.
To be fair, this type of action is also known to occur in traditional markets. A popular book called Flash Boys explores the phenomenon of high-frequency arbitrage at great length.
Overall, decentralized exchanges and decentralized applications for that matter, are still a very new concept and there’s no way that all of the world’s problems will be solved in a few lines of code. For those currently using a DEX, you might be able to reduce the risk of being arbitraged by paying a higher miner fee. For those watching the industry, it may take some time before we see everyday usage of decentralized networks.
@MatiGreenspan
eToro, Senior Market Analyst
Today’s Highlights
Earnings
What the Fed
Delisting BSV
Please note: All data, figures & graphs are valid as of April 16th. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets
Financial earnings soured a bit yesterday as Citigroup and Goldman Sachs reported declining revenues. Tonight, financial earnings continue with Blackrock, but the main focus after the closing bell will be Netflix.
The number one streaming content service is now facing some heavyweight competition from both Apple and Disney, but that isn’t likely to be reflected in today’s report. What investors want to hear about are their global expansion plans.
What the Fed
Yes, the Fed is probably watching the current earnings season very closely, but what really moves the markets are the central banks. As the great Wanye Gretzky would say, “don’t watch the puck, watch where the puck is going.”
Yesterday, former Fed President Narayana Kocherlakota published the following editorial on Bloomberg.
To me, Kocherlakota’s logic is a bit perplexing. He starts off by saying that the Fed has no tools left to fight a recession because rates are currently too low and concludes that the Fed should start lowering rates already now, just in case a recession comes. My brain hurts.
Fortunately, this is not the Fed’s base case at the moment. We also heard from two other Fed members yesterday who seemed dovish, but a bit more level-headed. Evens said that rates will likely remain flat until at least 2020 and Rosengren argued against negative interest rates.
Bitcoin Isht
Personally, I try to stay away from politics as much as possible, but often politics move markets. So it pays to pay attention.
For example, when someone claims to be Satoshi Nakamoto without providing sufficient evidence, then threatens to sue people for calling him out, and before you know it Twitter is full of space cats, these things can have an impact.
Now, I don’t know Craig Wright, and I don’t know who Satoshi Nakamoto is, but for those wondering if Craig Wright might be Satoshi Nakamoto as he claims, here’s a helpful link with a bunch of resources.
When Binance decided to delist Wright’s version of Bitcoin known as BitcoinSV the price of Bitcoin Cash did see a significant jump on the announcement.
Bitcoin, however, was not affected in the slightest. At this point, bitcoin is too large to be affected, even by what may seem like a significant cash flow in the lower cap coins.
Let’s have an amazing day ahead!
Best regards,
Mati Greenspan
Senior Market Analyst
Your Social Investment Network – www.eToro.com
eToro (UK) Ltd is authorized and regulated by the Financial Conduct Authority. eToro (Europe) Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission.
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared to utilize publicly-available information.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.