Bitcoin is sitting at a key support area as bulls look for a bounce. The Daily Breakdown digs in — plus we look at Alphabet’s record highs.
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Crypto Corner
Throughout the next few months, we’ll spend some time each week talking about the ins and outs of the crypto market, helping investors to get more familiar with the 100+ cryptoassets offered by eToro. Since we’re going by market cap, many of these names will be familiar to investors today.
Bitcoin: Currently trading near $111,500 with a market cap of roughly $2.2 trillion.
Bitcoin was created in 2009 by an anonymous individual or group under the pseudonym Satoshi Nakamoto. It was the first successful implementation of a decentralized, peer-to-peer digital currency.
It operates on a fully decentralized, open-source blockchain network that allows users to send and receive value globally without relying on intermediaries. New BTC is introduced through proof-of-work mining, where participants use computing power to validate transactions and secure the network.
Bitcoin has a fixed supply cap of 21 million coins, making it deflationary by design and a common comparison to digital gold. Bitcoin’s primary use case has evolved from peer-to-peer payments to store of value, digital reserve asset, and hedge against fiat debasement.
Ethereum: Currently trading near $4,375 with a market cap of roughly $528 billion.
Ethereum was proposed in 2013 by Vitalik Buterin and launched in 2015 as a general-purpose blockchain designed to support smart contracts and decentralized applications (dApps). Unlike Bitcoin, Ethereum is programmable, enabling developers to build DeFi platforms, NFTs, DAOs, and more using its open architecture.
Ethereum transitioned from proof-of-work to proof-of-stake in 2022 via “The Merge,” reducing its energy consumption by over 99%. Ethereum supports a rich DeFi and NFT ecosystem and remains the most widely used Layer 1 smart contract platform.
Ripple: Currently trading near $2.85 with a market cap of roughly $170 billion.
Created by Ripple Labs and launched in 2012 with the goal of enabling fast and low-cost cross-border payments. XRP transactions are confirmed through a unique consensus mechanism called the XRP Ledger Consensus Protocol, allowing for high-speed transactions.
Transactions on the XRP Ledger require a small amount of XRP as a fee, which is burned, reducing overall supply over time. XRP was originally pre-mined, with 100 billion tokens created at launch. Ripple Labs held a large portion of these tokens, some of which were placed in escrow to be released gradually.
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The Setup — Bitcoin
After running to all-time highs on August 14th, Bitcoin has been pulling back over the last few weeks. This has also weighed on Bitcoin ETFs, like IBIT — the largest Bitcoin ETF by assets. BTC is dipping to the breakout area we saw in late May, as bulls hope for support to materialize from this area and the 21-week moving average.
What if support doesn’t materialize?
That doesn’t mean the run in BTC is necessarily over. However, if Bitcoin cannot find support near this area, it could open the door to lower prices — potentially down to the $100K area. On the upside, a rebound could put recent resistance back in play, which is up toward the $120K area.
Options and ETFs
For investors who can’t trade or aren’t comfortable trading cryptocurrencies outright, they can consider ETFs for BTC and ETH. On the BTC front, IBIT remains the largest ETF by assets, while also supporting options trading.
Bulls can utilize calls or call spreads to speculate on upside, while bears can use puts or puts spread to speculate on downside. In either case, investors may consider using adequate time until expiration.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
GOOG
Shares of Alphabet are rallying this morning after a judge in the company’s antitrust case said Google will have to share information with competitors in online search but will not have to sell its Chrome division. Check out the charts for GOOG as it trades at all-time highs.
AAPL
Even though Apple wasn’t a party involved in Alphabet’s antitrust case, the ruling is a positive for Apple — which receives payment from Google to be the default search engine on the Safari browser for iPhones, Macs and iPads. Separately, Apple has an event planned for September 9th at 10 a.m. PT and it’s expected that the new iPhone will be announced.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
